One of the problems with the way many people manage their finances is that “tomorrow” seems to come sooner than expected, while “someday” doesn’t seem to come at all.
That’s why some basic financial chores never seem to get done. People know what they need to accomplish for some future tomorrow, and figure they will get around to it one of these days. But if that day never happens, a lot of money can be lost.
Instead of waiting to do financial chores until going through some confidence-shaking event, minor glitch or outright catastrophe serves as a motivation, a savvy money manager tackles jobs upfront.
Best of all, the niggling little stuff that we procrastinate over doesn’t take much time.
Here are nine things worth doing now to build your peace of mind and save you both time and money later:
– Check your credit report.
This is one of those tasks everyone knows they need to do, but most people just keep putting off. Don’t. The wrong time to find out you have a problem in your credit file is when you need a loan or have just applied for a job for which the employer includes a credit check in the application process.
Credit reports are free if you have been denied credit or a job in the last 60 days based on information in the file. Otherwise, costs can vary by state. It’s money well spent.
Check that the files accurately reflect your current financial status, show old accounts as closed or paid in full, and don’t include any surprises.
For instructions on ordering a copy of your credit report, contact either Experian (formerly TRW) at 888-397-3742; TransUnion at 800-916-8800; or Equifax at 800-685-1111.
Remember that while the data from each company is essentially the same, there are differences, especially if there is data that needs correction. To beat that problem, get your file from one company now and follow up with the others in a few months to check on corrections and changes.
– Shop mortgage rates.
If you bought a house a few years ago, you might be able to refinance at a significant savings. There are plenty of sources for rate information, but my favorite is Bank Rate Monitor, which has an extensive Internet site that tracks rates from 2,000 banks in about 120 markets. The site has, literally, thousands of pages of data, including calculators and other goodies that will help you figure out how much you can save in a refi. Check out www.bankrate.com.
– Shop for better long-distance rates.
Phone costs are one of the expenses that can be most easily changed. Often times, consumers sign up with a particular calling plan, then stick with it as their calling habits or the available rate plans change. The result is a bill that’s higher than necessary.
The Telecommunications Research & Action Center (TRAC) produces Tele-Tips, a comparison of the rate plans and features of various phone companies. The cost of Tele-Tips is $5 for a residential report, $7 for the small-business version. Say which type you want when ordering from P.O. Box 27279, Washington, D.C. 20005.
– Adjust your tax withholdings.
If you are getting back a nice refund this year, that means you gave Uncle Sam a big, fat interest-free loan during 1997. You would be better off putting that extra money to work, either reducing debts or increasing savings.
That said, use the data from your tax return to adjust the amount you have withheld. If you overpay taxes, increase the number of exemptions you take–yes, it’s legal so long as you pay the appropriate amount of tax–and your employer will pull less money out each week. Conversely, if you are facing a big tax bill and don’t want that kind of headache in the future, sign up to have a bit extra taken from your paycheck and you will ease the pain come 1999.
– Figure out how to save $3 more per day.
While saving a lot of money is daunting, saving a little isn’t. Just start writing down ways you could save $3 every day, whether it be from carpooling, bag lunches, using coupons, or that better long-distance plan. Be creative.
Saving $3 a day adds up to more than $1,000 a year. Plan to capture the savings and put it to work for you.
– Get free guides that help with almost all financial chores.
I used to laugh at those old, late-night public-service announcements that talked about the Consumer Information Catalog available by writing to Pueblo, Colo.
But if you take a look at that catalog, which, in turn, leads you to free information on hundreds of subjects, from dealing with door-to-door sales to your right to information when pricing a funeral, you stop laughing and start ordering.
You can get the Consumer Information Catalog by calling 888-8-PUEBLO.
– Check the beneficiaries on your insurance policies and investment accounts.
In all of life’s changes, the paperwork often gets left behind. In many divorces, for example, the couple splits the assets but the spouses forget to change the beneficiaries on their employers’ insurance policies. If one dies years later, his beneficiary will receive the proceeds, even if he had remarried.
So if you have married, divorced, remarried, had children, changed guardians, and more, you should check to make sure the right people will get the money you intend for them. Check with your employer to see how your retirement accounts and any employer-sponsored life insurance are registered. Changing the forms takes a few minutes; not changing them could cost your loved ones dearly.
And while we’re on the subject of your demise:
– Review your will.
We don’t like facing our own mortality, but if you either don’t have a will or don’t keep it up to date, you could make a stressful time (your death) even worse on your loved ones.
Wills should be updated every few years, but particularly whenever there has been a major change in your life, such as marriage, divorce, new children, a new house, a major acquisition of valuables, and so on.
– Inventory your important papers.
While you check the insurance policies and the will, start a list of all crucial documents and accounts in your financial life. Keep this in a safe place, preferably outside your home, either with a loved one or in a safe-deposit box. In the event of a catastrophe, this will help you reconstruct your life quickly and efficiently.
