Are you ready to kick off 2018 with a better financial you? Do you want to set aside your spending ways and educate yourself on money matters.
Have a will prepared, or update the will you have now.
Spell out where you’d like your assets to go after your death.
If you die without a will, your assets will pass to various parties under state law. That outcome probably won’t reflect your wishes.
Some people transfer assets into a trust during their lifetime. The future of those assets will be determined by the terms of the trust, not by your will.
But you still should have a will, to cover assets not moved into the trust. Treasured articles can be bequeathed to certain heirs, in a will.
You also can use a will to name someone to administer your estate. And to name guardians for your children, if they’re orphaned as minors.
Look into your insurance policies.
Checking your life insurance is vital after “life events”: a birth, a death, a marriage, a divorce, a remarriage, a new grandchild, etc.
After a divorce, say, you might not want your ex-spouse to remain as beneficiary of your life insurance. Scan your home and auto insurance as well. You’ll want ample liability coverage to protect your assets.
Ask your agent whether you need flood or earthquake policies. Those perils may not be covered by homeowner’s insurance.
Yet they can pay off in worst-case scenarios. We certainly saw plenty of them in 2017.
Get over being afraid of the stock market.
The stockbroker your parents used for years may be a great guy, and perhaps even a family friend who danced at your wedding. But is he necessarily the right broker for you? Learning how to invest your money is an important skill, and your fear may be based simply on the idea that you don’t know how any of this investing stuff works. The thought of just handing over a chunk of your hard-earned money with no guarantee of it growing is understandably terrifying.
The way around this is education. A broker is the intermediary between you and the investing world. You pay a fee for the broker’s advice and access to his knowledge and recommendations.
If you drive a clunker, don’t insure it like a Tesla. And if you’re married, don’t insure your car like someone who’s single.
If you’re driving an older car, paying for physical damage coverage (commonly called collision insurance) when you don’t have to may be a waste of money. For example, assume your car’s current value is $1,000, the same as your current deductible. If your car is stolen, the insurance company will reimburse you for the value of the car, minus your deductible ― in other words, nothing.
In an accident, you’ll be responsible for all repairs up to $1,000, and the insurance company will reimburse you for any repairs over $1,000, up to the value of the car ― again, nothing. By dropping your physical damage coverage, you can save some money on premium. Run the numbers yourself, or get help from an agent. Just remember that you are still legally liable for any damages you cause.
While no one gets married just to lower their car insurance rates, tying the knot does make you and your spouse less-risky drivers than single people in the eyes of your insurance company. Your insurer will lower your premiums, but first you need to report it to them.
You will likely be a caregiver, so start preparing for it now.
Caregiving is the life stage that occurs when parents or a spouse become incapacitated, and it’s increasingly recognized as something everyone should plan for financially. Yet few are prepared for its costs and complexities, noting that 75 percent of those contributing to the costs of care have not discussed the financial impact of doing so.
With caregiving staring at you from down the road, there is no better time than the present to do some advanced financial planning. First, talk openly with close family before caregiving needs arise. Where would they want to live? Who do they want to handle different aspects of care? What are their medical preferences and desires? How will they pay for health care expenses and caregiving needs? Don’t be afraid to seek professional guidance from a financial planner: When it comes to caregiving, you don’t even know what you don’t know.