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September 20, 2020

Time for your financial checkup

Everyone who owns a car knows that in order to keep it in good, running condition you have to do routine maintenance and wash it periodically. So what about your finances? Do you actively do annual maintenance on them?
As life circumstances change, so do your financial priorities. Before marriage you might have been concerned with only paying back student loans and beginning to save for retirement. But, if you marry and have a child, your financial plan needs updating.
The following are some questions to ask yourself as you prepare to do your annual financial tune up.
Is your estate plan up-to-date?
Your estate plan needs to be updated if you have undergone any life changing events. These events can include:
• A new spouse
• Divorce
• Birth of a child
• Reaching important milestones with your children such as you becoming a grandparent
In addition, make sure loved ones know where to find key documents such as your trust, will, life insurance, bank account information and investments. If you don’t have an estate plan, see an attorney and make one. You will be surprised by the peace of mind you gain from having one.
How is your life insurance?
Are your beneficiaries correct? Too often, people who buy life insurance forget to make it part of their financial tune up. Just as you would do with an estate plan, life-changing events need to be considered when reviewing your life insurance beneficiaries. Another factor to consider when evaluating your life insurance is if your income has increased. If it has, you may want to increase your life insurance so that in the event of your passing, your family can continue to enjoy the lifestyle you had provided for them.
Speaking of insurance – check both your auto and homeowners (or renters) insurance. If you want to minimize the risks, you might try lowering your deductible or adding an umbrella policy that pays when you have reached the liability limits of your insurance.
How are your investments doing?
It’s important to remember to regularly review the status of your investments even if you are satisfied with how they are doing. However, this should not be restricted to profit and loss. Instead, it may mean taking some investments from the growth stocks you purchased in your 30s and moving them to something less volatile as you approach retirement.
Renegotiate payments
Every month, American households pay monthly expenses that include:
• Cable
• Cell phones
• Internet service providers
It is amazing that as fights over consumers and market share increase, threatening to leave a supplier due to high rates may actually get you a better rate if you pay on time, all the time. But if you find that suppliers refuse to budge, make sure you do your research and use lower priced competitors.
Ditch high credit costs
Early in the first quarter is a good time to review your credit costs as the bills from the holiday season begin to come in. Credit cards are often high cost, and by using balance transfers with low introductory rates (or 0% interest) you can save major money.
Talk to your investment advisor
After you have conducted your financial tune up, schedule a meeting with your investment advisor so that you can share your goals for retirement and he or she can help you plan for leaving wealth to loved ones.

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