Put Your Financial House in Order

“Hey hon, where are the keys?” A shiver goes down my spine when I hear those words. There’s nothing worse than spending precious time scouring the house for a covert operator set of keys on a mission not to be found. Fortunately, my spouse and I have developed solutions to defeat unintentional search and rescue missions in our home. Simple ideas like a key bowl, a side table for purses and wallets, physical mail files, and dog toy bins have drastically improved our quality of life. When household items are returned to their rightful resting places each day, life feels just a bit easier. We manage to avoid a full CSI-scale forensic investigation in the hunt for a pair of sunglasses.

In similar fashion, our money and financial life can become an unintended scavenger hunt with none of the fun prizes at the end. Performing a simple inventory of your money-life can provide a sense of clarity and peace of mind for yourself and the people who depend on you. In the best of times, an organized financial life provides a foundation for the future. It clears the clutter to distill the most important goals in your life and identify what resources are available to put toward those goals. At the other end of the spectrum, during the worst of times, such as an unexpected illness or absence, a clear financial picture will lighten the burden of investigative work required when calamity strikes.

Consider these five actions you can take now so your family won’t need to untangle your financial ball of yarn:

Upgrade your sticky note password tracking system

Track and protect your family financial passwords in a secure password manager. No, a sticky note on your computer doesn’t count. The electronic equivalent to a sticky note is the notes section of your iPhone, which isn’t the most secure place either. Consider 1Password or NordPass where you can securely store all your passwords and allow multiple family members access to your vault.

Make a list and check it twice

List all financial accounts and where they are housed. For example, your 401(k) at work typically has an organization’s name at the top of the statement. Your self-managed brokerage accounts might be housed at Vanguard, Fidelity, Schwab, or another custodian. These details are extremely important to write down and store in a secure location. Consider the investigation that would need to be initiated if your spouse had to wrangle all your financial accounts without the help of a full inventory listing what you own independently or together. Do not assume that your family will recall the details of your accounts, especially in a time of unexpected crisis.

You’ll want to get that in writing

Ensure the appropriate estate planning documents are in good order. A financial power of attorney document (also known as a durable power of attorney document) allows another person to transact on your behalf if you are incapacitated or simply unavailable. Many banks, online brokerage firms, and credit card companies require an advanced authorization or financial power of attorney prior to divulging your account information, even in the most severe circumstances like a hospital stay. Speaking of hospitals, a healthcare power of attorney or living will document clearly outlines your wishes during an extended or acute illness. A healthcare POA allows you to outline advance directives to a spouse or trusted family member. For example, you may want to prevent a spouse from making the decision to remove you from life support if there is no hope for survival or an acceptable quality of life. You’ve already made the decision for yourself and have outlined this in the document and the healthcare providers must follow your wishes.

In addition, an updated will and beneficiary designations are crucial for directing your assets to the people and places you care about. Without these important documents, the laws in your state dictate how your property transfers to others.

Keep only the essentials

Shred old financial documents. Documents that are easily accessible online like quarterly statements, copies of paper bills, and correspondence may be shredded immediately. Better yet, switch to e-delivery and eliminate the paper! Keep completed tax returns and supporting documentation in a secure location for seven years in case of an audit.

Contact in an emergency

Create a contact list of your trusted professionals who need to be contacted if something happens to you. Think: attorney, accountant, financial advisor, insurance agents, HR department at work, etc.

Putting your financial house in order will help remove your family’s money-related stress. A few hours on a Saturday spent organizing your money-life will prevent days, weeks, or even years of frustrating investigation following an unexpected event. Assuming an uneventful life, you are then free to spend more time searching for your reading glasses, only to find them already perched atop your head.

Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.

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