FNTN

Introduction.

With the Christmas season being truly upon us now and all the spending that it entails, it is also the time of year that you need to start financially preparing for 2010 to avoid those New Year money blues. On the basis that the New Year will bring with it all the bills for the money you spent on the Christmas celebrations - should you be worried that you’re probably not going to be saving any money?

Savers are losers!

Do you want to start 2010 with the New Year blues?

The immediate response to that question is that you really shouldn’t feel too bad about not being able to save any money in the first part of 2010. The Federal funds rate has been pretty steady since 2008 at 0.25% and it’s showing little, if any, sign of improving in the New Year. The net result of that is that putting your money into a regular savings account with a bank will not yield any interest of any significance at all. However, that low rate could be potentially very attractive to borrowers. By that it is simply the case that, if you have taken out a personal loan to cover the costs of Christmas, it will have a low rate of interest attached to it - making it easier for you to repay. So, why bother thinking you’ll save some of the spare cash you have and re-pay the debt, when you might was well simply use all of the spare cash to pay off the loan more quickly. Paying off the loan ahead of schedule may well help you to reduce the total interest you pay and could significantly help your credit score when you next apply for your free credit report.

Loans you’ve already got.

Another tip when preparing for 2010 is to think carefully about switching any variable rate loans to fixed ones. The longer term your variable rate loan has to run the more reason you have to switch it. If you can’t repay the current loan and the finance company won’t let you switch it to a fixed rate loan - talk to a financial advisor about taking out a new loan on a fixed rate to repay it instead.

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