Pinnacle Bank: Resource Center: January 2006:

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2006 Personal Financial Resolutions
By Ray Tate, Pinnacle financial advisor and Rivergate office manager

Pinnacle Financial Partners has assembled six personal financial resolutions that will help you organize your personal financial materials and protect the wealth that you have worked hard to create.

We have recommended a two-month timeframe for each resolution. Accomplishing each task is more important than the timeframe.

January/February	Update your financial files
March/April	Organize your tax materials
May/June	Plan an emergency fund
July/August	Conduct or update your household inventory
September/October	Review and update your will
November/December	Meet with your financial advisor

Scroll down to reach more detail about each resolution.

January/February

Update your financial files

No matter how you have your personal financial files organized, it is important to know what to keep and what to throw away as you organize your files for the year.

In general, you should have a set of files for maintaining the current year's records and an archive where you store specific files, such as tax returns, salary records, and other documents you should keep for some time.

The following are some general guidelines to follow when cleaning your files at the start of the year:

Discard

Pay stubs for previous12 months if you received year-end statement
Credit card statements unless they have tax-deductible expenses. If so, put those with your tax papers.
Quarterly brokerage statements if you received a year-end statement
Utility and phone bills if you have paid them
ATM/deposit receipts that have appeared on a bank statement

Move to your archives

Any medical bills from the previous 12 months. Put with tax papers if tax-deductible.
Wage and salary records
Monthly bank statements and cancelled checks
Savings account records
Retirement (401k, IRA, etc.) account records
Income tax returns from the previous year and any materials used in preparing tax returns
Any documentation of improvements to your home
Warranties and guarantees
Vehicle titles and repair information

March/April

Organize your tax materials

Half the battle when preparing an income tax return is getting all of your materials in one place at one time. The following are general categories that will help you find and organize your materials:

Income - W-2s, 1099s, interest statements, and dividend statements, other income such as stock proceeds
Medical - receipts for medical expenses and health insurance out-of-pocket expenses
Donations - receipts for both cash and non-cash donations
Real Estate - interest statements from mortgage and tax assessments
Child Care - child care payment receipts
Tax Correspondences - important letters from the IRS or your state revenue service
Tax Preparation - receipts for tax-preparation fees and software
Student Loans - statements of loan interest paid
Payments - any records of advance payments

May/June

Plan an emergency fund

Financial experts recommend having an emergency fund that would sustain you through three to six months of unemployment. For some people, establishing the fund will take planning and persistence. The following tips will help you get started:

Review your monthly budget to establish the goal for your emergency fund
Set a timetable for accomplishing your goal - use Bloomberg's emergency fund calculator to review some options
Open a savings or money market account for your fund
Establish a monthly direct deposit into your fund
Put a portion of "found money" - bonuses and income tax refunds - into your fund every year

In general, your fund should be liquid assets. Do not put your emergency fund dollars into stocks or mutual funds.

July/August

Conduct or update your household inventory

Every homeowner has homeowner's insurance. In most cases, your homeowner's insurance estimates the value of your household goods. By contrast, a complete household inventory ensures you know exactly what is in your house in the event of a disaster.

Here are some steps to follow when doing your inventory:
Photograph or videotape each room of your house
Open cabinets, drawers, and closets for close-up shots
Take individual pictures of valuable items
Photograph serial numbers on electronics and appliances

Insurance experts recommend an outside appraisal for rare, valuable, or collectible items such as artwork, oriental rugs, silverware, coins, jewelry, and other irreplaceable items.

Private companies can provide the inventory service for a fee. You can also purchase household inventory software to assist in the process (search for "household inventory" at www.download.com.

The last steps in the process are reviewing your household inventory with your insurance agent and making any necessary changes to your policy.

September/October

Review and update your will

Your will is your most important financial document. Every year, take time to adjust your will to changes in your life and your thoughts about your estate. Triggers for revising your will could include:

Changing your mind about who should receive what as part of your inheritance
Getting married
Getting divorced
Moving from a community property state to a common law property state, or vice versa
Having a new member of the family - child, grandchild, stepchild, niece, nephew, etc.
Acquiring or disposing of substantial assets, such as a home

Your attorney and financial advisor can help structure a will that is most beneficial to your desires and those who ultimately receive your inheritance.

November/ December

Meet with your financial advisor

Even if you are in perfect health, everybody should get a physical every year. The same is true for your personal finances. Meeting at year's end with your financial advisor gives you the opportunity to review your current plan and make any changes for the next year. You many also want to consider some year-end charitable donations to minimize your income taxes.

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