We have to admit that this year has us feeling a bit uneasy. It’s the first time we’ve seen “13” at the top of the calendar, so the odds could be stacked against us. Even so, we’re big believers in creating your own luck, so we’re going to offer four steps to help do just that:
Consolidate and simplify. “Don’t put all your eggs in one basket” is typically sound financial advice. However, having so many baskets that you can’t keep track of them can defeat the purpose. It’s very difficult to manage and maintain your portfolio or spending when your money is strewn across multiple accounts and institutions. So come up with an investment plan and then consolidate your holdings into no more than a few baskets. Use online bill pay and automatic investments to ensure you’re doing the right thing at the right time.
Save now for near-term goals. Whether it’s holiday shopping, vacations or something else, you probably already know where some of your money will be spent this year. Bingo! You’ve just taken the first step in developing a savings plan. “Plan and save” is a much better financial strategy than “wait and borrow.” Develop a monthly savings plan to accumulate the money rather than borrowing it. When you’re able to do or get what you want without racking up big-time interest, it won’t have anything to do with luck.
Look at liability. Bad things can happen to the best of us, and sometimes it’s even our fault. If you’re found legally responsible following an incident or accident at your home, on the road or on the water, you could find yourself at the wrong end of a costly lawsuit. To help protect yourself, make sure you have adequate levels of liability insurance offered through homeowners, renters, auto policies, or separately through a personal umbrella policy. Hint: In many situations, state-mandated levels of auto liability coverage could be woefully inadequate.
Create an estate plan. Wealthy or not, most Americans need some form of estate plan. Typically this includes at least a will and/or trust, a durable power of attorney, a health-care power of attorney and a living will. Preparing these documents is far from pleasant, but the pain of getting them done is usually much less than the pain your survivors will feel if you become incapacitated or pass away without them.
Is that all you’ve got to do? No, but it could be a good start. Thomas Jefferson said, “I’m a great believer in luck, and I find the harder I work the more I have of it.” Now that’s a sentiment we can all embrace.
June Lantz Walbert and J.J. Montanaro are certified financial planners for USAA, The American Legion’s preferred provider of financial services. Submit questions for them online. www.legion.org/focusonfinances
This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC. Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers. USAA Financial Planning Services® refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and Certified Financial Planner TM in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.