There are only 31 hours until the New Year and a new opportunity to make sure your finances are in shape to help you reach your life goals. The beginning of the year can be a great time to take stock of your financial health because it is an easy date to remember. So start a new tradition and use the first of the year as your financial check-up date. Below is a list of some areas to review and make changes if necessary.
- Your credit report. Visit annualcreditreport.com and request your free credit report from each one of the major credit reporting agencies; Experian, Equifax and TransUnion.
- Analyze your auto insurance coverage to make sure you are getting the best deal and that you are adequately covered.
- Check your savings and investment accounts. Make sure you are taking full advantage of employer matched savings programs and check the diversity of your investment portfolio. If you need help with investments, talk to a certified financial advisor.
- Determine your net worth. Make a list of the value of all of your assets and the amount of your liabilities. Then subtract your liabilities from the assets. If the number is negative, you owe more than the value of your assets. If part of your debt is unsecured look for ways to reduce it or eliminate it as soon as possible. Every dollar that goes to repaying interest on unsecured debts, like credit cards, is a dollar you cannot use for securing your financial future, buying a home or meeting your personal financial goals. Certified Credit Counselors can help you determine your net worth and develop plans for managing your debt. Visit the Association for Independent Consumer Credit Counseling Agencies at www.aiccca.org to find a counselor.
- Once you know the worth of your belongings and investments, determine the level of home or renters insurance you may need.
- Finally, evaluate your need for life insurance. MSN Money has a great calculator you can use to determine how much life insurance would be necessary if something happened to you.
The above is just a bare bones list of items you should evaluate on, at minimum, an annual basis. By reviewing these critical areas you will have the information you need to create a plan for your financial success!