Taking Care of Finances

Superintendents that take care of multi-million dollar budgets should be able to handle their personal finances. These ten steps outline how to prudently take care of your own resources:

Here are 10 things to ponder. Then, go to "calculators" at www.bankrate.com to get things started.

1. Think about your life goals. The trend in financial planning is to help people determine what they want out of life and then establish financial objectives to facilitate achieving those life goals. Visit a financial adviser with your life goals in hand, and they'll thank you for giving them a solid foundation to work with.

2 . Develop a spending plan. Most people have a handle on the income part of the equation; it's the outgo part that's a mystery. Where did the money go? Plan for spending and you'll know. Strike a balance between instant and delayed gratification. Reconsider your spending plan to make room for investing to build your net worth.

3. Know your net worth. List your assets, subtract your debts, and what's left is your net worth. What you own less what you owe is what's yours. Plan to have your net worth next year exceed this year's number. Life is bound to throw you a setback or two, but you should expect your net worth to increase over time by spending less than you make and investing the difference to build wealth.

4 . Keep a little green book. A notebook with a list of your bank accounts, brokerage accounts, retirement accounts, pension rights, insurance policies, etc., (along with a note letting heirs know where to find an executed copy of your will) is an important item to keep on hand and current. Let your loved ones deal with their grief, not chase down financial details. Don't have a will yet? It's time to get one, or have an existing will updated.

5. Build an emergency fund. Try to have three to six months worth of living expenses available as cash in your emergency fund. There are plenty of reasons to add or even reduce that amount, but it's a reasonable target.

6. Review and rebalance your portfolio. Put too much of your wealth in one investment and you've increased the risk of your portfolio. Two common examples are being house-rich and being too heavily invested in your company's stock. If your targeted breakdown between stocks, bonds and cash is 60/30/10 and you have 80 percent of your money in stocks, then selling off part of your stock portfolio to get back to your target allocation re-balances your portfolio. Target allocations will also change over time.

7. Review your credit reports. At a minimum, you should review your credit reports once every two years (See www.seattletimes.com/makeitcount for more information on how). Currently, Washington residents can get three free a year. If something's not right on your report, use the dispute process of the Fair Credit Reporting Act (FCRA) to attempt to correct your credit report. The Federal Trade Commission's "Facts for Consumers" series publishes "How to Dispute Credit Report Errors."

8. How to be left alone. Sign up for the do-not-call list. Don't forget to do that with your cellphone number, too. The FTC's Web site links to www.donotcall.gov where you can register up to three numbers at a time. Stop getting those pesky credit card or insurance offers in the mail by calling 1-888-5-OPT-OUT or by going to www.optoutprescreen.com. The Direct Marketing Association also maintains listings of consumers who prefer not to receive mail or telephone solicitations.

9 . Estimate your retirement needs. Pulling a number out of the air isn't retirement planning. Too low a number and you risk outliving your portfolio; too high a number and you stay on the job longer than necessary. Bankrate's Retirement Worksheets take a two-step approach to sizing the nest egg. www.bankrate.com/brm/calculators/retirement.asp.

10 . Stop phishing. Phishing is an Internet scam that uses spam or pop-up messages to trick you into disclosing your bank account, credit cards, Social Security number and other financially sensitive information. If you get an e-mail or pop-up message that asks for personal or financial information, do not reply or click on the link in the message. Don't e-mail personal or financial information. Use antivirus software and keep it up to date. A firewall helps make you invisible on the Internet and blocks all communication from unauthorized sources. It's important to run a firewall if you have a broadband connection.

For more information, see www.bankrate.com