SAN ANTONIO — There are four easy steps to freshening your finances for 2021.
First, review your credit report. Ryan Moore with the Kingman Financial Group said your credit score is essential to your financial health.
“It’s your net worth, so to speak,” he said. “A little ding on your credit score can make your interest rates go much higher.”
Dispute any mistakes. It does not hurt your credit score or cost you to check your credit report according to Nathan Grant, a credit card analyst with Credit Card Insider.
“You also don’t want to go out for some important life decision that’s dependent on your credit score being a factor and then be blindsided like, oh, I didn’t realize I had so much work to do,” he said.
You can get a free credit score report weekly through April 2021 at annualcreditreport.com.
Second, check your social security earnings. Make sure your statement is correct.
“If you missed one of those great years, it can truly, definitely change the amount of money you’ll get later in life,” Moore said. “It’s easier to catch it now than it is to go back 20 years and say, hey, I remember this was a great year. A lot of times we find that it is just misreported or they failed to report.”
Statements from Social Security are mail to you annually or check online any time at ssa.gov.
Third, update your will and estate documents.
“If you don’t want to be resuscitated, it takes the burden off your loved ones,” Moore said. “No one wants to pull the plug, so just go ahead and write that down. We also find a lot that old accounts, like a pension, they might have divorced spouses or even spouse that have pass on. Once you’re gone, it can’t be changed.”
Or create a will if you do not have one. You can go online or to an attorney, depending on how complex your situation is. Moore said you should at least have these five documents:
- Either a will or trust: This directs how your property will be distributed after your death.
- Power of attorney for medicine: This designates a loved one to make medical decisions for you if you are incapable of doing so yourself.
- Power of attorney for finances: This appoints a loved one to manage your finances if you cannot do so yourself.
- HIPPA Authorization: This lets you name the people who can have access to your medical information.
- Physician’s directive: This is also known as a living will. It instructs your doctors on the medical treatment you want if you have a terminal or irreversible condition.
Finally, review your insurance policies.
“Everything we have is insured nowadays. Your cars, your house, your life, but they can be outrageously high every year,” Moore said. “Go review them, make sure you’re not overpaying for insurance and make sure you’re covered as well.”
These quick checks will freshen up your finances for the new year.
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