FINANCIAL PLANNING

The economy is a top news story and the end of the year is approaching -- it's a good time for a financial review. Consider:

$$$ Goals and Priorities: Outline or reconfirm your financial goals. Then examine your budget -- do your spending and saving reflect your priorities? If, like most people, your living expenses are increasing, think about realistic ways to change your money habits, especially in the areas of transportation, utilities, food, and clothing.

$$$ Dealing with Debt: If you don't have enough money left over after expenses to invest for retirement or are using credit to finance your lifestyle, it's critical to re-evaluate your choices. Create a plan to eliminate debt, especially high interest rate credit card balances, and manage your cash flow so as not to add to outstanding debt.

$$$ Life Changes: Take in to account any significant life events such as marital status changes and the birth of a child or grandchild. Remember to update beneficiary designations on accounts and insurance policies. Review all legal documents -- wills, powers of attorney, advanced medical directives, and medical proxies.

$$$ Insurance Coverage: Insurance needs change over time, so make sure your policies provide appropriate coverage in the areas of life, health, disability, vehicle, professional liability, long-term care, and property or rental.

$$$ Taxes: Are you withholding too much? If so, consider making adjustments and using the extra cash flow to maximize your retirement contributions before the end of the year.
Source: T. Rowe Price Investor