Improve your finances by making a few decisions on a regular basis. Get the Money Girl book at http://MoneyGirlBook.com
Money Girl
342 MG Financial Decisions You Should Make Every Year
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Hi, friends, and welcome to another weekly edition of the MoneyGirl podcast. I'm Laura Adams, the author of MoneyGirl's Smart Moves to Grow Rich. Grab a copy of the paperback or ebook from your favorite bookseller. No matter if you're a 20-something, just starting to learn about money management. Or you have decades of experience. Improving your personal finances is an ongoing process. Maybe you're earning more or less. Have a new family situation. Or have completely different financial goals than you did last year. By taking the time to review a few key decisions and tasks on a regular basis, you'll find easy opportunities to improve your financial life. Yes, it takes a little time, but I promise that the rewards, like having peace of mind, saving more money and building wealth, far outweigh the effort. In this episode, we'll cover four key financial decisions that you should review every year. To achieve financial security, don't forget to reevaluate the following four financial decisions at least once a year. Decision number one, how much to save for retirement. This is so important because most people aren't saving nearly enough for retirement. To make sure you can live comfortably after you stop working, set aside at least 10-15% of your monthly gross income for your golden years. If you have a workplace retirement plan, such as a 401(k) or a 403(b), make it the first place you score away money for the future. Traditional retirement plans give you a nice tax break and a relatively high annual contribution limit. Already contributing a percentage of your salary for retirement? Well, consider bumping it up a percentage point or two. And if you receive employer matching funds, always contribute enough to max out the match, so you don't miss that fantastic benefit. Don't make the mistake of thinking that you're too young to plan for retirement, or that you'll make up the difference when you earn more later on. Young people have a lot to gain by saving early, because they can amass a fortune on far less than someone who starts later in life. In other words, postponing retirement contributions is expensive. Decision number two, what insurance coverage you need. In order for you and your family to stay safe, it's critical to have enough of the right kinds of insurance, such as property, health, and life. Use a site like insurancequotes.com to get free quotes from competing companies. Prices can vary considerably over time and also from carrier to carrier. Review your coverage types and amounts every year to make sure you aren't over or underinsured for the following types of insurance. Most of us have auto insurance, so consider raising your liability coverage if it isn't enough to protect the total of all your assets from a potential lawsuit. These assets might include your home, cars, and non-retirement investments. Also, raising your deductible lowers your annual premium, but just make sure you'd have enough in savings to cover the deductible if you made a claim. If you own a home, you want to take inventory of your belongings and consider what additional coverage you may need so you don't come up short if you're the victim of a theft, natural disaster, or lawsuit. Remember that home insurance does not cover damage from certain natural disasters, including floods and earthquakes. If you rent your home, your landlord's insurance never covers your personal belongings or liability. That means every renter should have a renter's policy that protects you from a natural disaster, theft, or lawsuit. We all need health insurance, and starting in 2014, having coverage that pays for a portion of your medical costs is a legal requirement under the Affordable Care Act, also known as Obamacare. If you don't have affordable insurance through an employer, you may be eligible for a plan that's subsidized by the government, depending on your income. And life insurance. Consider how loved ones would pay bills, cover future education expenses, and maintain their current lifestyle without you. If you have a young family, a general rule of thumb is to have life insurance in an amount equal to 10 times your annual income. Cheers to fall at Whole Foods Market with sales through October 29th. Select frozen pizzas are 50% off with prime, so stock up and be ready for game day. Hosting a cozy dinner? There's a sale on hearty no antibiotics ever beef-tuck roast and stew meat. Or be the best guest ever and bring a robust bottle of Bordeaux wine or specialty cheese like Humboldt Fog. Cheers to fall at Whole Foods Market must be 21 or older. Please drink responsibly. Now that we're in Q4, it's a good time to start thinking about making memories with the people you love most before the end of the year. We put a lot into the time we spend with our loved ones. So you want to extend that care, comfort, and peace of mind to what happens when you're gone. 41% of people don't have the life insurance coverage they need. Policy genius makes finding and buying life insurance a breeze. With policy genius, you can find life insurance policies at start at just $292 a year for a million dollars of coverage. And some options are 100% online and let you avoid unnecessary medical exams. Policy genius combines digital tools with the experience of real licensed agents. You can compare quotes from America's top insurers side by side for free with no hidden fees. They have an amazing licensed support team that helps you get what you need fast so you can get on with your life. They answer questions, handle paperwork, and advocate for you throughout the process. Policy genius is the country's leading online insurance marketplace. And even if you already have life insurance through work, remember it may not protect all your family's needs or follow you if you leave your job. So save money and time on providing a financial safety net for your family. Head to policygenius.com or click the link in the description to get your free life insurance quotes and see how much you can save. That's policygenius.com. If you've ever felt like the auto repair business is broken, you're not alone. Everybody's over it. From talking down to selling up to car-splaining mechanics, you're just done putting up with BS, bad service. At Midas, we're on a mission to redefine car care, where get this. We talked to you like a real person, helping you plan for today and down the road. Imagine that. We're driving forward with this in mind. We're out to Midas, but we're putting an end to BS. Decision number three. What legal documents you should have. There are a few critical legal documents that everyone should have in order to make your wishes clearly known. Once created, update the following each year. Your last will and testament. This is a document that every adult should have no matter your age. If you die without a will, the courts, not your family, decide what happens to your possessions and even to your children. Review your will on a regular basis and make updates that may be necessary due to life changes, such as getting married, divorced, having a child, or becoming a widow or widower. A power of attorney. This is a document that allows you to give someone you trust, called an agent, the ability to make decisions for you. Your power of attorney can be used if you're not capable of making routine transactions, like paying bills or signing contracts. A health care proxy. It's also known as a health care surrogate or health care power of attorney. It allows you to designate someone to make medical decisions for you if you become sick or mentally incapacitated. Each year, consider who you've designated as your power of attorney and health care proxy and make any necessary changes. You can even appoint more than one agent if needed. And a living will. This is similar to a health care proxy, but only applies when you're facing death, so you need both documents. A living will specifies what end of life care that you'd like to have, such as dying naturally or not. If you don't have these important emergency documents, there are online legal sites where you can download templates. But be sure to work with an attorney when you have questions or a complex situation. And decision number four, how to improve your credit score. Your credit score plays a huge role in your personal finances because it affects what you have to pay for interest, insurance, various utility deposits, and even affects things like how a potential employer views you. Unfortunately, many of us don't uncover problems in our credit reports until it's too late. Every year, give your credit a checkup by viewing or downloading your credit report for free at annualcreditreport.com. And by the way, checking your own credit never hurts it or gets counted against you in any way. Look carefully for accounts that aren't yours, which could indicate that you're the victim of identity theft. If you see incorrect account details or personal information, submit an online request to get them corrected right away. Errors on your credit file could be dragging down your credit scores and costing you money without you knowing it. To see a step-by-step video about how to check your free credit reports, download my credit score survival kit. It's a tutorial that lets you look over my shoulder as I check my own credit. It also includes an e-book and audio book with three smart strategies to raise your credit score fast. Visit smartmoves2growrich.com and click the button that says credit score survival kit. Again, the credit score survival kit is a free download at smartmoves2growrich.com. I'll also put a link to this resource in the notes for this show on the Money Girl page at quickanddirtytips.com. If you've been putting off important decisions and tasks, consider taking a day off from work to tackle your financial to-do list. Start with the four major decisions that I just covered, but consider other ways to save or make more money, and I'll include links to each of these ideas in the show notes for you. You might open up a traditional or Roth IRA, transfer debt balances to a no or low interest credit card, shop for a less expensive phone or cable TV plan, create a budget and start tracking your spending, switch to a no fee bank account, or set brand new financial goals. Taking a day to improve your financial life will repay you many times over, not just for now, but for decades to come. If we haven't connected on social media yet, please visit Facebook and do a search for Money Girl. On Twitter, you'll find me under user name @LaraAdams. Everything I mentioned and the sign up for the free Money Girl newsletter is on the Money Girl page at quickanddirtytips.com. To read a transcript of this show, look for episode number 342 called Financial Decisions You Should Make Every Year. I'm glad you're listening to Ching. That's all for now, courtesy of Money Girl, your guide to our richer life. 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