Dealing with your Personal Finances

Jul 2017


It’s hard to believe that we’re already halfway through 2017. It seems the older I get the faster time goes by. Before you know it kids will be going back to school and the days will be getting shorter. When I was a kid it used to be that things slowed down in the summer; however, that is no longer the reality. We live in a 24/7 world where the pace of change never seems to slow down. That being said, it is important that we all find time to deal with our personal finances. All too often, because it seems that most of us are constantly putting out fires, our personal finances take a back seat. The problem is that when you put off addressing your personal finances, all you’re doing is kicking the can down the road. It doesn’t solve the issue; in fact, it just makes resolving the issue more difficult and complex. Therefore, it is important to find time to look at your personal finances and it can’t be just once a year. This is an excellent time to do that because if nothing more, over the next few weeks, you will be receiving financial statements from all your investments.

When I talk about personal financial planning, it is more than looking at your investments. It is looking at your entire financial picture. As far as I’m concerned, when you talk about personal finance, the areas that you need to consider are estate planning, taxes, risk management, investing and debt. You need to look at all these areas on a regular basis to make sure that your affairs are current. From an estate planning standpoint it is important that at least once a year you review your estate planning documents to make sure they are current and reflect your current thoughts. In addition, you need to check your beneficiary designations and how your accounts are titled. Family dynamics and situations constantly change and that is why it is important to periodically review your estate planning situation to make sure it’s current.

From a tax standpoint, let’s never forget your goal is not to lower your taxes but rather, to have more money in your pocket. If you haven’t started a 2017 tax file, you need to do so. In addition, you don’t have to wait until the end of the year to do 2017 IRA contributions. The sooner you make it, the longer your money can grow on a tax efficient basis.

From a standpoint of risk management, when is the last time you had your automobile and homeowner’s policy looked at? In addition, if it’s been a while since you’ve had your policy shopped around, there is no time like the present to do so.

As you look at the area of risk management, don’t forget to look at your life insurance policies. My philosophy has always been if you don’t need it why pay for it. Just because you’ve had a policy for a number of years doesn’t mean you should keep it. The insurance companies may want you to keep it, but that doesn’t mean it works for you.

From an investment standpoint, this is a great time to look at your allocations and make sure your portfolio continues to match your goals and objectives. Don’t focus on what is currently happening in the market but rather, focus on your individual goals and objectives. Don’t be afraid to sell investments that are either underperforming or no longer match your goals and objectives.

Lastly, we all need to look at our debt situation to make sure that we are being as efficient as possible. It’s important when you look at your debt situation to recognize that not all debt is the same. Not only is the interest charged dramatically different between different types of debt, but also the tax consequences. Obviously, when you have outstanding debt the goal is to pay the least amount of interest possible and to make as much of it tax deductible as you can.

It seems that everything in our society changes at a lightning fast pace. It is easy to put issues that don’t require your immediate attention such as personal finance, on the back burner. The problem is that if you don’t allocate time to your personal finances, over a short period of time they will be totally out of whack and will cause you all sorts of aggravation and problems. Therefore, to make sure that your personal finances are always in order, you do need to spend time with them, and as far as I’m concerned, there’s no time like the present.

Good luck!
Rick is a fee-only financial advisor. His website is If you would like Rick to respond to your questions, please email him at