Marriage and Finances

June 23, 2008

Both Spouses Involved in Financial Planning

When one partner manages the finances, without regular updating, what happens if there is an illness or death? You not only probably have bills associated with that tragedy, but you may have the surviving or healthy spouse left in the dark about finances. Too often that is exactly what happens. Men usually manage the money – and they usually die first. Women’s life expectancy is 79 versus 72 for men. Because women outlive men by an average of seven years, their financial planning strategies need to take into account a longer life and the additional health care needs that may be associated with it.

These statistics make it clear why both spouses need to be involved in financial planning. The tendency of most couples is to divide money issues into two categories: periodic or regular expenses and savings or investments to finance future goals and plans. As I have noted, women are often responsible for the first, men for the second. Successful money management requires that those lines be erased. The result is that all the money in your household should be managed jointly and with agreement on your financial priorities.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.

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Organizing Your Financial Life

June 13, 2008

Plan Ahead for an Easier Future

The first step in an effective personal financial plan is organization. Not only do you need to identify your spending patterns-where, when and how you spend your money-you also need to organize the paperwork that documents those expenses, as well as any other records that are important to your financial life.

In other words, you need to organize your personal life the way you would with your business. You should set up a personal filing system to keep your important financial records in order. Make sure they are in a place that you and your family can easily find when you need to get your hands on those records.

Many people have their records scattered throughout their homes-in drawers, boxes and closets. You should set up one central location-preferably a desk or filing cabinet-where you can keep all of your records in a single, easy-to-find place.

What types of documents should be in your filing system?

Tax records. You should keep your tax returns from at least six years back along with supporting documentation, such as checking account statements, credit card statements and receipts that show what you paid for big ticket items.

Legal documents. You may have a number of legal documents that you will need to find at some point for personal or estate purposes. Those items would include birth certificates, adoption papers, business ownership papers, passports, contracts, funeral arrangement agreements, deeds and titles, education records, insurance policies, living wills, powers of attorney, marriage certificates, Social Security cards, military service records, loan documents and, of course, your last will and testament and other trust documents.

Investment records. If you’ve purchased stocks or mutual funds, it’s important to have a complete record of all of those purchases to use for tax purposes when you sell those investments. Keep records that show when you bought those investments and what you paid. And, by all means, you should keep all of your retirement plan records safely tucked away until you’ve withdrawn all of the money from those plans.

Financial documents. File away all of your insurance policy statements in a place that your family can find in case something happens to you. Life insurance policies should be easily accessible and well marked. Also keep health and disability insurance policies in a file that is well marked. You should also keep property insurance policies, such as homeowners, renters and auto insurance records in your financial filing system.

Other family documents. Do have written histories from yourself or your ancestors that could be of interest to the next generations. How about newspaper articles about yourself or your ancestors that you’ve managed to save. Your children, grandchildren or other decedents might find it interesting to read about you and their other ancestors years from now. It’s all part of their genealogy. Make it easy for them to learn about you and their entire family tree by putting those documents in a file that is clearly marked and easy to find.

By developing a simple, effective filing system, you can make life easier for yourself and your family. With a little organizational effort now, you can save yourself and your family a lot of time and trouble later.

Let us help you. Contact Wealth Enhancement toll free today and begin planning for an easier financial future. 1-800-492-1222

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.


Start Saving for College

June 6, 2008

College Savings Plans

If you have grandchildren or children at home you’d like to help with their college education, it pays to start saving as early as possible.

The government has given us a tool that makes saving for college a lot easier. The 529 college savings plan is a great tax-advantaged program to help you get a head start on your children’s college costs.
There are two excellent options available to help you save for college-the 529 college savings plan and prepaid tuition plans. The money you contribute to a 529 plan grows tax free within your account and withdrawals from the plan for qualified educational expenses are exempt from federal taxes.

You might also consider a prepaid tuition plan. These are offered primarily by state colleges and universities to help you lock in today’s prices for tomorrow’s tuition costs. They allow you to pay tuition in advance to cover your child’s fees and expenses.

With prepaid tuition plans, your concern might be that your child may decide on a college in a different state. Fortunately, these plans allow you to transfer the value to out-of-state public and private colleges.
Don’t wait too long to start your college savings plan. Talk to your financial advisor about setting up a savings plan for you to ensure that your children or grandchildren have the resources they need to get a college education.

Covering your back
No matter how well we plan, unexpected adversity can take us off track. That’s why it’s vital to include risk management as part of your financial planning process.
It’s important to review your insurance coverage from time to time to make sure that you and your family are adequately covered to get you through difficult times. Do you have sufficient life, health and disability insurance? Does your homeowner’s insurance policy provide enough coverage to protect you from law suits that may result from mishaps at your home?

Find out if you have the coverage you need to make it through your difficult times. For your own peace of mind and the financial security of your family, take some time now to sit down with your financial advisor and review your insurance coverage.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.