Springtime Money LaunderingWritten by Roger Sorensen
Summer is right around corner and most of us have our to-do-lists figured out, mentally, if not written down yet. Bible camp for kids, plant a large garden, and a trip to lake. What about financial housekeeping, shouldn't that be on your list too? Early summer is a great time to take a financial breather. The holidays are a long way off, taxes have just been paid and we're spending time eating in backyard instead of dining out. If you take even one day out of your summer play/work and organize your finances, you could cut down on forest of bills, bank balancing, and paperwork facing you all year long. Now is even a good time to take a look at your retirement and investment accounts and check up on your insurance coverage. Getting Started Starting with your bank papers, check out how many savings and checking accounts you have and minimize them. I like to have two checking accounts for house, one is used only for regular bills and other is for household items and irregular spending. Two savings accounts are enough as well, one for long-term saving and other for short-term. Another time and paper saver is if you set up an automatic deposit of your paycheck into your checking account, and then set up an automatic payment from your checking account into your savings, investment, or IRA accounts. Even if you pay yourself only $10 a week, it adds up over year and is a good discipline to learn. You can even use automatic deposits to save money for Christmas presents, a vacation or other "special occasions". If you are technologically savy and comfortable with idea of electronic payments, consider using e-payments to pay your regular bills, such as mortgage, electric, or car loan. Don't let companies do electronic with-drawls for you. How do you guarantee that they took right amount, and if they made a mistake (which happens) how do you get money back? It is a lot simpler and potentially safer for you to do an electronic bill-pay through your bank. Another step In 2001 Economic Growth and Tax Relief Reconciliation Act made it easier for you, investor, to consolidate your retirement accounts and still retain tax-favored treatment of money. Prior to this act, advisors frequently told their clients to keep retirement accounts separate to save on taxes. Now you can take eligible distributions from tax-qualified plans, 403(b) and 457 pension plans and other types of plans like IRA, and roll money into other tax-qualified plans. The purpose here is to consolidate your multiple plans into one or two accounts. This'll make it easier for you to keep an abreast of what your money is doing. With fewer accounts, you'll have less confusion, hopefully everything is on one statement and if you have questions or need to make changes you only have to talk to one representative.
| | Who will be their Guardian?Written by Roger Sorensen
If you are like most people today, you do not have a will. The reasons for this failure are many, with most common being along lines of “I don’t have enough assets to worry about”, “I don’t know how to write a will”, or “Lawyers charge a lot of money”. Here’s my answer to last two – buy a software package that helps you draw up your own will and follow forms. This software will ask you a series of questions and you supply answers. When you are done, you have a piece of paper ready to be signed; witnessed and placed somewhere it can be found in event you die. As for your lack of asset objection, that might be true if you live in a cardboard box, with only clothes on your back, as last surviving member of your family. If this does not describe you, than you do have assets and you really should make preparations for dispersing them when you die. As you can tell from title, this is not about your will except to relate as to why everyone should have one. Instead, this writing is about your children. If you are childless, keep reading because someday you may have children. If you know you will never have children, keep reading because someday you may be able to use what you learned here in a discussion with someone who has children. The biggest reason everyone who has children must have a will is because of children’s guardian. Essentially, a guardianship is an institution created and administered by court, making guardian a court-appointee. However, when you name someone to be a guardian in your will, you make it difficult for someone else to be appointed. If you don’t name a guardian, a judge will decide who will raise and nurture your children. Most likely, this judge does not know your family, nor does judge really have capability to know if any of your extended family members can properly raise your child. It is impossible to stress how important it is for parents who die early to find right people for guardianship job. They will be responsible for upbringing of your children. You should definitely consider things like parenting skills, values, physical environment (apartment/farm), and religion. Two important questions to ask (and answers): 1.What if best person to bring up your child physically is not best manager of money? While you are planning your will and your children’s guardian, you can also plan to separate functions of guardianship. To do so, you first write your will appointing a “guardian of person” who will care for your children physically. Then, also in your will, you name person whom you appoint to be “guardian of estate”. This person’s job is to dole out resources so that your children are not a burden on person or family taking care of them.
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