Are Your Finances in Shape - 8 Tips to Double Check Your Status

Check out these 8 tips to help you save money and get your finances in shape.

1) Life Insurance

You should be reviewing your life insurance every year.  As your family situation changes you'll want to adjust your life insurance accordingly.  As you approach retirement and get older the cost of your insurance increases significantly because the actuaries data shows the older you get the more likely you are to pass away.  You probably will also have less need for a huge life insurance policy so make sure you balance your needs.  I most recently retired and reduced my life insurance and will be considering just cancelling my plan as I move forward.  If I were to pass my wife's income would come form my pension, social security and disbursement from our investments. 

2) Savings Accounts

Beef up your savings to cover emergencies.  The experts say you should have 6 months to a years worth of savings to potentially protect you from a loss of a job or unexpected expenses.  Make sure you consider all expenses when thinking about how much you need to save.  Don't forget medical costs and unexpected house repairs.  Cut unnecessary spending to put more in your savings account.

3) Pay Down Your Credit Card Debt

Review how much you spend on your credit cards.  How much did you spend last year?  How much have you spend this year?  Are you carrying a balance on your credit cards that's costing you huge interest charges every month?  Make it a goal to stop all unnecessary purchases on your cards.   Maybe move to a cash envelope budget where you budget a specific amount by category.

Review your credit cards if you have more than one.  Figure out which one charges the most interest and pay off that card first, then focus on the next highest interest card. 

4) Home Insurance

Make sure your homeowners insurance is up to date with the right level of coverage for your dwelling and all it's possessions.  You should have a log for everything in your house including electronics, jewelry, furniture and clothing.  I like to take a photography of all my rooms with closet and cabinet drawers open as a reminder on what I have.  Make sure to update you possession list with any new purchases or gifts you may have received in the last year.

Most of all shop around for a better insurance.  Make sure the coverage is the same from all insurance companies that are quoting.  Call and get four or five quotes, you'll be surprised at how much you can possibly save. 

5) Auto Insurance

Same thing for your Auto Insurance Policy.  Make sure you have the right coverage for the vehicles you are driving.  Consider your liability risks, do you need more or less coverage.  Now that you're retired, are you driving less miles?  This can lower your insurance.  Maybe you moved to a city or town with less crime, this can also lower insurance.  Hopefully your kids have moved out and aren't on your plan any longer, this can lower your auto insurance.

Same as for Home Owners, shop around.  Make sure to get quotes a combined policy which would include all your cars, boat, house, liability.  This can save money on your insurance.

6) Is your Income Stuck in Retirement

Maybe it's time to start a part time job to get your income back on track.  There are many jobs out there that are just looking for a reliable worker to help them out.  What are you willing to do do get your finances in order?  I have a neighbor in Florida who found a job working a help line from home so he could pay cash for a new firth wheel.  Be creative, you might be surprised at what you can find.

7) How Are Your Expenses

Simply stated, lower your expenses and safe up to pay cash for those big expenditures.  Can you change to a smaller or used car to save on auto expenses.  Cut vacation and travel costs, save up for the next vacation and don't pay for it on credit.  If you need a vacation, stay local and figure out how to lower your costs.  Put off any non critical home remodeling or renovations, consider painting instead of other more costly updates.  Do it yourself!  Avoid shopping sprees, stick with the essentials.  

8) Check Your Credit

Check your credit report on a regular basis.  Focus on transactions that will raise your credit score.  Make payments on time, only keep necessary credit cards.  Check to make sure you don't have any identity theft issues or transactions.  Make sure to freeze you credit reports on the three major credit bureaus.

Return to Money Page