Evaluate finances before 2018

This was originally published on Monday, December 4, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

It is hard to believe 2017 is coming to an end. In a few weeks we will be ringing in the New Year.  December often flies by with holiday parties, present wrapping and cookie baking.  With all of the commotion happening around us, take some time this month to review your personal finances.  Here are some items to check-off of your end of the year checklist.

  • Your net worth. Calculate what you own and subtract what you owe.  This is the best way to start figuring out if you met this year’s financial goal and how to improve and set next year’s goals.
  • Credit report. You are entitled to one free of each of the three major credit reports from TransUnion, Equifax and Experian. It is best to request one at different points in the year to catch errors or irregularities.  Pull your credit report at AnnualCreditReport.  Look at your report and verify that there are no errors.  Not happy with your score?  Work on any past due or collection debt, make payments on time and lower your debt to improve your credit.
  • Insurance coverage. Review your life, home, auto and health insurance policies.  If you have had a major life change such as a new baby, marriage, or divorce you will want to make sure your insurance reflects those changes.  Many policies, especially health, have an open enrollment period which is the only time you can make changes.  Know when that period is and make the necessary changes.  If you have made any structural changes or improvements to your home, make sure you have informed your insurance company and it is reflected in your homeowner’s policy.  Now is also the time you can get quotes from other insurance companies to ensure that you are getting the best coverage for your money.
  • Estate plans. If you have sold or gained property, had a major life change, opened or closed a new account, you may want to appraise your will and make the necessary changes to reflect your new status.  Also examine your living trust and health care power of attorney. If you don’t have a will, living trust or health care power of attorney, make that a goal for 2018.
  • Review your beneficiaries. A lot of change can happen in a year: births, marriage, divorce, death, adoption, etc. Ensure that you have the appropriate person or persons listed as your beneficiaries on your insurance, retirement accounts, and even checking/savings.
  • Donate to charity. December 31 is the deadline for charitable contributions you plan to deduct from your 2017 tax return.  This includes money, clothes, cars, or even stock.  Be sure that you get a receipt of your donations to include with your tax forms.
  • Use up FSA. If you participate in a health or child care flexible spending account, double check the balance on that account. If you don’t use it, you’ll typically lose it. While there may be a grace period to submit an expense for reimbursement, the actual expense needs to have been incurred by the end of December.  Double check your plan’s terms to be sure.

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 moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.




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