These seven tasks will help you simplify finances and reduce worry so you can focus on making your money grow.
I don’t know about you, but I can easily procrastinate on “boring” money tasks like updating a will or reviewing insurance.
The thing is, tackling these chores can help us sleep better at night, save money and help our finances thrive.
Let’s do this! Let’s tackle these seven mini-challenges.
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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 versions of LastPass and Bitwarden.
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
My bottom line finally started improving once I set an automatic savings deposit. 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 grows, you’ll be amazed at how much you can save.
I’m a huge fan of credit unions, especially for setting up savings accounts, and you can find a location near you with this handy Credit Union Finder.
Another way to save automatically is through micro-investing.
I use the Acorns app for this, and you might like it, too.
It rounds up your purchases to the next dollar and deposits those small amounts in a Vanguard account; I also automatically deposit $10 a month. The tiny deductions are painless, and several times the account has topped $1000 which I then withdraw and send to my IRA.
If you sign up for a free account using this affiliate link, Acorns will make an initial deposit of $5.00 in your account.
4. Rebalance Your Investment Mix
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? You may wish to consider 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 for the first time, 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.
It’s a good idea to review your life insurance, health insurance, disability and long-term care plans each year to make sure your coverage fits your current life situation.
7. Review Your End-of-Life Plans
Have you created a will? If not, put this on your ‘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.
A Living Will is so important, and will provide your loved ones with instructions for your care in case of a terminal illness. I used the online form at 5 Wishes to create my advance directive, and the cost is still just $5.00.
How About You?
Are there things on this list you can tackle this week to help your finances thrive? Do you have other money tasks to add to my list?
I’d love to hear your thoughts on the Comments section of this post, or over at the Money Diet Community Facebook Group.
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