Get yourself back on track with these money tips

by Donna Rosato

1. Rebalance

A banner year for stocks means you probably didn’t wince the last time you looked at your 401(k). It also means that your asset allocation is probably out of whack. A $100,000 portfolio invested in 60% stocks and 40% bonds and cash and rebalanced annually for the past 37 years would have grown to $2.9 million, vs. $2.5 million for one that was never rebalanced, according to the Schwab Center for Financial Research.

2. Earn one new credential

The economy is getting back on track, but the job market has a long way to go. So develop a skill that will make you more attractive to your current employer or a prospective one. Some in high demand right now include project-management certification, blog software like WordPress, and expertise in data-crunching programs like Excel and search-engine optimization, says Fabio Rosati, CEO of, a website that helps freelancers find jobs.

3. Convert to a Roth IRA

Face it, taxes aren’t going anywhere but up. That means it’s smart to own a Roth IRA, which offers tax-free withdrawals after age 59½. In 2010 anyone, regardless of income, can convert a traditional IRA into a Roth. You’ll have to pay income tax on the money you convert today, but if you’re in your mid-forties, you’ll come out ahead with the Roth even if your tax bracket stays the same or gets a little lower after retirement, according to a T. Rowe Price analysis.

4. Grab cheap health care

Your insurance premiums and co-pays may be higher this year, but chances are you won’t have to shell out more for a visit to your primary-care doc. Many insurers have nixed co-pays on preventive care because it saves them (and you) money on medical costs down the road. The Centers for Disease Control says that high blood pressure, for example, created over $73 billion in medical costs last year. So get that physical you’ve been putting off.

5. Get a better bank account

Building up your savings can feel like slow going when most banks are paying 0.5% or less. Shop around for a better deal: HSBC Direct, for example, is offering 1.34% on a savings account with no minimum investment. Go to to check current yields.

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