Written by Barry Choi
Wednesday, April 4th, 2018
Over the years I've learned a lot about money. Sometimes it came from lessons my parents taught me, but often I learned things naturally by going through the different stages of life. Once I became an adult, it became clear that I had to update my finances from my student days. Here are some things I did.
I Updated My Banking Needs
It was great having a free student bank account, but once I graduated, I knew I had to face the prospect of paying monthly fees. My bank at the time offered a few different account options, so I picked one that suited my needs and deposited the minimum requirement to get my monthly fees waived. These days, I supplement my day-to-day banking needs with an online bank account, since there are no fees and it offers a higher interest rate.
I Applied for a New Credit Card
Although I didn't use credit cards very much after graduating, I knew I wanted something that offered more benefits than my first credit card, which I signed up for when I started college. I settled on a no-fee cash-back card since it was perfect for my needs at the time. Over the years, I've applied for a few more cards for a variety of reasons, but I still hung onto that cash-back card since the payment history helps my credit score.
I Got My Investments in Order
As someone who has an interest in personal finance, I took the time to learn about investing over the years. Once I became familiar with investing, I was able to build a portfolio that fit my investor profile and risk tolerance. It wasn't easy, but I figured it out over time. Even if you're not a do-it-yourself investor, it's always worth looking at your investments and/or speaking to your financial advisor to ensure what you're invested in still makes sense for you.
I Figured Out My Insurance Needs
When I first started working full time, my employer's life insurance policy was fine, but when my wife and I bought a home, our needs changed. Since we had a mortgage, we purchased life insurance policies that would pay out enough to cover any remaining debt in the event that one of us were to pass early. It's important to review all your insurance policies including life, auto, home, and travel from time-to-time to ensure they still meet your needs. As your life changes, so do your insurance requirements.
We Had Wills Made Up
We all know that we should have wills done, but many of us put them off for way longer than we should. My wife and I waited until we had a child before we set up our wills, but it was obvious that we should've had them in place well before then. After speaking to an estate lawyer, we realized our wills covered a lot more than just what happens to our estate when we pass. We know that things will change over time, so we plan on reviewing our wills every five years to keep them up-to-date.
As your life changes, so do your finances. From getting your first job to having your first child, it's important to update your finances on a regular basis so they line up with your needs. It may sound daunting, but all it really takes is a little bit of time once a year.