I’ve gone back to an old-fashioned approach to make sure I get things done.
Several months ago I purchased a large white erasable board with a stand and set it up in my office. At the beginning of each week, I list all the things I need to do for my job and for my personal life. Like many people, I have an electronic organizer but I needed something larger. I wanted something I couldn’t ignore, misplace, or lose under piles of folders and papers. The white board was just the thing.
Making a list — a giant one — has made the difference in ensuring I complete certain tasks.
As the New Year begins, I want you to create a list of everything you need to do in 2008 to improve or organize your financial life. I want you to start by making the list large. You can use an erasable board or a big sheet of poster board, it doesn’t really matter. What matters is that it’s so large you can’t ignore it. Then put the list up in a place you spend a lot of time. Most importantly, the list should be in a location that has the tools you need to get the tasks done.
That last point is important because putting the list up in your bathroom might remind you every day of what you need to do, but it’s unlikely you will sit on the side of your tub and make the calls needed to cross something off your list.
Not sure what to put on the list? Well, let me give you some help.
Here are some items that can help you get in shape in 2008:
Automate. Make this the year that you use technology to straighten out your messed-up finances.
Try online banking if you haven’t already. You can set up a system that will allow you to pay your bills on time, all the time, which will greatly improve your credit rating.
Second, automatically have money taken out of your paycheck to begin building the emergency fund you keep promising to start but never do. The money should be automatically sent to an account that is not linked to your everyday checking and savings accounts. And don’t carry around an ATM card for the account.
Create a budget and a net worth statement. All things financial should start with these two documents. A budget lets you know where all your money is going. Your net worth statement gives you a snapshot of what you own and owe. To download both documents, go to media.washingtonpost.com/wp-srv/business/pdf/Budget WorksheetPost.pdf and www.washingtonpost.com/wp-srv/ business/pdf/networth.pdf.
Make a payment plan. If you have credit-card or student-loan debt, develop a plan to aggressively rid yourself of that burden. If you can’t do it yourself, contact a consumer credit-counseling agency. To find one in your area, call the National Foundation for Credit Counseling at 800-388-2227, or go to www.debtadvice.org.
Get a will prepared or update the one you have. If you don’t have the money to hire an attorney, then at the very least go to any office supply store or go online and order a no-frills will kit. Nolo.com sells basic wills online.
Leave instructions. While you are gathering all the information for your will, prepare a “letter of instruction.” This letter includes who should be contacted in the event of your death and the whereabouts of all your essential documents, such as your will, bank statements, insurance polices, checking accounts and mutual fund statements. If you write the letter on a computer, remember to print a copy or save it to a CD in case your computer can’t be accessed.
Get copies of your credit reports, if you haven’t already, from Equifax, Experian and TransUnion. Everyone is entitled to a copy of their credit report from each bureau every 12 months. For more information on the free reports go to www.annualcreditreport.com. This is the only official Web site to get the free reports.
Review all your insurance policies — home, car and life. You always want to be sure your coverage is adequate.
For example, if you have received some pricey gifts for the holidays, call your insurance company to make sure they are covered under your current policy. You might also consider raising your deductibles to cut your insurance costs.
Open your retirement statements or go online and make sure your retirement accounts are well diversified. Here’s a site with some general guidance on asset allocation: www.401khelpcenter.com/allocation.html.
By no means is this a complete list. But if you start with these items, you’ll be a lot further ahead at the end of next year.
I know life is busy, but procrastination is one of the biggest threats to your financial well-being year after year.
Washington Post Writers Group
Military challenge
Are you serving in the military at home or abroad and struggling with your finances?
Michelle Singletary’s 2008 money challenge will focus on personnel in all branches of the military who want to change how they handle their money. Singletary will follow select military families whose New Year’s resolution is to get financially fit. Write to her and tell her your financial story. Please realize that you will have to share personal financial information, but don’t let that deter you. Send an e-mail with your resolution for the new year to colorofmoney@washpost.com. In the subject line put: “Color of Money Military Challenge.” Include your name, address and daytime and evening telephone numbers.
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