Personal Finance

Make Financial Mistakes? Who Doesn’t?

September 24, 2017 By Twila Van Leer

Make Mistakes — Deal with issues as they arise

Financial mistakes are the norm. Even the most successful money-makers have a few on their records. It all adds to the anxiety, confusion and frustration that circulate around money.

Most people are doing better financially than they think they are, experts agree. Look at the bottom lines over time and see if there is a steady increase. That indicates you haven’t failed.

Money is not static. It is dynamic. So are the stock market and other investment options in which you may put your money. Plan for the future and don’t get too hung up on today, according to Lauren Lyons Cole, certified financial planner and editor of “Your Money at Business Insider.”

Individual bumps or dips in your net worth are not necessarily indicators of success or failure. One mistake doesn’t doom you to a lifetime of struggle any more than one lucky break assures that you’ll never have tough times. Enjoy the ups and don’t let the downs get you down.

Since money is dynamic, your financial goals also can fluctuate with circumstances. Long-term planning is essential, but not beyond adapting when necessary. Don’t underestimate your potential.

Deal with issues as they arise. If you lost your job, look for a new one. If you have too much debt, cut spending to the bone while you pay it down. If your progress toward the goals you have set seems too slow, don’t give up. Keep working toward them. If you can cross some off the list, set new ones. Keeping the target in view is the secret to making your personal goals come to fruition.

Financial Basics You Should Know As An Adult

September 12, 2017 By Twila Van Leer

Graduation is a milestone in the understanding of personal finances, as well as the basic underpinnings of the education that will take you through the rest of your life.

Advice from the experts on the basics of personal finances includes these gems:

There is always something new that the advertisers will tell you you can’t do without. Ignore them. You don’t need the “best” phone, computer, etc. etc. Obsolescence is the name of the game today. Find something that satisfies your needs and stick with it. You can pay less for the “not best” and find yourself well provided for.

Don’t get into the mindset that debt is the way to have what you need (or want) unless it is really necessary. Debt is not kind. Consider carefully when you are thinking of getting something new. When you overuse your credit, you are giving up the ability to create a margin for your living. Save up and pay up front for the things you merely want and keep the credit capacity for things that really matter. Watch out for lifestyle creep. It can bury you.

Be reasonable about college costs. If you haven’t saved up enough for a full-blown university, try a community college for the first couple of years. To avoid having to make the choice, begin saving early and consistently for the type of higher education you want. And four years of college is not the answer for everyone. Lesser degrees, such as associate or certificate, can lead to good jobs at less cost. At the very least, a shorter-term education plan might provide the earning capacity to finance more extended college training. Working during the first couple of years so you can stay debt-free will be helpful when you get into the final stretch and borrowing seems inevitable.

Breaking away from home post-high school may be an objective, but it also is very expensive. You may accumulate the sheets and towels, etc., for living away from home, but cash quickly becomes a problem in most cases. If you are looking at rooming with friends or living independently, be sure you have the means to make it work. Have a budget and stick with it, and include some savings in that budget. Even college students have emergencies.

High school graduation is a hallmark, but it can lead to financial stress if you haven’t addressed issues beforehand. Think about it.

A Living Trust Protects Assets

September 4, 2017 By Twila Van Leer

If you want to keep control of your assets while you are alive and set out guidelines for their distribution after your death, a living will may be what you need. Even if you need to make amendments over time, that can be easily done.

With a living trust, you can set specifics for all types of properties and have the flexibility to make changes as needed. For instance, you can name alternate beneficiaries if the individual you initially named dies. You can’t do that with joint tenancy or a pay-on-death bank account.

Compared with a will, a living trust does have some downsides. They are more time-consuming to establish and involve more ongoing maintenance. It is harder to modify them.

The usual cost of having a living trust prepared by a lawyer is about $1,000, but you can significantly reduce this cost by making your own trust. There are self-help tools to guide you through the process. Even if you create a living trust, you will need a simple will as a backup.

Age and wealth are the two most important factors in considering a living will. Greater wealth makes it more desirable to protect your inheritors from the inconvenience and cost of probate. The nature of assets also is important. If you own a small business or other assets that you don’t want tied up during probate, you are more likely to consider a living trust at a younger age. Although your expectation of dying is not immediate, you don’t want to risk having an executor obligated to report to a judge for a year or more.

The steps you should follow if you need to amend your living trust include: Locate the documents and identify the provisions you want to change.

Draft an amendment form or purchase one from a legal publishing store or office supply. Be sure all pertinent information is included, such as the name of the trust, the trust grantors, the trustees as named in the original document and the date it was created. Specify which article in the trust allows for amendments and which article you want to change.

Bring the trust grantors and trustees before a notary public and have all parties sign and date the amendment and specify who they are in the presence of the notary, who will then notarize the signatures.

Attach any changes you make to the original trust papers. Keep them is a secure place. If you filed the trust initially with your county records department, be sure you add any amendments as they are made.

Annual Price Of Raising A Child

January 12, 2017 By Twila Van Leer

That Darling Newborn Will Cost You $233K

Ah! Isn’t he/she cute? But take a closer look at what that darling little one is going to cost you over the next 17 years.

According to the United States Department of Agriculture, the estimated costs of rearing a child today is $233,610. That’s about $14,000 annually. The figure is based on a middle-income family with two children. Kids cost more in the city, also, than they do in rural areas.

The estimates, released recently by the department, are based on 2015 data, so the cost probably increased while you weren’t looking last year. The bottom line is about 3 percent higher than for the previous year, an increase that outstrips overall inflation.

It’s enough to give new parents the heebie-jeebies. The figures calculated by the USDA are used by state governments and courts to prepare child support and foster care guidelines.

The bulk of the costs fall right where you’d imagine: housing, food, transportation, health care, education, clothing and miscellaneous expenses.

Housing Costs

In case you had’n’t noticed, housing is expensive, accounting for 26 to 30 percent of a family’s expenditures. The USDA figures the cost for another child by calculating the cost of an added room to a home. The department admits that it doesn’t calculate into the figure such items as a family’s desire to live in more expensive neighborhood that offer better schools and other amenities attractive to those rearing children.

Middle income married-couple families living in the urban Northeast reported the highest costs – about $253,770 for the 17-year total, ocmpared with the urban West at $235,140; the urban South at $221,730 and the urban Midwest at $217,020. The average rural amount was $193,020. Lower-income families averaged $174,690 per child through age 17. At the other extreme, higher-income families will spend, on average, $372,210.

Food Costs

Following housing on the expense list are health care and food. For the middle-income family, food takes up about 18 percent of the child-rearing budget. Child care and education eat up another 16 percent. Education costs have consistently increased each year since 1960, when the USDA started calculating the costs. At that time, education only devoured 2 percent of the child-rearing costs. Child care also has become an increasingly expensive item with more women entering the labor force.

Education Costs

The report doesn’t even consider the costs of higher education, which usually don’t kick in until after the child is 17. The average annual cost of college now is $47,370 for a private institution, $20,090 for a public college.

New parents who groan at the costs of diapers and formula have even bigger surprises ahead. Between the ages from birth to 2, the little cherub costs only around $12,680 while a teenager 15 to 17 will dip into the family’s finances to the tune of about $13,900 each year. The costs of food, transportation, clothing and health care all escalate for the teens.

Good news for larger families! Those with three or more children spend an average of 24 percent less per child. That’s because kids in large families share rooms, wear hand-me-downs, and inherit older siblings’ toys. Child care facilities often offer sibling discounts.

On the flip side, a single child costs an average 27 percent more.

Finances Change With Divorce

June 17, 2016 By Twila Van Leer

Knowing how to manage money after divorce is essential.

Unfortunately, in a society where divorce is common, no one expects women to be expert in personal finances. They tend to know more about weight loss, cooking and other traditionally feminine matters.

But, according to DivorcedMoms.com, knowing about money and how to manage it (especially when a divorce may have drastically cut your resources) can become absolutely essentially in your new reality. Here are some tips to help in the process.

Hope For The Best, But Be Prepared For The Worst

Though your ex may be as generous as he promised he would be, it often happens that support money begins to lag. Insist on discussing money issues as the split occurs. You’re better off, if possible, to plan on taking care of yourself financially. If you get all the help you are promised, you’ll be pleasantly surprised, and if not, you won’t be devastated.

Educate Yourself

Financial training for women should begin in high school, but it seldom does. If possible, plan to do your own taxes and hone your budgeting and investing skills. Find a consultant, research online or get advice from someone you trust.

Regular Savings Plan

If work is part of the equation for you, be certain that some set percentage of your income goes into savings. Take advantage of employer participation in a retirement savings, if that is feasible. If you still have dependent children, buying a home may be very desirable. But be sure that it’s affordable and leaves you enough for other necessities, including education for the kids. If you need to upgrade employment skills, there are agencies that offer free services or can steer you to affordable options. Don’t be reluctant to explore any options, including government support, if it is necessary to provide for your family.

Have A Strategy

Create long-term goals, including concrete plans on how you are going to achieve them. Get rid of what you don’t need in favor of the things that will help you reach your goals. Be sure your goals are realistic, seeking counseling if necessary to stay within reason. Most women have some assets, such as jewelry or over-expensive cars, that they can convert to cash if necessary. Incurring more debt trying to become financially self-reliant is not a wise way to go.

Live Within Your Budget

It may even do your children good to be forced to expect less. Teach them to live realistically within the new budget now in place. They could thank you for it later. Keep in mind that the old saying is true: You can’t buy happiness. Look for free entertainment, such as board games at the kitchen table, home movie nights, visits to the library, nature walks, local parks, etc.
Love and attention don’t cost anything and they’re the greatest gifts you can give your child. Don’t let your emotional fallout become their problem.

Seek Mediation If Necessary

Resist going to court with your ex-spouse for every dissatisfaction. Lawyers are expensive and courts not cheap. . With divorce child support orders can be changed if your circumstances change, but don’t make money a constantly divisive issue that too often puts children in the middle.

Look around you at all the women who have divorced and succeeded. One needn’t automatically exclude the other. Divorce creates challenges, but it isn’t the end. Learn from it, plan for success and stick with the plan.