Imagine laying out all of your credit bills, account statements, insurance policies, and loans on
your kitchen table. Pretty overwhelming, isn’t it? Getting your financial strategies and
investments in place is critical, but sometimes the organizational aspects are overlooked.
Getting your financial house in order is essential for a solid foundation as you pursue your goals
and stay on track if any road bumps pop up along the way. Following these four steps can help
you strengthen your financial house.
1. Organize Your Paperwork
One of the simplest steps to get your financial house in order is to organize all of your financial
information. To get started, separate your financial papers into three categories: upcoming or
recurring bills, documents or statements to save, and old items you can toss. Use a small file
cabinet to save those important financial documents, such as past tax returns from the past
seven years, insurance policies, mortgage documents, investment and retirement account
statements, and any other warranties or service contracts.
Getting your documents organized not only helps you, but also benefits your spouse and family
when they need to handle your affairs after you’re gone or incapacitated, streamlining the
management of your affairs. Within your will, include a letter of instruction so the executor
knows where to find your paperwork.
2. Prepare Incapacity and Healthcare Directives
Perhaps more important than a will are legal instructions for your personal care and the
management of your affairs while you are alive but cannot make or communicate decisions on
your own. A durable power of attorney authorizes your designated agent to conduct business
affairs on your behalf such as paying your bills from your accounts. A living will is also known as
an advanced healthcare directive. These documents provide guidance to your family on how to
handle your medical treatment should you be in a coma or are otherwise incapacitated. A
medical power of attorney authorizes your agent to speak for you in carrying out medical
decisions and a HIPPA information release authorizes medical professionals to communicate
with your agent. These are big responsibilities that may be very stressful for your agent.
Choose someone who you can rely on and ask them if they are willing to take this on before
giving them this assignment. You can select different persons for different roles. For instance,
your financial advisor or a well-organized friend may be a good choice for your power or
attorney while you may ask your spouse or another relative to be your agent for medical
3. Create or Update Your Will
It’s estimated that nearly 70% of Americans die without a will. People may avoid completing
their wills because they don’t like to acknowledge that they will die. Or they may think this is a
complicated and expensive process. Will preparation by an experienced estate planning
attorney can be surprisingly straightforward and inexpensive. The value for your loved ones and
heirs will far exceed your cost and effort. In the simplest of terms, a will allows you to ensure
that you can leave a legacy to your desired beneficiaries, from physical household items to
assets. Without a will, the state will determine what will happen to your assets and the process
for your survivors and heirs may be much more complicated and time consuming than it should
If you don’t already have a will, it’s time to work with an estate attorney to create one. If you
haven’t reviewed yours in five or more years, it’s time to review and make any necessary
3. Set Up Your Inheritance and Charitable Gifts
Beyond having a will, an efficient estate plan not only incorporates tax reduction strategies but
also involves crafting a plan to ensure that your assets transfer to your desired beneficiaries.
There are high-level strategies that can help prepare you for the future without having a
negative impact on your current lifestyle. When done appropriately, preparing an estate plan
can help improve your and your family’s lifestyle.
When working with an advisor to plan your estate and consulting with an attorney to develop
your will, consider how you envision your wealth being put to use once you’re gone. Is it to
provide for your children? Do you want to contribute to a charitable organization or set up a
foundation or scholarship fund? Do you require a trust and, if so, what kind is appropriate for
your situation? Planning for the future and next generation of your financial house requires more
than just a will.
4. Educate Your Family on Finances
One of the greatest things you can pass along to your family is healthy financial habits and
clarity regarding your current circumstances and future goals. How do your financial strategies
reflect your values? How do you balance spending versus saving? Are you an aggressive
investor or are you more focused on preserving what you’ve already accumulated? Education is
the first step towards empowerment and conscious decision-making.
By encouraging your spouse and family to take an active role in your finances, you can instill
healthy habits and make sure they understand what you’ve worked hard to earn. This is also
helpful if you pass before your spouse. By knowing how you managed accounts and bills and
where you keep your policies and documents, it will be much easier for your loved ones to
organize your estate and put your assets to appropriate use.
With your financial house in order, you can have a stronger comprehension of your financial
strategies, be more prepared for expected or unexpected transitions in life, and feel more
confident in your future. If you’re ready to organize your financial house, or aren’t sure how
strong your foundation is, I encourage you to reach out to me today to set up a consultation.
Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at firstname.lastname@example.org.
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