A financial check-up is as important as a health check-up. Previously, we have learned several items to put into account when doing a financial check-up. These are more points to put in your financial check-up list to help you in becoming a better person in money management!
Retirement savings check-up
First, check whether your company provides you with a retirement plan or not. If yes, evaluate your work performance. Try if you can get an employer-sponsored retirement plan. If not, try to apply for a traditional or Roth IRA (Individual Retirement Account). IRA helps individuals to direct their pre-tax income straight to investments. Furthermore, consider changing your investment’s risk tolerance as you get older. Investopedia suggests putting at least 15% of your pre-tax income into retirement savings.
Other savings check-up
Recap other savings’ progress. Is your emergency fund enough to cover 30 to 90 days of living expenses? How is your college savings or vacation funds going? Is there any unexpected spending in the upcoming months? Take some time to look at the available interest rates. Who knows, there might be a higher-yielding account for your savings.
Taxes review, a critical point of a financial check-up
Taxes could affect your savings a lot. Investopedia quotes that The Internal Revenue Service (IRS) suggests taxpayers hold a paycheck check-up manually and report any irregularities as soon as possible. Self-employed freelancers and part-timers should also calculate their quarterly estimated payments. Also, keep your tax document records in one place. You might want to take it to a tax planner or financial advisor to plan a tax strategy.
Managing your insurance on a financial check-up
Insurance is interchangeable. Make sure your insurance is the appropriate amount. Whether it is life insurance, homeowners or renter’s insurance, even flood insurance, apply for what you need. If you already signed to several insurances, re-evaluate them. Investopedia even recommends to switch companies or raise deductibles on home and auto policies to lower premiums. Moreover, check for other insurance companies. Some of them give you cheaper bundling policies.
More to your financial’s future: estate plan
Having your own estate plan won’t hurt. However, try to hire a professional in making your will or trust. You certainly don’t want to violate the applicable state and federal laws. Grant your power of attorney to executors or trustees that clicks with you. Talk with your beneficiaries until you are satisfied with the deal. If needed, Investopedia recommends to assess your living will or other advance directives.
