QUOTE OF THE WEEK
Winning starts with beginning."
TIME FOR YOUR FINANCIAL CHECK-UP
Autumn may be the best time of year to schedule your annual financial check-up. Completing the items on this list and reviewing them with your financial adviser will help you make sure your finances are in tip-top shape.
1. Write down your goals.
This is the single most important step you can take to achieve financial success. When you know where you are going, you can develop a roadmap to get there. Be as specific as possible about what you want, when you want it, and how much it will cost. Writing your goals will also help you cut through the clutter of information so you can focus on what's really important to you.
2. Do a cost-of-living reality check.
There's nothing like keeping a record of your spending for two or three months to identify where money is leaking out of your cash flow pipeline. Making small changes now can make a big difference in your future financial security.
3. Create an emergency cash reserve.
Our economy is improving, but people are still losing jobs unexpectedly, sometimes without any severance pay. Now more than ever, it's a good idea to set aside the equivalent of three to six months pay in case of an emergency.
4. Know what you own.
Update your net worth statement, and compare it to last year's. Look at your retirement accounts and see how they are doing. Periodically reviewing these items, and making adjustments as necessary, will help you stay on track toward your goals.
5. Review your tax status.
Confirm that your withholdings are correct. Assess your ability to manage the tax consequences of any investment gains and/or losses. Consider the potential tax benefits of charitable gifting and if you are able to donate, identify charities that are right for you.
6. Analyze your investment portfolio.
Write down your investment strategy and asset allocation. Are they aligned with your goals? Ask your adviser to review your portfolio and provide you with a list of recommendations. If changes are needed, make them now.
7. Make an inventory of your personal property.
Photograph your home and office contents with a camera or video recorder. Store your lists and records in another location so they won't be damaged if a fire or other catastrophe occurs at home. If you have irreplaceable items such as family photos or heirlooms, consider storing them in a safe deposit box.
8. Review your insurance policies.
Make sure you have the correct types and amounts of insurance. In addition to protecting yourself against property damage and liability risks, confirm that you are protecting your family against the possible loss of your income if you die or become disabled. As part of this review, update your beneficiaries under these policies.
9. Take advantage of work-related benefits.
Make sure your benefits mesh with your spouse's. Eliminate duplicate benefits, if any, so you don't pay twice for the same coverage. Also, note the dates of any open enrollment periods so you won't miss deadlines for changes and improvements.
10. Check your Social Security record.
You will automatically receive a statement each year, a few months prior to your birthday. Check the statement for any errors that may appear and correct them. It will be easier to correct mistakes now than later when you apply for benefits, possibly after many years have gone by.
11. Request a copy of your credit report.
Don't wait until you apply for a mortgage or other loan to correct problems in your credit file. You can obtain a report from Equifax (800-685-1111), Experian (800-397-3742), or TransUnion (800-680-7293).
12. Prepare and/or review your will.
Also, make sure your Durable Power of Attorney and Health Care Directive reflect your desires. Write a letter of instruction to your family so they will know how to locate your important papers, and how to contact your advisers in the event of an emergency. Taking these twelve steps will improve your financial health and give you peace of mind, so you can relax and enjoy life.
Certified Financial Planner Dianne H. Webster is a registered investment adviser and president of Integrated Financial Strategies of Amesbury, Massachusetts. Contact information is available at www.ifslegacy.com.
Copyright 2002 Dianne H. Webster. All rights reserved.
Securities offered through Commonwealth Financial Network, Member NASD, SIPC.
COACHING CALL TO ACTION
TIME FOR YOUR FINANCIAL CHECK-UP
My husband, Bill and I have been working through Dianne's checklist this year. And I'll be the first to tell you it will take time. This week:
1. Review the list.
2. Complete number 1 -- Write down your financial goals. It makes all of the other decisions much
clearer and easier to prioritize.
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