Five Steps to Get Your Financial House in Order

Maura Schauss |

By Maura C. Schauss, CFP

Imagine laying out all of your bills, investment account statements, insurance policies, and loans on your kitchen table and trying to make sense of them all. Pretty overwhelming, isn’t it? Getting your financial strategies and investments in place is critical, but sometimes the organizational aspects are overlooked. Here are five tips to get your financial house in order today.


1. Organize Your Paperwork

One of the simplest steps to get your financial house in order is to organize all of your financial information. To begin, separate your financial papers into three categories: bills, documents or statements to save, and old items you can toss. Consider using a secure, online vault to store these items, making sure someone knows where to find them. For those of you who prefer paper storage, use a locked, fireproof safe.

As many documents are available online, the recommendations as to what should be saved have decreased. We recommend clients keep all tax returns, insurance policies, mortgage documents, deeds, estate plans, and any other warranties or service contracts. We provide a secure vault for such documents for our clients. Please reach out to us if you are not currently taking advantage of this service and would like to do so.

Putting your documents in order not only helps you but also benefits your spouse and family if they need to handle your affairs. Within your will, include a letter of instruction so the executor knows where to find your important paperwork.

2. Prepare Incapacity and Healthcare Directives

Perhaps more important than a will is legal instructions for your personal care and the management of your affairs while you are alive but cannot make or communicate decisions on your own. A durable power of attorney authorizes your designated agent to conduct business affairs on your behalf, such as paying your bills from your accounts. A living will is also known as an advanced healthcare directive. This document guides your family on how to handle your medical treatment should you be in a coma or are otherwise incapacitated.

A medical power of attorney authorizes your agent to speak for you in carrying out medical decisions, and a HIPPA information release allows medical professionals to communicate with your representative. These are significant responsibilities and may be very stressful for your agent. Choose someone you can rely on and ask them if they are willing to take this on before giving them this assignment. You can select different persons for different roles. For instance, a trusted advisor or a well-organized friend may be a good choice for your power or attorney while you may ask your spouse or another relative to be your agent for medical decisions.

3. Create or Update Your Will

It’s estimated that nearly 70% of Americans die without a will. People may avoid completing their wills because they don’t like to acknowledge that they will die. They may think that the process is complicated and expensive, but will preparation by an experienced estate planning attorney can be surprisingly straightforward and inexpensive.

The value for your loved ones and heirs will far exceed your cost and effort. In the simplest of terms, a will allows you to ensure that you can leave a legacy to your desired beneficiaries, from physical household items to assets. Without a will, the state will determine what will happen to your assets and the process for your survivors and heirs may be much more complicated and time-consuming than it should be.

If you don’t already have a will, it’s time to work with an estate attorney to create one. If you haven’t reviewed yours in five or more years, it’s time to reevaluate and make any necessary updates.


4. Set Up Your Inheritance and Charitable Gifts

Beyond having a will, an effective estate plan not only incorporates tax reduction strategies but also involves crafting a plan to ensure that your assets transfer to your desired beneficiaries. There are high-level strategies that can help prepare you for the future without having a negative impact on your current lifestyle. When done appropriately, developing an estate plan can help improve yours and your family’s lifestyle.

When working with an advisor to plan your estate and consulting with an attorney to develop your will, consider how you envision your wealth being put to use once you’re gone. Is it to provide for your children? Do you want to contribute to a charitable organization or set up a foundation or scholarship fund? Do you require a trust and, if so, what kind is appropriate for your situation? Planning for the future and next generation of your financial house requires more than just a will.

5. Educate Your Family on Finances

One of the greatest things you can pass along to your family is healthy financial habits and clarity regarding your current circumstances and future goals. How do your financial strategies reflect your values? How do you balance spending versus saving? Are you an aggressive investor or are you more focused on preserving what you’ve already accumulated? Education is the first step towards empowerment and conscious decision-making. By encouraging your spouse and family to take an active role in your finances, you can instill healthy habits and make sure they understand what you’ve worked hard to earn.

With your financial house in order, you can have a stronger comprehension of your financial strategies, be more prepared for expected or unexpected transitions in life, and feel more confident in your future. If you’re ready to organize your financial house or aren’t sure how strong your foundation is, we encourage you to reach out today to set up a consultation. You can call our office at 703.584.2700 or email clientservices@washingtonwealthadv.com.


About Washington Wealth Advisors

Washington Wealth Advisors is an independent registered investment advisory firm serving high net worth families and small businesses. We focus on holistic financial planning and comprehensive investment management. Leveraging our core strengths of unbiased, active investment management together with a detailed annual financial planning capability, we serve your comprehensive investment and financial planning needs.