With all of the online banking tools available today, if you’re not taking advantage of automatic deposits to savings accounts and automatic bill pay, this is something to do right away. The old adage of “pay yourself first” becomes seamless when you automatically have money transferred from your checking account to your savings account on pay day. When the money isn’t there, you won’t miss it. Setting up automatic payments for those bills that are the same every month saves you time and ensures you never miss a payment. You might not want to automate those bills that have the ability to overdraft your account, such as credit card bills or energy bills.
Check your withholding
Spring means tax season, and if you’re getting a big chunk of money back from the government, it’s a good idea to review your withholdings to achieve a better balance between retaining as much of your paycheck as possible, without owing a lot of money at tax time. While some people appreciate the instant savings a big refund gives them, you could reduce your withholding, increase automatic savings, and earn interest on that money instead of giving the federal government an interest-free loan.
Create a home inventory
If you had a loss in your home, would you be able to recount all of your possessions? If you could remember them all, would you be able to recall what you paid for them? Most people can’t. Taking an inventory of your possessions has never been easier. Walk around your home with a video camera or a digital camera and keep a corresponding list of how much these items cost. If you do a video, aim for something that is one-hour in length. Save receipts for big ticket items, or take photos of them. Save all your files to a folder on your computer, upload it to a cloud account (i.e. Google Drive, Dropbox), or better yet, do both. Update your inventory every 2-3 years.
Check your coverage
Once a year, or after every major life change (marriage divorce, kids driving) or home improvement, check your homeowners and auto insurance coverage to make sure that it’s still adequate. For example, after updating your home inventory, you may realize that your current homeowner’s insurance policy is no longer adequate since you turned your basement into a game room.
Create an ICE folder
If you were no longer able to manage your family’s finances, would another family member know where to pick up? An “In Case of Emergency” or ICE folder contains all of the information someone would need to manage your finances. Include a list of all the bills you pay each month and their due dates, as well as the account numbers, user IDs, passwords and websites someone would need to pay those bills. Also include investment and retirement fund information. If you don’t want to create a hard copy ICE folder, create a folder on your computer or laptop with an inconspicuous name and make sure a family member knows where to find it.
Invest in a portable, fire resistant, waterproof safe to save hard copies of all of your important documents, including marriage and birth certificates, social security cards, insurance policies, investment account info, and a hard copy of your ICE folder.