Saturday, January 5, 2013

Yearly Financial Tuneup

A few years ago The New York Times posed an article title 31 Steps to a Financial Tuneup.  It's still available and is an interactive site, allowing you to check off the ones you finish. It also gives estimated time for each step. I consider it one of the best sites out there for yearly financial planning.
The following list has one personal recommendation as item #0. Other than that, it comes directly from the New York Times site.
0. If you go to church check your tithing amount.
If you aren't giving ten percent, bump it up a little bit to get closer to the ten percent goal. You should know all the good your church does with the money. If you don't, think about a different church! (~ 5 minutes)
1. Save 1% more from your paycheck
This really works. Even if you can't do one percent, consider a little bit more than you do now. I know I didn't take advantage of my employer's retirement matching program when I was young - because I was stupid. This can add up for your future.  (~5 minutes)
2. Reconsider your investments
Where are you investing your money? Saving for a down payment is great, but make sure you're still putting enough aside for retirement. It sneaks up on you (or eludes you). Trust me on that one. I'm sorry I didn't contribute more when I was younger. (~30 minutes)
3. Rebalance your investments
It's good to analyze and rebalance these on a yearly basis. I do this every year. My retirement 401k lets me move money between different funds. I analyze the fund performance for the year and make changes. Does it make a difference? I don't know, but it makes me feel better. (~15 minutes, but took me an hour)
4. Find a better bank
In these years of less than one percent interest, maybe it feels like this isn't worth it. I still check around, though, looking for the better interest rates. I still like ING™ for most of my money, but some local banks do almost as well. (~2 hours)
5. Make an extra mortgage payment
If you have a mortgage, this will help pay it off early and save a lot of money in the process. It's worth it if you can afford it. (~5 minutes)
6. Open a home equity line of credit
Okay, I don't see the need for this one, but they make the point that you may not be able to open a line of credit if you lose your job. (~a few hours)
7. Increase your student loan payment
Obviously, only if you have student loans! However, make sure you're not paying off low interest loans with money that could be better invested elsewhere. (~5 minutes)
8. Seek a lower-interest credit card
PLEASE don't just get another card. If possible pay off your (only) card every month, and this isn't an issue. However, if you are carrying a balance, ask for a better rate from your current card or seek alternatives elsewhere (but watch out for balance transfer fees). Remember: Debt is a bad habit to get into. (~10 minutes)
9. Set an automated payment toward your debt
They say to set your card for automatic minimum payments from your bank, but obviously I think it should be the entire balance. Making minimum payments is not financially healthy. BUT automatic payments at least avoid the late fees, which will sink your finances in a hurry, so set those up. (~10 minutes)
10. Read the rules on your rewards card
Make sure you're getting all you can get from your rewards. Even if you read them before, read them again since they might have changed. (~15 minutes)
11. Cash in your rewards
Card rewards only lose value over time, since the programs rarely get more generous. Earn them and burn them as fast as you can. I don't do this because I like to have a pool of points for emergency plane tickets, but I'd agree it is a good idea. (~10 minutes)
12. Find a better-earning rewards card
Seek out help from and or try the recommendation tool at I'd agree on this wholeheartedly. Do it. (~2 hours)
13. Check your credit reports for free
Check one of your three major credit bureaus reports If you rotate them you can get a different one each year. (~20 minutes)
14. Consider a financial planner
Find planners at or I haven't done this, but it seems like a good idea. (~1 hour)
15. Pare part of your budget
If you can spend the time and energy to do a full budget analysis, that's the best thing. If you can't (and most of us can't) then identify the one or two problem areas for excess spending and consciously cut those back. They say a site like can help, but so can pencil and paper or a spreadsheet. (~2 hours)
16. Read your tax return
If you do your own taxes, you must do this. If you have an accountant, check through the return anyway. Talk it over with your accountant. It's worth your time to know what tax breaks you get (and miss). (~30 minutes)
17. Enroll in a flexible spending account
Especially in today's economy, use pre-tax money for medical, public transportation or child expenses when you can. (~15 minutes)
18. Reread your will
If you have one, make sure it still does what you want it to. If you don't have a will, go make one. Check retirement account and life insurance also. (~30 minutes or more).
19. Automate your giving
If you donate money on a regular basis, go ahead and automate it. We do, just because we want less things to remember every month. (~5 minutes per group)
20. Walk a loved one through your affairs
Make sure someone else knows how to find and handle your finances if you die. Write it down so they don't forget. (~30 minutes or more)
21. Ask your cable company for a better deal
In this age of cut-throat services, check your cable costs. Negotiate for better deals or more channels or both. Or change services. (~30 minutes or more)
22. Ask your wireless company for a better deal
In the same way, check your wireless costs. (~30 minutes or more)
23. Ask your landline company for a better deal
Getting redundant, isn't it? It's still worth your time to check with your phone company or even consider dropping them entirely for a cheaper VOIP line. (~30 minutes or more)
24. Spend your gift cards
I'm so guilty of this one. I have expired gift cards or lose them and that's just money down the drain. This is the only one where they recommend spending as a good thing! (~20 minutes)
25. Check your life insurance coverage
You should do this every year as a yearly financial maintenance item. (~15 minutes)
26. Buy a disability policy
I have one of these, and also make sure it will pay expenses if I'm badly hurt for a few years. It's worth the time and trouble to do the research and get the policy. (~a few hours)
27. Consider renter's insurance
Obviously this is for renters, but it's a good idea. Check it out. (~a few hours)
28. Raise your auto and home insurance deductibles
Only raise your deductibles if you can afford it, but it does reduce the premium costs. (~30 minutes)
29. Do a home inventory
I'll just quote NYT directly for this one "Tour your home with a video camera and record everything you’d want an insurance company to replace. Put a copy of the video someplace safe other than a computer, in case of fire or a hard drive crash. And add up the replacement costs for all of those items to make sure you have enough insurance." It's a good idea. I still have to do it. (~1 hour or more)
30. Read your home insurance policy
You should do this before you change your deductibles and after you do your inventory. (~30 minutes.)
31. Shop for new home and auto policies
It's always worth a few hours to see if you can get better insurance deals. Do this before you change your deductibles though, just to be efficient. (~a few hours)

As you can see, the list is comprehensive. I've done a number of the items on the list, but haven't done them all. Take a shot at getting at least some of them done for you and your family.
Let's make this a good year for personal finances.

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