Happy Leap Year Day! 2012 has given you a whole extra 24 hours, now what are you going to do with it?
You may just have some very exciting plans, and heaven forbid me from derailing them. But if you don't, our friends over at the Certified Financial Planner Board of Standards have some suggestions (don't they always?).
The Board's consumer advocate, Eleanor Blayney, says individuals should take a few of these bonus hours to "peel back the layers of their financial lives" and do a true self-assessment. "Sharpen your pencils, fire up your computer or tablet and take stock of where you are right now,” she suggests.
Take your most recent tax return, your last pay stub, and the latest statements for your retirement and investment accounts and ask yourself the following questions:
What is your gross and net income, and what are your expenses?What do you have in terms of financial assets (savings and investment accounts, real estate, retirement plans, etc.)?
What are your debts, both in terms of amounts outstanding as well as what you pay each month?
What workplace benefits do you receive?
What insurance coverage do you have to protect your health, income, life, property, or need for physical assistance?
How are your assets titled and who gets them when you are no longer here?
Answering all these questions, at one time, in one place, is a key first step to building a sound foundation for a financial plan. “Knowing your starting point is necessary for figuring out how far you have to go to achieve your goals, or if, indeed, those goals are feasible,” Blayney says. “By focusing on exactly where you stand, you’ll be taking a big leap toward financial confidence in 2012.”