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It’s Time For A Spring Cleaning Of Your Finances!

It’s been a long, cold winter, at least for us in the Mid-Atlantic region.  Admittedly, we don’t handle the cold very well.  The problem with this winter is we didn’t get much snow, so the fun factor was low.  Unlike 2010, when it was all snow and a lot of fun:

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Sometimes risk is a good thing (see NOTE below):

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Winter seemed like it would never end, but as in all things a new day has dawned and our harbinger of Spring, the robins, have returned in force.  With Spring’s arrival, there’s almost an innate desire to purge household items and do a thorough house cleaning.  If I may, I’d recommend adding a financial Spring cleaning to the to-do list. 

Beneficiary Designations:  Make sure your accounts have a listed beneficiary.  You will also want to double check that it is the correct beneficiary.  Many divorced couples neglect to update their accounts. 

Review Transactions: If you are not someone that reviews statements regularly, do yourself a favor and pull a quarter’s worth of transactions.  You could find ACH (automated clearing house) payments that you may no longer want or need. (I certainly have.)

Check Your Credit Score: You can receive a credit report for free once a year.  I’d suggest paying for complete credit reports from each of the three major firms, Experian, Equifax, and Transunion.   You’ll see different information on each and oftentimes inaccurate information.  For instance, if you have recently paid of an automobile, you’ll need to get it re-titled to your name or it may show us still owned by the finance company.

Analyze Year-end Statements:  Do you really know what’s going on in your portfolio?  Check the year-end statement to see a full view of what your paying and how your invested.  Fees should be clearly listed on the first page.  Calculate that number as a percentage of your overall portfolio.  If it’s above 1% of your portfolio, you may be paying too much.  Do some more digging into your holdings.  Are you invested in mutual fees that have transaction fees? Is there an upfront fee or load?  Do you get charged an account fee or an IRA fee? There really is no reason to pay such a fee. 

Allocation and Risk Profile: Do you have a “set it and forget” portfolio allocation? Unless you have an automated re-balancing feature, your portfolio is likely to be out of whack with your risk profile.  It’s very important that your allocation matches your risk. 

Make A Plan:  Shocker! A CERTIFIED FINANCIAL PLANNER™ professional recommends you get a financial plan.  No, you don’t have to use a professional to create a financial plan.  Of course, you don’t need a surgeon to do your back surgery.  Wait a minute, I guess you do.  All kidding aside, a CFP® will help plan for complex situations and prepare for future issues. 

As always, feel free to share with others and make suggestions for future articles: peter.oneill@fiduciamwealth.com

NOTE: No children were maimed in the writing of this article.

Peter O'Neill