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Priorities for a successful financial life

  With a new millennium fast approaching, it’s a good time to make some changes so that your next decade is more proficient and profitable for you.

  As a starter, take action to overcome distraction. Many of us have trouble prioritizing, trying to navigate the temptations of co-workers or neighbors stopping by to gossip, small children demanding our immediate attention, or a spouse (or boss) saying to drop everything else for their benefit.

  A “to-do” list may solve the problem and keep you on track. But you must remain flexible. Remember the childhood story of Frog and Toad, when Toad lost his “to-do” list in the wind and refused to chase after it because that wasn’t on his list of things to do.

What is the status of your financial life plan? Here are nine top areas for review:

Good recordkeeping

  This should be a priority of getting organized. If you needed a three-year-old tax return in a hurry, would you know where to look? Or last year’s canceled checks? So create a truly useful filing system that includes phone numbers of key advisers, such as your lawyer, insurance agent, and accountant.

Tidy up your financial records

  A number of websites and some personal-finance programs, such as Quicken and Microsoft Money, offer worksheets and calculators that help tally assets and liabilities and figure your net worth. Your goal? A positive number that grows from year to year.

Write or update your will

  Fewer than half of Kentuckians have a will or trust to ensure that their wishes are followed after death.

Review your credit report

  Find out what the credit reporting agencies are saying about you, and make sure it’s accurate. If you don’t have a credit history separate from your spouse, get a credit card in your name.

Check your insurance coverage

  Make certain you’ve adequately insured your home, health, life, and cars. If you own a house, consider replacement-cost coverage; if you rent, insure your personal belongings.

Consider disability insurance

  You have a one-in-five chance of becoming disabled sometime in your working life. Disability insurance replaces a percentage of your wages-generally 60 to 70 percent-if you can’t work because of illness or injury. Many companies have group plans for their employees, but this doesn’t help if you are self-employed.

Reduce your debt

  Make a budget and find out where your money goes and where you can save. Put raises or bonuses into the bank or investments.

Reduce the number of credit cards. More than 10 percent of Americans have five or more cards, with an average outstanding balance of $1,700.

Estimate your retirement benefits

  If your company has a traditional pension plan, ask the benefits department to calculate how much you’ll get upon retirement. If you’re a beneficiary under your spouse’s plan, you can get a summary-plan description, which tells your rights and what survivor benefits are provided.

  Know your Social Security benefits, too. The average benefit paid last year to a retired worker and spouse, age 62 and older and entitled to one worker’s account, was $1,310 a month.

Elderly married couples age 65 and older now get 36 percent of their income from Social Security, with 9 percent totally dependent on it.

  Financial planners figure that you’ll need about 70 percent of your current take-home pay to get by in retirement. But the amount could range widely, depending on your planned lifestyle.

People 65 and older spend an average of $22,265 a year. Here’s where the money goes: housing 34%, food 15%, transportation 15%, health care 12%, and other 24%. (Other includes entertainment, charity, education, and miscellaneous expenses.)

Set up an emergency fund

  Keep about three months’ worth of take-home pay in a safe, accessible, interest-earning investment, such as a money-market account. Use this fund for unexpected expenses, so you don’t have to tap your retirement assets.

Financial Priorities

· Good recordkeeping

· Tidy up financial records

· Write or update your will

· Review credit report

· Check insurance coverage

· Consider disability insurance

· Reduce debt

· Estimate retirement benefits

· Set up an emergency fund

Secrets to Success

  Do you wonder how successful people, in all walks of life, got to be that way? Most have similar traits that, when combined, can turn dreams into reality.

  How you think is everything. Always be positive. Think success, not failure.

  Write down your specific goals and develop a plan to reach them.

Don’t be afraid to get started now. Just do it!

  Go back to school or read books. Get training and acquire skills.

Be persistent. Success is a marathon, not a sprint.

  Learn from your mistakes.

  Don’t be afraid to innovate. Following the herd is a sure way to mediocrity.

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