Clean the Financial Crumbs Under Your Sofa Cushions

Brent Pittman —  07/18/2012

Red Couch ProjectYesterday I was tasked with vacuuming the crumbs under the sofa cushions. I’ll spare you the details, but there were a lot of crumbs, hair, toy pieces, and unidentifiable objects…oops I guess I forgot to spare you.

This was a chore that needed doing. I’ll blame the messiness on our toddler. I mean, no way could my wife and I have attributed to that mess. We are clean. We keep things tidy.

I bet you’ve got crumbs and other assorted objects under your sofa cushions too. These are chores that just get pushed to the back and seldom get done.

Why? Simple. We never see the mess. More ‘urgent’ tasks pop up.

It is hidden from sight and the mess we are sitting on just grows and grows until one day either the smell or bugs get our attention (ours wasn’t that bad).

You’ve got the same thing happening in your financial life. Hidden tasks, hidden crumbs, urgent and growing messes.

Clean the Financial Crumbs Under Your Sofa Cushions

It’s time to get the vacuum out and clean up those financial crumbs under our sofa cushions. These are tasks that are important, but not urgent (i.e. not the ringing phone or crying baby).

Only you know what those crumbs are, but I’ll share a few possibilites to check for in your sofa.

Life Insurance- You know that you need life (death) insurance, but you just keep putting it off. The time is now! I suggest 15-20 year term insurance from an independent broker who can shop the best rates. Make sure the coverage is at least 8-10x your earnings. Cover the stay at home spouse too!

Estate Planning- This is one that got me until my wife put the pressure on me. Planning for our death isn’t one that is exciting to talk about, but it’s time to face the facts that we’ll die someday. Make a will, do it for your family. or consider a trust if your wealth is growing. Don’t forget to update your estate planning when life changes : death, birth, divorce, marriage, large increase in estate, etc.

Organize Your Financial Records– There is a big stack of papers on your desk or in a box that need filing, trashing, shredding, scanning, or other important action.

These crumbs might clog up the vacuum! I suggest checking out this podcast from MoneyplanSoS How long do we keep this stuff? 

Make a Budget- If you’re reading this, then you probably have a budget. But do you really do it every month? Do you stick to your budget? If you need a reminder, check out my budgeting series for a refresher.

Disability Insurance- This is something I need to do myself. In 2011 8.5% of workers aged 21-64 reported a work limitation (source). Chances are at some point in your working life, you or your spouse will be disabled. That is why you need a large emergency fund of 3-6 months your necessities and long term disability insurance (pointing at myself).

Retirement and Kids College Planning- A lot of maintenance goes into planning for retirement and your kids college.

  • Do you have an old 401K you need to rollover to an IRA?
  • Changed your maiden name to married name on all our accounts?
  • Updated beneficiaries to reflect wishes in your will?
  • Rebalance your portfolio?
  • Dump a loosing stock or mutual fund?
  • Time to change to a broker who will actually teach you instead of sell you?
If you haven’t started planning yet use these calculators as a starting point:  10 retirement calculators and 10 college planning calculators.
These tasks are important. They matter. Join me in cleaning the financial mess under the sofa cushions.

What financial crumbs do you need to clean out from your couch? What have you been neglecting to do that is important? 

Photo Credit (Creative Commons)

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Brent Pittman

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.
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  • maria@moneyprinciple

    Yeah…I suspect that sofas always accumulate naties. But this is a good posts and the inventory of what one ought to look for when cleaning their financial sofa is complete.

  • krantcents

    What, no change? Good points! I would add as you get older to get Long Term care insurance and take care of your funeral arrangements. Itis a huge burden to transfer to your relatives if left undone.

    • No change in my couch! it goes straight to the pigs! Great points! I’d lump funeral arrangements in with will and estate planning.