The Second New Year: Personal Finance Review

Back-to-school season tends to have a “new year” feel. I think this is because we are returning to schedules and routines and preparing for winter. Even if you don’t have kids in school, something about the Fall makes us want to check in with our goals and finish the year strong! Life is busy, and it can be hard to remember to check in and do a personal finance review. I will outline a few helpful items to review regularly in this article.

Personal Finance Review & Check-In

This certainly isn’t an all-inclusive list of personal finance items to review. However, I hope it serves as a way to begin reviewing & checking in on your finances and goals.

Insurance

• Open Enrollment: For many of us, the Fall is the time of year for open enrollment at work. It is the time when you can make changes to your benefits package. Thinking through your needs now will set you up for success when your enrollment window opens!
  • Health Insurance: Evaluate your health insurance options and which one makes the most sense for you and your family. You can use the data on what you spent on medical bills this year and how often you went to the doctor to help you determine the best plan.
    • Remember that if you enroll in a high-deductible health plan, you will have access to a Health Savings Account (HSA). HSAs are a fantastic way to save for your medical needs now and into retirement. Remember that with a high-deductible health plan, the premium will be cheaper, but you will pay more when you go to the doctor (at least until you meet the deductible), so you must be prepared to cover those expenses.
  • Disability Insurance: If you don’t have long-term disability insurance, it is important to see if your employer offers it. There will likely be a cost, but if something happens that makes you disabled and unable to work, you will be happy you signed up for that coverage.
  • Dependent Care FSA: Not all employers offer this, but if yours does and you have kids in daycare or preschool, it may be beneficial to look into utilizing it. A Dependent Care FSA is an employer-provided benefit that allows you to contribute pre-tax money from your paycheck to an account that can be used to cover eligible childcare expenses.
• Home/Auto/Umbrella Insurance: If you haven’t shopped for your insurance with an independent agent in a while, it is always a good idea to do so. Even if you are happy with your agent and insurance carrier, take a few minutes to review your coverage to ensure it is sufficient.
• Life Insurance: If people depend on you for income, it is important to have life insurance. Having it through work can be an incredible benefit. However, it is also nice to have coverage outside of your employer. If something makes you uninsurable, the life insurance outside your employer will remain in place. On the other hand, the coverage from your employer will likely end when you leave.

Legacy Planning

• Will or Trust: If you don’t have a will or a trust, consider knocking that off the to-do list this Fall. You will be so thankful you did and will relax knowing that your final wishes are clear and in writing.
  • If you have a will or trust, review it and make sure it is up to date.
• Create a “legacy file”: A fireproof and waterproof safe is an excellent place to store all of your important documents. These can include things such as your will or trust, insurance documents, investment statements, car titles, and life insurance documents.
• Beneficiares: Does your life insurance, investment accounts, etc, have beneficiares listed? It is essential to review this regularly to ensure it still matches your wishes.

Adjust Your Financial Priorities

As your life changes, it is important to ensure that your budget matches your stage of life and priorities.

• Redirect Expense: If you had a child in daycare or preschool and they are now in Kindergarten, you could consider reallocating that money. Putting it in a 529 or UTMA could be a great move. You are already budgeting for it, so it’s a simple shift from an expense to investing. That could significantly impact your finances in the long run.
• Future Planning: If you have kids starting college soon, your child(ren) getting their driver’s license is on the horizon, or you are looking to retire or switch jobs, planning ahead will create clarity and confidence. A financial plan is a perfect way to look at your financial picture today, account for all of your goals, and see what (if anything) needs to be done so you can accomplish those goals. I would be more than happy to create or update a financial plan for you! Please feel free to contact me or schedule a meeting with me here.

One Step at a Time

You may look at this list and get overwhelmed, but I encourage you to take it one step at a time. Add the most important thing to your to-do list, and once you have that done, move on to the next.

On the other hand, maybe you have all of these things in place. That is great! I would recommend that you review them to ensure they are all still up to date.

Once you have all of these in place, it takes much less time to check in and review them.

If you have any questions or need anything at all, I am always happy to help!