Consumer Protection

Personal Finance Checklist: 10 Tips to Start the New Year

By Amy Loftsgordon, Attorney
Get yourself on track for the new year.

When you’re busy with work, family, and the holidays, it's easy to forget about taking care of matters that need to be done each year. But putting in the effort to complete them now can save you time and hassles later.

Here are the top ten things for you to do at the beginning of the new year.

1. Review and Update Your Will

Look over your will to make sure it's up to date. Did you get married this year? Divorced? Did you have a baby or adopt? Are your children now young adults? You should update your will to account for these and other life events. If you don’t have a will, prepare one. (To learn why you should have a will, see Why Is a Will Important?)

While you're at it, check your financial power of attorney, too. Make sure the person you've named to take care of your finances (called your “agent” or “attorney-in-fact”) is still willing and able to do so. If not, you need to make a new one.

2. Review Your Insurance

Review your current insurance coverage, including your:

  • Homeowners’ or renters’ insurance. Did you make any improvements to your home, like remodeling a kitchen or finishing your basement? Did you buy a new television or other expensive items? Check to make sure that your homeowners’ or renters’ insurance covers them
  • Auto insurance. You might want to adjust your coverage to account for how much (or how little) you drive, for example, or switch insurance companies to save money. (To learn more about car insurance, see Nolo’s article What Kind of Car Insurance Do I Need?)
  • Life and health insurance. Do you have enough life insurance to take care of your family if something happens to you? Talk to your insurance agent about your coverage if you've had a new baby or a change in your marital status. You should also take a look at your health insurance. If your situation has changed, review your plan. (Though, keep in mind you might have to wait until an open enrollment period to change your coverage.)

3. Start Getting Ready for Tax Time

It's never too early to start gathering receipts and other documents to get ready for tax time. Most employers send out W-2 forms before January 31st, so if you're ready before then, you can file well before the deadline—and perhaps get your refund, if you're due one, early. (Learn how to avoid IRS tax return errors in Nolo’s article 8 Common Tax Return Errors to Avoid.)

4. Review Your Credit Reports

Every 12 months you're entitled to get a free credit report from each of the major credit reporting agencies: Experian, Equifax, and TransUnion. Get at least one report and read it carefully. You may order all three of your free credit reports at the same time so that you can compare them and spot discrepancies. But it’s generally a good idea to stagger your requests—ordering one report every four months, for example—so that you can check more frequently for suspicious activity, like identity theft or errors. Fix any errors you find on your credit report immediately.

5. Review Your Credit Card Budget

Take a look at your credit card usage. If you charge more than you can afford, make low monthly payments, or pay late, you might be headed for financial problems. If you can't pay off the entire balance every (or almost every) month, then you’re overspending. If necessary, rearrange your budget and work towards paying off your cards in full. Then, use your cards to charge only as much as you can afford pay off each month.

6. Check Your Licenses and Permits

Most licenses and permits have expiration dates. For example, drivers’ licenses usually expire every few years, so check the date on yours. Depending on state law, driving with an expired license could lead to fines, points against your license, arrest, impoundment of the vehicle, and higher insurance rates.

Also, many professions and trades require a license. Attorneys, electricians, and plumbers usually need one. Bars and restaurants typically need a permit to sell liquor or sell food. Check the expiration date on any licenses and permits, and renew them as needed.

7. Don’t Get Scammed

Around the holidays, many people make donations to charities. But charity scams are common, especially over the Internet. Before you donate to a charity, check with your local Better Business Bureau to find out if the charity is legitimate. You can also check to see if a charity is tax exempt at the IRS website; donations to these charities might be tax deductible.

If you think you're the victim of a charity scam, file a complaint with the Federal Trade Commission, local law enforcement agencies, and your state attorney general. (Learn more about how to avoid common scams.)

8. Review Your Online Security

It's always a good idea to keep your computer, tablet, and smartphone security settings and software current. Make sure your device, browser, apps, antivirus, and anti-malware software are all up to date. You need to be proactive, not reactive, when it comes to protecting yourself from viruses and online scams.

9. What About the Kids?

Don’t forget to check the security settings and malware protection for their computers, tablets, and smartphones, too.

10. Get a Check-Up and Review Your Medical Power of Attorney

It's a good idea to see your family doctor at least once a year for a regular check-up. While you're at it, take care of other health-related matters, like getting a copy of your medical records, asking your doctor about how your electronic medical records are kept safe, and making sure your medical power of attorney is in order.

Getting Help

If you need help preparing a will or power of attorney, contact an estate planning lawyer. If you need help dealing with identity theft, fixing errors on your credit report, or any other consumer matter, contact a consumer protection lawyer. If you need tax advice, contact a tax attorney.

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