11 Smart Financial Moves You Have to Make

Robert AlbretsonRisk Management

According to a BankRate.com survey, 61% of Americans couldn’t handle a sudden $500 bill. Too many of us are living paycheck-to-paycheck and not worrying about retirement.

Planning your finances isn’t something you can put off for another day. The sooner you create a strong financial plan, the more money you’ll enjoy in retirement.

1. Understand your financial situation – It’s imperative that you understand your assets and liabilities at all times. Many people are worth less than they think because they’ve never looked at it on paper.

2. Create a budget – A budget is an excellent way to build discipline into your finances. By portioning your income into categories, you prevent yourself from overspending.

3. Set financial goals Figure out the type retirement you want. Use that to figure out type of life you have to live now to make it a reality. A person who wants to travel will have different financial needs than someone who wants to live simply.

4. Come to terms with your significant other – Partners who haven’t aligned their financial goals often make mistakes. One wants to save, the other wants to spend. Make sure you agree on a plan so there’s no deviation.

5. Work down your debt – Debt directly works against any of your investments. If one account is gaining 7%, but you’re paying a debt at 3%, technically your net worth is only increasing by 4%. The sooner you get rid of the debt, the faster your money will grow.

6. Prepare for the end – It’s a tough subject, but end-of-life planning is essential. Don’t leave your loved ones with a financial burden or family in-fighting. Have honest conversation about how to handle things after your passing and draft a will with a lawyer.

7. Hire a CPA – If your financial situation is complex, hire a professional accountant who can reduce your tax liability as much as possible. Take advantage of all deductions, tax-free accounts and loopholes.

8. Diversify your investment portfolio – Every day, people lose everything because they
keep their money in one place. Keep some cash in a savings account that you can access immediately. Then spread your investments into a mix of stocks and bonds in different funds. Never keep all your money invested with your employer; if they go under, you lose your savings and your income.

9. Examine your credit report – Your credit report is a history of your financial transactions and your willingness to meet your obligations. Make sure this report is accurate. Look for errors, accounts that should be removed, and accounts that don’t belong.

10. Change your financial passwords – Online security is a serious matter these days. Thieves can access your accounts if you create poor passwords. Make sure you aren’t using the same password for every account. Change them regularly.

11. Use a trust to cut taxes – A trust allows you to pass assets to a beneficiary without incurring a tax burden. For example, you could use a trust to pass your estate down to your children upon your death, but still permit your wife to use and profit from that estate.

Always remember: a plan is no good unless you follow through. Ensure that your plan is right for your situation and see it to the end.

Robert Albretsen

Accredited Pension Administrator


11 Smart Financial Moves You Have to Make