8 Tips for Organizing Your Finances

8 Tips for Organizing Your Finances

January 12, 2022

Whether you are just getting started or have already created habits to achieve financial freedom, check out 8 key areas where you can make the biggest impact and stay on track with your financial goals. We recommend reviewing your financial situation at least once a year as your life experiences and goals may change.

1) Assets and Liabilities

A good first step is to take inventory of your assets and liabilities.  You may investigate and update ones more than others but remember that certain assets will affect certain liabilities and vice versa.   For example, if you refinance your home, you might want to increase your life insurance policy to cover the additional debt.

Not sure what assets or liabilities you have?  Common definitions are listed below:

Assets: funds held in checking or savings accounts, retirement account balances, investments, real estate (home equity), insurance, annuities, vehicles, and other personal property.

Liabilities (Debts): Mortgages (Does it make sense to refinance?), credit cards (How much am I paying in interest? Should I consolidate?), car loans, personal loans, student loans, and unpaid taxes.

2) Life Insurance Policy

Do you have enough coverage? Did your situation change since you last revisited your policy? A job change, divorce, adding a baby to your family, retiring, buying a house, getting married, moving, or new health issues can prompt the need for a change in coverage. Life insurance can provide so much more than just covering your final expense or burial costs. It can give you the peace of mind knowing that you can cover your final expenses as well as your debt, thus lessening the burden on your loved ones.

3) Health Insurance

Your situation or health may have changed throughout the year. Also, the coverage might be changing as well as the premium costs. Checking yearly to see if you need additional coverage or even less coverage, can save you money.

4) Budget

Track your spending throughout the year and monitor your savings to progress to your goals.  You should track your planned spending monthly versus your actual spending each month to account for discrepancies. The more often you do this, the more accurate you will get with your true budget.

5) Auto and Homeowners or Renter’s Insurance

Reviewing your auto and homeowners or renter’s insurance policy will ensure that you have accounted for any new assets or liabilities. This ensures that you will not come up short in the event you have to file a claim as well as making sure you are not paying for additional coverage you might not need. Ensure you are taking advantage of savings opportunities such as bundling your home and auto insurance with the same company. This can get you a discount on your premium.

6) Will and Testament

Creating a will helps you plan for and protect your future.  If you already have a will prepared, you should periodically review it to see if any of the information has changed that would require an amendment or update. Here are some events that could occur that might impact your will:  the beneficiary named in your will has passed away; a new birth or adoption has occurred that may require naming a new beneficiary; changes in laws that affect estate planning such as a tax law; changes to the executor, trustees or guardians; marriage or divorce; and incurring the loss of significant assets.

7) Retirement Plan

Have you experienced any life events such as marriage or a new job? You may need to adjust contribution amounts to accommodate any changes in employment, income, and family life events. Also, check if your employer matches contributions and ensure you are automatically contributing enough to maximize all employer matching.

8) Credit Report

Reviewing your credit report yearly can help you be more aware of what accounts you have on your report, help you detect inaccurate or incomplete information, and help you have a good understanding of your current credit position. Whether you are preparing to buy a new home or car, staying up to date with your credit scores can help prepare you for the future.

Unsure about how much life insurance you and your loved ones need? Click here to calculate your needs. Need help reviewing your life insurance or annuity policy?  Contact us today at (800) 843-5755


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