Controlling Fixed Costs Via Mortgage Refinance and Debt Consolidation Is Good Personal Finance

By Richard Barrington
Calculators for Mortgages Columnist

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Think you have a handle on your personal finances?You have a steady job and a rising income--good.

You are careful to live within your means--very good.

You are even setting aside some money for retirement--better still.

And yet, even people with sound personal finances can benefit from opportunities to save substantial amounts of money. This isn't just a question of managing variable costs, like eating out a little less often or settling for a slightly cheaper bottle of wine. Those savings can be important, but the really significant opportunities for savings come from controlling fixed costs.

What are some examples of controlling fixed costs? Here are some techniques to consider:

Mortgage Refinance. Early 2009 saw mortgage rates reach all-time lows, with 30-year mortgage rates actually dipping below 5% on one occasion. How rare is that? In mortgage data going back to 1971, there have been only three years in which mortgage rates have averaged below 6%, and the lowest of those averages was 5.83%. This makes it a great time to refinance your mortgage. You can use online resources to shop for mortgage rates, and tools like mortgage rate calculators to help with your decision. A mortgage rate calculator can sort out whether the difference in mortgage rates would be enough to make up for any fees and closing costs involved in refinancing a mortgage.
Debt Consolidation. You may associate debt consolidation with people who have problems with debt, but even if your personal finances are in solid order, it makes good sense to push debt toward the lowest-cost sources possible. There are loan payment calculators online that can help you figure out the potential benefits.
Energy Efficiency. Going green is not just a trendy way to show your responsibility--it can also mean more green in your wallet. Making your home more energy efficient and switching a less gas-guzzling car can pay off for you every month.
Actively Shopping for Insurance. People often routinely renew insurance coverage without a second thought. This may be a mistake which could cost you hundreds of dollars per year. You should actively shop for insurance each time you renew, and online resources make it easier than ever. In particular, as you come up in the world, perhaps move to a better neighborhood or establish a longer driving record, you should make sure you are getting the discounts on insurance that those behaviors deserve.

When it comes to controlling fixed costs, the central message is this: you've earned your money, so why not be able to use more of it the way you want to?