Family Financial Review (Best Advice)

family financial review


The same skills required to run a company are also needed for truly effective household management. It can be daunting and has the capability to spoil enmity between relations if not properly handled.
This Family Financial Review’s best advice has been crafted to support you and your family. Don’t forget, we have written how to run personal finance like a business. Please check it.
The technique is:

Apply business skills

Hold periodic reviews of family finances; keep family members informed about changes in financial status. Checklist for review:

Balance sheet

Updating it will show changes in the family’s net worth (the difference between assets and liabilities) since the last review.


Salaries, business profits, stock dividends, capital gains, etc. Categorize these as either regular or nonrecurring income.


Personal, automobile, life insurance policy, and other loans, as well as installment purchases and charge account balances. Make sure the wife has her own credit line. Current budget. This spending guide helps assure the achievement of short- and long-term goals. While it must be realistic, it shouldn’t be so restrictive as to create family tensions.

Contingency budgets

Revise, if necessary, the budgets that would apply if either wage earner died.


Determine the current market value of the house and the principal balance on the mortgage. The difference is your equity, all or part of which would be available if the house were sold or refinanced. Does the fire insurance reflect current value? Using life insurance to pay off a mortgage is a useful estate-planning element. Generally, husband and wife should own a house jointly.

Life insurance

A review of assets, resources, and the revised contingency budgets will show whether present coverage should be increased or decreased. It may or may not be wise for each spouse to own the policies on the other’s life.

Since inter-spousal gifts and bequests are 100% deductible, consult your estate planner to find out what is best for your family.

Social Security and pensions

Check for changes in retirement and death benefits. If an employment-related pension is vested, find out its current value. If applicable, check for potential death benefits and the Veterans Administration and from unions, professional associations, or fraternal membership. Update data on your Individual Retirement Account (IRA) and/or self-employment (Keogh) pension plan.

Health insurance

If existing coverage (obtained through employment or otherwise) is inadequate, consider supplementing it with a major medical policy that will pay $1 million (or more) above other benefits.

Other insurance

Have your auto, homeowners, fine arts, jewelry, and other property and liability policies been increased to keep up with inflation? Rather than raising individual liability policies, consider buying a low-cost umbrella policy to cover claims against you of $1 million (or more) above your present coverage.


Make a list of checking accounts, regular and time-deposit savings accounts, and the contents of your safe-deposit box. Do both spouses have access to that box? At death, a person’s assets, for tax and probate purposes, are frozen. To make certain that the survivor has funds with which to operate, each spouse should have a bank account in his or her own name.
Do not store wills, life insurance policies, and other documents that would be required shortly after death in a safe deposit box, which normally would be sealed by the bank at the owner’s death. (Note: Boxes in a corporate name are not sealed.)


List all your stocks, bonds, commodity-futures contracts, Treasury notes, and other securities, showing where they are stored and whether they are individually or jointly owned. For tax purposes, keep careful records of the dates and prices of all purchases and sales. Names of the investment brokers also should be noted.

Other investments

Follow the securities review pattern in dealing with investments in real estate (other than your home), gems, precious metals, art objects, etc.

Charitable contributions

Reappraise the list of recipients and the sizes of gifts. Would a widowed spouse, or an estate, be liable for pledges or commitments made while the spouse was alive?

Family business

If a husband or wife is a sole proprietor or a principal in a partnership or private corporation, there should be a plan that goes into effect when death occurs. That plan, perhaps funded by life insurance, would provide for payment to the surviving spouse for the deceased spouse’s share of the business.
In the case of a sole proprietorship, the insurance proceeds would allow time to liquidate or sell the business (perhaps to employees).


They must be revised to reflect any changes in family circumstances, both economic and personal. This should be a joint effort, with each spouse fully aware of the contents of the other’s will. They should also be reviewed whenever the tax law changes, as it does so often.


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