Three Somewhat Quick Financial Fixes: Did You Do Them?

by Kevin on October 15, 2010

In the past two and a half months I’ve mentioned three specific financial tasks for you to tackle:

Pop quiz: how many of those tasks did you do?

Start Good Financial Habits Now

What, did you think I was kidding? I wasn’t.

Two of those tasks take less than 15 minutes to complete.

Fifteen minutes for a couple of tasks to improve your financial position for the long term. Come on. Work with me here.

It’s all about starting good habits now that will carry on for the rest of your life.

If you can start using the system to check your credit reports every two months (if married) and three months (if single) today then you can maintain that system through the foreseeable future.

If you’ll get in the habit of rebalancing your portfolio every August you’ll ultimately grow your portfolio more than you would without rebalancing.

It’s all about habits.

Don’t think about it. Don’t delay. Don’t ponder.

Get going. Get started on the right path today.

Spend Your FSA Money

The first task, spending your FSA money, is something you need to be aware of as you get into the fourth quarter of the year.

Not exactly a 15 minute task, but it should take amount of time (or less) to check your balance. You can’t spend it without knowing how much is in your account.

Why is this important?

If you don’t spend your FSA account balance by the end of the year you lose it. No whining, no complaining. It’s gone. Your account starts over at the beginning of the year.

Rebalance Your Portfolio

You should be able to use your portfolio’s online tools to rebalance your portfolio in a short amount of time. You only need to do this once per year. Fifteen minutes of effort once per year isn’t too much to ask.

Rebalancing is where you take money from a type of investment that has done very well (such as stocks) and reinvest into investments that may have lagged behind (such as bonds).

Why is this important?

By rebalancing you force yourself to sell high and buy low. It goes against your human instincts to sell investments that have grown for you. It’s like getting rid of the best parts of your portfolio.

But that’s the point. What has performed well so far probably will not continue to outperform the market. Buy low, sell high. Smart move over the long term.

Check Your Annual Credit Report

Log on to the government mandated website: Check one (only one) of your three credit reports. Check for errors.

If you don’t have any errors it should take you less than 15 minutes.

But don’t stop there. Don’t check one report during the year. Set up a system to remind yourself to check those reports every 2 or 3 months.

That way you’ll have a rolling set of reports every couple of months. The alternative is to check all three reports at the same time — but then you’re only getting reports every 365 days. If you space them out, you’re spreading out your coverage.

Three small tasks from a time perspective. Three big changes for your finances over a long period of time. Get going!

{ 1 comment }

Golfing Girl October 17, 2010 at 7:12 am

We just spent the last of our $2900 in our FSA last week. It was pretty easy to spend it all this year since we had a baby. For those who still have money left, remember that you can stock up on over the counter meds that you know you’ll need (Tylenol, bandaids, contact solution, etc.). Thanks to Obama and his healthcare bill, these items are not reimburseable next year, and the FSA limit falls from $5000 to $2500. Remember to plan wisely next year when estimating your FSA budget and DO NOT include those over the counter items or you may be left with a balance and no way to utilize it like you have in the past…

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