Get off to a Great Summer Start

Tuesday, June 20 at 09:30 AM
Category: Personal Finance

There's just something about summer. Maybe it's the longer days, warm temperatures or tasty barbecue treats. Or, maybe it's the break in routine from meeting morning school buses or haggling over evening homework. One thing no one can dispute is summer is a short season, so it's important to make the most of it.

Here are some tips for a great summer start for the kids — and the entire family.

Schedule a trip. Looking to get away from it all this summer? Start planning. Whether you are thinking about a week-long vacation or just day trips throughout the summer, advance planning will ensure you're prepared and all your family members will be available.

Live in the moment. While it's great to plan ahead, spontaneity can also make summer more exciting. Every now and again, take a last-minute day off and surprise your family members with an unexpected trip to the ocean or lake or maybe even an amusement park.

Start an exercise routine. There's no better time of the year to exercise. Schedule some fitness goals for the family and work toward them together. For example, you might plan to run or bike in a race and train together.

Learn something new. Is there some new skill you and your family members would like to learn? Perhaps a new craft, instrument, or even a foreign language? Find a common goal and then arrange to take classes or study together.

Get outside. Instead of staying in and watching television, get outside as much as you can. And if possible, serve your meals outside to soak up even more summer sun.

Take in some culture. There's always something happening in the summer, such as free concerts or movies in the park. Check your local listings to learn about events near you and to see if there are any museums offering discounted or free admission.

Volunteer together. There's nothing quite like the feeling of knowing you are making a difference in someone's life. Try recruiting your family members and volunteering to help a local organization, such as a dog shelter or soup kitchen.

Plan campfires. You don't have to have a trailer or tent to enjoy one of the most enjoyable parts of camping — campfires. With a fire pit, you can bring the relaxation of a campfire right to your back yard. Don't forget to buy some marshmallows, graham crackers, and chocolate and make some s'mores!

Start a family book club. Pick a book the entire family might enjoy and then set up a regular book club meeting where you discuss the book and enjoy special "book club" treats.

Summer is the season to be active. So put these simple ideas into action today to make the most of it.

 

Trim Your Monthly Expenses

Monday, June 19 at 10:20 AM
Category: Personal Finance
It comes as no surprise summer is a great time to get in shape. But, do you realize there's an easy way to get in great shape without having to put on workout clothes or sneakers or even breaking a sweat? It's called getting into financial shape. And you can accomplish that fairly easily by doing one simple activity — trimming your monthly expenses.
 
Here are some suggestions for losing that extra financial baggage this summer:
  • Get rid of higher-interest debt. If you have credit card debt, you may be wasting a significant part of your monthly budget on interest fees. Try to pay off any debt you can or at the very least, to consolidate higher-interest debt to lower-interest credit cards. To avoid credit card debt in the future, pay for purchases in cash.
  • Lower your cellphone bill. Most of us can't live without our cellphones. We can, however, do without those expensive monthly bills, which can be budget busters. Take some time to review your bill to determine your usage and to see if you can move to a less expensive plan. Or if that's not possible, shop around with other carriers.
  • Share the ride. Gasoline and car maintenance can take a big portion out of your budget. One way to reduce your automobile expense is to carpool with others. Or, if you live close to work, consider walking or riding your bike.
  • Dine in. There is a lot to love about dining out. You don't have to worry about what to cook or spend your valuable time cleaning up. But, dining out frequently can be very expensive. By preparing and eating your meals at home, you may be able to save hundreds of dollars each month. Also, if you work outside your home, pack a lunch and be sure to brew your own coffee.
  • Save energy at home. Put some energy into reducing your utility costs by using energy-efficient light bulbs, turning off lights, and conserving water.
  • Reduce your cable bill. Spending too much on cable? Examine your bill and see if you can get rid of premium channels. Or consider, eliminating cable altogether and using subscription services.
  • Get rid of your gym/club memberships. If you belong to a gym and don't get there often, cancel your membership. It's only worth it if you use it.
The best method for determining ways to save is to record and review your monthly expenses. Then, once you cut your expenses, take that extra money and put it in a savings account. In no time at all, you'll see that you look a whole lot better with trimmer expenses. 

Tags: Credit Cards, Debt, Financial Education, Savings
 

Tom Clancy’s Widow Wins Her Court Battle

Wednesday, June 14 at 02:05 PM
Category: Personal Finance
The estate plan of noted author Tom Clancy had three equal trusts, one for the children of his first marriage, a marital trust for his surviving second wife, and a family trust for the second wife and the daughter they had together. The trusts were funded from the residuary estate (whatever is left after paying expenses and any specific bequests), and Clancy’s will also called for estate and/or inheritance taxes to be paid from that same remaining fund. The personal representative of the estate (who also had drafted the will) proposed to pay half of the federal estate taxes due on Clancy’s $83 million estate from the trust for the adult children, the other half from the family trust. The taxes came to roughly $15 million. 

Mrs. Clancy objected. Before his death, Clancy had executed a codicil to his will, to clarify that he intended both the family trust and the marital trust to qualify for the federal estate tax marital deduction. That suggests that the trusts for Mrs. Clancy should not be tapped to pay taxes, because assets that don’t share in the creation of the estate tax burden should not have to pay those estate taxes. To the extent that the widow’s share is used to pay the estate tax, the marital deduction must be reduced, which means still more estate tax, and a further reduction in deduction, and yet more taxes, in an extended circular computation. In fact, if Mrs. Clancy’s share is free from the tax burden, the actual estate tax due will drop by nearly a third, to roughly $11 million. 
 
That’s what the probate court decided was proper, it’s what Clancy apparently intended with his codicil to the will. In a 4-3 decision, the Maryland Court of Appeals agreed with that conclusion in August. A savings clause in the codicil “explicitly directs that the personal representative not act to adversely impact the benefit of the marital deduction of the marital trust and the family trust.” Three dissenters believed that Clancy probably did not appreciate just how much that seemingly minor savings clause would upend the overall result of his estate plan. 
 
The result is decidedly unequal for the five children. The child from the second marriage will get roughly one-third of the estate, undiminished by taxes. The share for the other four will be reduced roughly 40% for taxes, and then split four ways among them. Whether Mr. Clancy expected an outcome for his estate plan to have as many twists and turns as the plots of the books that he wrote remains an open question. 
 
(December 2016) © 2016 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

The Retirement “Tryout”

Tuesday, June 13 at 01:40 PM
Category: Personal Finance
Retirement is sometimes defined in terms of what one is leaving behind — a career, difficult clients, job stress, the daily commute, the grind. But for retirement to be fully satisfying, according to many experts, one needs to retire to something, not just from something. Defining that “to” and giving it a tryout is what we mean by “pretesting” your retirement. Here are some examples. 
 
Donate your time and expertise. An attorney acquaintance of ours spent most of his career as in-house counsel for a major oil company. As he approached his retirement years, he arranged to be allowed to do pro bono legal work for immigrants. He found the experience so rewarding that after he started drawing his oil company pension, he founded a law firm specializing in such pro bono work. 
 
The “soft launch” of a retirement consultancy. Another acquaintance thought his years of experience in the banking business might be valuable in creating a marketing consultancy for financial services firms. Before he retired, this person tried out some of his ideas with the advertising agency that his bank used. Both sides found the experience valuable, and a basis was created for the individual’s new marketing firm. He was able to have a clear financial path to follow once his regular full-time employment ended. 
 
Try a month’s vacation. It would be a shame to retire to a quiet, secluded lifestyle, only to find it boring after a few months. Many retirees report that they miss the camaraderie of their working lives after they retire. Before deciding upon retirement relocation, it can be helpful to spend an extended period of time in the possible new location, to see what day-to-day life would be like there. 
 
As you conduct these tryouts, you should monitor your finances, noting any adjustments that may be required. You may find that your spending needs change or vary from your expectations, and that may influence your choice of a retirement start date. 
 
Testing the water early can head off unpleasant surprises after one enters retirement. By then, many decisions have become irreversible. If you’d like a professional review of your financial readiness for retirement, we’d be pleased to give you our evaluation. 
 
(January 2017) © 2017 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

6 Financial Traps New College Graduates Should Avoid

Monday, June 12 at 08:45 AM
Category: Personal Finance
As college students graduate and start their careers, financial responsibility should be a top priority. However, it’s easy to fall into traps that could hinder new college graduates from securing their financial future.
 
New college graduates should avoid the following financial traps:
  • Not having a budget. Simply put, don’t spend more than you make. Calculate the amount of money you’re taking home after taxes, then figure out how much money you can afford to spend each month while contributing to your savings. Be sure to factor in recurring expenses such as student loans, monthly rent, utilities, groceries, transportation expenses and car loans. 
  • Forgoing an emergency fund. Make it a priority to set aside the equivalent of three to six months’ worth of living expenses. Start putting some money away immediately, no matter how small the amount. A bank savings account is a smart place to stash your cash for a rainy day.
  • Paying bills late – or not at all. Each missed payment can hurt your credit history for up to seven years, and can affect your ability to get loans, the interest rates you pay on loans and your ability to get a job or rent an apartment. Consider setting up automatic payments for regular expenses like student loans, car payments and phone bills.
  • Racking up debt. Understand the responsibilities and benefits of credit. Shop around for a card that best suits your needs, and spend only what you can afford to pay back. It’s a great tool if you use it responsibly. 
  • Not thinking about the future. It may seem odd since you’re just beginning your career, but now is the best time to start planning for your retirement. Contribute to your employer’s 401(k) or similar account, especially if there is a company match. Invest enough to qualify for your company’s full match – it’s free money.  
  • Ignoring help from your bank. Most banks offer online, mobile and text banking tools to manage your account night and day. Use these tools to check balances, pay bills, deposit checks, monitor transaction history and track budgets.  
College graduates can find many enticing ways to spend their paychecks from their first “real” job. However, by avoiding these financial traps, the new graduate can make financial responsibility a top priority instead of exceeding their new income.
 
Information courtesy of American Bankers Association. 
 
Tags: Budgeting, Debt, Financial Education, Savings

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