It’s easy to lose or misplace money. But unlike finding $20 in an old jacket, what if a bank or investment account containing thousands goes untouched for years because you forgot about it or never told anyone it existed?
For various financial accounts, holdings, investments, loans, tax returns, and other arrangements, you need to gather account information and relevant contacts. If you’re wondering why it’s worth taking the time to get all this info in one place, just think of the people you love. By organizing your financial and legal documents, if something happens to you your family can more easily:
First, you need to determine all the types of accounts you have. Here’s a comprehensive list to get you started:
After you’ve identified all the accounts you have, here’s the information you need to gather for each. Tip: The details for each account or asset may vary, so just pointing a person you trust in the right direction -- like giving them the name of your financial advisor -- will be super helpful.
Name of Financial Institution:
Type of Credit Card: Visa | MasterCard | American Express | Discover | Diner’s Club | JCB | Store/Gas Card | Other
How do you prepare your taxes? (You could answer this question out loud but that won't really do anything. Except maybe scare the cat. So keep track of it.)
If you use a Financial Planner/Accountant: Share the name and contact info of this professional.
If you do your own taxes using Software or an Online Service: What software/service do you use? How do you login to this account?
No Matter What: Tell someone you trust where you keep your past tax returns! If something happens to you, these are an ideal financial blueprint for people in your life to understand your estate.
Keeping important documents (deed to your house, insurance policies) and valuable items (heirlooms, jewelry) extra safe is smart. Not giving someone access in case something happens to you can turn into a long detour through the courts. This is especially troubling if you kept your Will or other important documents your family might need in a safe deposit box. Solution: Check with the bank where you’re renting a box and name a designee or whatever they might refer to this person as.
Now, onto the details to share:
Don’t let any loans your family and loved ones are unaware of sneak up on them. Keep track of the following info and once the loan is paid off feel free to mark it “PAID” and celebrate.
Type of Loan: Line of Credit | Personal Loan | Student Loan | Other
Make sure all of the stuff listed above is neatly organized, updated, and shared with a trusted family member or close friend. Your financial advisor can offer experienced assistance as well. Having this information organized and available helps with those unexpected interruptions in life and is well worth the effort you put in today.
Waking up early in the dark mornings of winter to exercise comes hard. Once your workout ends, though, you often begin the day with the payoff of a tremendous energy boost. Can the same process apply to your finances?
If you’re like most people, you exercise for many reasons but expect to benefit from your sweat equity in the future, not just in the current moment. We will all encounter health issues at some time and the medical world assures us that we’ll deal better with problems if we get – and stay – physically fit. Preparation matters.
So, what does exercise have in common with financial planning and investing? The answer: Very few individuals prepare to invest, except maybe when selecting from choices in a retirement plan.
Or not: One study shows that in 2020 – in the teeth of the COVID-pandemic and perhaps the most volatile market year since maybe 2008 – most 401(k) retirement plan participants made no changes to their contributions.
Getting back to the fitness analogy, exercise’s greatest benefits come from the stress we intentionally place on our muscles so that when a health problem arises, our bodies are in better condition to deal with the situation. Regarding investments, if you choose to go it alone, you need a methodical (and regularly visited) regimen for taking in and processing market data. You also need a strategy to accommodate unforeseen yet inevitable future events, such as market downturns.
Don’t let random financial news clips guide your decisions when determining how to act. For the record, you need not re-allocate asset classes or otherwise change your portfolio just because something in the market changed. Call your financial planner to discuss your concerns and get a better perspective.
You do need to be prepared to consider adjustments when the information dictates that conditions shifted, such as stocks increasing to a higher portion of your portfolio than you want.
We call this an investment policy statement or some prefer the term “investment playbook.” The playbook outlines your holdings and specifies how you intend to respond to change with a disciplined approach aimed at particular objectives – as opposed to the usually heated emotions most of us feel in a suddenly rough market.
How are your holdings doing against benchmarks such as the S&P 500 Index? At specifically what point will market shifts make you re-allocate percentages of stocks and bonds in your portfolio?
Your playbook also describes what you’re trying to achieve as an investor – pay for retirement or for college tuition, for example – and how you’ll react to market changes. You might plan to sell or buy only if the S&P 500 hits a certain number or invest in oil if the cost per barrel drops to a pre-set price. A well-designed playbook keeps you from panicky decisions or from freezing up during Wall Street roller coasters.
Your playbook needs to clearly document your investment information sources, the technology involved in your investing and why you bought a particular investment. Remember: Great stock or mutual fund opportunities may arise and shimmer, but if they don’t match your playbook, you pass.
At the gym, you can wander among the clanking weights or plan exactly how to invest your energy. You know which method works better. And you can enlist the help of an experienced trainer who knows more than you’ve learned and can take you to the next level.
Investing is no different.
Today, unlike previous generations, there is an extensive array of financial information that steadily flows from the news media and the Internet. Almost instantaneously, you can review your own finances, ascertain your progress, and make necessary adjustments. However, do all these signs of progress really make managing your finances any easier? The fact remains that regular reviews of your entire financial affairs will help put you on a long-term track for success.
Now that it’s a new year, why not add “regular financial reviews” to your existing list of New Year’s resolutions? Here’s a brief description of what a typical review might entail:
Does your income equal or exceed the amount you put into savings and expenses? If it exceeds, by how much? The amount in your income that exceeds what you saved or spent is called positive cash flow. If your expenses exceed your income, you have negative cash flow. If your cash flow is negative, it may be time to reorganize and minimize any unnecessary expenses in your budget.
For every financial goal you establish, you need to address the projected cost, the amount of time until your goal is to be realized (time horizon), and your funding method (a scheduled savings plan, liquidating assets, or taking a loan).
Plan your goals on three tiers. On the first tier, you have an emergency fund of at least three months’ of income. On the second tier, you may establish a savings plan for your children’s education or future expenses. Finally, on the third tier are more flexible goals such as: automobiles, home renovations, and vacations.
Are you going to have enough money when you retire? Pensions and Social Security may provide insufficient income to maintain your existing lifestyle during your retirement years. Consequently, project your future needs and plan a disciplined savings program for your retirement.
Many taxpayers reduce their taxes by taking advantage of tax deductions. While many people are familiar with deductions (e.g., mortgage interest, contributions to retirement plans, and donations to charities), there may also be other ways to reduce your income tax bite. For example, under appropriate circumstances, losses or expenses from previous years may be carried over to the next tax year. A qualified tax professional can help you implement a tax strategy that is consistent with your needs.
Suppose the inflation rate is currently 3%. In order to maintain your buying power—just to break even—you need a 3% annual wage increase. A decline in your buying power will certainly lower your standard of living and affect your lifestyle. In the end, you’ll have less money if inflation starts to beat you. So, as you can see, you need to put your money to work to beat inflation. A disciplined approach to saving can help you meet your long-term goals.
You are probably well aware that life sometimes throws us unexpected “curve balls”—that is, risks we haven’t foreseen. Suddenly and unexpectedly, your potential risk may become a financial loss (e.g., you become disabled without income or an untimely death causes financial hardship for your family). Disability income insurance and life insurance offer protection that can help cover potential liabilities and risks.
In today’s complex financial world, everyone needs help in making knowledgeable, objective decisions. A qualified financial professional can help ensure that your current financial affairs are consistent with your changing goals and objectives. These seven steps will help you focus on your entire financial picture. During subsequent reviews, you may need to make alterations due to changing goals and circumstances. However, if you faithfully keep track of your progress, you may be better able to afford your future lifestyle and finance your dreams.
For many people, the New Year is a time for personal reflection, a time to consider commitments and resolutions for the coming year.
This year, why not resolve to make your finances a priority? With proper planning and appropriate guidance, you can begin to build financial stability and prepare for the uncertainties of tomorrow. Consider the following steps:
Gather all your important financial documents – life insurance policies, homeowners insurance, wills, trusts, and other pertinent financial records – and organize them so you can access them quickly and easily.
Arrange a time to meet with your financial advisor to review or write your will and establish any necessary trusts. Prior to your meeting, discuss with your spouse or other loved ones how to handle property dispositions and guardian appointments.
Pay off high interest debt first, especially if the interest is not tax deductible. Do your best to avoid the minimum payment trap. By making only the minimum monthly payment, the interest that accumulates over time can make even “bargain” purchases costly in the long run.
Review your life insurance policies to ensure that your beneficiary designations are appropriate to your current situation and that all arrangements are up-to-date. Also, consider repaying any loans you may have against your insurance policies. This can help to reestablish an emergency fund for the future.
If your children plan to attend college next year and require financial aid, remember that financial aid forms are due early in the year. The earlier you apply, the better your chances may be for obtaining aid.
Begin to gather your tax information and arrange a time to meet with your accountant, if necessary. It is important to file your income taxes on time and to be aware of any tax changes that may affect your return.
Once you’ve met with your professional advisors, write down a few realistic goals that you think are achievable. Make the commitment now to plan your finances accordingly. This is your first step to building a solid financial future.
The New Year offers us a fresh beginning. This year, resolve to make your finances a priority. With proper planning and appropriate guidance from your financial advisor, you can begin to work toward financial independence and prepare for life’s uncertainties.
What your New Year's resolution?
As a New Year rolls around, you, like many people, may take this new beginning as an opportunity to reflect on changes that you want or need to make in your life. Popular resolutions include making a commitment to lose weight, get fit, eat healthier, manage stress, save more money, and get more organized. Do any of these sound familiar?
It’s no surprise that many New Year’s resolutions focus on health and well-being. As you think about ways to improve your life over the coming year, your thoughts may naturally turn to the health and well-being of your family. Now is a good time to think about their future, as well as your own. If you haven’t already done so, let this be the year that you put a plan in place about the future long term care needs of you and your loved ones.
Although it’s not easy to think about the possibility of your own failing health or that of someone you love, avoiding the topic isn’t the answer. It’s important to have a long term care plan in place before you need it.
Long term care (LTC) refers to the range of medical, non-medical, social, and personal care services that can help someone cope with a reduced level of functioning due to injury, aging, or illness. LTC insurance (LTCI) can help cover expenses for the services provided by nurses, home health aides, occupational and physical therapists, and social workers among others. Although policies vary, they provide a set amount of coverage that can be used to help pay the costs of nursing homes, assisted living facilities, or home health care.
No one knows what the New Year may bring. But, by planning for the future, you can help to preserve your family’s assets, have more long term care options, and enjoy a happier New Year, knowing that you have a plan in place. And, that’s something to be excited about.
Investment advice is offered through Integrated Partners, a registered investment adviser doing business as Strong Valley Wealth & Pension. This information on the website has not been approved or verified by the United State Securities and Exchange Commission or by any state securities authority. Registration as an Investment Adviser does not imply a certain level of skill or training. Strong Valley Wealth & Pension, LLC offers securities through M.S. Howells & Co. Member FINRA/SIPC. M.S. Howells is not affiliated with Strong Valley Wealth & Pension. Not all products and services referenced on this site are available in every state and through every representative or advisor. Check the background of the firm or investment professional on BROKER CHECK or ADVISER CHECK.
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