Bringing your finances alive means clearing the clutter of miscellaneous matters like budgeting, insurance and estate planning.
Most successful businesses budget; few people bother. As long as more money is coming in than going out, people don’t keep track of where their money goes.
Still, if you want – or need – a bit more control, keep all your receipts for a month or two. Put them into envelopes with labels like supermarket, clothing, eating out, car, entertainment and so on, or find a program/app that does the job.
Total them at month-end. Write down other fixed costs like rent or mortgage.
It’s more an awareness exercise than anything. If you want to cut back – to increase debt reduction or saving, for example – list the expenses in priority order and cut or trim from the bottom.
You don’t need insurance … until you need it. The rule is to insure against financial calamities that you couldn’t cover financially.
The biggies are life insurance (how would the dependent survivors cope if the wage-earner died?), disability insurance (usually offered through work – but sometimes fairly restrictive), home/possessions insurance and car insurance.
Review your coverage annually, to make sure you have the right amount. Perhaps with the help of an agent, check your deal with the company that offers both a competitive premium and good service.
Estate planning starts with an up-to-date will – or an awareness and acceptance of the provincial rules that say what happens if you die without a will.
Life insurance and tax planning can be important. And see if joint tenancy ownership of assets would be appropriate, to minimize probate fees.
If you have more complex finances, get expert advice about the use of trusts, estate freezes and other approaches.
Finally, don’t neglect something as simple as having a current list of assets, contacts and steps to take following death. Both my parents had such lists, and it really helped with the necessary business side of things during a difficult emotional time.
Update this list annually. You’d be surprised how much changes in one year.
