7 minutes reading time (1399 words)

5 Financial Must-Dos On Your Birthday

Oh the joys of having another birthday. It just means you got another year older… congratulations! You are probably wondering where in the world the last year of your life went if you’re anything like me - getting old can be rough.

I heard a great quote the other day that totally resonated – “The days get longer, but the years get shorter.” So true in my opinion. The older I get, the more time flies. I have no idea why, but that’s definitely how it feels.

My theory is, 1 year of your life at 10 years old represents 10% of your life, while 1 year of your life at 40 years old represents only 2.5% of your life, thus resulting in years feeling much shorter than they once did. I have no idea if this has any validity – I’m guessing not, but it makes sense to me.

If today is your actual birthday, then a big happy birthday to you. Hopefully, you have something fun planned or at least get to eat your favorite meal. If it’s not your birthday, then I permit you to do the same thing since you’re taking the time to read this piece.

If you’ve made it this far after reading the title, much appreciated. I know thinking about financial must-dos on your birthday sounds pretty terrible and boring. But, since my job as a financial planner is to think of creative ways to better take care of your finances, this was about as catchy as I could get.

What I do think you’ll see though, is that these – for the most part – aren’t your normal boring to-dos that your financial advisor would tell you – okay, a couple might be, so I apologize for those.

Regardless, they cover all aspects of your financial life and serve as good reminders for you to do on an annual basis. Without further ado, let’s get started.

Check Your Credit Report

This one is absolutely vital. Hopefully, you’re doing this more than just once a year, but if not, then your birthday serves as a good reminder. Check out this post where we cover the importance of your credit report – Why Your Credit Report Controls Your Financial Life.

Your credit report truly controls your entire financial life. It determines if you get a house, a car, a credit card and, in many cases, a job. If you’re not keeping tabs on it, start doing so now.

With new credit breaches seemingly being announced every day, this becomes even more important. As much as retailers, banks, and credit cards try to protect you, it really comes down to you and only you. Go to www.annualcreditreport.com to get your report for absolutely free. You can also check with your credit card since more and more are making this information available for free to their customers.

Create A Login Safety Plan

You’re probably asking yourself what the heck is a login safety plan? Let me explain. It is a plan you create that would provide your login information for all financial and other important accounts to your spouse, executor, or who would need it if you were to become incapacitated or pass away.

Just think for a second how many logins you have in which you are the only one with access. I’m guessing it’s a lot and I’m guessing it’s a little scary to even think about.

I read about it time and again where the one spouse that handles all of the finances passes away and leaves the other spouse completely in the dark with not only no access to login information but not even knowing what all accounts they have in the first place.

Here is what I do personally and recommend to all of my clients – I suggest you look at doing something similar and updating it on an annual basis… say, on your birthday.

On a spreadsheet or document, make note of and list all of the following items in which you have a login that your spouse may not know how to access: phone, desktop, laptop, bank accounts, brokerage accounts, employer retirement accounts, mortgage accounts, other loans, credit cards, life insurance policies, long-term disability insurance policies, auto and home policies, etc.

Within the document, list the name of the company, the name of the account, and the last few digits of the account number. If you want to stop right there, you can. If they are listed jointly or as a beneficiary on each of the accounts, that should be just about all they need. As you know, this document is quite important, so I would recommend keeping it in an encrypted folder or in a safe – just as long as they know how to access it.

If you want to give them login credentials to all of these accounts, then I would recommend purchasing a password manager software and sharing the login information with this trusted person. I won’t tell you how to share this information, but obviously, it needs to be extremely secure. Good options are Last Pass, 1Password, Dashlane, and Sticky Password.

Most importantly, update this information and review it with that person annually so it jogs their memory. I can assure you, if something were to ever happen to you, they would be so extremely grateful you took the time to provide this login safety plan.

Consolidate All Retirement Accounts Into A Single IRA

If you have old employer retirement accounts and IRA’s strung out everywhere, it’s going to be a real pain for your spouse if anything were to ever happen to you. Plus, just having everything in one account just makes life easier.Financial Must Dos Birthday

I will be honest and tell you that this isn’t exactly the easiest thing to do if you’re going to try the DIY route. Certainly, it can be done, but working with a financial planner will make the process much easier – and no, I’m not just saying that because I happen to be a financial planner.

If you decide to go at it yourself, then you will need to find contact information for all of these accounts – from a statement. Call them up and ask what you need to do in order to roll over your account to your IRA at (insert name here).

Increase Your Retirement Savings

It is always good practice to increase your retirement savings through your employer by at least 1-2% annually. Most likely, you received some kind of cost of living increase during the year, so it only makes sense to add a portion of it to your retirement – the worst thing that could happen is you get to retire early.

After this is complete, set a reminder on your calendar to do this every year. Eventually, you’ll be maxing out your 401k in no time. And, speaking of maxing out your 401k, if you already do, I would highly suggest you check out Why Maxing Out Your 401k Could Mean Missing Out On Thousands.

Review Your Investment And Rebalance

I’m not saying you need to get in there and start doing crazy things, but rather just make sure you still invested in the right funds for you and, most importantly, it’s the best mix of funds for the goal of this account.

I would also recommend rebalancing your account as well. This just means rebalancing all of the funds to the correct percentage for the right mix for you – or what we like to call in the industry, your correct asset allocation.

By rebalancing annually, you are ensuring yourself that you’re buying low and selling high. And, that’s kind of the point to investing, so I recommend you do it. There are plenty of other benefits as well, but I’ll let you off easy for now.

So, there you have it, your financial must-dos for your birthday. Now comes the most important part, actually doing them. Best of luck and feel free to reach out if we can be of help.

Want More Great Information Like This Sent To You Monthly? 

Generated button

 This is a post from Clint Haynes, a Certified Financial Planner® in Lee’s Summit, MO. He is also the founder and owner of NextGen Wealth. You can learn more about Clint at the website NextGen Wealth.

The Best Personal Finance Tips When Changing Jobs
Acorns: A Cool App For Saving Money

Related Posts

Ask Us A Financial Planning Question!

NextGen Wealth, LLC is a registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities product, service, or investment strategy. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, or attorney before implementing any strategy or recommendation discussed herein.

Legal, privacy, copyright and trademark information
Copyright © 2017 NextGen Wealth. All rights reserved
Web Design and SEO by Igniting Business

Create Your Own Financial Plan

I apologize for the broken link! To make up for it...

Get My FREE Copy of The "0 to 10k Subscribers" Ebook