"You want to have adequate liquidity," says Nick Milazzo, a financial adviser with Waddell & Reed Inc. in Riverside.
If there is one thing you want to avoid, both stress, it's dipping into a long-term fund like a retirement asset -- a surefire way to handicap yourself in the future. Milazzo
observes the current troublesome trend of people prematurely cashing out their IRAs."If you're under age 59.5, you get a 10 percent penalty and immediate tax liability," he
In addition to money, it is crucial to stock up on insurance (health, property and life)."Insurance is one of the best ways to minimize the impact of risk," says Milazzo
The first step is to pull out the original mortgage document and examine it for information about whether your rate will reset, says Milazzo
.If you need help understanding the terms, call the lender directly.
Likewise, "if you call a credit-card company and say, 'I'm not happy with the current rate,' many times they will work with you ... assuming you have a good payment record," Milazzo
Get rid of bulky debt like high-interest credit cards.The first loans to pay off are the ones with the most cumbersome rates, advises Milazzo
, whether they be credit, student or car loans.