Financial Security: Preparing For The Unexpected

Originally published on Tom Leydiker's website.

As you plan for your financial future, you are anticipating all of the monumental milestones that will occur as you continue along the trajectory of your life. These milestones are intimidating because they often require you to make very serious decisions that are financially demanding. Some of these milestones include choosing the college you want to attend, committing to signing a mortgage for a new home, starting your own family, diversifying your investment portfolio, saving up for retirement, etc.

But the one area that not many think to plan for, mainly because it is not a very pleasant topic to dwell on, is what to do in the event that a spouse passes away unexpectedly. There are resources available to help plan for this (e.g. life insurance), but it’s also good practice to be prepared for an emergency by having a plan-of-action set in place to ensure everything is organized and accounted for so that you aren’t scouring through a disarray of documents.

Here are a few of the most imperative areas that you should prepare for in case of an emergency:

Estate Plan And End-Of-Life Care

One important conversation that need to happen is what will happen to that person’s physical and monetary elements after they pass away. These documents should be readily available for review once this happens so that everything can be carried out appropriately. Some other information that falls into this category are documents such as: your will, your end-of-life care, your power of attorney, etc. You will also want to make sure that your estate plan is as up-to-date as possible.

Securing Essential Documents

These are documents that have compiled up throughout your life, starting with your birth certificate and including any important paperwork you’ve received since. You will also want to organize all of your most important financial documents, from bank account information to any pertinent investment material.

Obtaining All Passwords

Now that there has been a push for more paperless transactions, there are going to be quite a few accounts that can only be accessed online. Nothing would be more time-consuming and aggravating than trying to relocate passwords or having to go through the process of updating them once you can’t find the original passwords. Put them all in one, easily accessible document.

Seeking Aid For Future Financial Planning

If you were not the one in charge of handling your finances, it may be beneficial to look into hiring a financial advisor to help you bear this new responsibility you are now being forced to take on.

Life is unpredictable. And while no one wants to dote on the possibility of an expected death, it is worth developing a plan-of-action in case a dire situation would occur. If you are prepared for the unexpected, you won’t be left trying to grieve while also trying to get your finances in order.

4 Changes To Make For A Better Financial Year

Originally published on Tom Leydiker's website.

We are constantly setting new goals for ourselves. While these goals differ immensely from person-to-person, we create these goals for ourselves in order to better certain areas of our lives. The most common goals are primarily health-focused – losing a certain amount of weight, eating a more balanced diet, exercising at least three times every week. But one area that should be at the forefront of more people’s attention is a focus on financial success.

Finances also happen to be the area that most individuals don’t know how to traverse. The answer to your financial success does not solely rely in risk-taking and huge investments. There are a few strategies that you should implement first in order to build a strong foundation to grow upon as you continue to expand your financial understanding.

You have probably heard these strategies before, but they are important because they work. Your financial success is contingent upon your personal habits and behaviors, so making these changes this year will help you to lay out a successful financial future:

Create A Budget (Or Optimize Your Current One)

Having a budget is essentially having an organizational tool that helps you track your finances over the course of the year – and they are not as daunting to create as many people make them out to be. But a successful budget is not one that remains static. It will require frequent changes that are dependent upon your income, the changes in monetary amounts that need to be dedicated to certain monthly expenses, and to account for any financial emergencies. Be as detailed as possible because your budget is what will help you control your finances. It provides you with physical evidence of where you can afford to cut back in order to save more money.

Put Money Into A 401(k) Or IRA Plan

One of the worst things that you can do for your financial future is to put off placing money into a retirement savings account. Do not wait until you are older to begin saving for life after employment. The sooner you start saving, the more time you have to accrue a more substantial amount of money. If your workplace offers 401(k) plans to their employees, make it a goal to contribute the maximum amount possible every year – or at least as much as you can afford to in order to still live comfortably. If you don’t have access to a 401(k) plan, look into getting an IRA plan set up instead.

Learn How To Invest

It’s inspiring to read the success stories of individuals who took a risk with investing to have it pay off beyond their wildest imagination. But risky investments may not be a good strategy for a beginning investor. Save these types of investments once you have more experience and more stable funds. When you first start out, be consistent and talk with a professional to ensure that you are making decisions that are both safe and wise.