Content Reviewed by: Dave Gormley • December.29.2019 Vertified Content
Dec 29, 2019 | Read Time: 4 minutes
Should you make a budget and track all of your spending to make sure you follow it? Sure, but is making a New Years resolution really going to make you do it? Probably just the opposite. Almost all New Year’s resolutions fail in the first few months of the year. My New Years resolution each year is to not make any New Year’s resolutions. And I suppose by making that resolution I’m actually proving that resolutions were made to be broken.
So rather than bother with making some grand Resolution to change how you handle your finances let’s just pull out your calendar and pick a day to set aside 5 or 6 hours to review your financial and legal affairs. We are all so busy dealing with the day to day matters that we rarely step back and look at the big picture. One of the first steps in a financial review is to make a list of your assets. The point of the review is so that at least once a year take a step back from cutting down that tree in front of you and take a look at the forest.
In this divided and conquer world even your spouse may have a retirement account that you have forgotten about. Also you may realize by looking at everything on one page that there is a more efficient way to diversify your holdings. Do you have a small retirement account divided up into various holdings resulting in maintenance fees?
Along with helping yourself get a handle on your affairs such a review could also save a friend or family member a ton of trouble if they ever have to step into your shoes and handle your affairs. How would they figure out what you have. The only thing worse than not being able to find anything is finding receipts and paperwork on every bank account and insurance policy someone has ever had.
When I became a lawyer I helped clean up my parents paperwork. We pulled out the tin box they kept under the basement stairs. About half of the papers were on old bank accounts and insurance policies they had closed. If they hadn’t been around to answer questions about those accounts I can’t imagine how long that would have taken to figure out.
Some of this project can seem pretty basic. But when is the last time you shopped your insurance. Are your wills and power of attorneys up to date? While these documents don’t necessarily have to be reviewed every year who is going to review these things every five years? My wife likes to joke about how I did our wills when our daughter was born. Only someone who went to law school would think right after the birth of their first child what happens if I die?
Well at that time my sister lived nearby with her husband and two kids so she made the perfect guardian. But years later her kids were off to college and she and her husband had just moved to California and were living in a condo. Time to update that will and pick another guardian. Now that my youngest is in high school it won’t be too long until I won’t need a provision in my will about who should raise the kids.
With all the hacks of personal information that occurred in this past year this would be a good time to make yourself personal information more secure. While there is no way to make yourself completely safe there are steps you can take. Maybe this is a good time to take a look at our guide How To Freeze You Credit Report.
If you are looking for a simple list of things to include in such a review take a look at our ebook “How To Do An Annual Review Of Your Legal & Financial Situation”. While you could probably come up with a pretty good list of your own at least use this book as a checklist to make sure you are at least covering the basics.
Once you have done this review then you can move onto changing your financial habits. For this see the “Financial Tools” page from the website our CPA Askey, Askey & Associates. The article on Budgets from this page is a great place to start if you are intent on making a resolution to change how you handle your finances.
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