There was an interesting series of tips over on CNNMoney entitled Get a Financial Life. It lays out a series of tips to get your financial house in order in 7 short weeks, with one task per week. Here are their tips, and my thoughts on them.

1. Talk about your goals with your partner. If you are married or otherwise attached, your finances are a team sport. You can’t get very far if you and your spouse are running towards different financial goal lines. So talk about what you want and make sure you are on the same page.
2. Build an emergency fund. Another good tip. The recommendation is three months of living expenses in good times, six months in bad. Just remember that your living expenses do not necessarily equal your salary. Hopefully you are frugal and six months of living expenses is a much smaller number than six months of your earnings, but if you have trouble saying no this number may actually be higher than your earnings.
3. Get life insurance, in the right amount. According to the article, you should have life insurance equal to 5 to 10 times your annual salary. The more dependents you have, the higher the number should be. However, if you are single and have no dependents remember that the purpose is mainly to replace income, and if no one else is going to need that income after you die you don’t really need life insurance. Just make sure to have enough to cover your funeral expenses so that your family doesn’t get stuck with a bill!
4. Use online billpay and automatic payments. I’ve written before on the virtues of automatic payments on credit cards, and many other bills can be paid by automatic draft from your checking account or credit card as well. Just make sure you are reviewing those bills for unauthorized charges, and if the payments come from your checking account be sure to write them down in the check register and make sure you have sufficient funds to cover the payment.
5. Simplify your 401k with target-date funds. OK, this one I will disagree with slightly. I find that target-date funds typically have slightly higher management expenses than the funds that make them up. If you are willing to keep up with it, I would recommend just buying the funds individually. This also allows you to adjust the riskiness of your portfolio to suit your individual tastes.
6. Automate your investments. I completely agree. The biggest investment challenge for a lot of people is just doing something. Setting up automatic investments allows you to set it and forget it. If done in terms of dollars, you also get the benefit of dollar-cost averaging.
7. Get down to a single credit card. OK, I will disagree on this one. If you use automatic payments as noted in #4 above, I really don’t see a point to limiting yourself to a single card. This is especially true if you have reward cards that give different percentages for different types of purchases. At one point I carried one card for gas (5% reward), one card for restaurants (3% reward), and one more for everything else. Now I am mostly down to just my Citi AMEX Platinum that gives 5% on some purchases (gas, groceries, drugstores) and 3% on everything else, and my Citi Dividend card with a 1% reward for use at places that don’t take AMEX.