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This year I’m meeting with many people who find themselves in the middle of a divorce, recently divorced or widowed. Not one of these people expected they would be in this position.
But as is life, we cannot predict our future, and it can change at any given moment. At best, what we can do is plan for the unexpected so that the outcome is not financially devastating.
Ask yourself, would I be okay financially if my partnership situation changed?
When applying for a credit card, a loan or insurance, credit reporting companies create a file, called a credit report, with your name on it. Your payment history and the amount of credit you have available are tracked over your lifetime.
Credit history is important because without a credit score above 720, it’s difficult to finance or rent a new home. Credit card reporting agencies know that when a consumer carries high credit card balances, their default risk increases. The agency penalizes the consumer by lowering their credit score.
Know how much debt you have outstanding. Read your monthly statements to understand the terms and interest rates of your mortgage, auto loans and credit cards. If you were supporting yourself on your own, could you afford your debt?
It can take up to seven years for bad payment data to be removed from a credit report. Some negative credit issues, such as bankruptcy, can last 10 years on a credit report.
The objective of a quarterly investment statement is to help you understand how investments and retirement accounts are allocated and if they are increasing or decreasing in value.
Your statement is a tool to help manage and maintain a portfolio.
Do you need to sell a stock that has lost value? Will you be paying income tax on capital gains? Are equity investments losing value when the stock market is up?
Review your statements, and if something doesn’t seem right, do a bit of research or ask for help until you feel satisfied with the answer.
Delaying saving for retirement often means you will be working well into your later years. There is no simple solution if you are in this situation.
If you are over 50 and have not established a retirement account or have one that is dangerously underfunded, take the time now to meet with a financial adviser to implement a retirement savings strategy.
Remember that in retirement, you will need assets and income sources to maintain your standard of living.
Before the survivor benefits are selected for your or your spouse’s pension, meet with a pension plan representative to ask questions. It is important that both you and your spouse understand the current survivor benefits. If the option selected results in a reduced spousal benefit at the death of your spouse, your financial future will be impacted.
Also, meet with a representative from Social Security. Understand your benefits, your spouse’s benefits and the benefits available to you if your spouse passes or you divorce.
Do not assume that, just because you are paying for insurance, you are adequately insured. Confirm with your insurance agent or financial adviser that the insurance will protect your assets. Life, disability and long-term care insurance may all be relevant topics to discuss.
Also, review property and casualty insurance policies with your insurance agent to determine if the coverage is sufficient. To minimize premiums, many auto or homeowners’ policyholders carry very low liability coverage limits.
California only mandates 15/30 automobile liability coverage, which insures you for $15,000 per person or a total of $30,000 per accident. If you have accumulated any assets, this coverage is insufficient. Confirm that the liability coverage on your policies is high enough to protect your assets. Never assume that it is.
Filing a tax return and paying taxes are no one’s favorite tasks. Gathering data to submit to the tax preparer is a chore in and of itself, and waiting for the results can be laden with anxiety.
When your tax preparer calls and provides an update, good or bad, make sure to spend a few minutes reviewing the data before signing the return. If reading your tax returns is completely foreign to you, ask the tax preparer to explain the information you are reviewing.
You may not prepare your own state and federal tax returns, but you will sign the documents and be held accountable for accurately reporting the information they contain to the tax reporting agencies. Whether you are in a relationship or not, always spend some time reviewing your final tax returns.
Strong negotiating skills are beneficial when seeking a raise or a promotion and when buying a home or a new vehicle. However, people are often intimidated by the prospect of having to negotiate.
Perhaps your spouse has strong negotiating skills, so you’ve never felt the need to develop yours. Spend some time learning and practicing the key steps to fine-tune this art. Fortunately, many free resources are available online. Successful negotiators learn to control the process, coming away with an outcome that feels equitable and favorable to their objective.
When you lease a car, you will usually have lower monthly payments than if you finance a car with a loan. You can transition to a new car every two to three years by simply returning the car to the dealer at the end of your contract.
If you decide to keep the car when the contract has reached full term, you will need to refinance the debt or pay off the outstanding. Additionally, you will be penalized if you terminate your lease early, exceed the allotted annual mileage (usually 12,000 miles per year) or damage the vehicle through excessive wear and tear.

Before you lease a car, understand you are committing to a contract that has negative ramifications if you terminate it early.
Being more engaged with and vocal regarding your finances will not only increase your confidence but also empower you to maintain control of your financial life, which is especially important if your life changes unexpectedly. Before committing to financial decisions that could negatively affect you in the long-term, evaluate your financial position, place your needs first and learn to say “no” when it is in your best interest.
Teri Parker is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at Teri.parker@captrustadvisors.com.
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