The best time to have a comprehensive review of your personal finances is when you don't need to. It is always better to look over your income, expenses, assets, debts, taxes, estate, etc. when there are no immediate concerns. Of course, most people don't think quite that far ahead, and consequently find themselves constant putting our financial fires and dealing with short-term urgencies. Here are some life events that normally trigger a need to reevaluate your finances.


Getting Married
A marriage obviously changes many things-including finances. Will each spouse maintain separate bank accounts or use a joint account? Beneficiary designations on retirement plans and insurance policies need to be updated. What are the financial and life goals of each spouse? How will the new couple handle their credit? What savings strategies will the new couple adopt?


Starting a Family
The arrival of a child is a huge wake-up call for a couple. Before children arrive, couples tend to be more free-spending and often never get around to thinking about their need for life insurance and estate planning. In addition, the birth of a child is a reminder to begin planning and funding for future educational costs. Of course, at this time of life, the financial demands of raising a family while also trying to continue long-term savings for retirement stretches the typical family budget to the limit.


Employment Change
Getting a job can be an exciting and nervous time. Beyond the immediate salary concern it is also important to consider the insurance benefits provided, the employer retirement plan, and many other matters. Job advancements, as good as they may sound, may also involve a move, a housing change, or a different or longer work schedule.

Losing your job has emotional and financial consequences. What are the short-term cash needs and where will the cash come from? What about your insurance? What will you do with your account in your former employer's retirement plan?


Death or Divorce
With the death of a spouse or a divorce there is a need to review insurance and retirement plans, reassess income and expenses, and contemplate what financial steps you need to take for the next stage of your life. Legal and estate documents will need reviewing and updating also.


Remarriage
Getting married for the second time is normally much more complicated than a first marriage. Both spouses may have children from their first marriages to consider and perhaps children from the second marriage also. Will finances be separate or combined? A pre-nuptial agreement might be warranted. Beneficiaries of insurance and retirement plans need reviewing. Will a joint tax return be filed? Wills and other estate documents need to be looked at also.


Retirement
Planning for retirement hopefully starts when a person is young, but as retirement actually looms closer, planning takes on even more importance and urgency. What will be the actual date of retirement? How should your investment strategies change as you edge towards that date or beyond? How will your income taxes change? Do you understand how your retirement date affects your Social Security benefits? Have you completed a post-retirement budget? What is your vision for retirement-what are your goals?

Inheritances Receiving an inheritance or other windfall is certainly a positive event for your finances, but it does create a need for planning. What tax issues are associated with this new money? What will you do with the funds-Invest? Pay down debt? Help other family members?


With any of these life events you should automatically review your existing personal financial plan. However, keep in mind that the best time to have a financial review is when you don't really need one.



Gerald A. Townsend, CPA/PFS, CFP^®, CFA^® is president of Townsend Asset Managment Corp., a registered investment advisory firm. Email: Gerald@AssetMgr.com

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