September 15, 2016

Your financial health check up

Your annual physical checkup and health screenings are scheduled. Your dental checkups, and perhaps those for your spouse and children, are on your calendar or smartphone. Yet many people fail to schedule time for a regular financial-health checkup.

Christina Ubl

Christina Ubl

Whether you prefer to block out some time each month or review your financial goals annually, here is what you need to do at least once a year to make sure your money is working hard for you, and that you address the goals most important to you and your family.

1. Create a snapshot of where you are today.

Take a fresh look at your net worth.

Ideally, comparing where you were last year at this time with where you are today is encouraging, but it may raise questions. Once you’ve completed the balance sheet, think about what the numbers are telling you.

  • Do you have enough money in your short-term accounts to be able to cover six months of expenses and any emergencies?
  • Are you adding to your retirement and non-retirement accounts?
  • Have you insured your personal property?
  • Do you see an increase in total net worth from last year to this year?

Compare your budget to actual.

Take a step back and make sure that you are comfortable with how you’re allocating your money to savings and spending. For example, are you so bogged down with household expenses that you have little left for enjoyment or investing? Maybe you can reprioritize how you’re allocating your money to both spending and investing so that you can take control of creating a stable financial life you are excited about.

Check your emergency fund.

Everyone needs an emergency fund. You need to know if something unexpected comes up, you’ll be okay. If you are young (perhaps in your 20s or 30s), you can probably get by with having three months’ worth of expenses in highly liquid investments (most people use a savings account). As you get older and as your income increases, you’ll want to increase that to cover six to nine months of expenses. That’s because those higher-paying jobs are harder to snag should you find yourself unemployed. Every now and then your emergency fund may get depleted. So do a quick calculation right now to see that you’ve put away enough.

2. Protect yourself.

You’ll have more confidence knowing your family is protected.

Is your estate planning in order?

Have you been procrastinating about getting this done? It’s so important, yet so difficult to contemplate for many people.

Find an attorney who specializes in estate planning to prepare your documents. You can go to and look under Trusts and Estates/Estate Planning for specialists in your area, or ask your financial advisor if she or he works regularly with a local estate planning attorney.

If you already have an estate plan, do your documents need to be updated? Many people think of their pets as their family. Don’t forget to plan for their care when you update your legal documents as well as your estate plan.

Are your family and property protected with insurance?

Most people are familiar with common insurance products, but it is easy to miss the need for new financial protection and insurance as your life changes.

  • Life insurance: Most people need life insurance when their kids are little and they have a mortgage. There are also many other situations and reasons to hold more permanent types of insurance. Assess this need with someone who is both qualified and objective so you can decide what amount and type of coverage is appropriate for you.
  • Disability insurance: Unfortunately, people get hurt. Injuries, auto accidents, and a whole host of other things can happen that may prevent you from working. Usually policies cover about 60 percent of your current income.
  • Homeowners insurance: Most of you will have homeowners or renters insurance. This will protect you from fires, storms, and other disasters, but not necessarily floods or hurricanes. Read your policy closely to know what’s covered as well as what is excluded.
  • “Umbrella” insurance: Personal liability coverage is often referred to as an “umbrella” policy. It provides additional coverage for your home and auto. Most of you should have a minimum of $1 million or more of coverage in case you’re sued for an accident on your property. The cost—usually $100-$300 per year—is minimal given what you’ll get in return.  Check with your property and casualty agent for specific advice.
  • Health insurance: Review your elections and adjust as necessary. Be sure to account for higher medical costs as you do your retirement planning.
  • Long-term care insurance: Everyone over 45 needs to consider how they would deal with a longer-term illness that requires ongoing care. This type of insurance can cover home health care and institutional nursing home care. Long-term care can be very expensive and can quickly eat through your nest egg. According to data on the government website, the average cost of a nursing home stay is close to $75,000 per year; but not everyone will need this care. At a minimum, educate yourself about the issues.

Update your beneficiary designations.

Make sure your beneficiary designations on your life insurance, retirement plans, and other contracts specify the beneficiary you want today; make sure they coordinate with your estate plan. It’s easy to forget to update these over time. Don’t forget to name secondary beneficiaries in case something happens to your primary beneficiaries.

3. Strategic Planning for Tomorrow

Review your investment plans.

“Save more money” is not an investment plan. The only way you’ll make any real progress is to make your goal specific and measurable — set a dollar amount to save each month — and then automate the investment process. Your retirement savings plan at work is a good way to automatically invest money. Start with at least the minimum contribution to get any employer match.

If you decide you would like to have some objective advice to help you decide on an asset allocation plan that’s right for you, you can go to the Financial Planning Association at and look under Find a Financial Planner in your area.

Check your progress on investing for retirement.

Do you know how much you need to put away? Have you contributed as much as possible for the year? If you’ve maxed out all retirement plans, start building up your after-tax, non-retirement accounts.

4. Results of your financial health checkup

Congratulate yourself. Financially, you are healthier and closer to meeting your goals simply because you’ve made the time to complete this checkup. If you think you might benefit from taking your financial health to a higher level, but aren’t sure if you need a financial planner or advisor, a complimentary guide is available at the Paladin Registry, a free public service that helps consumers avoid the risks and consequences of bad advice and select experienced professionals who have the competence and integrity to help them pursue their goals.

Christina Ubl is a certified financial planner and a certified divorce financial analyst working for Clute Wealth Management of South Burlington, Vermont, and Plattsburgh, New York. Clute Wealth Management is an independent firm and registered investment advisor that provides strategic financial and investment planning for individuals and small businesses in the Lake Champlain Valley region. The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations. For more information about the firm, visit

Securities offered through LPL Financial, member FINRA/SIPC. Clute Wealth Management and LPL are separate entities.

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