As promised in the last column, here are the final items that I have had on my review lists over the years when I have done my own annual financial review during April. Remember, that when I use the term “you,” it is intended to refer to an individual, a couple, and dependent children, depending upon the household.
$ HAVE I FOLLOWED THROUGH ON MY COMMITMENT TO BE A LIFE-LONG LEARNER WHEN IT COMES TO PERSONAL FINANCES?
Have I done things in the past year to increase my Financial IQ? Have I read a book, followed a blog, tried some new apps, taken a course, or read some articles, and then implemented some of my new knowledge, so that I am always moving forward when it comes to financial management? Have I developed some new “money matters” habits, tactics or techniques, so that I have done some things I wasn’t doing, or didn’t do some things that I was doing? By the way, if you are a regular reader of this column, you get an A+.
$ HAVE I TAKEN EVERY REASONABLE STEP TO PREVENT IDENTITY THEFT?
Have I been protective of all of my personal information, like my Social Security number and passwords, and have I changedmy passwords recently? Have I carefully reviewed all of my financial statements, like my bank statements, retirement account statements, brokerage statements and health insurance summaries, to ensure that they are correct? Have I considered purchasing a home shredder for my financially related trash? Have I revisited the question of whether an identity theft protection service may be right for me now, even if just for peace of mind? Do I use only secure websites on the internet?
Have I been ever-diligent about possible scams, whether by phone or computer, asking "why are they contacting me this way?" For example, we know that the IRS does not call, it writes. This is an area where the “press” has been increasingly diligent, so pay attention to all of those reports about identity theft scams. Also, have I helped older relatives or friends prevent identity theft.
This is only a partial list of the things that we have discussed in this column, and that you can find on the internet, if you do some quick research, but do pay attention to identity theft. It is clearly becoming a bigger issue every day.
$ HAVE I DONE EVERYTHING THAT I COULD TO AVOID OR MINIMIZE DEBT AND ANY INTEREST COSTS THAT I HAVE HAD OR WILL HAVE TO PAY?
We know that interest just cannibalizes your wealth as a consumer, unlike a business that can pass its interest costs on to its customers. As a result, it is important to avoid or reduce it. Avoiding credit card debt is an easy one — live within your means — but if you have some, start charging less and paying down any balances. I still like highest interest rate account first, but there is that "pay the smallest balance account first" technique that some believe better motivates you.
Choosing a 15-year rather than a 30-year mortgage can dramatically reduce your overall interest costs, and in any event, making an additional mortgage payment every year, or adding a few hundred extra dollars a month to your regular payment, designated for principal reduction, can retire that loan earlier and reduce interest costs. In fact, that goes for any loan — a car loan, student loan, home equity loan, or personal loan — add something to your payment designated to reduce principal. It will retire the loan earlier and reduce your interest costs. It will mean more money for you and your family. If you are getting older, are you on track to retire without any debt?
$ HAVE I DONE EVERYTHING THAT I CAN TO INSURE THAT I HAVE A GREAT CREDIT SCORE AND AN ACCURATE AND OUTSTANDING CREDIT HISTORY?
Have I obtained, and carefully reviewed for any errors, my three free credit reports from the three reporting agencies,
rotating them on a four-month basis, by going to annualcreditreport.com? Have I obtained at least one free credit score to see generally where I stand, knowing that financial institutions often use different credit scores for different categories of loans, and institutionally use some agencies' scores more than others? If my credit history or score need improving, have I done everything that I can to make that happen, including correcting any errors on my credit reports, paying everything on time, and reducing any excessive debt that may be having a negative impact?
$ AM I DOING ALL OF THOSE FRUGAL THINGS TO SAVE EVERYDAY MONEY?
Am I still committed to using cash as much as possible, because I know that I will make different and better spending decisions? Am I using coupons, checking unit prices, looking for and waiting for sales, purchasing store brands and shopping at discount stores when that is all I really need to do? Once again that will mean more money for you and your family to do or have more, or to meet some of your financial goals earlier.
As an aside, I was recently driving back on Jefferson Road from RIT’s financial wellness conference, where I did the keynote address and a breakout session, and saw a sign that announced that Big Lots was having a 20 percent off sale on everything that day. Of course I stopped!
I hope that these items will help you with your annual financial review.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo