Can Grief Become a Disability?
The beginning of the year is a good time to create your personal finance checklist so you can be smart about your money throughout the year. Being on top of your finances makes sure you prioritize financial security for yourself and your loved ones.
Today, we offer five things everyone should have on their personal finance checklist.
Five Important Must Haves on Your Personal Finance Checklist
A Personal budget
One of the most important items on your personal finance checklist should be your personal
budget. A personal budget is a financial plan which allocates your income toward expenses, debt repayment, savings, and retirement planning.
Without having a proper financial plan in place or being in debt can leave you stressed and uncertain about your future. Instead, if you understand your spending habits, you take control of your future and can begin to build your savings and achieve your financials goals.
If you don’t have a personal budget you can easily create one using free and simple online tools such as mint.com or budgetsimple.com.
A Simple Will
If you’re young and healthy, you may think you don’t need a will just yet, but the truth is it’s never too early to write even a simple one. A will is a legal document in which you give specific instructions to be carried out after your death.
No matter how young or old, anything can happen to us any time, sometimes when we least expect it. Therefore, when your time comes, it’s important to have things like who will take care of your children and how will your assets such as money and property be distributed documented.
Your will should include:
- List of beneficiaries
- Executor of the will
- Guardian for your children and pets
- Instructions for the distribution of your assets
Clearly stating your wishes in a will ensures that your loved ones are protected financially and otherwise after your death.
If you don’t have a will, now is the time to create one.
Saving for Retirement
Your personal finance checklist should include your plan for saving for the future. It’s never too early to start thinking about retirement even if you’re able to save only small amounts of money at this time in your life. Do your research and meet with a knowledgeable financial advisor to understand which savings vehicles may be right for you.
Debt Repayment
Your debt repayment strategy should also be a priority on your personal finance checklist. Begin by listing everything you owe such as student debt, credit card bills, or a mortgage.
Based on your current situation, what is a priority when it comes to pay off your debt? Are you comfortable meeting all your monthly obligations on time or would you like to be more aggressive in paying down your debt? Do you have the best interest rates on all your loans or credit cards?
Once you determine a debt repayment strategy for your needs, you can plan accordingly for the year. Talk to your lender to better understand your options. Also, shop around for the best rates by calling several lenders or mortgage brokers to see who has the lowest interest rate available to you.
Insurance Coverage
Your personal finance checklist should include having enough insurance coverage for your needs.The right insurance coverage can protect your life, your ability to earn income, and keep a roof over your head.
For example:
- If your loved ones will suffer financially when you die, most likely you need a life insurance policy to help support your family after your death.
- If you depend on your income to pay the bills or support your family, you need disability insurance coverage to protect you financially. A disability insurance policy covers a certain percentage of your income during the time you’re unable to work.
- Having health insurance coverage is important because medical bills can add up fast becoming a huge financial burden if you or someone you love becomes ill. Choosing the right health insurance coverage can ensure you and your family will be financially protected.
Also, just having a policy isn’t enough. Check your policies to see if you have enough coverage for your current life situation. For instance, if you just had a child or bought a home, you might need additional or different coverage.
Having these five important items on your personal finance checklist will ensure you are well prepared financially for the whole year.
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