Episode 48 - Financial Wellness Checklist

Welcome to Holy Week. Today I walk you through my Financial Wellness Checklist. This is a good place to start your financial "spring cleaning".

Download your copy of my Free Financial Wellness Checklist

Transcript

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Welcome to Catholic Money Talk, where we talk about all things money and finance, and we try to do it through a lens of being Catholic, where our ultimate goal is to one day be in heaven with the Lord. I am your host, Paul Scarfone. Thank you for being here today. Welcome back to Catholic Money Talk, and welcome to Holy Week in this year of 2024. We just had Passion Sunday, Palm Sunday, where we're able to be reminded and reflect on all that the Lord did for us to save us from our sins and to offer us the hope of eternal life in heaven. Sometimes when we get to this point of the year, Holy Week, it's that kind of final purification for Lent. As we approach Easter, many of us might experience an Easter break. May we get some spring cleaning done, and that can all be a pretty good time to make sure our financial house is in order as well. So today, we're going to talk a little bit about a financial wellness checklist that I make available free to you, and there will be a link in the podcast description where you can get your own financial wellness checklist, but before we go over that and kind of talk about that process, let's start with a prayer in the name of the Father and of the Son and of the Holy Spirit. Amen. Heavenly Father, we thank you for this day. We ask you for all the grace and wisdom that we need to face the challenges or the circumstances that we find ourselves in. We know that you love us and that you have a great plan for us. Allow us to yield to your Holy Spirit. Come, Holy Spirit. We ask this all in Jesus' name, Amen. In the name of the Father and of the Son and the Holy Spirit, Amen. So this Lent has been a pretty interesting Lent for me, and one of the things I've really been focused on doing is just learning how to surrender everything to the Lord and let Him take care of it. But the thing that I'm constantly reminded of is His constant invitation for me to participate in whatever plan he's got going on, and so we have to do our part, right? And so when we think of our finances, we can think and have the right attitude that the Lord will provide, right? If the Lord wants something to happen, He will make it happen. He will provide the resources so that it can happen, but we still have to do to our part. And one of those parts that we have to play is to actually check and inspect to

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Are we taking responsibility for all those areas that we need to have responsibility? So I have found it helpful to create a financial wellness checklist, and again, the link to it will be in the podcast description. And this financial wellness checklist, it's going to go through a few different areas. One is monthly activities, so actual behaviors you should be doing. It's going to go over some debt, a relationship with money, a review of just insurance, and then some other important items. And so I'm just going to kind of briefly give you an overview. You can download this form to do it yourself, but I'll focus on a couple areas that most of us need to focus a little bit more intently upon. So monthly activities, right? Are we creating a monthly budget? Do we update the budget weekly? Do we contribute towards retirement? Do we contribute towards savings? And there's probably some other goals that we might have that we're like, oh, we should be doing that monthly. Those would all be in that monthly budget, but you can feel free to add some other key monthly activities that you want to focus on. But do we do those things? And if we don't, if you can't check off all four of those check boxes, then you got to find a way to start implementing it, right? And there's different podcast episodes you could go back and look at for help with creating a monthly budget, or what updating a budget weekly looks like, or retirement or savings. And those are important to have. You want all of those things happening every month. So the next section is debt. Do we have a plan to eliminate debt? Do we pay off credit cards every month? Are we avoiding debt when making purchases? Do we avoid debt when we? Face an emergency, right? So, what are we doing with debt? And everyone might have different goals, right? Some people are trying to accelerate debt payments, get rid of debt as quickly as possible. I think that's a very wise thing to do. We are doing that with our mortgage. We don't have any other debt other than our home mortgage, but if you don't have a plan for this stuff, and you run to debt and you can't avoid debt when making purchases, you can't avoid debt when facing emergency, you don't have a plan to eliminate debt, and you're not paying credit cards off every month, you are digging yourself a huge hole, and you have some work to do, and it probably, if if you've been budgeting every month and you're doing all this stuff, then you have to get better at your budgeting process and put more money towards eliminating debt and less money on wants or whatever you're doing to accumulate debt. Right, things that you need to learn how to say no to some things, so you're not borrowing money. So that's the debt section. Very, very important. Debt will keep you from hitting your financial goals. It's the biggest challenge, the biggest obstacle for people hitting their financial goals. It's the biggest obstacle for people being generous with their money, because they've, you know, all their income has been spoken for every time they've signed up for debt payments. So having a plan to tackle debt is important. So relationship with money is an important thing to look at as well, and so these next five bullet points really focus on what's our relationship with money look like, what does our behavior with money look like, so do we have control over day to day and month to month expenses? Are we living within our means? Right, there's a check mark box for that. Do we have financial capacity to handle a financial emergency? Do we have an emergency fund? Are we not worried about a financial future because we're on track with our long-term plan? Right. It means do we have a plan and are we working it? We have the freedom and ability to make financial decisions that allow us to enjoy life. Is that true? Do we have space? Do we have some margin in our budget? And then again, last one with our

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Do we create financial space to be able to give and be generous? It's such an important thing to do. The most fun you can have with money is giving it away. You can only give, save, and spend. That's all you can do

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give, save, and spend. And giving it is by far the most fun. Then there's an insurance review, and this insurance review, this won't be for everyone if it doesn't pertain to you, you don't need home insurance unless you own a home, right? But you need to make sure you have all these in place, and you need to make sure they're adequate coverage for the purpose you have them for. So here's the insurance review. There's, I guess, about eight eight bullet points here. Do we have identity theft insurance? What is identity theft insurance? Identity theft insurance is, in the event that someone were to steal our identity, do we have insurance to help us, you know, clean up the identity theft, but also to restore anything that there may have been a problem? Taryn and I have identity theft insurance. We've had to use it a couple of times, where individuals or companies have misused our personal information and created accounts, did credit applications in our name that were not us, and so our identity theft insurance company. We contacted them, and they handle the whole thing, giving us updates and work us through the whole process, getting things removed from credit reports, getting cancelation notices from banks or other places that used our information without our permission. We one time had a collection agency mail us a postcard from an apartment. It said it was utility bill and cable and internet for an apartment in Chicago, from Taren under her maiden name, and she just contacted the our identity theft insurance company, and they cleared up the whole thing, right? Because that was not us. So identity theft insurance, car insurance, and make sure you have at least 250,000 ideally$500,000 in liability coverage. It's the cheapest part of the insurance to to get liability coverage. I actually we have collision on all of our vehicles, and some of the older vehicles that aren't worth that much. Collision is very inexpensive for the year, so it's not bad just to have, especially with what used car prices have gone to. If you have to replace something, do you have health insurance, or maybe it's some type of medical health sharing program, but do you have something to cover large health expenses? Do you have home insurance or renters insurance? If you don't own a home, if you rent, you should have renter's insurance that covers the your contents, your personal belongings in your apartment. The landlord will have building insurance if the place were to God forbid burn down, but if it did and you don't have renter's insurance, you get nothing. So, renter's insurance, which basically covers your personal belongings, it's very cheap and you can get all your, you know, personal belongings covered at a reasonable price. Umbrella insurance. So, umbrella insurance is an extra insurance policy of liability that you can put on top of your car and home liability insurance. Once you start having assets, so you've got a home that's worth something, you've got money in savings or retirement accounts. Umbrella policy is a good policy to have. Again, it's liability insurance, so it's relatively cheap, and you can get that easily up to a million dollars. Then we have long-term disability insurance. So through your work, you may have short-term disability, long-term disability, and you might be able to opt for those right out of your paycheck at a very, very discounted rate. But if you're self-employed like myself, you've got to find those elsewhere. Short-term disability isn't really worth the cost of it. Having a fully funded emergency fund will take you through any type of short-term situation, but long-term disability insurance that impacts your ability to earn. Right, if you can't work at what you're trained to do or not able to earn the income that you've earned, you want to have long-term disability insurance because you still need to be able to provide for yourself, buy food, pay for your needs, food, shelter, utilities, and your transportation. And then long-term care insurance. Long-term care insurance you really only need to get once you're over 60 years old, and that's going to cover like nursing home stays, and it's again that insurance is to protect your retirement nest egg from, especially if you're a married couple. If one, you know, if it's a husband and wife, and the husband gets sick and needs to go into a nursing home, if they don't have long-term care insurance, they could quickly deplete a lot of the nest egg while he stays there, and then he maybe passes away, and then the wife is left with not much in the nest egg. So having long-term care insurance kind of protects that. And then the last thing is term life insurance, and you need term life insurance if there's anyone that counts on your income to live, and rule of thumb is 10 to 12 times your annual income in term life insurance, and you would want that on a term at 10 years, 1520, 30, for however long people will be counting on your income. So, you know, my youngest child is four years old. If he's going to be counting on my income till, let's say, he's 20-one, I need at least 17 more years of term life insurance. So, a 20-year policy would be sufficient for me. So that's the insurance review. The last section of this checklist, which is actually near the top of the checklist, if you were looking at it, is important items, and there's these are things that we all need, and we don't either know how to get them or you know how to go about getting them. We don't know enough about them to feel comfortable asking questions because we don't want to look like we're an idiot. We don't think we need them because everything's going fine, and usually it's kind of morbid to think about a little bit. So we don't like to. It's not a comfortable topic of conversation. And these items are things like our last will and testament, right? So, if I die, what happens to my possessions and my children, right? If my wife dies, what happens to possessions and children? What if we both pass away? What happens to our kids, right? And if we don't have a last will and testament, we are rolling the dice that the legal process in our state will be able to fix all this. There's no way. There's no way they'd be able to fix it all and honor our wishes and make everyone related to this peaceful. So having a last will and testament is just a way to tell your loved ones that you love them, and that everything is in order. If God forbid, the unimaginable happened, right? So, last will and testament it can be very simple. In if Paul dies, everything is left to Taryn, and she's the guardian of my children. If Taren dies, everything's left to Paul, and I'm the guardian of her children, but then if we both die, then the questions pop up, right? If we're in some mutual like car accident and we both were to pass away, what happens to all our possessions and our money, and what happens to our children? So having someone who's going to be a good guardian for our children, and then having someone who's going to be able to manage the money well be a trustee for the trust that would be created if we died, and that's important to have all that outlined in your last will. A trust gets created. Who the trustee is, your kids are guardians of this person, and sometimes we think we need to have someone who can handle the kids and the money. I like it to be two different people. In our will, we have a designated couple that would become the guardians of our children if God forbid something happened to Taryn and I, and we have someone else who would manage the money and be the trustee of the money if something happened to to us. And the beauty is, I I don't need like the parent the people that are going to be guardians to my kids. I just need to worry about how good are they as parents. I don't also have to worry about like how good are they at managing money, right? I've got someone else for that, so it kind of helps because we might not have the perfect person in mind that can do all of that. The other thing that's helpful too is if someone's the guardian and they're also managing the money, it can be very easy for them just to see it all as theirs, and it's harder for them to say actually this funds these funds are for the care of these children. So having it managed by two different places, your kids being taken care of by, you know, one couple and the man the money being managed by someone else separate, just helps create that boundary a little bit better than if it wasn't there. So that's last will and testament. Healthcare proxy and living will. So what happens if I'm not able to make my own healthcare decisions. I want Taryn to be able to do that, and she for me, right? So you want to have that in writing, so that we're free to do that, and you're actually able to say, like, this is what I would like to happen in the event that my life is faced with these situations, right? These are my choices. Then a power of attorney. Power of attorney is what happened if I was in the hospital tomorrow with something and I'm incapacitated to be able to call a coma to to transact on my behalf. I want to have someone lined up to do it because if I wait till then, it's too late, right? So having that set up, a durable power of attorney is important, and for all of those, last will and testament, healthcare proxy, living will, power of attorney, you designate different people for different roles. Have alternates ready, right? If someone can't serve in the capacity you're asking them to serve, have someone lined up as backup, and talk to these people before you just put them into these documents. Make sure they're willing and able, and they understand what you're going to be asking them to do. That's very, very important. So those are three, and then the last one: financial information. Have it accessible. So if something were to happen to me and Taren, right, the person who is going to be the trustee and the executor of our will and estate, they have copies of the will and trust documents already. They have a document that says where our accounts are, where life insurance is. They have all that information already. I've provided it to them, so they know, and the alternate person has it as well. They have it so that they have the whole thing all together. Again, it would be so morbid; it'd be terrible if something happened to Taryn and myself. But our kids, there'd be part of them that would feel loved because we've set up things well that they they will be taken care of, and there wouldn't be some big gap in the process because we've we've lined it up well so that it would be as hard as it would be, it would be pretty soon. Those are important things to have. Earlier this year, my grandmother passed away, and I've been helping my family kind of work through some of these documents and and stuff. If we had had everything nice and clean in a folder from day one, it would have been a lot easier than some of what we're dealing with now. So, it is having this together in a clean file or folder where the people who need to know where it is know where it is and have access to it. It's just a way of telling those people that when you die and you pass away, the people that you leave behind. Just another way of you being able to tell them that you love them. So, as we approach Easter and this great moment-I mean, the weather's getting nicer, right? The sun's coming out, the the air's going to warm up. We get this feeling of new life, right? It's so beautiful. We get the new life in Christ's resurrection, right? His conquering death, defeating the evil one. We get new life through that, which is awesome. That's all we need. That's really all we need. But through this, we also see new life around us, whether it be trees and flowers blossoming. We're able to open the windows, get a fresh breeze into the house. Just the vitamin D, the sun, right? It lifts our spirits. We want to do spring cleaning, right? We want to make sure everything's ready to enjoy this new moment, this new moment of life, the spring, the summer. Let's also do that with our finances, I am sure there's some things we wanted to accomplish when we started this year back in January, and we're like, we're gonna do this. This is the year for this, and we haven't gotten them done. Whether it be just crazy busyness, sickness, medical stuff, other financial things, job things, family stuff, whatever. Now's the chance. Let's dust it off. Say, let's take this new moment, this new life that we get through Easter. Let's parlay this into so many different other areas of our life that we can get resurrected, right? Because this, right? God, we trust God. He's going to take care of everything. He He is taking care of everything. It's awesome, but He invites us to do our part. And so, if there's been things He's been putting on your heart, you need to accomplish this. You need to do this. You need to work on this. You need to get better at this. Now is the time. Let's assess it. So go back into the podcast episode. description, and click on the link to download your financial wellness checklist. It's a little PDF. You could probably screenshot it, mark it up on your phone, or you could print it out, put it on the fridge, and create a to-do list from it of those areas that you need improvement on. So I hope this has been helpful. Thank you for joining me today. God bless. Thank you for listening to Catholic Money Talk. I hope you join us again next time. Please click subscribe in your podcast app to get notified of new episodes, God bless you and have a great day.