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4 Important Financial Resolutions for 2019

2109 resolutionsToday’s Struming is an oldie, but goodie, but always important to reflect on as we begin a new year, the final year before the 20s.

As we begin 2019, committing to resolutions are popular pastimes. The most popular one is our desire to lose weight. I am among the guilty. The gyms, weight reduction products, Weight Watchers spots, etc. slam us with messages in January about memberships and programs to help us in our ongoing struggles. Alas, by February 95%+ of us fall off the wagon. Better luck next year.

However…..

My suggestions for all us of us are easier, more accomplish-able and have far long lasting impact. If you follow this advice, you and your family will be the beneficiaries of these resolutions for years to come. These suggestions come in the form of important tasks that are mandatory for all of us, young and old. They are not cheery tasks, but ultra-important ones. So here they are:

1. Create a will

If you aren’t going to die, a will is not necessary. For the rest of us who will someday leave this earth, it is mandatory. You might say, “A will is not necessary. It’s all going to…wife/kids/person/charity/etc.”. Not so, unless you write it down. If you don’t have a will, the state will decide who gets what. Are you OK with that? In fact if you don’t have a will, don’t waste time reading the rest of this article. Stop here and get it done. Start by writing down your wishes and then you can get a lawyer to draft a simple document. (PS: Reread this document annually as well since circumstances and your wishes can change). And surely if your marital status changes or you have children/grand children this may change your wishes.

PS An important detail: your beneficiary designation on your 401ks/IRAs supersede your will. This is a really important detail for divorcees who forgot to change beneficiaries. This means your ex could be your beneficiary if this isn’t updated. That’s OK if that was your intention. But I suspect for most it is not. So pay attention.

2. Power of attorney with DNR provisions

What if you can’t make decisions for yourself? Who will do so? Do you want to be kept on life support? No? Then say so. You need to establish a health-care power of attorney with an explanation of how you’d like to be treated in case of incapacity.

3. Annual net worth calculations

OK it’s a little painful to do so right now because your 401k may have turned into a 301k in the last month. But no matter. Do the math. Include all asset items—savings, checking, investments, 401ks, IRAs, real estate etc. Include all liabilities—mortgages, loans, etc. In the end it’s simple math–Assets minus liabilities equals net worth. You might want to segregate long term retirement stuff (401ks, IRAs) from other investments. I suggest you chart his minimally once a year. It’s ok to do so more often. Measure your progress. What gets measured, gets managed.

4. A short-written document with all pertinent info

Phone numbers, people to call, documents in a single place. It’s critical to create a simple to do list. This should include real estate info, insurance policies, retirement accounts, etc–The whole shebang. I have a purple bucket in my home with all these documents. All family members know where it is, and on the top of the bucket is a simple 3 page document called. “If something happens…” Don’t make it hard for a bereaved spouse, child, other to try to sort through your documents.  Having a simple list of numbers, documents, people to call and things to do is one of the biggest gifts you can give your family if you have an untimely passing. Do it once and then it’s easy to update once a year.

You may not be able to lose weight in 2019 or get a big raise, or get a better job, but if you organize your finances properly, you’ll earn more while you are living and better provide for your family when you’re gone. That’s a resolution with lasting power.

Best wishes for a happy and healthy 2019 ahead.




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