If you watch the national and global markets, like I do, then you are noticing warning signs pointing to a troublesome 2015 for businesses big and small. There's reason to hope and to fear in this market.
Interest rates on government bonds, all across the board, are crashing to lows that we have rarely ever seen. For example, just today the Federal Reserve announced that it would not be raising interest rates in the near future, due to fears for the global and national economies. See CNBC's article here on US treasury yields.
Lower interest rates can be a great opportunity for a small segment of people. If you have a loan at a high interest rate (anything over 4.5% is, amazingly, a high interest rate in this environment) you are practically being begged to refinance at these levels. And if you have an adjustable rate loan? You'd be absolutely NUTS not to refinance at this time.
But interest rates plunging is also fearful sign. When investors are scared of loss of capital, they run to US treasuries, which drops interest rates. There are storm clouds on the horizon. The wind may blow the storm our way, or it may pass us by. Either way, you'd also be foolish if you didn't close up the storm shutters and get ready to ride out the weather.
It's time to solidify your finances, and start saving for a rainy day. If you're considering a mortgage refinance, DO NOT take out more money than you already owe. That path leads to foreclosure. This is not the time to add more debt to your life. Refinances are great - cash out refinances in the face of global economic insecurity are not so great.
If you haven't done so yet - Get on a written budget (Rule #1) and Save Save Save Money (Rule #2). Use that lowered interest rate to put more money in your pocket. Drop debt and save cash. If the economy turns sideways, you'll be glad you did.