30 Steps to Great Finances: Steps 22 through 24

Today we are going to continue listing the 30 steps anyone can take to have great finances.

If you are new to this series, please read through the steps we've already covered, starting with 30 Steps to Great Finances: Steps 1 through 3, before reading this post.

We are reaching the home stretch, which means our steps now will focus less on growing wealth and more on maintaining and protecting it.  Growing your wealth can take a lifetime, but one accident or other event may be all that is needed to wipe out your financial security.  Don’t let that happen! 

Let's get started.

Step 22: Avoid the Worst Money Mistakes

Making the wrong money mistake can be a financial disaster -- something that can wipe out years of hard work, discipline, and financial self-control. And while recovering from most money mistakes is possible, it's a long, hard process that's simply best avoided in the first place.

That's why I named my list of the worst money mistakes anyone could make. They include (in countdown order):

10. Not having an emergency fund.
9. Neglecting to make a will.
8. Not having enough insurance.
7. Marrying the wrong person.
6. Not saving.
5. Buying too much house.
4. Waiting to invest.
3. Being deep in debt.
2. Not working to maximize your career.
1. Over-spending.

If you have been following this series and implementing the steps we have discussed, you will avoid many of these mistakes -- but not all of them. That's why this list is worth reviewing and taking to heart. Because any one of these mis-steps can put a huge damper on your best-laid financial plans. 

Step 23: Get Proper Insurance

Most people hate to think about buying insurance.  Some consider it a waste of money -- you pay for something and then hope you don't need it. But if you do ever need it, it could be a lifesaver. That's why insuring yourself properly is one of the most important steps you can take to protect your assets and your potential earning power.  

Here are the types of insurance I think most of us need:

• Auto
• Homeowner or Renter's
• Life
• Disability
• Health/Medical
• Umbrella

FYI, one type of insurance that is not yet on my list but likely will be soon is long-term care insurance. I don't have a solid opinion on it at this point, but my initial research seems to be pointing toward it being a "must-have."

Step 24:  Make Out Your Will and Estate Plan

If you die without a will, the state will determine what will happen to your assets and who will care for your children, if you have them. 

Scary thought, right? 

Yet there are millions of people who have not yet created their wills. 

We don’t like to think about it, but we are all going to die some day, so for those we love, it is best if we are prepared.  Take the time to create your will and other estate planning documents so you can dictate where your money goes, not the state.

You should also make a list of all important financial information that your family needs to know such as your bank accounts, credit card numbers, investment funds, basically anything related to your finances.  If you need help thinking of things to include for your family,  check out 12 Critical Things Your Family Needs to Know.

Next time we will look at three more ways to protect yourself, because, after all, protecting your wealth is just as important as growing it.

Update: Click here to read steps 25 to 27.

Comments

[Old Limey]

I fully agree with every one of the recommendations.

The only item that I don't have is "Life insurance". I used to hve term life insurance when I was young, working & raising children etc., but now that we are 79 and 80 respectively and have a very large net worth I feel that it is no longer necessary.

By far the worst mistake of all is #7.
Fortunately we grew up in a very different era from today. When we were growing up in England we didn't know of a single person that had ever been divorced, in fact, the word wasn't part of our vocabulary back then. However times have changed and all three of our children have gone through divorces.

Sometimes I feel that all the progress that has been made in so many areas has come with a high price and had a very negative impact upon young people where marriage, loyality, and fidelity are concerned.

[Steve]

I can't agree with you more on the "buying too much house" mistake. A lot of people today think they need a McMansion and then can only afford to furnish half of it.