61 percent of Americans don't keep track of their money according to Business Insider. This begs the question... how can you know if you have enough if you don't know what you have?
Most of us have a general idea about how much is in our savings account and approximately how much may be in our 401(k) at any given time. But we hear two common concerns on this topic. First, people wish they had an organized snapshot of all cash/assets/accounts/debts, etc. at any given moment. Secondly, especially in the case of couples where one spouse manages the finances, people worry that their spouse will be burdened with decoding their finances and accounts if the financial-managing spouse passes away. But rest assured, we've seen some cool tools that can help with these worries.
Our Recommendation: To start with, consider if you're a digital or paper kind of person. Spend the time getting everything in one place. Make a list and share it with your spouse or valued family member. Get organized and make sure all important documents are in a safe place. Include things like passwords to allow your spouse access if needed. Additionally, or, preferably, use an online tool to build a net worth snapshot all in one place. We love Mint and Personal Capital as free online tools. It takes about 15-30 minutes to integrate all of your financial accounts in one place. They use bank level security and at any given moment you can track all accounts and spending to help you with your budget.
Your To-Do's: Decide what your end result will be: handwritten or digital spreadsheet that you keep in a safe tracking all accounts, balances, passwords, etc.; or an integration with an online platform? Either way you need to include:
Assets and Liabilities for your snapshot:
- all checking accounts
- all savings accounts
- investment accounts like retirement and taxable accounts, old 401(k)s
- investment real estate, or other atypical investments
- kids' college savings accounts
- active credit cards
- debt balances (personal, credit, mortgage, student)
- value of any businesses you are involved with
- life insurance that has a cash value
Important documents to keep somewhere in the event of your passing:
- net worth snapshot with all of the above
- debt documents (personal, mortgage, student, credit)
- investment real estate, or other atypical investment backup (title/ownership structure etc)
- life insurance policies (personal, work, old policies your parents may have purchased for you as a child)
- home owners/car insurance policies
- a copy of your budget if you have one
- a copy of your estate documents, or a note where to find them if they are held with your attorney
- if you have a closely held business, buy-sell agreements, etc.
Great news! The Pocketnest app is now available for iOS! Download Pocketnest and get your finances in order—in just 10 minutes a month! No jargony finance-speak, pricey fees or in-person meetings required. Download now!
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