7 Small But Important Money Tasks to Tackle

Tend to your finances | Happy Simple Living blog

Dear friends,

These final days of the January Money Diet are perfect for taking a little time to review some important details related to our finances. These are some suggestions:

1. Lock Everything Down

In both the online and physical realms, do all you can to protect yourself from theft and fraud. Do you have super-duper tough, unique passwords for each and every one of your financial accounts? A password program can help you choose and store complex passwords; I use the free version of LastPass.

If you keep confidential financial documents in a file cabinet, is it locked? Do you have copies of your important papers and financial account numbers scanned and securely stored?

2. Review Your Credit Report

Check your credit report and make sure there are no errors. The Fair Credit Reporting Act requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. It just takes a minute to order your free copy at annualcreditreport.com.

3. Set Up an Automatic Savings Plan

If you do nothing else this year, set an automatic savings deduction. This is the easiest, most painless way to grow wealth and I promise you’ll be glad you did it. Start with just $10 or $20 a month if that’s all you can afford. If you can start now and gradually increase the amount as your income increases, you’ll be amazed at how much you can save.

4. Rebalance the Investment Mix in Your Retirement Accounts

Most financial experts suggest checking your targets at the beginning of every year, and rebalancing your investments when your balances veer more than five percentage points from the targets.

5. Consider Hiring a Financial Advisor

Do you feel confident in your own abilities to manage your money, or could you benefit from professional advice? If you decide to hire an advisor, I recommend working with a fee-only expert who doesn’t receive commission for investing your money. You can find one through the National Association of Personal Financial Advisors.

If you have an advisor, do you feel confident that this person is carefully monitoring your investments and has your best interests at heart? If not, it’s time to have a conversation about your goals and expectations. Or perhaps it’s time to make a change and find just the right person to help you achieve your objectives.

6. Make Sure You’re Adequately Insured

When our roof was damaged in a hail storm, I discovered my policy covered the actual (depreciated) value of the roof, not the replacement value. How did I miss this important distinction? The result was that I had to spend months getting bids, disputing the insurance adjuster’s initial claim and fighting for a fair settlement. Despite paying thousands of dollars in premiums over the years, I still had to pay nearly $4000 out of pocket toward the roof.

Learn from my mistake! Schedule a call with your insurance agent and ask to go though your policy coverage. Ask questions, and make sure that you understand exactly what is covered and what isn’t. You don’t want to pay for coverage you don’t need, but you also don’t want to be under-insured.

Another lesson I learned the hard way:  if you have a 16-year-old driver hitting the roads this year, purchase an auto insurance policy with the lowest deductible amount you can get. Higher deductibles make sense for more mature drivers with a history of safety. Trust me on this.

7. Review Your End-of-Life Plans

Have you created a will? If not, put this on your 2017 ‘To Do’ list. You can find online resources to do it yourself, but a good estate attorney can make sure everything is done according to the laws in your state and also help you create documents like a health care proxy and durable power of attorney if needed.

If you have a will, it’s a good idea to review it at least once a year to make sure it still reflects your wishes. Have you designated the right person to be executor of your estate or make decisions for you in case you become incapacitated? Also, review the beneficiaries of your investment accounts and life insurance policies to make sure this information is up-to-date.

You may also want to create a Living Will, with instructions for your care in case of a terminal illness. I used the online form at 5 Wishes to create mine, and the cost was $5.00. You can also find a living will form at www.caringinfo.org.

How About You?

Are there things on this list you can tackle this week? If you have other financial tasks to add to this list, we’d love to hear your thoughts on the Comments section of this page.

The January Money Diet will officially end next Tuesday, and I can’t believe how quickly the month has passed. You’ll hear from me again tomorrow, with a challenge to keep us all focused and strong during the last weekend of the month.

Hugs,

The signature for Eliza Cross

About Eliza Cross

Eliza Cross is a full-time writer and the author of a dozen books about food and home design. She has been blogging about simplicity and sustainable living since 2006.

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