Valentine’s Day & Personal Finance
Why you should use this Valentine’s Day as a reason to get your financial life in order.
Happy Valentine’s Day!
Greeting cards, chocolates, champagne, and… organizing your financial records. At first, this might sound like a game of “Which One Doesn’t Belong” but it’s not. In this blog, I will make the case for why Valentine’s Day and your financial picture do belong together.
Before you close the tab, I’m not suggesting that you and your partner should ditch your dinner plans to organize your tax documents. What I am suggesting is that the sentiment behind Valentine’s Day provides many reasons for why you should prioritize organizing your financials. We all know that Valentine’s Day is about love, the romantic love you have for your partner, the parental love you have for your children and pets, the gratitude you have for your parents, and more. While you may not realize it, your financial organization, or lack thereof, can now or someday play a major role in the lives of all of these people (okay maybe not your pets). But seriously, Valentine’s Day is about your appreciation for and commitment to the people you love and the people that love you. Since these people have committed to you, what better way to show your appreciation than by getting your finances in shape.
Why now?
Most commonly, major life events and changes are what prompt someone to seek financial help from an advisor or at least begin to get organized financially. Typically, these events might be a landmark birthday, an inheritance, a divorce, a raise, or something similar. However, as these times can often be emotional and overwhelming as is, it is often much less stressful to have your finances in order in advance of these events. With that said, even if you’re not in the market for a financial advisor, there is still a lot that can be done on your own to begin cleaning up your financial life.
What do my finances have to do with my family?
So, why should you do this and what do your loved ones have to do with it? In this article from Forbes, “How to Organize Your Finances for Your Loved Ones”, you can read more about why this is important and how you can approach the task.
Essentially, having organized finances will make it much easier in the event that your family members have to take control for you. In the event of a fatal accident or a life-changing injury, there is a lot that your family will be faced with emotionally. Should something happen to you, there is a long list of things to address, your estate may need to be cared for or sold or maybe you need long-term in-home care. Regardless, these things can be emotionally draining and very difficult for loved ones.
Should something happen to you, the added stress of having to dig through a mess of unorganized documents, statements, and policies can represent an unnecessary and unrelenting burden for your loved ones. By gaining control of your finances now, you can take this burden from your loved ones. While they may not realize it immediately, this is one of the best gifts you could give a loved one in the event that something should happen to you.
What do I do?
Just the fact that you’ve begun to think about the next steps is a great sign. You’re already ahead of the estimated 50%+ of U.S. adults that have no estate planning documents whatsoever.
So, where to begin? This is where the help of a financial professional, an attorney, and other professions may make this process much easier. With that said, here are the basics steps for ensuring your financial life is well-organized and accessible.
Power of Attorney & Health Care Proxy-
At the most basic level, be sure you have a Power of Attorney as well as a Health Care Proxy. A POA is a document while gives legal rights to one person to act on behalf of another person. This is typically regarding the said person’s finances, property, or other assets. A Health Care Proxy is a document that appoints another person as an agent who can make decisions related to your health care should you be unable to do so. Contrary to popular belief, your spouse or parents do not automatically have the authority to make decisions for you relating to your healthcare. This is a frequently overlooked step when “getting your affairs in order”. On that note, as much as it might make sense to simply appoint your spouse as your proxy, beneficiary, or otherwise, you should always consider including an alternate individual in the event that both you and your spouse are in an accident.
A list of all of your assets, accounts, liabilities, and other financials-
You can’t expect your children or parents to remember all of the insurance policies you have or who the beneficiary is on your brokerage account. Having a list with these critical details can be extremely helpful for loved ones. Think about “What”, “Where”, and “Who”? What accounts, assets, and documents do you have, where can they be accessed, and who should they go to for help. This list can include details about investments, tax documents, deeds, car title and registration, and more. With that said, be sure that any lists of this nature are practical in terms of security. If you are including passwords or other sensitive personal information, you may want to use a protected online software or other safe storage option. Finally, be sure to periodically review this list to ensure its accuracy.
Designate Beneficiaries-
Be sure that you have a named beneficiary on all of the accounts you have whether they are retirement accounts, brokerage accounts, insurance policies, or something else entirely.
Create a will-
If you do not already have a will, you should work with an attorney to create one. Be sure that your loved ones know that you have a will, where it can be found, and who you worked with to create it. An attorney can also work with you to create a living will or advance directive which will inform medical professions exactly what your wishes are for your end-of-life-medical care.
Contact Information-
Leave your loved ones with the contact information for any important people in your life who should be notified should something happen to you. This might include financial advisors, friends and family, employers, accountants, doctors, lawyers, and more.
How can our team help you?
Here at Johndrow Wealth, we know that this can be a difficult topic to discuss and an overwhelming process to approach. That’s why our team created the “Family Legacy Letter”.
This is a 50-page document where you can organize all of this important information in an easy and accessible way. The letter also offers a way to safely store the information for your loved ones, when the time comes. If this exercise is something you might be interested in, feel free to reach out to our team with any questions or to schedule an initial consultation with one of our advisors.
Final Thoughts
So, while I don’t advise you discuss the potential for tragic and unlikely events over dinner this Valentine’s Day, I write this in the hopes that you might consider giving the silent gift of an organized financial picture to your loved ones. Someday, hopefully a long time from now, your loved ones will thank you for this gift and all you’ve done to simplify the process for them. As difficult as these topics can be to discuss, there will never be a perfect day to approach them. Getting a start on organizing your finances is one huge step in the right direction both for yourself and the people you love.
From myself and the team at Johndrow Wealth, we wish you a happy and healthy Valentine’s Day spent with those you love most, even if it may be spent virtually this year. Please feel free to contact our team if you are interested in meeting with an advisor to discuss how you can begin to get your finances in order.
Written by Kaitlyn Keeler
Kaitlyn is an enthusiastic client service intern that assists our advisors with your accounts. She is an attentive business student with a concentration in finance.
