There are no easy answers when dealing with aging loved ones.  There are also limitless topics we could discuss.  Here, I only address one: the need for communication.  There are so many issues that are difficult to discuss as families and loved ones age.  Old patterns of communication, old rivalries, assumptions can all get in the way.

But, even though these discussions will be hard, it is so vital to try your best to have them.  If you are young (or young-ish) and there is an aging person close to you, do you know things like:  

-  who are all of their professionals (their doctors, lawyer, broker, home health aid, etc.)
-  where do they keep important things (such as wills, lists of medications, contact numbers, keys, combinations, etc)
-  who has signing authority (on checks and invoices and other financial stuff, who can sign?)
-  what are their preferences (regarding health care, end of life care, etc.)

You can't get to all of this, and other, information all at once.  It takes time.  Maybe years.  But the sooner you and other family members can have open discussions about these types of things, the easier your lives will all be down the road.

Good luck and peace!

If you're one of the many folks who are still filing their taxes, don't worry... you are not alone.  I've come across several folks lately who are still filing, and who have various technical questions.  First of all, don't anyone out there beat yourself up about filing so late: there's no reason you have to file early.  In fact, the longer you wait, the more time you have to let your money work for you.  Just make sure you file, on time!  If you run out of time, file for an extension, before the deadline of Monday, April 15.

And, if you are still looking for answers to various technical questions that have come up for you (that is, assuming you are preparing your taxes yourself), that's perfectly normal too,  The US tax code is such a mess of arcane rules and incentives, there are of course people who make a living helping people and corporations understand what to do about taxes.  

But, let me offer a simple resource that you may not have thought of:  the IRS.  Many people don't want to go to the source for information. But, some time a few years ago, the IRS actually figured out that their website could be an excellent resource for us normal folks as we try to prepare our taxes.  If you go on to the IRS.gov web site, and run searches about your various questions, you'll be surprised at how much information is there.  And I find the writing on the IRS site to be very user friendly and readable (don't be afraid, you'll be able to go onto their website and they'll never know you were there...).

So, hang in there.  Pay attention to deadlines.  As you seek answers, the IRS website is an excellent resource to turn to.

Peace!

Sometimes we get a chance to take a big step forward, financially.  Sometimes something goes right for us in terms of money.  Examples include: finally getting a job after a long time laid off,  getting a better job with higher pay,  refinancing to a super low rate,  selling a house and moving to a better one.

When (not if) these things happen to you, bravo and congratulations.  You've worked through enough hard times, you deserve some good news.  But, make sure to hold the line!

What I mean by this is, don't spend all your new found money and end up worse off than you were before.  Before the positive step forward came, I bet you had all sorts of great ways to save money, keep expenses low, make ends meet.  And you just knew that if fortune ever came your way again, you'd make sure to never get into money trouble again.  Well, now you have to follow through on that.

You'll have to fight against many urges when you come into some money.  You'll want to just relax a bit, take the pressure off and treat yourself.  That's just fine, but be careful.  Perhaps the biggest risk you'll face is that you'll just start spending your money at a faster rate than ever before.  And you'll blow through whatever windfall you've achieved.  I've seen this happen all too often.

Best thing to do is make a budget, and stick to it.  I don't mean to throw cold water on the celebration party.  But be careful, be deliberate, follow your budget.  Still treat yourself, but just a little, for a little while.  Then get back to business.

Good luck, and peace!

Many people don't know what financial planning actually is.  Well, it's not a silver bullet, a magic incantation, or a super elixir that cures all money woes.  Financial planning is, quite simply, an ongoing process that you establish in your life to regularly address and manage your money.   It works step by step, over time.

There are many many processes out there, with different steps and different approaches.  But I think they are all basically the same:

1. Organize - Get organized.  Write down your financial information into an easy to understand (for you) format.  How does your income compare with your expenses?  How do your assets (assuming you have any) stack up against your debts (I hope you don't have much!)?  Once you've gotten organized, you can begin to think about what you need to do.
2.  Make a Plan - What should you do about your finances?  You've organized and looked at your situation.  What needs to be done immediately?  Over the next year?  Over the next three years?  Write these to do's down, with dates.  Put the dates on a calendar.
3.  Follow the Plan - You know, of course, that none of this work will amount to a hill o' beans if you don't follow through and actually do the to do's on your list, right?  Do what you need to do in order to help your ability to follow through.  Get a a friend or family member to help you stay on track.  Put big encouraging notes on your calendar.  Set up reminders on your smartphone or online calendar.  Do whatever works for you, so long as you follow through.  This is a process that will help, over time, if you stick with it.
4.  Repeat -  Same time next year, go through the process again.  Before you start rolling your eyes and sighing dramatically, you should know that this gets easier each time you do it.  You get more organized and understand things better.  But, the most important thing is that you do this process year after year.  You can't change everything in one hour or one day.  But you can make some big change in a year.  In three years, you can begin to turn things around.  In five years or more, you can change your life.

Develop a plan that seems like it will work for you.  Stick with it.  Tweak it over time.

Good luck!  You can change your whole life, step by step.

For 2013, try being more intentional.  What I mean is this: try to slow things down and act with a sense of control.  You could do this in many areas of your life of course:  you could be more careful with your eating, your exercise, the way you treat others.  But for our purposes here, let's focus on being more intentional financially.  Don't shoot for changing everything all at once.  But take a step, take two steps, toward taking charge of your money.  Here are two ideas:

1.)  Shop with cash.  Whenever you go out to buy something, whether it's groceries, clothes, a cup of coffee, whatever, plan what you're going to buy, and use cash to buy it.  You will spend less than if you use a debit or credit card. There have been studies that show that shoppers who use cash spend much less than those who use plastic.  And, you won't be tricked into those last minute impulse purchases - you know, those things you don't need at all, but buy anyway.  Do this, and I bet you will spend less and feel more in command of your money.

2.)  Pay off the smallest loan first.   I've spoken of this in an earlier post, but it's worth repeating.  If you have a lot of debt, spread over many things: car loan, credit cards, mortgage, and so on, a good way to make progress is to focus on paying off the smallest one first.  Each month, you continue to pay all of your debts - paying the required amount, on time.  Now, focus as much extra cash flow as you can onto the smallest of your debts (by smallest I mean the one with the smallest principal balance).  Keep doing this until you pay that smallest debt off.  This frees up some cash flow.  Now, focus on the next smallest debt and try to pay that one off as quickly as you can.  And so on until you're out of debt.  This process might take time, several years even.  But it works.  By focusing on the smallest debt first, you will see your progress.  And that will encourage you to continue.  And, you will make an impact on your cash flow situation in the near term future.  

Well, I hope these tips help.  Here's to a happy, blessed, and intentional new year!

Peace!   

IRA - This stands for "Individual Retirement Account."  There are many different types of IRAs: some are used for small businesses (SEP IRAs or SIMPLE IRAs) and some for individuals (Traditional IRAs and ROTH IRAs).  What each of these have in common is that they are accounts that a person can put money from income into, and receive a tax benefit in return. 

An IRA is a tax deferred account.  For tax deferred accounts (Traditional IRAs, SEP IRAs, 401Ks, 403bs), money invested is then deducted from the contributor’s income in the current year, so the contributor pays lower taxes in that year. Then, contributions can grow and no taxes are owed on the gains or income until distributions begin in retirement (indeed there are penalties if a person tries to take money out of a retirement account before age 59.5). When distributions occur in retirement, the account owner will have to add the distributions to their income, and pay income taxes on the total amount. 

ROTH IRAs are different in that contributions are made with after tax dollars, so there is no tax break in the year of the contribution. And, no taxes are owed when the account owner goes to take distributions in retirement. In summary, for a Traditional IRA, taxes are deferred until retirement. For a ROTH IRA, distributions in retirement are tax free.

Make sense?  Ask me questions if you want more info.

Some people out there can claim to have things all under control: no debt, a nice working budget, all their ducks in a row.  Well good for them.  They are rare.  Most people in America, middle class people, have way too much debt.  We have car-loans-credit-cards-department-store-cards-home-equity-lines-mortgages-student-loans-and-on-and-on-and-on.

Here is my fondest wish, prayer, and challenge for anyone who reads this: let's set goals to be completely DEBT FREE within (pick the time frame that realistically will work for you): 5  to 10 years.  This will mean you have to pay down things faster than you might want to.  You might have to scrimp and save.  You might have to forego things like vacation or that big new whatever it is.  

But your life will be better.  If you get out of debt, your life will be better.

Don't worry about your credit score.  You'll be better off.

And, most importantly, you will have inoculated yourself against the influence of the banks.  You may not be able to completely avoid all influence by the financial behemoths, they will still have influence in your community.  But, if you have no debt, they don't have control over you.  

Think about it.  If you have no debt, then when interest rates go up, it won't matter to you.  If there's another financial collapse and your income goes down, you can't be foreclosed on or repossessed or otherwise worked over.

And, your life will be simpler, cheaper, better.

Maybe this approach will help.  Click here.

This is my wish for you.  Make a plan.  Follow though.  It will take some time, but hang in there for as long as it takes, hang in there.  Good luck! 

You can do it.