A Yearly Financial Check-up

Your Yearly Financial Check-up

Making a change can add change to your wallet

By Debra L. Karplus

You’re diligent about scheduling yearly doctor and dentist visits for your family, complete with blood and urine tests, flu shots, recommended cancer screenings for people your age including the beloved colonoscopy that people love to joke about; dental cleanings and x-rays, eye exams, and consulting with a specialist when needed. Good for you!  Preventative health care helps keep you healthier and, ultimately, wealthier.  You’re definitely on the path for the many good things ahead. Give yourself a gentle pat on the back.

But, have you scrutinized your finances?  Money-related matters require that same kind of attention as your physical health to assure that you are on track financially.  People’s life situations change.  Your income fluctuates, for example.  Children get older, enter college and eventually move out of the house, or maybe grandma moves in.  You relocate to a bigger house or maybe scale down to a smaller one.  It’s important to examine financial aspects of your life at least yearly.

Review your monthly statements to assure that your accounts in sync with your current lifestyle.

The next time you receive your monthly bank statement, peruse it carefully for fees such as service charges.  Perhaps there’s a bank across town that more closely suits your needs in terms of minimum balance and easy online bill paying.  Or maybe you no longer need the local bank and might instead establish an account with one of the online banks.

Examine your monthly credit card statement.  Life can be simpler if you have as few credit cards as possible; one credit card may really be enough.  Make sure that your credit card has the most appropriate program for your lifestyle, such as cash back rewards.

Review your financial portfolio yearly, including workplace retirement such as 401K or 403B, IRA and ROTH, and non-retirement investments.  Do you have the correct beneficiaries listed?  Dividend reinvestment plans can be tax-smart. Conversion to a ROTH might be a good idea.  Do some tax planning in the fall before the holiday season consumes you, or at the start of the next year, or around your birthday.

Speaking of taxes, check your W4 at work.  Have you listed the correct number for exemptions?  If your yearly IRS refund is substantial, you might consider raising the number on your W4. You can make changes to your W4 anytime of year.  This definitely shouldn’t wait until tax time, the best time is now.

 

 

 

Provide the appropriate protection for you and your family, and your home and valuables.

Schedule a yearly meeting with your insurance agent.  Ask if your deductibles are appropriate; consider raising deductibles to lower premiums.  Be sure you have the right amount of coverage, especially for your home.

 Possibly you have policies you no longer need such as life insurance, if you’re a person without dependents or debts.  Or maybe as you’re aging, you might consider purchasing long term care insurance; if you’re young and healthy, the premiums can be quite affordable.

Don’t forget your will.  Pull it out of your safety deposit box and review it carefully. Is everything stated in your will current?  Is the person assigned as executor still the best choice?

Pay only for utilities and auto expenses that reflect your lifestyle.

Read each line item on your utility bills, gas, electric, water, sewer, home and cell phone, and cable TV.  You may be paying for services you no longer need, such as long distance on your home phone when you make always make long distance calls on your cell.  Are your cable and Internet services and cell phone plans still right for your family?

Operating a car can become a real money pit.  Is the shop where you get your oil changed, tires rotated and other routine maintenance still the best for you? Perhaps you pay for roadside assistance through one of the motor clubs.  Do you still require a roadside assistance program or are you paying for services you no longer need? You might consider dropping the program, and adding towing to your auto insurance; the cost is generally nominal.

Cancel the gifts that don’t keep giving.

Magazine and newspaper subscriptions are great.  But, do you really read all these, or could you cancel and read some of them online.  Glossy magazines end up in the landfill, often unread. 

Kudos to you if you’ve joined a gym to become more physically fit. But how often do you get to that gym?  Maybe you’re not getting your money’s worth out of your membership.  Many fitness centers sell cards that charge you per fitness class? Calculate which is a better way to stay fit.

Don’t procrastinate.  Every day you put off tending to your finances could be money lost. Little things add up to big things.  Making time right now to examine your finances could put money into your pocket today and in the future.  Most of these are small things, but the composite of them can be huge over time.  Get busy now!