Guest Column: Midyear Review: 10 steps to examining personal finances

One task that should be on everyone's checklist is a thorough, financial review.

Most people balance their checkbooks (or online balances), pay bills and manage accounts on a regular and timely basis. But how often do most people take an inventory of their overall financial standing and plan for the future? There are several recommended steps to help with the very important process of managing financial portfolios.

Step 1. Review the title and ownership of all financial accounts.

Individuals should make sure any accounts that are owned and titled in a trust or that may have a payable-upon-death designation will meet desired intentions if a transfer were to take place.

Step 2. Review a credit bureau report.

Individuals can obtain a free copy once every 12 months from www.annualcreditreport.com. Credit scores can be negatively impacted by late payments, multiple open lines (credit cards) and multiple credit inquiries.

Step 3. Examine the listed beneficiaries of all insurance policies and retirement accounts.

This is particularly important if there has been a recent change in marital status. A spousal waiver will be needed if the beneficiary is not the spouse.

Step 4. Execute a will as well as a living will.

If these documents already exist, they should be reviewed regularly. Circumstances and viewpoints change, which can heavily impact desired allocations and intentions. These documents should be reviewed annually, even if no changes are made.

Step 5. Check the interest rates on all credit cards.

Individuals that carry balances should consider consolidating to the card with the lowest interest rate or accessing a home equity line of credit, as the interest may be tax-deductible.

When using credit cards, choose those that offer rewards. Many now carry no annual fees and offer cash back in addition to travel and merchandise rebates.

Step 6. Take advantage of online resources.

Using online banking and online bill pay will save time and provide a record of expenses, enabling better tracking of where money is being spent.

Step 7. Make the most of the 401(k) employer match.

If there is an opportunity to participate in a company-sponsored 401(k), individuals should at least contribute enough to take advantage of the full employer match.

Step 8. Review life insurance.

Individuals need to make sure existing coverage will meet the financial needs of their families if any member were to die, not just the primary breadwinner for the family. Regular expenses such as child care and house cleaning can be expensive; these will need to be considered carefully so that savings for long-term events such as college and retirement can continue. Also, if the only secured life insurance is provided by an employer, individuals may want to price other term policies. Remember employer-provided insurance may not transfer if there is a change in jobs.

Step 9. Research long-term care insurance.

Individuals should ask their insurance providers about this coverage to ensure it offers home health care in addition to nursing home care. Life expectancy is much longer than it used to be, and as in-home and community care prices continue to rise, people need to be aware of the potential expense.

Step 10. Review or create an investment policy statement.

This is an agreement with a financial adviser that states an individual's purpose for their investments, the time frame of the investments and the amount of risk the person is willing to take with the investment. An IPS clearly states the investor's goals and helps provide clear expectations, consistent communications and true accountability for both the adviser and the investor.

When undertaking a financial review, it's important to do the homework to obtain professional services from investment consultants, estate planning attorneys and certified public accountants. Request references from trusted friends and colleagues, and stick with specialists. These professionals will be able to offer insight and guidance to reach financial planning goals.[[In-content Ad]]Matt Connell, CFP, is a vice president and financial adviser for UMB Bank's investment and wealth management division in Springfield.