Financial Steps I Need to Take

Out of the NY Times' list of 31 steps to a financial tune up, here are the ones I need to take action on personally:

• Rebalance your investments -- I'm in the process of both rebalancing as well as setting my asset allocation so that a higher portion is in bonds. Right now I have way too much in stocks for someone my age.
• Check your credit reports for free -- Haven't done this for a year. It's been on my list, but always seems to get passed by.
• Walk a loved one through your affairs -- I'm actually in the process of writing down all of our family's information in one place -- so my wife can go to one source in case anything happens to me. Kind of like the 12 Critical Things Your Family Needs to Know. 
• Spend your gift cards -- Somehow we have collected a broad selection of gift cards and can't seem to spend them faster than they roll in. I'm thinking that we'll be able to use many of them during back-to-school time, but if not my plan is to use them to buy Christmas gifts.

FYI, the reason I don't need to do the others is that I've already done them (read your tax return, pare part of your budget), they don't apply to me (I don't have a mortgage, don't have credit card debt, etc.), or I don't want to take their suggestion (consider a financial planner, automate your giving.)

How about you? Do you see any items on the list that you need to tackle?

Comments

[jayda]

Agree with switching to bonds, but not when the stock market is down. Wait for DOW 12000 at least.

[janetJ]

Buy low, sell high, not the other way around. Don't shoot yourself in the foot.

[Doug Warshauer]

The NYT article is suggesting to rebalance your investments from bonds to stocks, not the other way around. It is assuming that most people's stock portfolios dropped in 2008 and 2009 and that, as a result, they are overweight in bonds.

I'm inclined to disagree with that advice, though. People shouldn't worry about rebalancing their investments whenever the market swings. It encourages them to be too active in managing their investments, and trying to time the market leads people to make major mistakes. Better to set a reasonable starting allocation and change it, as this post proposed, at a time when that allocation no longer makes sense from a life cycle perspective.

[FMF]

All --

If you knew (the very high) percentage I had in stocks, you'd rebalance too. Don't worry, I'm not giving up on stocks -- I'll still have 75% in them AFTER I rebalance. In fact, I'm buying more as the market has gone down -- just buying more bonds too to make the splits a bit better.

[RBK]

Rebalancing is the only one I need to do, and it's hard to do with my combination of accounts. I'm in the process of trying to roll an old 401k over into my rollover IRA, but there are two retirement accounts that I CANNOT roll over because of restrictions on payouts. That means any rebalancing I do has to be coordinated among several retirement accounts (two accounts with current employer, a Roth IRA, a rollover IRA, and the two old retirement accounts I can't move) and 3 taxable accounts (which I am trying to consolidate to 1 in the near future).

I believe in rebalancing as at least an annual exercise but it's been hard to do it properly over so many accounts. Hopefully I can consolidate ~9-10 accounts into 4 or 5 to make this easier.

[Budgeting in the Fun Stuff]

I really need to spend the gift cards we have...we keep getting more and more and don't go out as often. Kohl's, here I come!