Do you know the ins and outs of your financial accounts? I didn’t for a long time!
About two months before Steve died, I looked at him working at our kitchen table and stated, “if anything ever happened to you, I wouldn’t know where to start.” Instead of putting it off until later, he had me come with him and showed me right then how to access our finances on his computer.
He simply opened a folder, which all of our financial information was in. I figured that was good enough and went back to what I was doing. If only I knew then what I know now…
A Preview Was Not Good Enough
Fast forward to a few days after the accident. I remembered that conversation. I remembered where the folder was. I found all of our information.
The problem? It wasn’t good enough. I didn’t have enough information to act. Figuring things out was like a full-time job – when I was barely qualified to get through each day. Instead, every day I would have a plan of places to call or go to and hope to find answers. Don’t let this happen to your loved ones!
Here are six quick and simple steps that you can take this weekend to get your finances organized. Don’t forget to share them with your significant other – better yet, do this together!
1. Start a Spreadsheet
Use Excel (or another program) to make a list of all of your accounts. Include checking, savings, retirement, life insurance, loans, investments, basically everything. Locate statements, so you have full details available to complete the rest of the steps below.
2. Add Contact Info.
List contact information for each account. This may be the local bank, a financial advisor or just a customer service phone number. Make sure to list something.
3. Add Beneficiaries
List your beneficiaries for every account. Read my horror story about having incorrect beneficiaries if you need additional motivation!
Some accounts should be Payable On Death (POD) in the event that funds are needed immediately to cover costs (think the accounts at your local bank). The rest should be listed to beneficiaries or to a trust.
Many accounts do not force you to name a beneficiary – do it anyway! This avoids probate. Keeping the list handy makes it easy to review on a routine basis.
4. Add Account Numbers and Balances
Consider listing account numbers and dollar amounts for any accounts with a loan or asset balance. You should keep this information confidential with the exception of the executor of your estate or financial advisor.
Doing this will make any follow up phone calls so much easier. It’s also important when you’re trying to make changes, such as consolidating accounts.
5. Make It Accessible to the Right People
Store this information where your executor can get to it. If you have it in a safe deposit box, make sure they are a signor. I have a copy on my computer and my parents have a copy since they are now the executors of my estate.
6. Review, Review, Review
Make a plan to review your information. Keep a copy handy for a quick review. I review it annually on the anniversary of Steve’s death. I will never forget to review my information!
Do It – Before It’s Too Late
Get started by gathering all of your financial statements. Make a date (this weekend) with your significant other (if you have one) and start a spreadsheet. Add the contact info. for each company, the beneficiary, any balances and account numbers and then make it accessible to the right people. Review it annually. Rinse, cycle, repeat!
And don’t forget to list, review and update your beneficiaries! I cannot stress enough the importance of this!
Even though my beneficiaries were listed on my sheet, I worried about whether I linked everything to my trust correctly. It took a simple email to ask the bank to update my beneficiaries with the trust information. They had everything printed for me that day, I went in, reviewed it, signed and was done in five minutes. It isn’t as complicated or time intensive as you think. The peace of mind is completely worth it!
Gina: As a financial advisor, we would help clients create these and called them “single sheets.” Basically it was a one page document that encompassed all of the pertinent details of a client’s financial situation – both for the client’s benefit, as well as their beneficiaries should something happen to them. We traditionally did this for older individuals/couples, but as Erin’s experienced, EVERYONE should start and maintain one. Make sure to share this information with your spouse or build/maintain it together!
Do you have a single sheet? If not, do you now plan on starting one soon?