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Put your finances in order for the new year

January 7, 2013 12:00:00 AM PST
The start of the new year is a good time to get your finances in order, and it's none too soon: In a just-released survey, Consumer Reports found a surprising number of people have overlooked some of the most basic financial precautions. That can be devastating, especially when disaster strikes.

Consumer Reports says financial oversights are all too common.

"Our survey found that in the last five years, 86 percent of respondents had not checked or updated important estate documents, including wills and beneficiary designations," said Tobie Stanger, senior editor of Consumer Reports Money Adviser.

Financial planner Gayle Lob says another frequent mistake couples make is having only one person in charge of the finances.

"What if somebody gets disabled? What if one of them dies?" said Lob.

Consumer Reports confirms that "money stumble" is common with married couples. Its survey found that with 70 percent of respondents, only one spouse knew key details about their accounts.

"And if you are over 60 and have adult children, it's time to let them know where that important information is as well," said Stanger.

Other "money stumbles": 50 percent of homeowners did not have enough insurance to cover full replacement of personal property at today's prices. And more than 70 percent didn't have at least three months of living expenses set aside in case of job loss or illness.

"You may not solve everything all at once, but just taking those first simple steps may save you and your family a lot of heartache down the road," said Stanger.

In addition to regularly updating estate-planning documents, Consumer Reports recommends designating a file cabinet or safety deposit box for your will, insurance policies and a list of all important account and investment information.