Skip to main content
Extra Time on Your Hands? Use it Wisely to Tackle Your Financial To-Do List
July 2, 2020 at 1:00 PM
financial to do list blog.jpg

Coronavirus stay at home is a good time to update financial and legal matters.

- Develop a budget to get through this economic downturn

Review year-end credit card and bank statements to see which categories you are spending the most money in, to clarify your fixed expenses like mortgage, property tax, utilities, and how much of your annual cash flow goes toward discretionary expenses (vacations, entertainment, club memberships). Write down how much cash you have in the bank. Is is enough of a reserve for 3-6 months of living expenses? If you are in your 50’s or 60’s nearing retirement, do you have 1-3 years of living expenses in cash? If so, you will be less likely to panic and use investment accounts in a downturn. This is also a good time to eliminate expenses such as travel and dining out. Use these savings to build your cash reserve.

- Consider refinancing your mortgage

If you plan to stay in your home review interest rates and do a break even analysis to determine if reduced payments exceed up front refinancing costs. If so, you could cut hundreds from your monthly budget. Switching from a 30 year to a 15 year mortgage can also save money. It is best to refinance while you still have a regular paycheck so don’t wait if you think you could be laid off.

- Review your will and the legal documents

Many clients have no will or have one that is decades old. Financial powers of attorney and health care directives are often also outdated or lost. Take time now to make a Zoom appointment with an estate planning attorney to discuss your will and estate plan and to review tax law changes such as the SECURE Act of 2019. Review your Will and estate plan every 5 years or after a major life event. Young couples may be focused on a guardian but older couples want trusts for adult children to protect inheritances from divorce. Families, wealth and laws change over a decade. Use this downtime to focus on legal updates.

- Locate and examine your insurance documents

Your need for life insurance is likely less as you near retirement, have gotten kids through college and grown your 401(k), but your need for long term care insurance may be important. Talk with an insurance agent about converting or “refinancing” your policies now.

- Plan for your 2020 taxes

Don’t overpay 2020 taxes if earning less in your paycheck and your investment portfolio. Consider adjusting withholdings or estimated payments to reflect a down year. Consider using the savings to build up your cash reserves.