COVID-19 Notes: #QuarantineGoals: 10 things to do without leaving your home to improve your financial well-being
Well, here we are living life during quarantine. Watching way too much TV and eating far too many carbs. But we also have the opportunity to use some of this new-found free time to improve our financial well-being, taking care of those tasks that we always meant to get around to.
Here’s your quarantine financial to-do list:
- Review your most recent debit card and/or credit card statements. What better time is there to review your spending? Print out your most recent bank and/or credit card statements. How many transactions did you conduct in an average week? Where did most of these transactions occur? Although you may find yourself saying that you do not know where your money goes, in fact your money actually does not have a life separate from yours. It only goes where you take it. Use this time to discover opportunities to change your habits in ways that can save you money.
- Update your beneficiary designations. When was the last time you looked at who you designated as beneficiaries of your most important assets? In many cases, you can complete this online. Go to your bank or brokerage account website (we are not looking at the balance today!) and make sure that your wishes for your loved ones are reflected accurately.
- Review your credit reports. Are you doing this every year? Now is a great time to do it and it is fast. Go to annualcreditreport.com and get a copy of each of your credit reports (Equifax, Experian, TransUnion) if you have not done so in the last year. Because you are generally limited to one free report per company per year, many people spread this task out over the year, reviewing one report every four months. This is a great way to monitor your report over time. But if you have not seen any of your reports for a long time, just get them all right now. You have time.
- Freeze your credit. Just do it. Reviewing your credit report can be a great way to discover if your identity is being mis-used…after it has happened. Freezing your credit prevents it from happening. This takes a bit more time (which you have) than obtaining your credit report because you have to go to each of the three credit reporting agency sites. But once it is done, you do not need to do it again. And should you need later to apply for credit, you can lift the freeze temporarily and then put it back in place later.
- Complete your 2019 tax return. Yeah, tax returns are not due until July 15. But that doesn’t mean that you should wait until Bastille Day (look it up) to complete your return. If you have a refund coming, there is no reason to wait. And if you have a payment due, it is better to know that now and plan for it than be surprised later. And don’t forget: If your income is less than $69,000, you can use free software available at the IRS site to complete your return.
- Update your W-4 tax withholding. Did you know that the W-4 form, the one your employer uses to determine the amount of tax to withhold from your paycheck, was updated this year? It looks radically different and if, having completed #5 above, you found that you had a too-big refund or payment, likely you need to adjust your withholding.
- Take an inventory of your home for insurance. Now this task is almost fun. Using either video or still photo, take an inventory of everything in your home. This will be an important part of your record should you need to file a claim under your property insurance. Store the file safely in the cloud so that it is accessible at all times. Also, clean up the house a bit before you get started.
- Shop for a better deal on car or property insurance. How many insurance commercials do you see in a day? Now may be time to see if in fact a better deal can be had.
- Get your Social Security benefit statement. Have you created your online Social Security account yet? This gives you access to your annual benefit statement which, in the olden days, was mailed out to you annually. Not only can you get an estimate of what your eventual benefit will be, this is an opportunity to review your earnings record to make sure that all of your employment is accurately reflected. If something is missing, this will negatively impact your eventual benefit. (Note: If you have frozen your credit reports, you will need to temporarily unfreeze your reports in order to establish the Social Security online account.) You can create your account here.
- Switch to an online savings account. Right now, you are probably feeling quite thankful for your emergency savings. Show it some love by switching to an online savings account that pays more interest. Yes, interest rates are low generally so maybe you are of the opinion that it doesn’t make much difference. Consider this: If you have $3,000 in a “brick and mortar” bank account earning .02%, you will earn a whopping 60 cents after one year. But in an online account at 1.7%? $51.43. Now, these online rates may adjust in the coming days and weeks, but they should still remain much higher than traditional offerings. That is worth a bit of effort, yes?