Some Things to Think About In the New Year

January 10, 2014

As I was surfing the Internet during a snowstorm, I read an article about a plane that skidded off a runway. There was also a plane that landed on a highway in New York recently. Fortunately, there was no one seriously hurt in either incident but as someone who flies a lot for business, seeing these stories always gives me a moment of pause…as does thinking about the loss of friends along the way, at ages that were far too young. Continue reading “Some Things to Think About In the New Year”

Keep It or Chuck It?

January 03, 2014

One of the questions a lot of my friends have asked me as we got to the end of the year was about keeping their financial documents. I have friends on both ends of the spectrum. Some keep EVERYTHING and are tired of seeing boxes pile up in their attic.  Others keep NOTHING and figure that with online statements, if they need it they can request it.  Continue reading “Keep It or Chuck It?”

What You May Want to Discuss Around the Thanksgiving Table

November 20, 2013

Thanksgiving is right around the corner, and if you are like most traditional American families, you’ll probably eat too much, watch a game or two on the TV, and simply enjoy spending some quality time with each other. For some families, spending quality time together happens regularly, but for many, including my own, it usually only happens around the holidays.  If that is the case for your family, one thing you may want to do this holiday season is discuss long-term financial goals. It may not seem like the most enjoyable topic of conversation around the dinner table, but with more and more uncertainty about the future, it may be one of the more important conversations you will ever have in your life. Continue reading “What You May Want to Discuss Around the Thanksgiving Table”

“Rules of Thumb” Can Make Financial Planning Simpler

November 13, 2013

One of the many hats I wear around the Financial Finesse office is that of a fact checker.  Before we publish an article or release new content, I am frequently asked to verify any factual information it may contain.  In some instances, the information I am asked to verify is absolute. For example, the IRS has recently released 401(k) and IRA contribution limits for 2014: $17,500 (or $23,000 if age 50+) and $5,500 (or $6,500 if age 50+), respectively. At other times, the information we include in our publications is based on generally accepted financial planning principles—what we typically refer to as “rules of thumb.” Continue reading ““Rules of Thumb” Can Make Financial Planning Simpler”

Charitable Intentions With Potentially Uncharitable Results

October 29, 2013

My husband was ecstatic last weekend as the winning bidder of four Ravens tickets at a silent auction. The silent auction was part of a fundraiser for my friend’s niece, Melissa, who has been suffering from a rare illness that left her paralyzed from the waist down. Her story captured the attention of the local newspaper, then went viral when she was the featured recipient of Chive Charities for Hope for a Home. When I made the check out to pay for the Ravens tickets, I was told to make it payable for $350 to Melissa, but my check was miniscule compared to the over $388k raised altogether.  I was so happy that Melissa’s fundraiser had been such an amazing success, but I was also concerned about the consequences these donations might have on her since I was writing the check directly to her.  Continue reading “Charitable Intentions With Potentially Uncharitable Results”

Oh No, I Forgot to Check My Line-up!

September 02, 2013

If you are a sports–obsessed, fantasy football player like me, you’ve probably been mortified as you said those dreaded words at some point.  If you are a football widow like my wife, you’ve probably heard that before and wished it happened a lot more often. Why does someone need to check their fantasy team line-up? Didn’t they spend a bunch of time in August putting together the greatest draft strategy in the history of man or at least the history of football? With super star players dominating at every position, why should you bother with something as mundane as checking your line-up before each game?

Well, I guess someone could get hurt. Of course, every team has a bye week so you wouldn’t want to start Tom Brady if the Patriots are off. If you really want to reach the playoffs, then I guess you might not play a lot of Broncos wide receivers if Peyton Manning couldn’t play.

Of course, then there is my team.  If usual form holds true, my quarterback will be crippled by week 3 (Sorry to all Matt Ryan and Julio Jones owners), I will not realize that my back-up quarterback, tight end, kicker and defense have the same bye week and my can’t miss rookie running back will be buried somewhere below whale dung on the depth chart. In short, stuff happens.

The same is true in our financial life.  It always amazes me to see how much time, effort and money people will devote to putting together a financial plan and then rarely if ever re-visit the plan.  In my own life, I’ve seen multiple changes in the last year, let alone the last 5 – 10 years.  Sticking with the old plan would be a quick trip to the losing locker room. While as any of the guys in my fantasy football league will tell you, I’m the last person who should give fantasy line-up advice, here are a few tips for how and when to check your financial line-up:

Set a time each year for an annual review of your plan

  • Have it coincide with the start of something like New Year’s or the start of the school year

Resources:  Financial Planning Checklist    Financial Goals Worksheet     How to Check Your Family’s Finances (9-minute checkup)     E$Planner (Retirement Calculator)

Re-balance your investments

  • If you aren’t in funds that re-balance automatically, this should be done at least once a year
  • When you do your annual review you can choose another memorable day like April 15th

Resources:  Beginner’s Guide to Asset Allocation, Diversification, and Rebalancing     Guide to Rebalancing (WSJ)     Create an Investment Policy Statement

Review your home and auto insurance

  • Having inadequate coverage could leave you in a huge bind, or you could be paying too much
  • Start this process about 60 days before your annual policy renewal so you have time for changes

Resources:  Cars and Auto Insurance    Homeowners Insurance    Homeowner’s Checklist

Update your budget

  • This is really the most basic and most crucial.  Probably good to do with those resolutions, but if you don’t remember when you last updated your budget, do it NOW!

Resources:  Budget and Net Worth Worksheet     Mint    You Need a Budget     How Do I Create a Budget?

Re-evaluate your estate plan

  • This is definitely one that everybody puts off because it just isn’t any fun and can be depressing to think about. Consider doing this on every 5th birthday, for example 40, 45, 50.  A lot can change in 5 years from tax laws, to your income, to kids being in the home or not and even your health situation.  You probably will do something fun anyway for that milestone birthday so that can cheer you up after thinking about this.

Resources:  5 Steps to Estate Planning    A Simple Estate Planning Checklist For a Challenging Topic

Last, obviously if God forbid your star quarterback really does go down with a season-ending injury (please stay healthy Matt Ryan) you need to reassess your fantasy team immediately. If you have a major event in your life, good or bad, it is always a good time to do a top-to-bottom review of your plan to make sure that it is still relevant for you and your family.  Please, pay attention to your financial line-up and if you have any ideas on back-up running backs leave them in the comments section ASAP!

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A Simple Estate Planning Checklist For a Challenging Topic

June 17, 2013

What does your current estate plan look like?  If you said you don’t have an estate plan, you’re probably wrong because the state you live in actually has a plan for your estate if you die without a will, trust, or other crucial documents.  If your line of thinking is “what estate…I’m overwhelmed by debt” or “I’m single with no kids” or “I’m young and just getting started in my career,” understand that everyone has an estate and needs an estate plan to make sure your individual, family, and financial goals are met once you die. Continue reading “A Simple Estate Planning Checklist For a Challenging Topic”

What Happens When You Inherit an IRA?

April 08, 2013

Last week, I received a difficult but important question from a good friend who wanted to know what to do when an IRA account is inherited from a loved one. His mother is in the final stages of a long battle with cancer and the need for hospice care had prompted my friend and his family to start the emotional process of making sure her estate plan is in order. Unfortunately, most families wait until it’s too late to have these difficult talks but in this case, my friend’s question was driven by the difficult ordeal his family experienced following the sudden death of his father about five years ago. They didn’t want to get blindsided this time around but weren’t sure about what tax laws and potential surprises were waiting for them. Continue reading “What Happens When You Inherit an IRA?”

What’s Probably Missing From Your Financial Plan

February 21, 2013

When people call our financial helpline or schedule a one-on-one consultation, they usually have a particular problem or goal in mind. It might be getting out of debt, knowing whether they’re on track for retirement, or dealing with a thorny tax issue. But sometimes we have people that seem to be doing all the right things. They have no high-interest debt. They have more than adequate savings for emergencies. They’re saving enough for retirement. They just want to know what they might be missing. Here are the most common holes in people’s  financial plans: Continue reading “What’s Probably Missing From Your Financial Plan”

If I Won the Lottery

January 09, 2013

Recently, my 10-year old son Ethan asked me what I would do if I ever won the lottery.  What a great question.  How we answer this question says a lot about how we feel about money and what we value most.  After pondering the question for a moment, here is what I would do. Continue reading “If I Won the Lottery”

How to Make 2013 a Financially Productive Year

January 03, 2013

If you’re like most people, New Year’s resolutions are usually a source of endless disappointment. We start the year with grand ideas that often melt away before the end of winter.  One of the biggest reasons for this is the tendency to try to do too many big changes at once, which causes us to burn out and get nothing done at all. That’s because we tend to overestimate what we can accomplish in the short run and underestimate what we can accomplish in the long run. To break things down, here are some ideas for each month to improve your financial situation in 2013: Continue reading “How to Make 2013 a Financially Productive Year”

Do You Have These Essential Financial Protections in Place?

December 20, 2012

One of the most difficult financial challenges people often face is trying to decide how to balance competing goals. A typical situation might be someone who wants to pay off student loans and credit card debt, save for emergencies and a home purchase, start putting something away for retirement, open a college account for their newborn, and purchase disability and life insurance. Yet, they only have a limited amount of money they can save each month. Continue reading “Do You Have These Essential Financial Protections in Place?”

What Your Financial Planner Needs to Know About You

December 06, 2012

One of the questions I commonly get from people is about what information to bring to a financial planning consultation.  In my own meetings with employees, some people come with spreadsheets or even thick binders of information while many bring nothing at all. In both cases, they often have no idea what information is relevant and useful in making financial decisions. Whether you work with a planner or manage everything on your own, here is some information that you’ll want to have at your fingertips: Continue reading “What Your Financial Planner Needs to Know About You”

How to Prepare for an Impending Divorce

November 28, 2012

Marriage is not easy.  (Can I get an AMEN?)  Marriage takes a lot of work, a lot of sacrifice, and a lot of compromise.  Couples must find a way to bring two separate worlds together, and that means finding common ground on everything from having children, to where you spend Thanksgiving.  Continue reading “How to Prepare for an Impending Divorce”

5 Unromantic Reasons to “Put a Ring On It”

November 08, 2012

I’m amazed at how often I speak to people who have lived with a significant other for many years and even have children together but haven’t tied the knot. Now, I’m not trying to make a religious or moral argument for marriage. In fact, I’m a bachelor myself. Rather, I think it’s important for these couples to understand the various financial implications of “living in sin.” Continue reading “5 Unromantic Reasons to “Put a Ring On It””

Five Step Check List for Your Estate Plan

October 08, 2012

What did Heath Ledger and former Supreme Court Justice Warren Burger have in common?  Their career choices couldn’t have been more different but in their estate planning, they made similar mistakes — ones that could have been easily avoided.  Heath Ledger made the mistake of not updating his will when his daughter was born and even though Warren Burger was a Supreme Court Justice, well versed in the law, he made the mistake of doing it himself and ended up leaving out some key provisions.  In both cases, the family paid the price.  If a Supreme Court Justice can make a mistake, anyone can. Continue reading “Five Step Check List for Your Estate Plan”

What We Can Learn From “The Will: Family Secrets Revealed”

October 05, 2012

Sometimes my job is really fun!!!  Today is one of those days.  I had the opportunity to check out a TV show before it airs.  That made me feel a little bit like a celebrity.  Here’s the story.  There’s a show on Investigation Discovery called The Will: Family Secrets Revealed and I had never seen the show before.  Because of our blog here, someone from the channel contacted us to let us know that Season 3 is starting soon and graciously allowed one of us to preview a few episodes.  Luckily for me, I was the one who got to do this.  I think I have a new favorite show and I’ll be DVR’ing the series now!  Continue reading “What We Can Learn From “The Will: Family Secrets Revealed””

Three Common Estate Planning Mistakes That You Can Easily Avoid

October 01, 2012

When I made a mistake once on my taxes, I got a notice from the IRS in the mail asking me to pay what I actually owed and a little extra for interest and penalties.  This was certainly not a pleasant experience, but all it really cost me was money and my pride. However, when you make a mistake in estate planning and don’t catch it, you may not know it until it is too late.  The very people you were trying to take care of may end up muttering your name under their breath in frustration because they have some problems on their hands. Continue reading “Three Common Estate Planning Mistakes That You Can Easily Avoid”

Why Naming a Successor Trustee Is So Important

July 18, 2012

Last week I shared with you the story of Joe who, as a named healthcare power of attorney for his aunt and uncle, found himself in the difficult position of having to make healthcare decisions for both of them under less than hospitable circumstances.  As though that were not enough, Joe was also named the successor trustee for his aunt and uncle’s trust, which meant that at the same time he was making difficult healthcare decisions, he would also have to make important financial decisions.  Now, at first glance you might think it makes sense to name the same person in both capacities.  After all, one of the decisions Joe had to make was whether his aunt and uncle should receive care in their home or in a facility, and that would certainly depend on what they could afford.  But there are a number of reasons why it may have been better to name someone else as the successor trustee. Continue reading “Why Naming a Successor Trustee Is So Important”

Choosing the Right Healthcare Power of Attorney

July 11, 2012

Choosing a person to make healthcare decisions for you when you are physically and/or mentally unable to make them for yourself is difficult, but it’s a choice that should be made with great care and diligence.  This person may be required to make decisions not only about the type of treatment you receive but also about which hospital you go to, where and what type of custodial care you receive, and when it may be time for hospice care.  You may be inclined to simply name a spouse or a child, but as my friend Joe found out, this might put them in a very difficult position.  Here is Joe’s story (and just for the record, all names have been changed to protect the privacy of those involved): Continue reading “Choosing the Right Healthcare Power of Attorney”