By John R. Schneider, III & David Auten
Like
diets and birthday cakes, there are some things we should do annually. Whether
for fun, fitness or our finances, we’re better for them. It helps to have firm,
recurring dates to exercise these habits. Now that we’re in another tax season,
here are five practices to start this year and perform every year.
Investment
Portfolio Allocations
For
buy and hold investors, tax season is a perfect reminder to rebalance their
portfolios. The various markets, like large cap and small cap, don’t move in
tandem. Therefore, buy and hold investors should adjust their portfolio
allocations to stay in line with pre-established risk tolerances, time
horizons, and investment objectives and goals.
Beneficiaries
Confirm
the beneficiaries on your investment accounts annually. Beneficiary
designations supersede instructions in wills. This technicality catches many by
surprise.
Power
of Attorney
Confirm
the agents of your financial and medical powers of attorneys. A financial power
of attorney designates an agent to manage your financial matters. A medical
power of attorney appoints someone to manage your medical needs. Because such
agent powers carry heavy responsibilities, confirm the appropriateness of each
agent each year when you file your taxes.
Check
Your Credit Report
Review
all your credit card, debit card, bank, and investment account statements
regularly to confirm nothing untoward happens from month-to-month. If you see
negative or inaccurate transactions, contact your financial services firm
immediately.
An
added layer of protection for your credit score and credit report is to review
your credit report annually. Reviewing your credit report is an opportunity to
contest or clean up incorrect items on your credit report.
Consumers
are entitled to one free credit report a year from each of the three credit
rating agencies, Equifax, Experian, and TransUnion. Rather than contacting all
three credit rating agencies yearly, only go to AnnualCreditReport.com
to request your free credit report from each institution all at once when you
file your taxes.
Emergency
Contact Information
Update
your list of important contacts with contact information every year when you
file your taxes. Your contact list should include, but not be limited to:
•
Attorneys
•
Accountants
•
Financial
Advisors
•
Doctors
•
Executors
•
Power of attorneys
•
Spouse
•
Children
•
Parents
•
Siblings
•
Heirs
Docubank and Carbonite
for Home let you electronically store this and other legal
documents, such as healthcare directives and emergency medical information, so
they’re in a safe and accessible location.
It
can sometimes be hard to maintain important aspects of our finances without
having systems in place. By implementing a system to address some of the more
important aspects of your finances every tax season, you’ll keep your fiscal
house in order.
