Are You Making Checklists?

Check lists are a great way to stay organized each day, and are a great way to avoid "A.D.D." A checklist is also a good approach to kick start your financial plan. Start out with a simple list of broad categories: debt management, cash reserves, retirement planning, estate planning, tax planning, insurance, and long-term investments. Within the broad categories drill down deeper into your specific needs.

Debt Management - When was the last time you re-financed? Have you consolidated student loans? Track your expenses if debt repayment is an issue for you.
Insurance - If you have a family, make sure to have life insurance and disability insurance to replace income should something happen to you. Get a Personal Liability Umbrella Policy to give liability coverage above and beyond home owners and auto insurance. If you medical issues, check your maximum "out of pocket" expenses in your major medical policy.
Retirement Planning - If you are in your working years, contribute the maximum you are allowed to your retirement plans. "Save and invest. Save and invest."
College Planning - Take advantage of tax deferred growth in a 529 college savings plan. Qualifying educational expenses will be paid tax free. No capital gains.
Employee Benefits - Take advantage of your employee benefits such as Flexible Spending Accounts and Employer Matching.
Estate Planning - If you are ALIVE meet with an estate attorney, who will review an estate planning checklist.
Long-term care insurance - If you have accumulated assets over $700k, look into long-term care insurance as an estate planning tool to protect your nest egg should you meet long-term medical care.
Invest in a diversified fashion - Know yourself and invest according to your risk tolerance and comfort levels. But avoid getting too conservative. If you place too much of your money in cash or bonds, you run the risk of losing purchasing power over time to inflation.
Taxes - If you are a business owner, work with a CPA to efficiently manage your tax issues. If you are an individual, also work with a CPA. The tax code is complicated!

It can be overwhelming out there, but it does not have to be. Starting out with check lists can reduce the stress and anxiety involved with getting your finances organized.

Reasons to Have an Estate Plan

1. Get a will. Dying without a will is referred to as "dying intestate," which means you gave up the opportunity to distribute your assets as you would have liked. Instead, the state (through probate court) gets to figure things out for you. It's quite possible all your assets may not pass to your spouse and children as you would have intended.

2. Name a guardian for your minor children. If you have young children, you need to consider who will care for them should something happen to you. Do you really want a judge-appointed stranger to make those decisions?

3. You also need a medical directive and a durable power of attorney. These documents apply if you become disabled and cannot make decisions on your own for basic expenses like your mortgage and other monthly bills. A power of attorney lets a friend or family member do that for you. Your medical directive allows another person of your choice to act on your behalf, honoring your preferences.

4. Think of your heirs. Without proper planning, your heirs will have to deal with probate court. If you own real estate in several states, your heirs will have to deal with probate in each state. The process involves long delays and high legal costs. It is also public information. Fortunately, you can avoid all this with a revocable living trust.

If you haven't done any estate planning, set up an appointment with an estate attorney soon.