As most of us stay close to home, we address projects on the “to do” list. Now is the perfect time to clear out home offices and review the integral aspects of our financial lives. If you have not done so yet, it is time to get started. Financial Spring Cleaning Just like when you go through your closet or food pantry to determine what to keep, what to donate, and what to toss, you need to do the same with your financial life. Perhaps even more important than what you keep is what you can shred, recycle, or delete. Keeping unnecessary documents and statements makes it harder to locate vital personal finance information in a hurry. Most of us waste a lot of time trying to find things on our computer and amidst our papers. Getting rid of unnecessary documents frees up precious space in your file cabinet and on in your filing system on your hard drive.…
Managing Your Passwords
Whether appearing in your mailbox or your browser, financial information inundates us daily, adding to the papers and information (virtual or real) you already have. Some of it is important; some of it is not. Not only should you strive to reduce the amount of paper and computer files that you retain, but you need a system for organizing everything that you decide to keep. Not only are we inundated with information, our lives require more passwords than ever. Time to confess: I have far too many passwords (financial accounts, online shopping, subscriptions, kids’ schools, activities . . . the list goes on). I have wasted a lot of time trying to find or remember them all, and I worry about online security. Your passwords need to be secure, whether you write them on a piece of paper (keep the list hidden far from your computer) or you use a…
Prepare an ICE Plan
With an In Case of Emergency or ICE plan, you assemble key contact and financial account information in one place. An ICE plan guides someone who must act on your behalf—it is like a roadmap of your financial life. If you use a web-based personal financial management service, you have a great head start. To create an ICE plan, prepare a list of: Bank accounts, credit card accounts, retirement accounts, brokerage accounts, and any other investments The name and phone number for anyone who helps you manage your financial life—banker, insurance agent, accountant, investment adviser Details about your lease or your mortgage—the name of your property management company or mortgage company Bills that are on automatic pay, with passwords to access the accounts or the master password if you use a password management service For someone just starting out, your retirement account is likely your most valuable asset. As you…
Spring Cleaning for Your Files
As most of us shelter in place, we are tackling projects around the house. This is the perfect time to clear out our home offices. I like to call it a financial spring-cleaning. Just like when you go through your closet or food pantry to determine what to keep, what to donate, and what to toss, you need to do the same with your financial life. Perhaps even more important than what you keep is what you can shred, recycle, or delete. Keeping unnecessary documents and statements makes it harder to locate important information in a hurry. Most of us waste a lot of time trying to find things on our computer and amidst our papers. Getting rid of unnecessary documents frees up precious space in your file drawer and on your hard drive. Keep both a recycle bin and a shredding bin near your desk or wherever you pay…
Create an ICE File
An In Case of Emergency, or ICE, file contains key documents that are easily accessible to you or someone acting on your behalf. If you need to leave your house or apartment quickly, it is beneficial to have your most important documents all in one place so that you can easily access them as you leave your home. At the least, include the following items in your ICE file: Legal documents, such as wills, powers of attorney, health care directives, and the titles for your home and car Vital records, such as birth certificates, adoption documents, marriage certificates, Social Security cards, and military records Copies of passports, credit cards, and driver’s licenses After you have gathered your essential documents, you need to put them in a safe place. Keeping these important papers in one location will save you a lot of time and makes it easier for someone who might…
Making Tax Prep Less Stressful
Due to COVID-19, the federal tax filing deadline has been extended. Even with additional time, preparing your taxes is not a fun task. It can be significantly less unpleasant if you are organized. Your taxes involve a lot of documents, and you must keep good records. In addition to your W-2 (or 1099-Misc forms, if you are a contractor), you will need supporting documentation related to your savings and investment accounts. A 1099 is a statement that details the dividends, interest, and capital gains earned during the year. Some investments are structured as partnerships and provide a year-end, or annual, K-1 instead of a 1099. A K-1 shows an investor’s share of partnership income for a given year. Transactions that you need to document at tax time occur throughout the year. Therefore, I strongly recommend that you keep a Current Year Taxes folder. As you receive tax-related documents in the…
Passwords and Security
Just as we are inundated with financial documents and marketing materials, the number of passwords we have—and need to keep track of—has exploded. Your passwords need to be secure. If you write them on a piece of paper, keep it out of sight and away from your computer. Think about using a passphrase that will be easy for you to remember. The longer a password or passphrase, the harder it is to crack. Consider using a password management service, which stores your passwords securely online. You enter all your passwords into the service’s website. When you are logging in to a site, you enter a master password rather than entering your log-in and password for each website you visit. The sites will flag any of your passwords that are not secure and suggest you revise them. If you have a partner, a password management service can help you work together…
Benefits of a Financial Spring Cleaning
Tax season is upon us, which is the perfect time for a financial spring cleaning. Just like when you go through your closet to determine what to keep and what to donate, you can do the same with your financial life. Get ready Designate a room or an area for your work. Set out a staple remover and stapler, sticky notes, pencils, paper clips, and file folders as well as bins for recycling and documents to be shredded. Gather your information Gather all documents and papers relating to financial, tax, and legal matters, including bank, investment, and credit card accounts; insurance; mortgage, car loans, student loans; tax returns; birth certificates, marriage certificates; wills, trusts, and powers of attorney; and information related to your home and big-ticket purchases. Determine what to keep It is time to sort and determine where to keep essential information and what to recycle or shred. For…
In Case of Emergency Plan
My In Case of Emergency (ICE) Plan will be very helpful if someone needs to step in and help you manage your financial affairs in the event of an emergency. At the same time, going through the exercise of preparing an ICE Plan also helps you be more organized and engaged in managing your financial life on an day-to-day basis. Attached is an example of an ICE Plan. Click on the link below. ICE Plan Example
New Book is Featured in The Winnetka Current
Thank you to The Winnetka Current for featuring me and my book today as the cover story of the Life & Arts section. In the piece, I discuss how important it is to find a way to save. For those just starting out, time is on your side. Take advantage of it. Winnetka Current 6.14.18