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Getting Your Financial House in Order

July 17, 2020

Many of us have found that our priorities and perspectives have shifted with recent events. Your financial strategy may need to adjust accordingly, and now may be the perfect opportunity to get your financial houses a little more in order, putting you on better footing for whatever the future holds. Here are a few things to consider – pick and choose which apply most to your financial situation.

Build/Adjust Your Budget

  • Create your budget: Collect a few months' worth of bank and credit cards statements so you can understand how much money you have to work with and where it's going. Read more about balancing your family's budget.
  • Cancel subscriptions you're not using: These are generally small monthly charges but add up over time.
  • Check for lower insurance rates: Ensure you're getting the best rate without sacrificing coverage.
  • Refinance your mortgage: Your local lender should be able to compare your current terms to the rates available now to determine if you would benefit from refinancing your mortgage.

Tackle Your Debt

  • Add it All Up: Make note of the type of debt (credit card, student loan, auto payment, etc.), the total amount owed, the minimum payment, and the interest rate being charged.
  • Check Your Credit Report: Mistakes on credit reports are incredibly common, so make sure everything is accurate and there are no negative errors that could result in you paying more for your debt.
  • Consolidate Your Debt: This can mean fewer payments with balances being charged lower interest rates. Be aware of any fees that get charged and the potential impact to your credit score.
  • Make a Plan to Pay it Down: Determine how much money you have to reduce debt, and then make a plan for paying it down. This can be a particularly tough step, so don't hesitate to reach out to your financial advisor for help.
  • Read more about tackling your debt.

Safeguard Your Plan

  • Plan Your Emergency Savings: Emergency savings helps protect against an unexpected expense and/or loss of income. Even relatively small amounts of savings can help create financial stability.
  • Do an Insurance Check-Up:financial advisor can explain the importance of different types of insurance (life, disability, long-term care, etc.) and determine if you have adequate coverage.
  • Set Up A Password Manager: Having different and secure passwords for different accounts, especially your financial accounts, creates more security to protect you from online threats.
  • Consider Freezing Your Credit: Placing a freeze on your credit reports restricts access and makes it more difficult for identify thieves to open new accounts without your knowledge.
  • Read more about preparing for the unexpected.

Take Advantage of Market Fluctuations

  • Invest Toward Future Goals: Although past performance is not a guarantee of future results, pull-backs in the market have historically been a great time to invest. Your financial advisor can help you determine how best to put your money to work to help you meet your financial goals.
  • Rebalance: Large market swings can throw off the balance you want among your investments. Revisit your portfolio to ensure your investments are properly aligned to keep you on the right track.
  • Roth Conversion: If you have a traditional retirement account, a down market or year in which you have lower income can be an opportune time if you've been wanting to convert it to a Roth retirement account. Talk with your financial advisor and tax professional to determine if this could be beneficial.
  • Tax Loss Harvesting: If you have taxable investments, selling at a loss can reduce your tax bill. It's best to talk with your financial advisor and tax professional to determine if this is an appropriate strategy.

Ensure Your Wishes are Honored

  • Update Beneficiaries: The beneficiaries for your financial accounts (bank, savings, retirement, and investments), as well as your insurance and annuity policies, is how these institutions know who the funds should go if something happens to you. Read more about beneficiary designations.
  • Create or Update Legal Documents: Many legal professionals are taking appointments remotely, allowing you to create (or update) important documents like advanced directives, medical or financial power of attorney and a will from home.
  • Organize and Share Your Legal Documents: If you've already got your legal documents in place and updated, now is a good time to get them organized and share them with key people.
  • Your financial advisor or legal professional can help you with these important documents.

Start a Conversation

  • Talk with your parent(s): Determine how your parents plan on meeting any long-term care needs they might have, who has their financial and medical powers of attorney, and their end of life wishes.
  • Teach Your Young Children: Take some time to share money lessons with your children. Being transparent and open now will help them navigate their finances as adults.
  • Share with Your Adult Children – At a minimum your children should understand who has healthcare and financial decision-making rights for you, as well as your end of life wishes.
  • Ask for Help – We can help you navigate through the financial to-dos and conversations that can otherwise feel overwhelming. That's what we're here for!
  • Read more about family financial conversations.

More Resources:

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