Spring cleaning isn’t just for your home, you should also consider doing the same for your “financial house.”
While daylight saving time is a yearly reminder to change the batteries in your smoke detectors, tax season should serve as a reminder to update your financial documents.
Getting Started:
Gaslowitz Frankel partners Robert Port and Craig Frankel say the first question someone should ask is — Do I have a Will and Power of Attorney in place?
If the answer is NO, you should consider the following:
When choosing someone to act on your behalf financially and legally, Laura Akins with Nadler Biernath LLC recommends, looking for someone who has “business common sense.” According to Akins, that means knowing when to consult a professional, knowing when to delegate, and being a financially ethical person. “Part of spring cleaning is setting up those documents and really thinking about who you want to put in place for your different designations,” said Akins.
Making Changes:
If you already have those documents in place, you may want to consider tidying up a bit.
Take a look at your current family situation and assess any changes that have taken place. Did someone pass away? Did you get a divorce?
Financial Advisor Bradley Hilton shared some of the most contentious family issues he’s witnessed. “They often occur when a couple divorces and they do not update their financial information. It can create a situation where everything is passed down to the ex-spouse and the new family is left with nothing.”
Remember, insurance companies follow the beneficiary designation on the Will. The fact that you were divorced doesn’t mean anything, it’s what’s on paper that matters.
Making Access Easy:
Once your documents are complete, it is important to keep them in a secure place where the right people can find them. A great solution is buying a fireproof safe for your home. If passwords are required, consider making a list of all the passwords your Beneficiary or Power of Attorney may need in the future.
Budgeting:
Spring cleaning your financial house isn’t just about updating your information for the long term, it is also about the present.
Consider designing or updating your budget to match your current needs. It is as simple as taking a look at the numbers, money in and money out. “People often spend more money than they think,” says Hilton. “A financial professional will ask you the right questions about your lifestyle and goals. Your budget is the backbone to achieving them.”
The DIY Approach:
If you prefer to tackle your budget on your own, there are several online resources available as well. Hilton recommends websites like Mint.com or YNAB.com (You Need A Budget). Resources like these allow you to categorize your purchases using bank statements. They give you an idea of where your money is really going.
Keep in mind, spring cleaning your finances does not have to mean a total overhaul every year. Just like cleaning your actual home, you can decide what should be done now and what can wait until next year.
Want to hear the whole conversation? Check out our Wealth Matters Radio Show. The show airs live on the 4th Wednesday of every month at 8:30am on Gwinnett Business Radio X.
