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Financial Health Checkup - 2019

2019 Financial Health Checkup?

Start 2019 off on the right foot by following this simple and powerful financial health checklist.

  • Why do I Need a Financial Health Checkup?
  • What are Your Financial Health Goals?
  • Annual Mortgage Review – Asset Review
  • Estate Planning Review – Have or Review Estate Plan
  • Insurance Review – Annual Protection Review
  • Home Warranty Review – Annual Coverage Review
  • Working with an Expert

Why do I Need a Financial Health Checkup?

New Year resolutions are very popular this time of the year.  What is also very popular are the jokes about how long we stick to those resolutions.

These things are really important, and yet, we tend to just let them run on auto-pilot.  If it’s not broken, why fix it?  There are two ways to look at this actually.

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First way is “whats the worst thing that could happen” by just letting it run on auto-pilot?  If you take this approach, you let things ride, and if something comes up, you’ll deal with it at that time.

Second way is “am I getting the most out my long and short term financial health goals?”  This is a much more proactive approach prevention and optimization as the goal.

3 Reasons Why You Need a Financial Health Checkup

If you’re still wondering what the heck a financial health checkup is, and why it’s important to you, wonder no more.  You need to carve out a few hours over the next 30 days if any of these things are important to you:

  • You want to be proactive, and be in the best possible position for avoiding or preventing financial surprises.
  • You want to improve monthly cash flow.
  • You want to maximize protection and transference of your long term assets.

Well, let me share a few thoughts with you here, and you can decide for yourself whether or not this would positively impact you and your family.  Fair enough?

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What are Your Financial Health Goals?

There are many large and small things you can do to make your financial life easier.

Simple things include eliminating anything you’re wasting money on that you shouldn’t be. In today’s day and age of monthly subscriptions for everything from shave kits to groceries, it is not uncommon that we sign up stuff that we don’t end up using nearly as much as we thought we would.

  • Maybe you’re not really listening to those audio books they way you though you would.
  • Maybe you don’t need 3 music streaming subscriptions
  • Maybe there are some small monthly charges on there you don’t even recognize

Financial health goals for the purposes of this article include minimizing your monthly payments, which means you’re saving money, and protecting your short and long term financial health.

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Asset Review – Annual Mortgage Review

In most cases, while you’re doing your financial health checkup, you’re going to find that there are very few adjustments or actions required to take to get back on track.

Your home mortgage loan is definitely one of key pillars of your long term wealth strategy that offers some degree of liquidity.

Should you be in a position to invest in the improvement of your current home, purchase an income producing property, or eliminating high interest debt, access to your equity could put you in a very good long term position.

Having sufficient equity in your home to make investments that result in short term cashflow or long term wealth building is a blessing.  Keep in mind that most missed opportunities come from simply acting too late.

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Here’s the absolute truth.  As soon as you’ve heard about an opportunity, it’s probably too late. Examples of “opportunities” include interest rates, home prices, home values, pay-off terms, access to equity, short term cash flow.

The “perfect time” can only be identified once it is past.  Only with the comparison of where you’re at now, can you see that another time was “better”.  So, when is the perfect time to take advantage of an opportunity?

The perfect time to take advantage of an opportunity to improve your financial health is worth considering.

5 Common Strategies for Leveraging your Accessible Equity

Holiday Credit is Expensive – The reality is, it wasn’t just the holidays if you’re carrying a significant amount of revolving debt.  Credit card balances are unbelievably expensive if you’re only making the minimum monthly payment.  If your credit card balances are higher than $10,000, running the numbers on a consolidation strategy would be worth your time.

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Credit Profile Quick Fix – If your interest rates and credit opportunities are costing you because of low credit scores, you could be suffering from maxed out revolving debt.  Paying down revolving debt to $0 (or close to) can result in a very quick boost to your credit score.  This strategy should NOT be looked at as a “bail out”.  It is important that when you pay off debt that you do not replace those balances in the future.

Deferred Maintenance – These are the repairs that you’ve put off for many years.  The most common reason for deferred maintenance is that many homes had been upside down in the past 10 years.  If you’ve put off home improvements, it’s definitely worth your time to review the numbers on this investment.  It might help increase the value of your home when completed!

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An Investment Vehicle – Using your home equity as an investment strategy can be a risky endeavor if you are without the right people in your corner. As long as you understand the risk, you can use your equity to purchase income producing property or other other vehicles.  My opinion is that 2019 is going to be a great year to purchase income producing property.

Remove Solar Lease / Property Tax Lien – It sounded like a good idea at the time.  You thought you were doing your part to be more energy efficient.  You didn’t completely understand that your property taxes, and your monthly mortgage payment will increase as a result.  It is now possible to pay off HERO and PACE loans using “no-cash out” underwriting guidelines.

Estate Planning Review – Have or Review Estate Plan

Earlier this year, I had the opportunity to interview Anna Serrambana, an estate planning attorney with SurfCityLawyers.com in Huntington Beach, California.

Anna Serrambana Estate Planning Interview Article

Click Image or link above to view entire Estate Planning Attorney Video Interview

I learned a lot in this interview, and when you consider the cost of not having an Estate Plan, it’s crazy to not at least seek out an estate planning attorney for a free initial consultation.

Many people think that estate planning is about keeping your assets out of probate, and you would be right.  But that’s not the most important reason to sit down with an estate planning attorney.

Not only do you want your assets to go to your heirs based completely on your terms, you want to make sure that you are not causing any unnecessary tax hardships for your estate, or your heirs.

If you have an Estate Plan, review it once a year.  Especially if there have been any significant changes in the family.  If you’ve lost touch with your estate planning attorney, find one that you’ll be able to sit down with once a year to review your plan.

Protecting your heirs and protecting your assets is as simple as sitting down with a professional to put your plan on paper.   The cost to put an estate plan in place is insignificant when weighed against the cost to the estate that the probate process will inflict.

Insurance Review – Annual Protection Review

When you’re a first time home buyer, homeowner’s insurance is just another hoop you have to jump through to close on your new home.

After an interview with Keir Jones, a State Farm Insurance Agent in Long Beach, California, my eyes were opened to the importance of using a professional insurance agent.

Click Image or link above to view entire Homeowner’s Insurance Expert Video Interview

There is often a lot to digest when you you’re trying to determine what coverage will protect your assets and family, in the most cost effective way possible.

This is where building a long term relationship with an insurance agent is very smart strategy.  An annual review of your coverage, your costs, and your options will empower you with the information you need to make and informed decision.

Home Warranty Review

When you buy your first home, the seller will typically include a 1 year home warranty.  The cost of a one year warranty will typically run around $350 for standard coverage.  You can purchase additional coverage if needed.

With such a small annual investment, I would strongly recommend that you maintain your home warranty, and review your coverage once a year.  Do you still have appropriate coverage?  Do you know that you may need service on something that’s not currently included in your home warranty?

It’s always a good idea to review any and all coverage based protection policies, and your home warranty is definitely not an exception.

Working with an Expert

I can not emphasize enough the importance of hiring a professional when selling or buying your home.

When you call a lender from a TV or radio commercial, or click an ad you saw on the internet that has a catchy headline, you are playing competence roulette.

I personally have been in the business for almost 20 years now, and started this website 10 years ago to educate and empower consumers.

We have had over a million consumers visit this website and I have answered many thousands of questions from folks all over the Country.

If you are trying to buy or refinance your home in California, I can help.  You may ask questions about your options below, or shoot me an email directly to scott@buywisemortgage.com.

If you are outside of California, I can introduce you to a loan officer from our Expert Network that I personally know and trust.

About the Author

Scott Schang

A 20 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

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