Getting in Shape... Financially

Happy New Year, Peoria women! And as the new year begins, we have to make our resolutions, right?

How would you rate your physical fitness? If you’re like many of us, you probably think there’s room for a little improvement. Can you say the same about the state of your finances? Here’s a five-step financial action plan to help you start the year off right.

Step One: Make a list and gather your important papers, like deeds to property, tax records, bank and brokerage account statements, birth and marriage certificates and other identification papers. Once you have gathered these, decide what you should put in a safe deposit box at a bank, in a fireproof box or safe in your home or file with an attorney. The objective is to have an organized system that you review and update once a year.

Step Two: Consider the unexpected. Sit down with your financial professional and insurance specialists to review all of your insurance coverage, from life and liability to home and auto to long-term care and disability. Make sure you understand what you actually have versus what you think you have. Use the time to discuss what you’re likely to need in the future and evaluate costs for the coverage.

Step Three: Inventory your belongings. To start, walk through your home, room by room, and make note of valuable items. Write down their years of purchase, original prices, current estimated values and serial numbers if applicable. For items such as jewelry or art, it’s a good idea to have them appraised to establish their value. To supplement your written inventory, photograph those items at close range, turning over pieces such as china or silver to show the hallmark, manufacturer and pattern name. Consider videotaping each room, as well as other parts of the house, such as hallways, attics and garages.

Step Four: Plan for tomorrow. If you don’t already have one, draw up a will and establish other estate-planning essentials, such as a living will, health care/medical directives, durable power of attorney and trusts. Consider the potential consequences when choosing your executor and trustees, as well as how you will communicate those decisions to your family. If you already have your estate in order, remember to review your plans regularly, and update beneficiary designations on all your accounts and policies.

Step Five: Check your financial alignment. When was the last time you sat down with your financial professional for an indepth look at income, living expenses, debts, savings, investments and how close you are to your financial goals? Invest some time to evaluate the ins and outs of your cash flow, review your shortterm, mid-term and long-term goals and determine whether your current expenditures and investments are aligned with those goals. Make reviewing and adjusting your plan an annual activity.

Financial fitness takes effort, discipline and collaboration with people you can trust. Talk regularly with your financial professional about your state of affairs and exercise your access to online tools and resources.

You don’t have to divulge your weight or shoe size, but be sure to tell your financial professional the following:

1. Any assets that he/she is not aware of. Your financial professional needs to know your full financial picture, including all real estate holdings, outside investments accounts, 401(k) plans with former employers, art collections, etc.
2. Your short-term cash needs. Whether you’re planning your daughter’s wedding or a hot air balloon excursion, share your plans early so that you have access to cash when you need it.
3. If you don’t understand something. Don’t hesitate to ask for clarification on terminology, graphs or financial concepts you don’t completely comprehend.
4. Changes in family structure. Reveal any births, marriages, divorces and deaths in your family which may impact your financial strategy and estate planning.

Remember, the better we understand your current financial status, the better we can help you work toward your goals. TPW