Avoiding Crisis

Don’t let a crisis cause financial problems. Take these steps now:

  1. Calculate your net worth once a year: list all you own, and owe (family income, expenses, debts, savings, investments, insurance)
  2. Start and build a rainy-day fund of savings readily available for crisis.
  3. Update your Wills at least every five years.
  4. Draw up durable powers of attorney for you and your spouse. (Actually, only your spouse can do this for him or herself.) These allow someone else to manage your finances and/or your health care decisions in case one or both of you become disabled.
  5. Carry enough insurance – life, health, disability and car and homeowner’s, with floaters or supplemental coverage for extras like jewelry, art, furs. Keep the premium payments and the appointed beneficiaries up to date.
  6. Have a credit history – put loans and bank and charge accounts in the name of both spouses if one does not earn an outside income; if each earns or has separate income, also establish accounts in each name.
  7. Ask your personnel department for details on pension plans and all other benefits to which you and your spouse may eventually be entitled. Keep the appointed beneficiaries up to date, and change them as circumstances change.
  8. Keep a “Doomsday” book, with the location and numbers of stock certificates, bank accounts and credit cards; where to find your safe deposit box, will, power of attorney and life-insurance policies; names and numbers to be called in emergencies (lawyer, accountant, insurance agent, etc.); make sure your attorney, children and/or a trusted friend know where to find the book.
  9. Create a Digital Assets List with all of your online accounts, web addresses, user names and passwords, so that in an emergency, your appointed agents will be able to access your bank and other important accounts. The Doomsday book isn’t enough in this digital age.