Do you know the value of every possession you own? You can probably name a few big items and their value off the top of your head, but without a detailed list, you may never know the cumulative value of your assets.
Creating a home inventory is the best way to know what you own and how much your belongings are worth. With a comprehensive list, you’ll also have access to any serial numbers and other important details about all valuable items in your home.
In fact, some insurance companies require this kind of information for claims. If your home is burglarized or damaged by severe weather, having this inventory of everything you may have lost, including photos and other important information, will expedite any insurance claim.
Financial Planning Benefits
While the benefits of having a home inventory for insurance purposes is quite clear, it can also be extremely valuable information for your personal financial planner. Having a list of your possessions and their value is an easy way to keep track of your overall net worth. This inventory, along with other asset information such as brokerage accounts, retirement accounts, stock certificates, and other financial assets will help you keep track of all your valuables, tangible and intangible alike.
In addition to giving your wealth management adviser a complete picture of your assets, your inventory can have other financial benefits as well. For example, a complete breakdown of your assets can help in the development of wills, ensuring that your beneficiaries will receive any inheritances according to your wishes. You can also document any improvements and upgrades to your home, potentially improving the appraisal value.
Where to Start
Creating a list of everything you own may seem overwhelming, especially if you’ve acquired decades worth of furniture, jewelry, and memorabilia. The good news is that compiling your inventory is easy as long as you know where to start.
● Begin with your biggest, most valuable items first. These are the easiest to inventory and the most important.
● Go room by room. Working through each room of your home makes inventory more manageable, allowing you to set small goals for yourself during the process.
● Use a home inventory software. There are many apps and programs available to help you keep track of your valuables. Some apps have barcode scanning features, making inventory as easy as a quick scan! http://www.toptenreviews.com/software/home/best-home-inventory-software/
● Make a spreadsheet. Organization is key! It will be much easier for your financial planner to determine your net worth if your inventory is well organized in a spreadsheet or similar document.
● Save, save, save. Make sure you are frequently saving and keeping backups of your home inventory. Technology can fail, and you don’t want to lose all your hard work to a disaster such as a house fire or failed hard drive.
● Hire a specialist. If creating an inventory seems like too daunting a task, hire a professional!
By breaking up your home inventory into more manageable tasks and organizing your list, you can have a detailed record of your assets in no time!
What to Add
Valuables like jewelry, collectibles, and heirlooms may be obvious candidates for your home inventory, but you should also consider items like furniture, electronics, appliances, and clothing. If you paid for it, put it on your list. If it can be damaged or stolen, you need to have a record of it. This will help with your insurance claims, home appraisal, and financial plan.
You should also make your inventory as specific as possible. When applicable, your list should have the following information:
- Estimated appraisal and replacement value
- Photo or video
- Receipts and other documents, if possible
- Make/model and serial number
If you’re using your home inventory to supplement your will, you may also consider adding an heir designation for each asset.
A home inventory is incredibly valuable for insurance and financial purposes. Your list of personal possessions is a great way to determine the value of your assets, especially when working with your personal financial planner.
If you’re looking to create a solid college savings or wealth management plan, contact us today. Our experienced and dedicated advisers are ready to help you meet your financial goals!