Financial Wellness Skills

Protect Money

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Protect your finances to support your financial wellbeing. There are many things you can do yourself to give you peace of mind.

protect financial wellness skillIdentity Protection

With the growing number of data breaches, it continues to be a challenge and difficult to keep your personal information safe.  

  • Monitor your credit report on a regular basis. Use a free credit report monitoring service to help you. 
  • Enroll in an identity theft protection service. Your personal information is more than your credit report. In the event you’re a victim of ID theft, you’ll have a service to help you regain control.
  • Safeguard your Social Security Number. Don’t share your number with anyone who isn’t authorized. Always ask why your social security is required.
  • Use credit cards for purchases. With credit cards, you get more protection compared to debit cards. In the event of fraud, you’re not out of cash since credit was used and many card companies offer zero-liability.

Protect from Scams

There are many scammers looking to take your money or use your identity for their own purpose.

  • Be socially aware. Don’t share too much personal information on social media like the financial services you use or post answers to questions that can be used to guest your password.
  • Don’t fall prey to email scams. From the Nigerian Prince scams to phishing scams that ask you to click on a link and provide your login information. 
  • Watch out for phone scams. The US federal agencies like the IRS or Social Security Administration will not call you or threaten you with arrest unless you pay. 
  • Save yourself from social scams. Scammers use social media to get you to click on links that either download viruses or asks for your login and passwords. 

Insurance Protection

You don’t need a lot of insurance, you just need the right insurance and amount to protect yourself from unforeseen hardships and losses. Insurance is really about mitigating risks.

Protect your stuff. Review your homeowner’s or renters insurance to verify how much of your personal stuff is covered.

Life insurance. Consider how much life insurance you’ll need to take care of your financial obligations in the event of your passing. 

Protect your income. With disability insurance, you can supplement the loss of your income when you’re injured or sick and unable to work. Disability insurance is often offered through employers and can be purchased personally as well.

Protect your senior years. You may want to consider long-term care insurance to help you in your later years to cover nursing home stays or home health care support from draining your savings accounts.

Protect your Financial Legacy

With some preparation, you can save your loved ones from losing time and stress by outlining your goals for your money.  

Think about your future and what can happen if you get sick or after your passing. Ask yourself who will make decisions for you or carry out your wishes and determine how you’ll divide your estate after death. Although it may be difficult to have this conversation, it’s important to communicate with your loved ones way in advance.

Will or estate plan. It’s important you have your wishes written down and witnessed by a professional. A will can be used for people with simpler finances. It’s not just for wealthy people. For more complex finances, estate planning may need necessary with the assistance of CPAs, tax experts, financial advisors, and attorneys.

Trusts. A trust can be used to distribute your assets after your death. It’s more often used to minimize taxes and avoid probate.

Powers of attorney. Have a plan to protect yourself in the event you’re ill, hospitalized or unable to make decisions. Consider these types of power of attorney: financial power of attorney, health care power of attorney, and living will.

Joint tenancy with rights of survivorship. When you hold a title for an asset with someone else like a house or car then your stake of the asset transfers directly to the surviving owner.

Add Beneficiaries

There are things you cannot include in a will and actually better to assign a beneficiary to a smooth distribution of your financial assets. This skips the need to go through probate.

Payable of death banking accounts: Add PODs for all your bank accounts including savings, checking, certificates, money markets, or any other money accounts you have with a financial institution.

Transfer on death investing accounts: Add a TOD beneficiary for your stocks, bonds, and brokerage accounts.

Retirement plans like 401(k)s and IRAs: Complete a beneficiary designation form when you enroll and review/change beneficiaries for any life events (like marriage, divorce, children, etc.).

Life insurance: Designate a beneficiary for your life insurance and remember to update if necessary for life changes.

Annuities: Have your loved ones receive your annuities by designating who will receive any money left after your death.

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Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

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