Your personal finances are healthiest when they’re reviewed often. Here are 8 top priority items that you should be reviewing at least annually.
- Credit Reports
By law, you are entitled to access your credit report from each of the three reporting bureaus (Experian, Transunion and Equifax) once per year. It is crucial to review these to ensure a few things:
- A – That your current and creditors are accurately reporting on your credit file
- B – There is no fraudulent use of your personal information
- C – If errors are present, you can correct them in a timely manner
Your credit reports are viewed not only by future creditors you may do business with but also by your service providers. Credit history is like your report card of your past performance and can play a role in what you end up paying for services like insurance.
I recommend annualcreditreport.com to safely check your credit reports. There are options to pay for your credit score through each bureau, but know that you do not have to pay a fee in order to review each bureau’s file on yourself.
Update: Annualcreditreport.com is now offering free weekly reports through April 2021 to ensure you have access to your credit during the COVID-19 pandemic.
- Insurance
On at least an annual basis, you should review your insurance policies. Visit with your Insurance Agent to see if there are new programs which you may qualify for, that you are not over/underinsured on your property and ask if there are any additional ways you can be saving money. I also recommend having that conversation with at least one other agent/company as well. Provide them with your current policy and see what they can provide in return.
- Negotiable Bills
Negotiable Bills? Yes! Many of our monthly services can be negotiated! Think about your TV, Internet, Phone, etc. and check in with your service provider. Does your employer offer a discount through you service provider that you’re not taking advantage of yet? Is there a new service provider that can offer you something even better for even less?
- Retirement Accounts
If you haven’t yet, I highly recommend finding a Financial Advisor. Financial Advisors can help you determine how to best fund your future and make sure that your invested funds are working as hard as possible for you. Once you have an Advisor, make sure you review your performance at least annually with them. The market is ever changing and a great advisor can help you grow with those changes.
- Paycheck Deductions
While I recommend that you should review each and every paystub for accuracy, especially if you are paid hourly/overtime/variable rates, you should also be reviewing your deductions at least once per year. Questions to ask yourself include:
- Am I withholding the appropriate amount for taxes?
- Am I taking advantage of my employer’s retirement plan match?
- Should I be saving more for retirement?
- If you contribute to a Health Savings Account, have you fully funded your HSA for the calendar year or should you be contributing a different amount to your account?
- Does your employer offer the ability to deposit into multiple accounts for each payroll? Can you take advantage of that and save a specific dollar amount/percentage from each check to be deposited into your savings account?
- Bank Accounts/Account List
After seeing hundreds of messy probate/estate cases in my decade long career in banking, I borrowed this great trick from my grandpa. To stay organized, he had a document that he updated yearly. That document included:
- The name of the institution he banked at/held assets at
- The account number and ownership (joint account, individual retirement account, etc)
- Beneficiaries
Seems simple right? As simple as it is, it was an absolute lifesaver when he passed and we had to manage his estate. I can’t tell you over the years how many tens of thousands of dollars I’ve seen become Unclaimed Property never seen by an estate’s beneficiary. I also include on my Account List where our Life Insurance Policies are held and the amounts for each of those policies.
If You’re a Homeowner, Escrow
If you personally manage your escrow, review your tax and insurance payments over the course of the next year. Is there enough set aside to cover the next year’s expenses? If not, make a plan to fund your escrow savings each paycheck rather than scrambling to come up with large payments a few times a year.
Goals
Last, but certainly not least, make a point to review your goals as often as possible. Review your financial habits to see if there’s a way that you can achieve your goals sooner. Split your large financial goals into smaller, more manageable mini-goals and celebrate when you hit your goals! We are all human in nature and we love to be rewarded so don’t forget to celebrate your successes too!
Have you made it a habit to review your personal finances at least annually? Is there anything additional you review annually? I’m excited to hear what you do differently that works great for you!