Finance Roll

The financial year of 2008 was somewhat like an earthquake for just about everyone in the US. There is a new landscape to deal with, and the stock market proved to be not as secure as many thought. Therefore, your financial strategies must roll with the rocks and change accordingly.

There are stories daily of investors who have watched their retirement nest egg shrink by 40% or more, and with tears in their eyes, they are scrapping their financial plans for the future. Homes have lost value or are in foreclosure, jobs are insecure, and foreclosures approach 50% in some states. Overall, it looks like a financial disaster, but there are steps to take to maintain control, including mortgage payoff plans.

There are 5 numbers to know for 2009:

1. 401(k)
2. Mortgage Balance and Interest
3. Emergency Reserve
4. Credit Score
5. Net Worth

1. Historically, the stock market fluctuates, and over time it has risen to record heights. Your 401(k) value may have dropped, but continue to make maximum contributions to keep tax benefits, and continue to use this savings vehicle.

For 2009, contribute $16,500, and remember age "50" is when you can contribute an extra $5000 yearly. Watch your stock market portfolio each quarter, and rebalance if needed.

2. Know your mortgage balance. If you find you are owing more than the home is worth, look at mortgage payoff plans, and mortgage acceleration to lower the balance faster so you pay less interest over time. Refinance at lower rates.

3. Maintain your emergency cash reserve by keeping at least 6 months cash in savings. You can no longer count on access to money through credit cards due to new restrictions, higher interest rates and fees. HELOC loans, and loans in general are more difficult to obtain. Be prepared with cash for any job loss or unexpected medical expenses. Boost your personal qualifications reserve by learning new job skills.

4. Know your credit score. It is essential to have a good score when seeking a new job, or access to cash markets. Your FICO score represents your financial health. If it is below 680, bring it up. If higher, see how high you can go. Consult online advice from experts such as Suze Orman. Cash may soon be available only to those with high FICO scores. Check it yearly.

5. Know your net worth, and if it is growing or shrinking. Your current nest egg and home value may have been greatly slashed in 2008. Take action steps to bring your net worth back to previous levels. Use strategies such as mortgage payoff and acceleration techniques to bring balance back to your real estate values. Continue to contribute to retirement savings.

It is important not to panic, but continually assess your financial situation and worth. Mortgage payoff or acceleration is one of the best ways to improve your overall picture, and save you tens of thousands of dollars in the future that you can invest and use later.