NEW YORK (CNN/Money) - Your house, your wallet, your portfolio.

Just about anything in your life that you can quantify with a dollar sign will feel the effects of rising interest rates. Trouble is, rates have been so low for so long that most people have forgotten what happens when they start heading up.

But with Treasury and mortgage rates creeping up, and market watchers in agreement that the Fed is done cutting, it's about time you familiarized yourself with the phenomenon. Here's how higher rates will hit you in three areas.

Bond prices have undergone a selloff as the stock market has rallied in the past several months.

The yield on the 10-year Treasury note has risen from a 40-year low of 3.56 percent on Oct. 9 to 4.2 percent around midday Tuesday, a potent sign that investors are feeling more bullish about the economy. Bond prices, which move in the opposite direction of yields, have dropped sharply as demand for ultra-safe investments has waned.

Still, bond funds have had estimated inflows of about $5.5 billion in November, not much of a slowdown from the blistering pace for most of this year, according to fund tracker AMG Data Services. Fixed-income took in $6.3 billion in October, and nearly $15.4 billion in September, the trade group Investment Company Institute said.

A bond fund, Pimco Total Return, managed by bond kingpin Bill Gross, was recently crowned the nation's largest mutual fund. At the same time, stock funds have seen record outflows -- $50 billion in July alone -- which only recently turned mildly positive (An estimated $1.5 billion in November, AMG Data said.)

While you won't lose money if you own an individual Treasury bond until it matures, all of those late-to-the-party bond fund investors will take it on the chin over the next year if rates continue to rise.

John Lonski, senior economist and bond analyst at Moody's Investor Service, predicts the yield on the 10-year note could hit 5 percent by the end of the year, 5.5 percent by the end of 2003 and 6 percent in 2004. The last time the yield hit 6 percent was during the good old days of the bull market -- with a peak of 6.78 percent on Jan. 20, 2000.

As a result, it makes sense to stick to bonds and bond funds with shorter durations of one to five years. Short-term bonds are less sensitive to interest rates than long-term bonds. Because you wait less time for the bonds to mature, you're taking on less risk.

The Dow Jones industrial average has closed higher for eight weeks in a row, and the Nasdaq had its third-best November ever in percentage gains. But higher rates are still a mixed bag for stocks.

On the one hand, they can signal a stronger economy, which means healthier earnings, a return of capital spending, and a better outlook for the job market.

Yet some stocks are hurt more by higher rates. Auto makers and housing companies are both likely to suffer as rates edge up, said Delos Smith, an economist at the conference board. People buy fewer cars and homes because the loans get too expensive.

Higher rates can hurt stocks another way. As yields rise, bonds become more attractive, pulling money from stocks. Still, according to one measure, stock valuations are cheap. The Fed's Stock Valuation Model, calculated by Prudential economist Ed Yardeni, compares the yield of 10-year Treasury bonds with the earnings yield of stocks -- that is, the expected earnings for Standard & Poor's 500 companies divided by the index's price. The idea is that their values should be similar -- the lower the rates are, the more attractive stocks are. (Click here for more from CNN/Money's Walter Updegrave on understanding Yardeni's Stock Valuation Model.)

Using current figures, stocks are undervalued by about 30 percent, according to Yardeni. That said, rates have been at such a historic low that even if the 10-year yield keeps rising, stocks wouldn't suddenly get expensive.

Low rates, of course, have kept the housing market percolating long after the bear market made its appearance. Mortgage rates hit a 40-year low this summer, which boosted consumer confidence and eased the pain of falling stock prices. Lower rates meant that consumers were able to afford buying and refinancing homes and still had money in their pockets to spend.

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Now, with higher rates around the corner, there are signs that housing is cooling off.

Long-term mortgage rates rose for the second week in a row to 6.13 percent for the week ending Nov. 29. The volatile Mortgage Bankers Association index of mortgage refinancing activity dropped 39 percent in October (Year-to-date, the index is up 330 percent.) And most recently, a federal report released Tuesday showed the average appreciation of homes slowed dramatically in the third quarter, to 0.84 percent from 2.39 percent last quarter.

As a general rule of thumb, if long-term mortgage rates rise above 8 percent, that's when you should start worrying about the health of the housing market, Smith said. Anything in the double digits spells dark days for the sector -- the housing market was virtually dead in the water back when the 30-year mortgage hit its peak of 18.6 percent in October 1981.

"You killed the housing market in the 1970s and 1980s when interest rates were in the double digits," Smith said. "High interest rates are the end of the good times for housing."