The Woeful Inadequacies Of Traditional Estate Planning The Four Critical Questions You Need To Ask Yourself Personal Finance Credit Agencies Refused Access To Information About Student Loans What Happened To My Money Tips On Saving Dollars On Energy In Your Home Navigating The College Savings Programs
When I mention the words, estate planning, most people think of meeting with an attorney and drafting legal documents. Traditionally, those documents include a will, durable power of attorney, health care proxy and perhaps a trust. After you draft these documents, you meet to sign them, then you put them somewhere “safe,” cut a check to the attorney and breathe a sigh of relief because you finally have things covered.All is well and your estate is perfectly in order, right? WRONG!
Too often the drafting of legal documents is confused with developing an estate plan. Sure, legal documents are part of an estate plan, but they are not “the” estate plan. You need to make sure that you have everything in one spot. If not, you could cause yourself some real problems. That’s why 98% of all estate plans fall short. That’s why you have debacles like the Terry Schiavo case and the Ted Williams dispute. In order to make sure that these sort of things don’t happen to you, you have to have a plan. Most people plan out what should happen in the event of their deaths. What if you are disabled or mentally incapacitated? Effective estate plans must be drafted in order to account for these kinds of contingencies.
If you wish to have an effective estate plan, you must answer four extremely critical questions:
1. What documents do I need?
You need a will, durable power of attorney, and health care proxy. Additionally, you need an original marriage certificate, military discharge paperwork, health and life insurance information, beneficiary designation forms, deeds, and appraisals. Another necessity you need to have is a listing of important contacts with telephone numbers.
2. How will my beneficiaries find these documents?
We all have our own personal and unique filing system that has worked well for us over the years. That’s fine. You should use your own unique filing system, whatever works for you. However, you do need to create a system that “unlocks” your personal filing system. For example, if something ever happened to you, how would your beneficiaries even know you had a safety deposit box, let alone the location of the bank or key?
3. Who should have access to these documents and when?
I know that’s actually two questions camouflaged as one. Remember, these documents are personal and confidential. Today, we are all too aware of the very real threat of identity theft. Safeguarding these documents and making them available, under specific circumstances, to a select group of individuals will allow you to protect your privacy while still preparing an effective estate plan.
4. Who will best advise my beneficiaries?
Your estate plan needs to address not only your financial assets, but also your dreams, wishes, and values. You need to designate that one person who can capture all these characteristics of your life, someone with whom you have shared those most personal thoughts. At you or your beneficiaries’ time of need, who should be that one call?
Don’t confuse proper estate planning with simply drafting the needed documents or purchasing an insurance policy or special investment product. An effective estate plan can only be accomplished with a well thought out approach that is designed to protect your most important information and guide your heirs. Only then will you have peace of mind in knowing that you’ve done your best for your loved ones and nothing important will be overlooked.
For a review copy of the book or to set up an interview with Mark H. Kaizerman for a story, please contact Jay Wilke at 727-443-7115, ext. 223 or at firstname.lastname@example.org.
These days, when you apply for a mortgage, loan or other form of credit, the lending industry will automatically scrutinise your personal credit history. In practice, you hardly need to tell them anything as within a fraction of a second, the lenders computers will lock into your credit file held by any one of the big three credit agencies; Experian, Callcredit or Equifax And you’ll be amazed what they know about your finances!
For many years now banks, building societies and other lenders have been providing information about your finances to the credit agencies. They know about every credit applications you’ve made, the occasions you’ve been late or missed paying a loan, mortgage or credit card, the balances on your loans and credit cards and whether you just pay off the minimum each month – even your credit limits! The agencies also accumulated lots of other information about you provided by public records, the voters’ roll and the public register of court actions where all county court judgements are recorded. Their computers then statistically analyse all this information and assess your application. So in this context, the credit industry argues that the more information they have about you, the more accurately lenders can make lending decisions.
Yet within this mass of information, there is one notable omission. Despite representations to the government, information about student loans and their repayment history’s, is not provided to the credit agencies. The data is refused because student loans are a debt to the taxpayer, not a commercial business.
Prior to September 1998, graduates repaid their student loans by mortgage style direct debits collected once the graduate started earning over
Have you ever found yourself asking this question?
If you have you are not alone. There are thousands of people who find themselves looking at their bank statements or calling their banks and asking this same exact question.
The problem is two fold. By this I mean, as consumers it is our money so it is our duty to keep track of our finances not the banks or anyone else. Most people lack the knowledge to understand that we as consumer should not be calling the bank to ask this question, we should already know the answer.
Let’s discuss this a little deeper…
Why is it that most people don’t keep track of their finances? Some of the top ‘excuses’ I hear are:
1. Lack of time
3. Don’t know!
Lack of Time
Today it is not unheard of for people to complain about not having enough time in a day to do all of things we have to do. Between soccer practice, doctor’s appointments, and helping with homework and all of the other things we have to do in any given day it is no wonder we don’t have the time to do the simple things.
Keeping track of your account is really a simple task if you learn how to do it the right way.
The ironic thing about all of this is that the banks GIVE you the tools you need to effectively manage your accounts. But majority of use fail to even use a fraction of those tools.
For example, most banks offer some sort of online banking option. This option makes it easy for you to monitor your banking transactions from anywhere with an internet connection. You can also perform some basic maintenance task without ever having to call your bank.
What makes this such a great tool is that it is available 24 hours a day. So after you have had a chance to put the kids to bed and settled down you could balance your daily expenses using this helpful tool.
It is important to note here that any of the tools that the bank put at your disposal are just that… tools! They are not there to keep track of your account for you. That is your job.
Let’s face it with all that is going on in our days how can we remember every single thing that we buy in a day. It is inevitable that we will forget something and that is one of the reasons that we find ourselves scratching our heads and asking the question “What Happend To My Money?”
Creating a system that allows for you to keep on schedule but at the same time keeping accurate records of your daily expenses is crucial.
Depending on your lifestyle you should examine your daily routines and find a way and/or time when you can track what it you spend your money on day in and day out.
This one comes down to complete and total laziness. It just couldn’t be said any other way.
People get lazy. It is easier to not do it and expect someone else to do it than it is to take an interest in where your money is going every single day.
It goes without saying that being lazy almost always leads to more troubles. By not taking OWNERSHIP of YOUR finances you are leaving it in the hands of strangers.
My dear sweet Grandma used to say “If you want something done right… do it yourself!”
If that ain’t about right!
If you want to change your life financially you have to know where to start making changes. That simply cannot be done if you don’t already know where your money is going now!
Well now that we have covered some of the more common reasons most people don’t keep track of their finances what are some solutions?
1. Hire an accountant
2. Get off your lazy butt and do it.
3. Let things continue the way they are. (Not Recommended)
Take your pick. I suggest option #2.
If you would like to know just how myself and my wife started to keep better track of our finances visit the following link:
Budgeting Basics System
Not only will you learn how track your daily expenditures easily and quickly, but you will also receive additional tools and tips to help create the ultimate budgeting system that will have your bank account growing at an alarming rate.
Mosiekk Conley is the owner and creator of the Budgeting Basics System that teaches you how to budget in smart and efficient manner. For more information:
Budgeting Basics System
A typical U.S. family spends more than $1,600 a year on home utility bills, yet making some simple changes around the home can save money and make heating and cooling systems more efficient, according to World Energy Solutions, a publicly traded energy services company based in St. Petersburg, Fla.
By evaluating facilities and equipment, World Energy Solutions (symbol: WEGY) helps businesses lower their utility consumption and maintenance costs and extend the life of their equipment.
“Many of the energy-saving strategies we use for our commercial customers can also be applied to the home,” says Benjamin Croxton, chief executive officer of World Energy Solutions. “There are many common-sense, low-cost and no-cost ways to lower your home energy use as well as many new technologies that can be applied to your home’s energy-consuming systems.”
Here are some tips from the American Council for an Energy Efficient Economy on things homeowners can do to make their homes more energy efficient:
* Turn down the temperature of your water heater to the warm setting.
* Use energy-saving settings on refrigerators, dishwashers, washing machines and clothes dryers.
* Use compact fluorescent bulbs, which can save three-quarters of the electricity used by incandescents. First to be replaced should be any 60-watt to 100-watt bulbs that are used several hours a day.
* Have your heating and cooling systems serviced in the fall and spring. Duct sealing can also improve the energy efficiency and overall performance of your furnace or central air conditioner.
* Clean or replace furnace, air conditioner and heat-pump filters.
* Assess your heating and cooling systems to determine if you should replace or retrofit them to make them work more efficiently to provide the same comfort, or better, with less energy.
“If your home’s central air-conditioning system is over 10 years old, a new state-of-the-art system can save you 30 percent or more of your home’s air-conditioning expense,” says George Walker, air-conditioning expert with World Energy Solutions.
As a parent, the big financial concern with a newborn is how to set aside enough money to assist for a college education. Universities and state governments have developed many different financial savings plans to encourage parents to save money for college. Some of the plans include 529 accounts, Coverdell accounts, Roth IRAs and prepaid/guaranteed tuition costs. Unfortunately, few of the programs offer every benefit such as tax deductions, tax deferred savings, unlimited investment options, self directed investments and no penalties.
Selecting a university is a critical and expensive decision, and in my view it is foolhardy to make before the last couple years of high school. A drawback of the university-based or state-based plans (such as a 529 account) is that they impose penalties if a child doesn’t attend a specific university or in a specific state. Who knows what aptitudes, skills or interests your child may develop that necessitate a specific school that is out of your home state. University and state-based plans also impose penalties if the money isn’t ultimately used for qualified college expenses; another example where an event that is out of your control and may cause an unneeded expense. But the biggest problem with university and state programs are the financial rule changes they make – after you start the plan.
To me, the university and state-based programs are a lose/lose savings plan for parents. If the cost of tuition rises faster than forecasted, in spite their guarantees, they raise the price and leave you under-funded. Conversely, if tuition rises less than forecasted, then you end up overpaying for tuition. And the same applies to the stock market some plans force you to invest in; when the market fell in 2000 and 2001, many plans broke their promise to guarantee full tuition funding in spite of promises to the contrary.
Another drawback of state-based plans is that your investment options are severely limited to a few mutual funds run by the brokerage firm operating the account. I have evaluated several: and they have high fees and poor returns, and I’m wary of the lack of competition for many of these accounts. The brokerage firms blame economics for the lack of investment choices, saying that most of the accounts are small and not very profitable for them, so they want as little trading and customer interaction as possible.
The federal college savings plans are better because they allow the widest selection of investments (such as an educational Roth IRA or other education savings accounts), and can be applied to most any accredited university. These accounts offer tax-free growth and withdrawal is also exempt from federal taxes and some states taxes. Realistically, your situation may call for multiple accounts. Rules prohibit you from using these if your income passes certain thresholds.
In my opinion, the best place to start saving college is with U.S. government ibonds from TreasuryDirect.gov. These bonds offer the most flexibility and control, and require none of the paperwork and rules of other savings plans. They accrue a decent rate of interest every month, the principal is adjusted for inflation each quarter, the income tax is deferred, and you don’t have any brokerage fees. And when the money is withdrawn for a university on their approved list, the money can be redeemed tax-free. (As for limiting rules: you cannot withdraw the money in the first year, and if you withdraw it within five years, there is a three month interest penalty – so ibonds are not the best savings plan after a child reaches about age twelve). Since ibonds are simply savings not an educational account, the money can be spent for any type of expense that may arise.
The government and brokerage firms keep updating these accounts, so my complaints will hopefully become moot in the near future. But the criteria that you need to watch for are: many investment options, few penalties, no taxes and total control. These will maximize the money you’re setting aside for that expensive degree..
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