5 Steps to Putting Your Personal Finances in Order

Today is a great day to begin getting your personal finances in order. Here are a few easy steps to take to get there.

1. Compose your Last Will & Testament. Your death would be an untimely event and letting it happen without a Last Will & Testament means that you will have no say in what happens to your money after you die. If you die “intestate,” or without a Will, there will be major headaches for your heirs and could leave them with nothing if they are not directly related to you. Use an attorney if you can afford it. There are a lot of low cost attorney services online. If you can’t afford an attorney, at the very least have a Notary Public witness the signing of the will along with two other people.

2. Set up an automatic deposit into your Savings Account and then save until you have three to six months of living expenses in your account. This is the proverbial rainy day fund. By automating it, you force yourself to begin saving. I have multiple savings accounts and I have an auto payment into each one.

3. Buy Life Insurance. Your personal financial plan should include life insurance to help those you leave behind maintain their same standard of living. Many times we end up buying too much life insurance. Stick with term insurance. You really won’t need any other kind unless you have significant wealth and want to use life insurance as an investment vehicle. See this life insurance calculator before you call a sales rep.

4. Set up a budget. A simple budget lists your projected income and your desired outflows. There are a lot of online options for setting up a budget. Mint.com works well. YNAB.com is better, though it is a paid service. Set up reminder emails to keep you honest.

5. Create an investment management plan. I recommend using Marketriders. For a low annual payment they will create an investment plan tailored to you and your risk tolerance. They’ll tell you what to invest in and then help you rebalance your portfolio in order to maximize your returns. It is the best personal finance software available.

More than anything, take action. If personal finances are overwhelming to you, consider professional help. You can join Personal Capital and get free financial planning as well as investment tracking, and expense tracking. Personalcapital.com and other online resources are free or very affordable and readily available. Creating an online financial plan is easier than ever and will help bring you peace of mind.


Matt5 Steps to Putting Your Personal Finances in Order