×

4 money must-dos if you want basic financial security

  • Keep hard copies of key personal documents on hand, in addition to digital versions.
  • Designate a guardian who will care for your children should you pass prematurely.
  • Never underestimate the value of education and professional accreditation.
  • Pay close attention to your health, health plans and related documentation.
Paying attention to official documentation, children's guardians, health issues and education and training can help ensure financial security.
sorendls | Getty Images
Paying attention to official documentation, children's guardians, health issues and education and training can help ensure financial security.

Most mistakes can be fixed. With regard to your financial safety, there are a few things you can goof up that can cause long-term and sometimes irreparable mistakes. What really matters when it comes to financial safety?

Financial documents

My two millennial children aren't into paper documents. They've fully given themselves over to the cloud. I get it. I've physically lost airplane boarding passes, shopping receipts and insurance cards, only to be saved by finding the electronic version on my email.

However, in 2017 you still need to be able to clutch a few key docs in your sweaty palm. Hard-copy documents will help you prove your identity and justify well-deserved benefits if your identity is stolen or key electronic keys are irreparably compromised. Here's a list:

  • Original birth, adoption, marriage and death certificates and Social Security cards (and copies kept in a different location).
  • Current and expired passports and passport cards (and copies kept in a different location).
  • Last will and testament.
  • A list of your credit card numbers, expiration dates and CVC codes, because these are no longer available on your statements.
  • Military discharge information, including DD214 and Certificate of Eligibility.
  • Social Security retirement benefits estimate. (Just one for each family member. Info is online, but a printed-out copy can be useful if identity theft occurs.)
  • Tax return (returns and W-2 forms for the last few years).
  • Financial and investment-related statements. (Just one of each will do.)
  • Original loan documents (student loans, mortgage, car, etc.)
  • Original policy documents for insurance, such as life, home or health. (You don't need the bills, etc., but the original policy info is important in case company ownership changes or you are disputing a claim.)

Many people don't have printers at home anymore, so it's worth the money to put statements on a thumb drive and pay to print at the library or Staples.

Designation for kids' guardian

If you have kids, you need to pick a guardian in case you both die in an accident. Then you need to discuss that responsibility with the person you've chosen and put it in writing in your will. As your kids get older and their needs change, you may want to revamp your guardian choice. For example, your parents may be too ill to care for your older children or your sister's parenting style might no longer jibe with yours.

More from FA Playbook:
How to figure out if you'll be able to retire early
Why a 30-year mortgage may not be your best option
Investors clueless about impact of a possible market correction

A guardian doesn't have to be a family member. You can choose friends as long as you clear it with them first. I don't think it's necessary to formally tell unchosen relatives, "You're not our kids' guardians." But you definitely need to clear potential guardianship with the person you are naming.

The chance that you both will die when your children are little is incredibly low, but it's not zero, so this crucial action must be discussed, completed, written, signed and revised as necessary.

Education and training

Friends, spouses, cash, assets and hairlines come and go, but a college degree or welding cert can never be taken away from you. The undeniable permanence of these accomplishments is comforting. Although most educational documentation is online today, it's worth keeping printed copies of degrees, diplomas, certifications and test grades.

You can bet I still have the printout I got when I passed the 10-hour certified financial planner test. Keep hard copies of hard-won qualifications, and be sure to do the renewals and continued education that keeps them current even if you don't anticipate an immediate need for them.

Health

It's no secret that health directly affects finances, but a few issues necessitate precise management. Chronic, life-threatening disease is one. When you or a loved one is diagnosed with an illness cancer or diabetes, the financial aspects of the disease can be daunting. The person who is ill may not be able to manage the record-keeping and tracking required to get the best care for the least money.

Ask a family member or trusted friend for help. And take heart that, even if treatment options seem to be coming to an end, if you can hold on a little longer, new treatments are continually discovered that might help.

The potential for suicide is another vital issue. If someone in your family is persistently depressed or upset, avoid leaving them alone. Lock up your guns and lethal medicines and take the keys with you when you are out. A person who is chronically determined to take his or her own life may perhaps not be able to be deterred.

Your Wealth: Weekly advice on managing your money

Sign up to get Your Wealth

Please enter a valid email address
Get this delivered to your inbox, and more info about about our products and service. Privacy Policy.

But for a person going through a temporary hard time or in a chemical withdrawal period or on a new medicine, the desire may be short-lived. Making it hard for them to physically act may buy time for a change in the circumstances that led to the desire. Things change, and when they do, that person may no longer think about committing suicide.

So much paper, so little time. The "should-dos" of life — from flossing to oil changes — overwhelm me. It's hard to know where the priorities should be. In "Doesn't Remind Me," the late Chris Cornell sings about "the things that I've loved, the things that I've lost, the things I've held sacred, that I've dropped." Try to hold on to the sacred parts of your financial life that help you stay financially healthy.

(Editor's note: This article originally appeared on Investopedia.com.)

— By Kathryn Hauer, financial planner with Wilson David Investment Advisors

Contact FA Playbook

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    Get these newsletters delivered to your inbox, and more info about about our products and service. Privacy Policy.

Financial Advisor Council

  • Louis Barajas is founder and CEO of Wealth Management LAB, a fee-only firm specializing in entertainers and professional athletes.

  • Sophia Bera, founder of Gen Y Planning, has been named one of '10 Young Advisors to Watch.'

  • Lazaretta Rainey Braxton

    Founder/CEO, Financial Fountains, blogger, columnist and speaker.

Latest Special Reports

  • A globe-trotting look at the world of investing, from developed Europe and Asia trends to the least-traveled frontier markets.

  • Unlock the keys to building a successful long-term financial plan: manage your money, grow your money, and protect it.

  • Watch investments

    Covering the full set of tools and strategies for long-term investors: How to take everyday market fluctuations in stride, and when to know it’s time to take action or protect against a major economic shifts.

Financial Advisors