6 Smart Moves to Make in a Scary Economy

En español | Want to know how hard the recession whacked us? Take a look at these newly released numbers from the Federal Reserve: From 2007 to 2010, the wealth of the average American family plunged by 40 percent, taking it down to the levels of the early 1990s.

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That's frightening news for everyone, but particularly for people who are knocking on the door of retirement or have already edged through. How are you supposed to recover from that?

The answer: By thinking strategically. Here are six key steps to get you back on track toward financial peace of mind.

1. Develop a road map.  People with financial plans are much more likely to feel prepared, even in tumultuous times. They're more likely to feel that their dreams and goals are secure.  And, oh yes, they do actually save significantly more.

That's why Nathan Bachrach, CEO of Cincinnati-based Financial Network Group, calls this the first move. He suggests working with a fee-based financial adviser to develop a plan, but also notes you can craft one on your own as long as you use realistic assumptions.  

The most important one: Plan on a conservative 6 percent a year return on your money over the long term. Don't assume you'll earn the 12 percent a year on your money that you got during the market's heyday.  

2. Consider refinancing your debts. We're living in the lowest interest rate environment in history; you might as well cash in-and not just for your house. 

Currently, 48-month loans for used cars are averaging 4.67 percent, according to Bankrate.com. If you're paying more than that, refinancing your loan is a simple, cheap and smart transaction. Transfer credit card debt to a zero percent card so that you can make headway paying it down.  

Bill Hardekopf, CEO of lowcards.com, suggests the Slate card from Chase, which offers zero percent interest for 15 months, no annual fee, and no transfer fee if you transfer your balances within the first 30 days of opening the account. He also likes the Citi Simplicity Card, which offers zero percent for 18 months. There's a 3 percent balance transfer fee but no annual fee.  

And even if you refinanced your mortgage a year or two ago, you may want to do it again, particularly if you can lock into a 15-year fixed loan at just over 3 percent. Just be sure you'll be in the house long enough to recoup the costs of doing the deal. (Divide the total cost by your monthly savings — that's the number of months you need to stay in the house to make it work.)

Next: Paying off your debts. »