Take the time to put your financial house in order
By KEN MORRIS
Special to The Oakland Press
Sunday, December 27, 2009
Hopefully, Santa was good to each and every one of you and your families. Historically, at the end of the year, I like to encourage everyone to do two things. First, review the year on which we’re about to close the door. And second, set your financial goals and objectives for the upcoming year.
However, this year with the Michigan economy in turmoil and many families still in the recovery mode, I would like to slightly amend my suggestions for the upcoming year.
Don’t get me wrong. It’s always prudent and important to set your financial goals and objectives. If your finances are stable enough, by all means update, prepare and implement your financial plan. But it’s a fact that many families have had significant financial changes in the last year. That’s why I believe virtually everyone needs to get back to basics and create their own financial “to do” list.
Such a list tackles all the issues you need to address to get your financial house in order. For example, many automotive retirees who thought they had significant amounts of life insurance forever were shocked when their company suddenly changed the definition of forever.
Consequently, they’ve had to do some scrambling to get their house in order. They’ve had to determine how much additional life insurance they need to compensate for the amount they lost when their benefits were so abruptly changed.
Believe it or not, 2010 is the year of the tiger. And just like the Tiger making all the headlines, everyone needs to get their lives straightened out and their priorities properly established.
Hopefully, the following suggestions will help get your financial house in order in 2010:
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Review all your insurances, including life, health, disability, long-term care and casualty. Insurance is not an exciting topic, but it’s one that cannot be ignored. Certainly, price is important with insurance, but equally important is the integrity and financial strength of the company you choose.
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For example, the definition of “disability” in a disability policy is critical. And in today’s world of financial uncertainty, I think it’s also a good idea to have an umbrella policy that’s coordinated with your homeowners’ and automobile insurance.
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Review all your debts, from credit cards and mortgages to auto loans, boat loans or any other long-term obligations you may have. The rates and terms of your loans are important. You need to keep them under control.
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Get your legal affairs in order. Don’t just have a will; keep it up to date. Perhaps establishing a trust might suit our needs. In this category, I would also include taking measures to prevent identity theft. It’s definitely a growing problem.
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Monitor your savings and investments. Do you have adequate cash reserves? Do you have an investment goal? If so, do you have a plan to achieve it?
It’s a simple list, and seeking the answers can sometimes be confusing and time consuming. Nonetheless, these are some basic financial fundamentals that should be addressed in 2010.
The past few years have been trying times for many families. In order to survive in this financially volatile world, it’s going to require some time and effort. But it can be accomplished. I wish you all good fortune and a happy and prosperous new year.