4 ways to organize your personal finances quickly

Although the economy will get tougher from here, consumers have several avenues to take advantage of lower rates or at least minimize the effect on their personal finance, if they act fast.

Here's the key strategy: Use the low rates to improve your own balance sheet and cash flow with some of these money moves.

1. Consider refinancing your mortgage
With rates falling rapidly, it could put more pressure on mortgage rates. And that could be a boon for those with a mortgage (and even those looking to buy a new home). A home refinance, if it makes sense, could be the best way to boost your personal finance.

Mortgage rates are already well below last year, and with millions of borrowers paying substantially higher rates, it's a great time to take advantage of low rates and put extra money in your pocket each month, saving tens of thousands or more. more over the life of your loan.

The bank rate table shows that refinancing rates were below 4 percent for 30-year mortgages and close to 3 percent for 15-year mortgages during the month of March. A year ago, the average for 30-year fixed-rate mortgages was 4.49 percent, according to Bankrate data.

So if it makes financial sense, use falling rates to improve your financial situation.

2. Put your CDs in order
A drop in rates may be good for your mortgage, but it's definitely not good for your deposit accounts. Savings account interest rates are already falling, almost in step with the decline in the federal funds rate. With the federal funds rate now at near zero, savings accounts probably pay out about the same amount, give or take.

But that's not the case with CDs, at least not yet. Although CD rates have fallen after the series of federal rate cuts in 2019 and this year, you can still lock rates higher for the next year or two or three, so you won't be subject to the rate decline. rates at that time. But you'll want to move quickly, before rates catch up with the Federal Reserve's actions.

3. Prepare your investment plan
While the stock market plummeting seven or eight percent in one day isn't anyone's idea of fun, it won't always be that way. For now, you may be stuck with a fund made up of high-quality bonds, which will feel less, if any, the impact of the market crash.

Bonds may be enough for now, but if you need to grow your portfolio and you have a decade or more until you reach retirement, you'll likely need the compounding power of the stock market to get you there. So you will want to determine how and when you will re-enter the stock market.

Rather than trying to bottom out, one strategy is to wait for a sizable drop, say 30 or 40 percent, and then start investing regularly. You won't buy when the stock is at its lowest point, but you will get a discount from recent prices. More importantly, if you put your investment on autopilot, buying regularly no matter what happens in the market, you won't be talked out of buying when everyone else is running for the hills. Stocks are cheapest when everyone is afraid.

So as long as you can think calmly and clearly, develop an investment plan and stick to it.

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4. Pay off those credit cards
Near-zero interest rates can be great for credit cards, especially if the low rates can be used to refinance a balance to a higher rate into lower monthly payments through an attractive balance transfer offer. But lower rates can still positively affect credit card debt. Since credit card debt is typically variable rate, your monthly payment can be lowered, even just a little, and organize your personal finance,.

The most dangerous part of a near-zero interest rate environment for those with credit card balances is what it says about the economy as a whole. These low rates indicate that the economy is moving slowly and that policymakers are anticipating more unemployment.