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  • Josh Stubbolo

5 Steps To Get Your Financial House In Order



By Joshua Stubbolo


Here is a question we bet you don't get asked often: What’s your money personality? Does the thought of updating your budget and reviewing your portfolio excite you? Or are you more of the “just avoid your accounts at all costs and hope for the best” type? It may not be the most flattering to admit, but if you said yes to the latter, you might find some comfort in knowing you are not alone.


In fact, 4 out of 10 Americans admit that they prefer not to think about money. (1) And if we’re being honest, it’s understandable. For many of us, finances can seem complicated—at best. Even worse, they can cause feelings of hopelessness for those who are facing some worst-case scenarios. And to complicate things even further, there is an overwhelming amount of information to sift through if you try to figure things out on your own. In fact, many are stuck wondering where to even start! We at Family Legacy Financial Solutions would like to help get you set on a solid path. So here are 5 actionable steps you can take now to get your financial house in order.


1. Create Organized Systems


Create A Filing System For Hard Copies

These days more and more companies are going paperless. However, despite how digital our lives are becoming, there are still times we need physical documents. Having hard paper copies means that you will not automatically have everything you need in one easy-to-access place as you do with digital files on your computer. So, in order to avoid clutter and misplaced documents, it is imperative that you find a filing system that works for you. Whether it’s a binder, a locked filing cabinet, or an in-home, fireproof safe, having a designated place for important paperwork will help you avoid stress and remain organized and prepared.


To start, separate your paperwork into three categories: bills and statements, important documents, and other miscellaneous paperwork that needs to be saved. Gather everything together neatly and store it in one place that is easily accessible. Avoid overwhelming clutter by regularly clearing out and discarding items that do not need to be saved.


Utilize A Password Manager Tool

Do you have a method for keeping track of your countless usernames and passwords? As you may already know, you can save yourself some serious inconvenience and frustration by finding a way to keep all your information in one place. There are plenty of online password managers to choose from, but no matter how you decide to organize your login details, be sure to regularly update your passwords to protect yourself from hackers.


Go Green

If you want to minimize the amount of paper that piles up on your counters, you can get rid of clutter by enrolling in paperless document delivery for all your bills and financial services. Not to mention the added perk of saving a tree in the process. And since you’re already planning to create a password management strategy in the step above, you won’t have to worry about being unable to access your documents due to forgetting your login information. If you forget a password, simply look it up and be on your way.


Communicate

Develop a master directory that lays out all your financial information and where it can be found. This will not only help you manage your affairs but also serve as a guide for your family members in the event they need to assist with your finances. Be sure to include account numbers and logins, including your password manager tool of choice. You can give a copy of this document to a few trusted family members or keep it under lock and key with other vital documents, such as your will and life insurance policy. Just be sure to let someone know where it is!


2. Set And Follow A Budget

A huge part of achieving financial order is being aware of your current financial status and spending habits. If you know how much money is coming in and going out of your bank account each month and you develop and stick to an effective budget, you won’t find yourself scrambling to pay bills or wondering where that recent paycheck went. You can clearly see and decide exactly what amount will go where and turn chaos into stability, no matter the amount.


A budget helps you understand your current needs, establish parameters for operating your household, determine if your goals are achievable in your desired time frame, and may even free up some extra funds to place in savings in order to help reduce stress in the event of an unexpected incident, such as an automobile-related emergency or medical injury that requires time away from work.


3. Take Advantage Of Automation

Automating your bills and savings not only streamlines your life by taking some of the unnecessary tasks off of your shoulders, but it can also have long-term benefits for your financial world. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier. Not to mention, many companies have set up incentives to enroll in autopay, which can offer savings that will add up over time!


Additionally, by automating your savings, you set yourself up for success by saving your desired amount before you can even touch the money. Because, if we are being honest, we all have great intentions of saving a certain amount each paycheck, but when the money is in hand, there is, more often than not, an impulse buy that takes a portion of that savings before it ever even hits the account. For many of us, simply getting the money into savings is the hardest part, so automating this process removes that battle.


4. Tackle Your Debts

If you really want to achieve your goals, one of the first and most vital steps you need to take is to eliminate debt. When you are paying 10-30% interest on any number of credit cards or loans, you are drastically cutting down on the money you have available to put toward your goals. When is the last time you sat down to calculate how much money you give away each month simply in interest? It should be a top priority to stop giving that money away as soon as possible.


Become relentless about reducing your debt and interest costs. Consolidate accounts where you can, as this often lowers interest and simplifies payments. If you have a loan with a significantly higher interest rate than the others, you want to work on paying off that one first. Or, if you're feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum and confidence with a small victory.


In order to avoid accumulating more debt, establish an emergency fund as soon as possible. By creating a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund ready when you need it.


5. Create Or Update Your Will

It’s estimated that nearly 70% of Americans die without a will. (2) People may avoid completing their wills simply because they don’t like to acknowledge that they will die. Others may put it off because they have a false impression that it’s a complicated and expensive process. But the truth is that the value a will provides for your loved ones and heirs far exceeds the cost and effort required to create one. In the simplest of terms, a will allows you to ensure that you can leave a legacy to your desired beneficiaries, from physical household items to assets. Without a will, the State will determine what will happen to your assets, and the process for your survivors and heirs becomes much more complicated and time-consuming than it should be.


If you don’t already have a will, it’s time to work with an experienced professional to create one. If you have created one in the past but haven’t reviewed it in five or more years, it’s time to review and make any necessary updates. These are things you do not want to leave to chance.


Ready To Get Started?

Making the decision to work with a financial advisor in order to get your finances in order is so much more than just opening an IRA and setting up monthly contributions. The expertise of a trustworthy financial advisor can open up opportunities you didn’t even know were available and help you to avoid unnecessary mistakes you may not be aware are posing a threat to you. Advisors add value to your financial situation and your life by making sure all the important details are taken care of and helping you create a personalized financial strategy that serves you most effectively. If you want to benefit from the knowledge and experience of a financial planner as you get your financial house in order, contact us at Family Legacy Financial Solutions. Simply click here to schedule a complimentary consultation online today!


About Family Legacy Financial Solutions

Family Legacy Financial Solutions is an independent financial services firm serving individuals and families, retirees, and small business owners in the Cary, Durham, Raleigh, and Chapel Hill areas of North Carolina. We offer comprehensive financial planning and investment management, focusing on building lifelong relationships while educating and empowering our clients. To learn more about Family Legacy Financial Solutions, connect with us on LinkedIn.


Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.

Family Legacy Financial Solutions LLC and Cambridge are not affiliated.

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(1) https://files.consumerfinance.gov/f/cfpb_fin-ed-digest_organizing-finances.pdf

(2) https://www.daveramsey.com/blog/the-importance-of-having-a-will/

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