10 Things to Look for When Inventorying Your Finances

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• Legal Matters,Stuff My Dad Never Told Me

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hether you want to organize your life for retirement or leave your next of kin on firm financial footing, taking inventory of your finances is a smart move. Set aside a folder in your filing cabinet, and fill it with these 10 pieces of information:

1. Any and All Debts

Mortgages, car loans, your kids’ school loans, credit cards, and other forms of debt are difficult to keep track of, but you can help yourself out by filing them all in one location. You’ll never have to guess how much you owe on one account or another, and you’ll be less likely to miss payment deadlines. Should something happen to you, your estate’s executor or caretaker can continue to pay bills on time, and they won’t be hit by debt collection agencies months or years down the road.

2. Bank Accounts

Equally important are your savings and checking accounts. Insurance payouts can take weeks to finalize, which can make handling medical or funeral expenses difficult to cover. Your bank accounts can pay for small expenses until your insurance plans, investments, real estate, and other large assets are disbursed.

3. Turning Money into More Money

Unless you’ve only worked at a single job your entire life, you likely maintain a number of retirement and general investment accounts including IRAs and 401Ks. While rare, some retirement accounts go unclaimed after the account holder passes away.

Take the uncertainty out of your investments, and make sure that all of your account information is located in your financial folder. Even if you don’t include account numbers and other sensitive information, list all of the companies with which you maintain an active account.

4. Tangible Property

Everything that you own has some monetary value. Include vehicle and home titles in your folder, so your executor will know exactly what needs to be appraised, auctioned off, or given away to beneficiaries.

5. Insurance

Insurance is one of those things nobody ever wants to use. If you use auto insurance, you’ve been in an accident. If you use home insurance, a tree branch damaged your roof. However, insurance is also one of those things that everybody loves when they need it.

If you pass away, your life insurance policy can quickly give your beneficiaries hundreds of thousands of dollars, and you can rest assured that they’ll be taken care of financially. However, your life insurance policy won’t be of much use if nobody can find it. Other types of insurance like auto and health aren’t likely to make your family rich, but the estate might get a partial refund for the remainder of the policy period.

6. X Marks the Spot

This list is already pretty long, and it’s only going to get longer. Instead of jamming every document into a single folder, consider writing a list. Your executor can look at your financial inventory list and find every item on it, and if an important document is missing, your executor can still contact the bank or insurance company to request account information.

7. Contact Info

Nobody knows your life as well as you, so nobody will know who to call if you’re incapacitated. Create a list detailing phone numbers, email addresses, and mailing addresses for your executor, family members, friends, business colleagues, and any other individuals who are important to you.

8. Your Living Will

Your living will is one of the hardest documents you’ll ever have to write, but it’s important to finish while you’re still healthy. With this single document, your executor will have a road map to finalize your estate, and you’ll prevent your family from bickering over your assets.

With any luck, you’ll never need somebody with medical power of attorney over you, but if you do, make sure that it’s somebody you trust. Update your medical files with a document giving a close friend or family member medical power of attorney.

9. Cash Flow

Everyone wants to live to a ripe old age, and you can ensure that your retirement years are filled with luxury by preparing today. When it comes to getting your finances in order, sooner is infinitely better than later. Print out all of your bank statements from the previous year, and look at your cash flow over time. How much did you earn, and how much did you spend? If necessary, change your habits today to give you that much more financial freedom in retirement.

10. Shoot for the Stars

It’s never too late to find a fresh purpose in life, but life’s biggest goals are often the most expensive. A kid can cost more than $100,000 to raise. Want to go back to school? Expect to pay at least $20,000 a year. Write down all of your life goals regardless of their cost, and start saving for them today.