Year End Financial Checklist

Year End Financial ChecklistCan you believe we are near the end of the year already?

Time flies and I am sure that if you are like me,  you are looking forward to the holiday celebrations and some well deserved rest.

However, before the year runs out, I wanted to give you a year end financial checklist.

The great Zig Ziglar said: “It’s true. Spectacular preparation precedes spectacular performance.

These actions will help you prepare to  start the new year on the right foot with your finances:

1. Check your Credit Report

Have you checked your credit report lately? This is something you should do at least once a year.

According to the Federal Trade Commission (FTC):

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy.

Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

So take the time to request a copy of your credit report.

  • You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to:
    • Annual Credit Report Request Service
    • P.O. Box 105281
    • Atlanta, GA 30348-5281
  • Get a report from each one of the agencies.
    • They are supposed to cover the same information but there can be differences.
    • In some cases entries in one report will not show up on the other reports.
  • In case you cannot get a copy of your report from the online website, proceed with the phone call or complete the form to request via  mail.
    • Just make sure you get your hands on that report.
    • If I had done this, I would have taken the steps to correct the problem before starting the mortgage refinance.
  • Review your report for any inaccurate entries.
    • Keep in mind that only entries that are inaccurate can be removed from the report.
    • Don’t fall for scams that promise to “clean-up your credit”.
  • If you find any inaccurate entries, contact the appropriate credit reporting agency.
    • Send a letter via certified mail, return receipt requested detailing the inaccuracies.
    • Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.
    • Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days.
    • Additional information can be found at the FTC website.

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2. Assess Your Insurance Needs

As you work on your financial plan, I also want you to consider the need to manage the risks to your finances by evaluating the role of insurance in your financial plan.

What is the role of insurance? In simple terms, insurance is the tool that is designed to protect you and your family against what might happen.

Ensure you have the right type of insurance and the right coverage to protect your financial plan.

3. Check Your Retirement Plan

Understand how your plan is progressing and make adjustments as needed.

Even with all the focus on personal finances today, planning for retirement is one area where we continue to come up short.

The good news is that you can do better than average. Seven years ago, I was part of those statistics but now I have a plan that is yielding good results.

Here is how I am preparing for retirement.

4. Prepare a Will

Do you have a will? If not, you are among 50% of Americans with children who have neglected this important step.

So what are some of your reasons for not dealing with this issue? You might think it is costly (it is not), or complex (it is not), or that simply you don’t have anything to leave to anyone so you don’t need a will (oh but you do).

Or you might just not want to think about your own mortality.

However, the reality is that we will all face death and the sooner you face that fact, the better off you will be.

So here are the 3 Reasons you should prepare a will:

  1. Because it puts you in control:
    • If you die without a will, the state takes over deciding what happens with your property.
    • The state already has too much say in what happens in our private lives.
    • There is no wisdom in leaving the disposition of your assets to the government.
  2. Because it is simple and cost effective:
    • You don’t need a high priced estate lawyer to do this. For most of us it is really a simple process.
    • Personally I used an online service that provided my wife and I with the required state specific forms for our wills.
    • It just took a few hours and less than $50 and we are able to put our last wishes on paper.
  3. Because it shows love for your family:
    • Imagine if something were to happen to you. In the midst of the grief and sorrow of losing you, your family also has to deal with the legal ramifications of what to do with your assets.
    • Don’t leave a problem behind. Love your family to the end by taking care of your will preparation today.

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5. Get on a Budget

I have always told you, the budget is the key to your financial success.

If you can’t control your money, you can’t build savings, you can’t pay-off debt, you can’t plan for the future.

Make 2015 your best financial year by starting to get control of your money today!!!

What other steps could you take this month to help you make progress with your money in 2015?

7 Principles For Financial Success

How are you building your financial household? Is what you are doing working? Do you see positive results?

Our family has been on a financial transformation journey for a little over 9 years now and I have had some time to reflect on how far we have come.

We have experienced the rewards of applying God-given, time-tested principles for winning with your finances.

I wanted to share these 7 Principles for Financial Success with you today because I firmly believe you too can win with your money if you are diligent in applying them.

If you want to know more, you can check my e-book in which I share more about how these principles have changed our lives.

If you are winning with money, I would love to hear how have you applied these or other principles to succeed. Share those blessings with others!

“The law of the Lord is perfect, restoring the soul; The testimony of the Lord is sure, making wise the simple.”
Psalm 19:7

7 Principles for Financial Success

Life after Debt: Building Up Your Financial Household

House under Construction

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 By wisdom a house is built, And by understanding it is established;
And by knowledge the rooms are filled with all precious and pleasant riches.
Proverbs 24:3-4 (NASB)

Last week I began a short mini-series on what happens after you get out of consumer debt. I wanted to discuss where you need to apply all that energy and focused intensity you used to get out of debt.

If you recall, I equated a financial wellness, as a journey in three stages that are analogous to the building of  a home: laying down a firm foundation, building up your financial household, and letting the trees grow.

Today I want to cover stage 2: building up your financial household. After you get out of debt your next step, to strengthen your financial position. You want to focus on increasing your savings and managing the risks to your finances.

Savings

Savings fall in three major categories: emergencies, large purchases, and wealth building. Just like when you are building a home, some rooms will have higher priority than others. In the list below, I would personally pay initial attention to items 1 & 2.

  1. Increase your initial emergency fund ($1,000) so you can cover 3-6 months of your monthly expenses.
  2. Start saving for retirement (15% of your annual household income) and college expenses if you have children.
  3. If you don’t own a home, this might be a good time to start saving for a down payment that will cover 20% of the purchase price. If you own a home maybe it’s time to save for that renovation project you have been putting off for a while. Or you could start paying extra on the mortgage principal so you can retire that mortgage earlier.
  4. Is it time to replace one of your vehicles? Well, start saving now so you can buy a nice, reliable, used car with cash a few months from now. Stay away from car loans and car leases. Remember, the name of the game is to stay out of debt.
  5. How about saving money for some fun? You know, the financial wealth journey has to include some stops for fun and rewarding your hard work. You don’t have to wait until you are in your 80s for that cruise around the world. How about saving for a short weekend getaway or a 2 week vacation? And don’t forget about saving for Christmas!

 

Risk Management

The skill of managing risks is essential because life happens. We don’t’ control many things that happen to us, but we can control how we prepare for them.

  1. Review your insurance needs. It’s time to make sure you are prepared for what might happen. You need to properly transfer that risk to someone else via the wise use of insurance.
  2. Prepare a will. We all come into this world with a limited time. You need to be sure that you leave accurate instructions for your loved ones when your time comes.
  3. Get into the habit of checking your credit report with regularity. Each of the 3 Credit Bureaus is required by law to provide you with a free copy of your report every year. You could end up with 3 free reports each year (one from each bureau). Pay attention to your financial reputation.

 

 Question: Where do you need to put more focus today on your finances, savings or risk management?

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New e-book Now Available: 7 Principles for Financial Success

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My e-book, 7 Principles for Financial Success” is now available for purchase on Amazon for $2.99. The book is also available in Spanish (“7 Principios para el Exito Financiero“) for the same price.

In this book, I am sharing with you the 7 God-given, time-tested principles for succeeding with your personal finances. Giving you the what, why, and the how for winning with your money. Please share this great news with your friends and family and thank you for your continued support!

Click on the pictures below to go to the Amazon site for each version and enjoy!

7 Principles for Financial Success Cover SM

Cubierta para 7 Principios para el Exit Financiero

Reducing the Risk To Your Financial Plan: 7 Required Types of Insurance

7 Required Types of InsuranceAs this year winds down, it is the perfect time to start planning for the new year.

You might be thinking of setting goals to gain control of your finances by getting on a budget, saving more and getting out of debt.

As you work on your financial plan, I also want you to consider the need to manage the risks to your finances by evaluating the role of insurance in your financial plan.

What is the role of insurance? In simple terms, insurance is the tool that is designed to protect you and your family against what might happen.

When you have the right level of insurance coverage in place, you are transferring the risk to another entity (an insurance provider) and you pay a premium for that risk transfer.

7 Required Types of Insurance

If you think about it, insurance works like an umbrella works when it rains. The umbrella does not stop the rain, but it keeps you from getting wet.

Likewise, having the proper insurance won’t stop an event, but it will help you weather the storm and minimize the impact to your finances. So what types of insurance do you need?

1. Home Insurance/Renters Insurance

Your home is your most valuable asset so you need to ensure it is properly covered.

Be sure that you review your policy on a regular basis so the coverage you have stays in step with the value of your home.

Another option is to look for a policy that provides “guaranteed replacement cost” for your home.

This type of coverage is rare these days but you should still look for it. If you are renting, you also need to have the proper coverage on your assets to cover against the loss due to theft or fire as an example.

2. Auto Insurance

You should have both liability and collision coverage on your vehicles.

Having at least liability coverage is a legal requirement in the U.S.

3. Health Insurance

This is one of the most critical areas to have the proper coverage. Medical bills are consistently a leading cause of personal bankruptcy.

In order to save in your premiums, you can increase your deductible and/or co-insurance amounts.

You should also evaluate if a Health Savings Account (HSA) might be a good option for you.

The HSA is a tax-sheltered savings account for medical expenses that works with a high deductible insurance policy.

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4. Long Term Disability Insurance

This is the type of insurance that would replace your income if you were to be disabled from working for an extended period of time.

The best deal in this area is when it is offered by your employer at a discounted rate.

You need to look for a policy that is designed to replace 65% of your income.

5. Identity Theft Insurance

Identity theft is one of he fastest growing crimes in the U.S. Over 200 million people have had their identities compromised in a data breach since 2005.

The best type of identity theft coverage not only monitors for identity theft but also assigns a counselor/specialist to deal with the restoration services on your behalf.

If your identity is stolen, the biggest and most time-consuming problem is dealing with creditors to restore your good name.

6. Life Insurance

If you have anyone depending on your income, you need to make sure they will be taken care of in case something happens to you.

The recommended coverage amount is 8 to 10 times your annual income.

The preferred option is to have 20 to 30 year Term Life insurance. It is a less expensive option than Cash Value or Universal /Whole Life type of insurance.

The industry is very competitive so if you are healthy you should be able to get great coverage for a great price.

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7. Long Term Care Insurance

This is the insurance that would pay for the expenses in a retirement home, at an assisted living facility, or for in-home care.

These expenses are very high and if not covered could quickly eat through your retirement nest egg. 69% of people over the age of 65 will require long-term care at some point in their lives.

You should put this insurance in place for yourself as soon as you turn 60 years old. Be sure to include a cost-of living rider and that the pay-out period is “until death“.

So, how well covered are you? Do you understand the risks to your household?

What do you need to do today to reduce the risks to your finances? Review your insurance position today!