We’re all busy and tend to procrastinate in seemingly less busy areas of our lives. There is always some new item on our constantly growing to-do lists. Some tasks are fun to take on. Others are tedious, boring, long or all the above. But some of the most important to-do’s in our lives often get overlooked because — well, let’s face it — they’re not all that fun.
Here are three we see often. See if you are dragging your feet in any of these areas. If so, quit putting off making the necessary fixes. You will be glad you acted.
Refinance Your Mortgage
The first mistake we see has to do with a failure to refinance a mortgage at current lower rates. With interest rates bouncing on the floor of historic lows these past several years, there is really no reason whatsoever to have an excessively high mortgage rate. Yes, it’s a hassle to apply for a new loan, with a lot of forms to fill out and disclosures to file. So what? If you procrastinate, you could miss out on significant savings.
Today, you can easily find rates in the mid-to-low 4’s. (To be sure, be cautious of rate vultures, who tease you with ultra-low rates just to get you in their door, and you end up paying more once the process is over.)
When it comes to mortgages, the numbers are pretty simple. The going rate is the going rate. The spread (or difference) between banks and other lenders is pretty small. One company might charge $250 for closing costs, but their rate might be a tad higher than the lender who charges a higher closing cost, yet carries a lower, long-term rate.
Bottom line: If your mortgage rate is too high, you’re paying too much money and you’re using that money as kindling to light your fire-pit in the back yard. Burning money is bad.
Estate Planning Documents
The next mistake is not updating estate planning documents. You must do this periodically and without fail. Circumstances change: People get divorced or die or otherwise fall out of your life. Your estate needs to reflect those changes. We get it: This is boring stuff. However, if you procrastinate, life (and death) can get miserable for you and your family.
The basic documents almost everyone needs are:
- a will,
- a health-care directive, and
- powers of attorney documents.
The will tells your family where your money should go and who should handle it. The health-care directive tells your family and medical professionals how you want your medical matters handled, in the case you cannot respond. The powers of attorney ensure your financial affairs are handled efficiently if you become incapacitated and are unable to make decisions on your own.
If you’re one of the roughly 50% of people who actually have these documents updated and in order, just make sure your powers of attorney docs are specific about what financial matters they govern. In this day and age of strict legal oversight, some financial institutions will not honor a general POA without this specific language.
Investment Consolidation & Proper Management
Finally, the last mistake we see is neglecting to manage your hard-earned money. Money, investments, and retirement planning are more important than your mortgage rate or estate planning. Why, you ask? You are missing out on the time value of money. If you procrastinate and are not properly managing your investments and the cash available to you, you are missing out on the power of compounding. You need to save, grow, and protect your money.
It’s a simple task to consolidate all your old investment accounts into one place where you can diligently watch and manage them on an ongoing basis. We make it a point to hold our clients’ hands through the process so that it’s fast, easy and painless. Most consolidation projects with new clients take less than 10 business days to complete.
Don’t procrastinate! If you have any questions about potentially refinancing your mortgage, updating your estate documents, or ensuring all of your investments are being properly managed, please contact us.