Now that the holidays are coming to a close, it’s a great time to take inventory of your personal finances. Here are some key areas that should be reviewed each year.
Credit. “First and foremost, you have to become more engaged with your credit reports,†says John Ulzheimer, credit expert at CreditSesame.com. “Every person in the country has the right to see their credit reports at least once every 12 months.†You get three free credit reports from AnnualCreditReport.com; some states even allow for additional reports. From CreditSesame.com you can get a free Experian report every 30 days and free credit score. Ulzheimer says the best credit scores to aim for are 720 or better for auto loans, 750 or better for credit cards, and 760 or better for mortgages.
Taxes. David Morris, CEO of Global Accounting Solutions, advises his clients to review pay stubs for correct federal and state tax deductions. In addition to Quicken, use Bankrate.com, IRS.gov, and a mileage tracker from a mobile apps store. “People who get coverage through a health insurance marketplace may be eligible for the premium tax credit,†says Morris.
Insurance. It is important to have different types of insurance for financial protection. For auto insurance, Sharon McCarty Armstrong , principal of McCarty Armstrong Agency Inc./Allstate Insurance, suggests purchasing comprehensive or collision coverage in addition to the required auto liability policy. Mortgage lenders require homeowners insurance, but it is good to get your belongings covered as well. To create an inventory of items in your home, download Allstate’s free app, Digital Locker, which makes it easy. “Finally, life insurance may be one of the most important but overlooked types of protection you can purchase,†says McCarty Armstrong. “Families often don’t think about what would happen if a family member’s income is lost.†She recommends reviewing policies once a year.
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