Even people who are super-organized with their finances often don’t have things set up so that anyone could come in and carry on for them in case of an emergency.
Whether that’s the one step you haven’t taken yet or you’re just deciding to get more organized with your finances, this is a particularly auspicious time to get going and here’s an easy, super-painless way to make it happen. Bonus … doing this will help you even if there’s never an emergency.
Get a new spiral notebook with lined pages. Not a small one. More like 8 1/2” x 11”. The bigger the better, so you feel like you have plenty of room for side notes.
Title the first page 2017 and the next page “January 2017”. Then throughout the month, make a note of each bill you pay along with helpful details like the account number, which bank account the payment comes from, the bank location, phone number and any other specifics about your accounts or assets that would provide a reliable roadmap for somebody else.
Also make notes about any special or unusual annual or quarterly expenses that typically come up in January. If there’s paperwork associated with those items – like a life insurance policy or an annual fee payment for a safe deposit box – record where you keep the policy/account paperwork or safe deposit box key.
January’s items may take one page. They may take several. Either way is fine.
If you’re single, that’s it for January. Except for perhaps telling someone you trust that your notebook exists and where you keep it.
Then you do the same thing for February, March and throughout the year. (Obviously, you don’t have to record the same level of detail for every month after January unless something significant has changed. And also obviously you will want to store your notebook in a secure place.)
If you’re in a relationship, having the monthly pages gives you a great opportunity to review your family finances with your partner. If they’re interested and engaged, great. Even if they’re not, at least knowing the notebook exists will help them if they should ever find themselves having to take over unexpectedly.
Doing this will only take a few minutes a month – less as the months go by. And it gives you multiple chances to consider what you’re spending and how you’re spending. The goals? 1- You being sure you’re okay with how things are going, and 2- You being aware of where things need to be streamlined, simplified or changed altogether given your current age or changes in your situation, like getting married or having a child.
Extra points if you designate one month every year to double-check that your important legal and financial documents are filed in a secure-but-easily-accessible location with that location and any password or lock combinations recorded in your notebook.
The same goes for making sure your insurance and/or IRA beneficiaries and your will are up-to-date (many are not – not at all!) and that trusted co-owners’ names are added to bank and/or credit card accounts now when it’s so easy to do.
Nobody wants to think about not being able to handle their own finances, for all the obvious reasons. Most people ignore the whole thing until a health scare – their own or someone they know – gets them super-motivated to do it. Which is why millions and millions of dollars end up as Abandoned Property every single year.
Do yourself and your loved ones a huge favor. Don’t be like “most people.” Make a roadmap of your finances that someone else could follow. Have regular money conversations with trusted loved ones. January is a perfect time to start.
Nick Maffeo is the President & CEO of Canton Co-operative Bank in Canton. “Smart About Money” is a regular column he writes for the Canton Citizen. Have a financial question you’d like to ask? Email to firstname.lastname@example.org.