Tips on saving your hard-earned money

Random Money Thoughts - Five Steps to Common Sense (Cents)
March 25, 2012 7:49:06 AM PDT
Some of the best ideas hide in plain sight. We occasionally fail to undertake what I call "financial quality controls," on a consistent basis. Get ready to consider the following money-smart inspections by the end of the first quarter 2012:

Double check the financial coach. You've been working with the same financial representative for years. You feel comfortable and trusting. He or she acts in an ethical manner. It's all good. However, it's worth the time to re-examine the background of your financial coach and accomplish this action step. Ultimately, it's your responsibility to make sure the professionals assisting you with money decisions remain as ethical as you remember and consistently adhere to industry standards of conduct. Through www.FINRA.org, you can retrieve a summary of a broker's professional background and conduct.

The term "financial planner" is used broadly however becoming certified requires many hours of study followed by an extensive examination process. To check the status of a "Certified Financial Planner®" go to www.CFP.net. From the home page, click on the link titled "VERIFY an individual's CFP certification." You can then enter a planner's name and determine whether there has been any disciplinary action taken in the past.

It's smart sense to investigate your financial representative's record every couple of years to make sure nothing has changed from a regulatory perspective. It's a good idea to retrieve this data before you make a final decision to work with a financial professional too, if you're in the market for one.

Can you check on the match? I'm consistently amazed over the number of employees who don't understand or even know if their employers match contributions to company retirement plans. At the very minimum, you should be contributing up to your employer's match otherwise you're literally leaving free money on the table. Say for example, your gross salary is $50,000. Your employer completes a fifty percent match up to the first six percent. As an employee your six percent contribution amounts to $3,000, which means your employer's addition totals $1,500. Without your six-percent contribution, a match could not occur and you would be out $1,500.

Credit Score? Check. Most people can roll the latest sports scores off their tongues as soon as you ask. How many can do the same when it comes to a credit score? You should be aware of where your credit stands and it's important to check annually. Through www.annualcreditscore.com you're allowed one free credit report every twelve months from Equifax, Experian and TransUnion, which are nationwide credit reporting agencies. Seek to strive for a score exceeding 700. For tips on how to increase your credit score read through tips provided by the Federal Reserve at www.federalreserve.gov/consumerinfo/fivetips_creditscore.htm.

Who gets what? Check on it! Frequently, at least one retirement account, insurance policy or bank account containing outdated beneficiary information crosses my desk. More often than I prefer I find beneficiary information missing altogether. Both scenarios can wind up circumventing a well planned estate strategy and provide assets to unintended recipients. Check to make sure all beneficiaries are up to date on all retirement accounts and insurance policies. Make sure to store copies of beneficiary designation pages along with other important estate documents.

Check those automatic debit payments regularly. Recently, after a financial quality control, I realized I had been paying for duplicate magazine subscriptions. My autopilot payments were completed annually from two different credit cards. Call it "stealth wealth deterioration." Finally, I caught the error (after three years) canceled one subscription and stopped the automatic payment feature. For discretionary items like subscriptions and memberships, make sure to receive electronic or paper copies of the bills before you pay. Not only will you keep better track of where your money is going, you'll also be able to assess at the time whether the discretionary expenses are still worth the money.


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