Women & Money: Financial assumptions can cost you dearly

It's prudent, not paranoid, to always verify and confirm that you know - not think, but know - that every aspect of your financial life is in order. With that in mind, here's my list of common bad assumptions that can cost you plenty.

The money got moved.

Whether you're moving money around within a 401(k), doing an IRA rollover, or simply making an ATM deposit, it's important to take one simple step: Check that what you think you did actually occurred.

Mistakes happen. So keep records of everything. If you made an online trade, print out the confirmation. Keep ATM deposit slips. File away all correspondence from a rollover.

It's easy to shred them later, after you confirm that everything is fine. But if something goes wrong, you'll be sitting on a mound of evidence to help get the case resolved in your favor.

Due dates are etched in stone.

Credit card companies aren't shy about moving around the due date on your bill, even if it's just a day or two earlier. That can end up costing you a $39 late fee if you don't notice and the payment arrives a day or two late.

Auto-enrollment is all you need.

If you're simply assuming that your employer took care of everything when you were automatically enrolled in your company 401(k) plan, you're wrong.

The problem is that, quite often, employers will set employees' contribution levels into the plan at a very low rate - say, 1 percent or 2 percent of salary. That's simply not good enough. At a minimum, everyone should contribute at a high enough percentage to get the maximum company matching contribution. Often, that wil be as much as 3 percent to 6 percent of salary.

Look at the bigger picture: You can't assume the 1 percent to 2 percent auto-enrollment rate is going to take care of all your retirement needs. You need to do a lot more.

Your portfolio can be on autopilot.

Unless you invest solely through a life-cycle fund that automatically rejiggers to keep the proper allocation, you need to rebalance at least once a year. According to one survey, investor losses in the 2000-02 market downturn could have been halved if people had paid attention to keeping their portfolio allocations in line with their long-term goals.

That means scaling back holdings that have had a lot of appreciation and adding to positions that are now underweighted.

You pay your bills on time, so your credit profile must be fine.

Identity theft remains a huge problem. You may be doing everything right in handling your debt, but you can't assume that no one has co-opted your financial identity and taken out credit cards in your name.

It costs you absolutely nothing to check your credit reports for any mistakes or mysterious accounts. Go to AnnualCreditReport.com.

Your home is fully protected.

We see the stories every time there's a big natural disaster: People find out too late that their homeowners' insurance policy won't pay enough to cover the cost of rebuilding or repairing their home. Quite often, people haven't made sure that their policy has kept up with rising construction and material costs.

Two of the most important features you need in your insurance policy are an automatic inflation guard and what is known as extended replacement cost coverage. The inflation guard will automatically increase your policy coverage by a set amount to keep pace with rising construction costs. Extended replacement coverage will entitle you to a potential payout that is 125 percent or more of the stated policy limit.

Once a good interest rate, always a good interest rate.

At the beginning of 2007, it was easy to find great savings account deals offering 5 percent interest. But given the Fed easing of late, savings rates have fallen back to 4 percent or less. While that's to be expected, it doesn't mean you should just settle for whatever rate your account is paying. Plenty of online banks continue to offer high rates.

While I'm on the topic of interest rates, I hope people who bought a home in the last few years have taken the time to truly read - and I mean scour - their mortgage agreement to make sure they understand exactly what can happen to their loan. Plenty of people who are now in the midst of a huge payment crunch didn't realize what they were getting into. They assumed it would all be OK without paying attention to what could actually happen.

Don't get caught assuming you know what your loan documents say. Check exactly what the rate adjustment could be. Don't assume it'll be limited to the 2 percentage point increase that's been the norm. Don't assume you can refinance or sell without a big prepayment penalty.

No matter how bad the news may be, it's always better to know the facts and act proactively than just sit back and wait for your assumptions to land you in a financial mess.