Patching Holes in Your Financial Fences
The metaphor I use in my office is that financial planning is like raising a farm of cash cows. You have to put a fence around cows or they’ll find greener pastures.
So, what fences do you need to put up to make sure your money doesn’t get up and walk away? These are things that you usually don’t think you urgently need and don’t want to spend time on, but when trouble hits — like when COVID-19 shows up — those holes in the fence now become painfully obvious. It’s not too late, though, and you might have some time on your hands to get them done.
Get your estate planning done. If all the news about illness and death wasn’t enough to bring this to the forefront of your mind, I don’t know what will. This is nonnegotiable if you own real estate or have minor children. Trust me. There is no worse intersection on this planet than death, family, and money. Make sure your intentions are clear and designate who will take care of your finances if you are incapacitated.
Increase your reserve account. This is your rainy-day fund. This might be the hardest one to do if you are not getting paid right now, and you may be draining that account. But if you’re not, you’re likely saving money because you can’t go anywhere. I recommend getting that account up to 3-12 months’ worth of expenses, depending on the reliability of your job.
Get your insurances reviewed. Make sure you have adequate life insurance and homeowners or renter’s insurance. Make sure you have a disability policy and an umbrella policy, if you need one. Also consider a long-term care policy. Insurance is one of those things that you must purchase in advance; it’s also one of those things that it’s better to have and not need than need and not have.
Evaluate your investments and tax situation. Are you invested in alignment with who you are as an investor? Are you paying attention to taxes and deductions? Are you taking advantage of opportunities to save money?
These are all topics my clients and I discuss in our meetings together because I want their cash cow farms to be healthy, thriving and safe from horrendous loss. If you need any assistance with this, please reach out.