Financial Smarts

“Financial fitness is not pipe dream or a state of mind it's a reality if you are willing to pursue it and embrace it.” ― Will Robinson

Each day we hurry about working to provide for our family and to get ahead in life. We worry about our teenage children driving, the frightening drug use trying to lure them away and all of the possibilities of what could happen. Yet an article I read asks, "do we worry about what if something happens to you...what will happen to those around you?"

You are probably the most careful person around. You buckle your seat belt, eat all of the right foods and exercise is part of your daily routine.

But as the saying goes, "stuff happens."

Financial experts estimate that nearly 70% of men have not taken the needed steps to secure their family's finances. Heaven forbid you end up getting hit by a car. But it happens and all too often without warning. It is natural as human beings not to think about dying.

Heck, who wants to think about that stuff?

But it is relatively easy to take a few steps and ensure some 'after-you' stability. Those steps you can take are;

1. Get yourself together - put together a document listing details of your finances, investments, bank account, insurance policies and any financial advisers. Then ask around for an attorney to draft a will for you.

2. Replace your salary - employer-sponsored life insurance policies will normally cover two times your annual salary. This is much less than your family needs. So buy a term life insurance policy to cover you until the kids have graduated and moved away. From that point on, the kids are less dependent upon you. Notice I didn't say they are totally independent.

3. Pay your family, not Uncle Sam - when you die and leave everything to your wife, your children lose something many of us didn't know we had: a $2 million exemption from the estate tax. Upon your wife's death, your kids benefit from her $2 million exemption, but yours would be lost. For your kids to get the combined $4 million exemption, the attorney can set up a credit shelter. Transfer $2 million in assets (or up to this amount as all of us do not necessarily have that much) into the trust, including your house and enable your wife to access the funds, but name your kids the beneficiaries upon her death. What happens is eventually the kids will inherit your $2 million and her $2 million...all estate tax free.

4. Protect your legacy - remember to update and keep updated all beneficiary forms for 401(k)s, IRAs and other retirement accounts as these override your will. Just make sure they are current. Ensure that your will includes instructions including specific instructions about how your assets should be handled.

5. Hire your replacement - when you and your wife are travelling, there is that underlying thought of, "what if the plane goes down?" Assign the jobs of executor and guardian to different people. Divide the power by giving control of your kid's inheritance to one person while someone else takes them in. "The best person to raise your kids may not be the best one to handle finances," says Lisa Osofsky, a tax advisor in New York. Think of things like, what if the guardians divorce? Name one person in a couple as the guardian...and name backups.

It is also important to educate yourself on financial matters not only in case you should die but also in case you continue to live a long and happy life. Having a sound financial plan will make that life even happier.

Stay inspired my friends.

Family Financial Matters

"Beware of little expenses. A small leak will sink a great ship." - Benjamin Franklin

Every day of our lives, we hurry about working to provide and get ahead. We worry about our teenage children driving, the frightening drug use trying to lure them away and all of the possibilities of what could happen.

But, as article stated, "worry about what if something happens to you...what will happen to those around you?" You could be the most careful person around...buckling your seatbelt, eating right and exercising.

As an old saying goes, "stuff happens."

Financial experts estimate that nearly 70% of men have not taken the needed steps to secure their family's financial security. Heaven forbid you end up getting hit by a car or have an unfortunate accident.

It is natural as human beings not to think about dying. Heck, who wants to think about that stuff? But it is relatively easy to take steps to ensure some 'after-you' stability.

Steps you can take are;

1. Get yourself together - put together a document listing details of your finances, investments, bank account, insurance policies and any financial advisers. Then ask around for an attorney to draft a will for you.

2. Replace your salary - Employer-sponsored life insurance policies will normally cover two times your annual salary. This is much less than your family needs. So buy a term life insurance policy to cover you until the kids have graduated and moved away. From that point on, the kids are less dependent upon you. Notice I didn't say they are totally independent.

3. Pay your family, not Uncle Sam - When you die and leave everything to your wife, your children lose something many of us didn't know we had: a $2 million exemption from the estate tax. Upon your wife's death, your kids benefit from her $2 million exemption, but yours would be lost. For your kids to get the combined $4 million exemption, the attorney can set up a credit shelter. Transfer $2 million in assets (or up to this amount as all of us do not necessarily have that much) into the trust, including your house and enable your wife to access the funds, but name your kids the beneficiaries upon her death. What happens is eventually the kids will inherit your $2 million and her $2 million...all estate tax free.

4. Protect your legacy - Remember to update and keep updated all beneficiary forms for 401(k)s, IRAs and other retirement accounts as these override your will. Just make sure they are current. Ensure that your will includes instructions including specific instructions about how your assets should be handled.

5. Hire your replacement - When you and your wife are traveling, there is the underlying thought that, "what if the plane goes down?" Assign the jobs of executor and guardian to different people. Divide the power by giving control of your kid's inheritance to one person while someone else takes them in. "The best person to raise your kids may not be the best one to handle finances," says Lisa Osofsky, a tax advisor in New York. Think of things like, what if the guardians divorce? Name one person in a couple as the guardian...and name backups.

There are many things to think of, many not the most pleasant, but necessary to leave a legacy for your family. Do what you can to prepare. Your family will thank your memory for it.

Stay inspired my friends.

Money 101

“Too many people spend money they haven't earned, to buy things they don't want, to impress people that they don't like.” ― Will Rogers

Many of us grew up earning money performing small jobs around the house or mowing a neighbor's lawn. You might have even earned that money by spending Saturday evenings babysitting for your parents friends or delivering newspapers on Sunday mornings.

It turns out that many of us were never taught how to handle that money.

This lack of education happens for a myriad of reasons. In preparatory school, the basics of math, english and history are taught. There is a level of budgeting concepts taught but at that age, budgeting is the furthest thing from young minds.

As we get into our college years and or early job years, these things called budgets, credit, bills and savings are words we have heard. But do we really understand how handle the implications of each? Are we truly prepared for it?

Yes, the reality of money suddenly hits.

For a lot of kids turning into young adults and even older, the struggles to learn and pull out of money issues consumes much of their lives. A capitalistic system is a good thing. It fuels the economies of many countries. It creates opportunities to work hard, get ahead and earn more money. With those better paying jobs, the promise of better schools, roads and lots of things in the stores to buy. But what fuels it?

You and I spending money, lots of it!

The billboards, magazine ads, television commercials and even product placements in the movies we watch. We are bombarded by these things and more, all in of effort to get you to spend your money and to keep the economy flowing. It preys upon our nature to WANT things more than what we actually NEED.

Yet all of this spending short changes us individually with higher debt, less savings and a shorter distance to fall when something major happens effecting our income. Never fear though, you can learn how to handle money now. This is for all ages and it begins by reading.

Take it upon yourself to learn.

There is a great series at CNNMoney which provides a "Money 101" set of 23 lessons on the various aspects of our financial lives. It is simple but it is a place to start getting you on a great financial track.

Some of the lessons covered are;

- Setting Priorities
- Making a Budget
- Basics of Banking and Saving
- Controlling Debt

And others which take you into growing your money.

Start now, improve your finances and your life will improve.

Remember its not about the money. It is about you and how you handle money. Even the richest of us can be miserable and the poorest amongst us happiest. Handling what money we do have in a smart and sensible way makes life much better.

Get your finances in order and bring more balance into your life.

Stay inspired my friends!