Ten Steps to Simplify Your Finances, Part 4

Here’s Part IV of my thoughts on Consumer Reports’ ten steps to simplifying your financial life. Today we’ll be covering steps 9-10…

(9) Safeguard your financial identity. Put your outgoing letters in a post-office collection box instead of leaving them in your mailbox for pickup. A thief might beat your mail carrier to the door. Get your name removed from offers for preapproved credit cards and insurance by going to www.optoutprescreen.com or calling 888-5-OPT-OUT. (You will have to provide your Social Security number, but the service, operated by the major credit bureaus, is legitimate.)

Don’t carry your Social Security card in your wallet. Photocopy the front and back of every card that you do carry. Keep your copies in a secure place in your home. If you lose your wallet, you’ll be able to cancel those cards quickly.

(10) Draw up a durable power of attorney. Your financial life might be the very picture of simplicity while you’re healthy enough to make your own decisions. But all of your hard work could blow up if you don’t take this final step and hire a lawyer to draft a durable power of attorney for you. A DPA will permit someone you trust to safeguard your assets and pay your bills if you get sick and can’t manage your own money.

My thoughts on these:

(9) Great advice. See also my tips for protecting your privacy and protecting yourself against identity theft.

(10) Done. I would also recommend writing a will. While you won’t be around if/when it comes into play, it’ll certainly simplify your finances for whoever has to deal with what you leave behind. And if you have kids, you should seriously consider setting up a testamentary trust.

See also: Part 1, Part 2, Part 3

[Source: ConsumerReports.com]

3 Responses to “Ten Steps to Simplify Your Finances, Part 4”

  1. Anonymous

    unless you really, really trust the person you are giving the dpa to, you might opt to have a third party hold onto it and execute it in the event of an incapacitation. many banks also require or request filing of POA’s with the bank, too.

    also, don’t forget to update those beneficiaries on your investment and retirement plans. your beautician may not be in your favor next year.

  2. Anonymous

    9 is actually terrible advice, since it implies it’s perfectly OK to keep sending confidential information through snail mail, which it isn’t.

    Better advice would be “don’t send anything by mail that would cost you money if it got stolen or read by thieves…pay your bills online, get your bank statements online…SSL is much more effective at resisting an identity thief than a mailman would be”.

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