June 19, 2009

Getting Organized...

This is something that everyone should do, but they don't... Everyone should think about, but they put it off for another day... Yes, it is the dreaded "organization" talk that I have with most of my clients. I can already hear the groans...

This is one of the most interesting parts of my job, and it can be funny or tough, but it needs to be done. To get a grasp on your finances, it is a necessity.

First, there are two areas that we need to focus on, but you can take getting organized so much further than just these important items - detailing all of your financial assets and accounts and preparing a will and power of attorneys.

Today, we are going to focus on the detailing of the financial assets and accounts, and in a few days, we will handle the will and power of attorneys.

First, if you are good with excel, then create a spreadsheet with one page for assets and one page for debts. If you are not that great with excel, I created some sample sheets for you to print and use (click here to see the PDF file). This is not a complete balance sheet, but it gets you pretty close.

Next, find your stuff! Bank balances, IRA accounts, savings accounts, credit card statements, school loans, car loans, mortgages, etc. If you have money in it or owe money to it, put it on the list. When I have my clients do this exercise, I always try to make it "budget friendly" too by including monthly income and expenses (also included in the sample sheets). This may look like something trivial, but the better organized you are with your money the easier it is to make some decisions.

If you wondered where your money went each month, this is a good time to figure it out. If something seems a bit wrong, you now have some information to go investigate it.

Okay, once you have everything all together (and it may take a day or two), you are ready to move on to the real fun stuff... wills and power of attorneys.

By the way, I once had someone ask me why they needed to get organized first before they start making some decisions. There are numerous reasons with a few being to help with retirement options, planning your estate, potential debt issues, and the last one is so your "agent" or "attorney-in-fact" can make decisions for you should the need arise.

These items are important, so gather them all up, make some notes, and now on to step two after a few days of rest.

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