Year-End Financial Checkup

Use this guide to help you evaluate your financial health

You’re probably wondering what happened to 2010. It blew through quickly and might have left you spinning. But you can make smart moves now that will help you start 2011 on the right foot. black enterprise spoke with financial experts who came up with a game plan for assessing six indicators of financial health: credit, taxes, insurance, estate planning, retirement planning, and savings.

Whether you’re single, married, divorced, or widowed, it’s vital to do a financial checkup regularly. Dr. Hughan Frederick and his wife, Nekeidra Frederick, understand the importance of staying on top of their finances. With two young sons—Hughan, age 3, and Caelen, age 18 months—the Fredericks know it’s important for them to keep track of every dollar they earn, spend, and save. “Doing a financial checkup pays off,” says Hughan, an obstetrician and gynecologist who has opened his own practice, Isis OB/GYN, in Alpharetta, Georgia. “We know where our money goes. We can account for it.”

Hughan and Nekeidra, ages 37 and 35, respectively, talk frequently with their financial planner, with whom they meet in person annually. They also meet with each other quarterly to discuss their budget and major purchases, and to set financial goals. “This economy has been a reminder that nothing is guaranteed,” says Nekeidra, who owns a public relations consulting business, Gunner Marketing Group. “We buy what we need instead of everything we want. We also review our finances to ensure that we are meeting our goals.” One of their goals is to make sure their sons are taken care of in the event that one or both of them should die. The couple has drafted wills and set up a 529 college savings plan for each child. They’re also vigilant about managing their credit, making sure to check their credit reports quarterly and pay off balances in full each month. During their annual financial checkup, the Fredericks make sure they’re on target with college savings, retirement, and insurance needs. They pay specific attention to whether they’re saving enough for college, whether their retirement accounts are properly diversified, and whether their insurance is adequate for their current stage in life.

Here are some guidelines to help you conduct your own financial checkup.

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  • Dorina

    You should claim the pro-rated amnuot you paid on the old property and any pro-rated amnuot you paid on the new property (often in advance of the year-end billing), then remember to make any necessary adjustments after official tax bills come out and get re-divided. In theory, you paid the taxes by giving the money to somebody else (or putting it into escrow for taxes) and you are allowed to assume they actually made the necessary payments to the necessary authorities. A lender holding tax escrow should give you an annual statement of taxes collected, held and paid out.