This was originally published on Monday, December 14, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
By now your holiday festivities are in full swing and soon we will be toasting 2016. Now is the time to give yourself a check-up of your financial health. Where do you stand? Do you need to work harder to get where you want to be or are you in a good position and ready to start on new financial endeavors? Here are a few more topics to include in your financial check-up:
Mortgage. If you own a home you understand that any mortgage, no matter how much you paid for your home, probably makes up the largest expense. Whether you have a fifteen- or thirty-year mortgage, the amount you pay in interest is quite large. Communicate with your bank and see if there is any penalty with paying it early. If not, add a little more to your payments. You will be surprised just how much that little extra adds up to.
If you have a 20-year mortgage for $150,000 with a fixed rate of 6% you will pay $107,915 in interest in addition to the principal. That is almost as much as the original mortgage. If you add an extra $100 to your monthly payment you will shorten the mortgage by almost three years and reduce your interest payment by $18,000. If you have fallen behind on your mortgage talk to your financial institution as soon as possible to see if you can work out a solution.
Passwords. The end of the year is the best time to remember that all your passwords should be changed. Keeping your passwords fresh will make it harder for your information to be hacked. If possible, use a combination of capital and lowercase letters, numbers and symbols. Using birthdays, anniversaries, phone numbers, or other information that is of public knowledge is easy to remember and even easier to be hacked.
Emergency and disaster preparedness. Are you ready for an emergency? Do you have an emergency plan or disaster locker ready? Typhoons, earthquakes and other natural and man-made disasters can happen at any given time. Do you have a copy of your financial and personal records ready in case you have to leave? Copies of your insurances, powers of attorney, wills, bank accounts, marriage and birth certificates, divorce papers, passports and IDs, and other information that may be required to process claims, get medical care, or verify your identity may be needed after a disaster. Scan these important documents onto a memory device and have it in an easily accessible location.
Get organized. Organizing your files now will help you prepare for tax time in a few months. This will also make it easier to verify information on your credit report, and build a solid picture of your financial behavior. Organizing now can help you decide if you are going to itemize deductions on your tax return. Make sure all of your documents are gathered in one place. File your statements in a manner that is easiest for you, although at tax time chronologically is usually the easiest.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.