We know you’ve been wanting to get your finances organized, but everyone’s schedule is way too busy – where to find the time? Well, be careful what you wish for!
With COVID-19 and the essential social distancing measures we're embracing, suddenly we all have much more time at home than we’ve had in a long while. Yes, some family time with games or Netflix is in the cards. But it’s also a perfect opportunity to catch up on your personal business and paperwork.
Staying calm and productive is a good way to deal with the uncertainty we’re facing.
Here’s a little pep talk: Yes, this is serious. Yes, stay at home as much as possible to help flatten the curve of transmission. But let’s be supportive of our communities. No need to panic, no need to hoard. Stay calm, stay healthy, practice good self care, and make optimal use of this bonus at-home time we’re all facing.
Everyone, absolutely everyone, will benefit by getting their finances organized. You personally will benefit, and eventually your loved ones will too.
I know it’s not most peoples’ idea of a good time – that’s why so many folks put it off. But trust me, the rewards are great.
Haven’t we all decluttered and staged a home to sell, or gotten a car spiffed to like-new condition to sell it, and asked ourselves “why didn’t I do this earlier, so I could actually enjoy it?”
Well, I promise, it’s like that with organizing your finances. it WILL make your life simpler and more satisfying. You WILL feel a burden lifted.
Think of it as a gift to your family, a kind of “love letter” for them to use as a helpful guide, at such time they may need to act for you. You can be sure your efforts will be appreciated enormously. It’s also self-care: You reduce your stress about the unexpected, AND you reap benefits in real time. Win-win!
So let’s get started.
Take a Financial Inventory
Start by inventorying all your assets and liabilities. Make sure you include all assets both inside and outside your estate, including all trusts.
Document your income and expenses. Make a list of ALL vendors you interact with. Since you are documenting all expenses, this is the perfect opportunity to update or create your annual budget.
Inventory all your digital assets. Make a record of all online accounts and passwords. Consider a password manager, and share it with trusted, important people.
Document everything. You may have it all in your head, but it needs to be written out in a file or notebook. Share it with family or other trusted people in your life, and store it in a safe place that they know about.
Documents You Should Keep
Most of us store too many documents, too long. Here are guidelines on what records you should keep. Everything else – be ruthless! Ask yourself whether you can get it online, and when was the last time you needed anything from that file.
Keep these documents:
- One year of personal/household vendor invoices and statements
- Seven years of tax returns and associated receipts/documentation
- Keep investment tax basis information permanently
Tax implications:
- Keep good records for income tax deduction purposes
- Make itemized lists of household items you donate to charity; this will maximize tax deduction value
- Put your “hobby assets” to good use - Seek out charities that may have a need for some of your collections
- Remember that “related use” by a charity that uses your donated item to directly support its exempt purpose (like a used car donated to a charity that will use it, not turn around and sell it), will get you a greater tax deduction
Share these important documents NOW with those who will need them, and include them in the documentation stored in a safe place, mentioned above:
- Financial Power of Attorney
- Health Care Directive
- Estate planning documents
Questions?
Just start somewhere. You’ll be happy you did - everyone loves a sense of accomplishment! If you feel stuck and have any questions that you need answered to get you started, don’t hesitate to contact us via our website https://simplify-wealth.com. Send us your questions via email and we will get back to you or call us at 612-203-2718.