Category Archives: Money matters

3 Simple Steps To Take Today Towards Financial Freedom

No matter your financial situation right now, financial freedom is possible. You don’t have to struggle or feel controlled by your money. Here are 3 simple steps you can take today to get in control of your finances.

Photo by Alexander Mils on Unsplash

1. Set Goals

Writing down what you want and when you want to achieve it is an important step to making dreams a reality. Setting financial goals can help you feel more in control of your finances. They can help guide your financial plan and give you simple, actionable steps to take each day to move you closer to your goals. Once you know what your goals are, you may want to consider financial planning Souderton PA to help you reach them.

2. Automize Savings

Make saving money something you don’t have to think about. Set up a way to save money automatically every month. This can be by setting up an automatic transfer from your checking account to a savings or investment account. If you receive a paycheck via direct deposit, check to see if you can split the deposit into multiple accounts. That way every payday a portion of your paycheck goes directly into your savings account.

3. Transfer Debt

If you are working to pay down high-interest debt, such as credit card debt, see if a lower-interest option is available. It may seem counter-intuitive, but opening up a new credit card account can help save hundreds of dollars in interest. Many credit cards will offer 0% APR on balance transfers within a certain period of opening. Take advantage of the offer to transfer your debt to the new card. Then create a plan to pay off the remaining balance before the 0% APR offer expires.

Taking small steps consistently can have a significant impact on your finances and improve your feelings of control. Financial freedom is possible if you are willing to work towards it every day.

What is Estate Planning and Why Do You Need It?

Estate planning is the process by which you anticipate your future needs and those of your family, as well as the documents you direct your attorney to draft for you that will provide for those needs. Estate planning is likewise the way you protect your assets during your lifetime and at and after your death so you can avoid probate and minimize the income, gift and inheritance taxes your estate will need to pay.

Your Estate

Your estate consists of everything you own at your death, including the following:

  • Checking and savings account balances
  • Stocks, bonds and other securities
  • Life insurance policy proceeds
  • Real estate
  • Personal property, such as vehicles, jewelry, antiques, etc.

Minimum Estate Plan

Whatever your age, marital status or amount of wealth, if you live anywhere in the Louisville area, you should contact an experienced estate planning attorney Louisville KY to draft at least a Last Will and Testament and a medical power of attorney for you. Why? Because if you die without a will, the intestacy laws of Kentucky will determine who inherits your assets.

As for a medical power of attorney, this document becomes crucial if you suffer a debilitating injury or illness that makes it impossible for you to communicate your wishes regarding the types of medical care you want and don’t want. Your medical power of attorney solves that problem because you not only list those things in it in as much detail as you wish, but you also designate someone as your attorney-in-fact to follow those directions, plus make any other medical decisions for you in the event you cannot make them yourself.

Additional Estate Planning Documents

Many people also include one or more of the following additional documents in their estate plan:

  • Revocable living trust(s)
  • Irrevocable trust
  • Special needs trust for a special needs child
  • Financial power of attorney

All in all, wise estate planning will give you the peace of mind of knowing that you have provided for yourself and your family no matter what happens in the future.

Tips for Choosing the Right Financial Manager

Whether you need Asset Management or minor financial planning help, choosing the right financial manager is vital. Therefore, you must define your financial needs, research financial managers and their companies and estimate the fees you will pay.

Define Your Needs

Because advisors, planners, and managers have different specialties, you should define your financial goals prior to seeking financial help. For example, are you setting up a college fund or retirement fund or seeking a residual income? In addition, do you want to invest in physical assets, such as real estate, or intangible assets, such as securities?

Identify whether you seek steady long-term growth over time or high short-term gains for a specific purpose, and explore any moral and ethical standards that may affect your investment choices?

Calculate your initial investment, regular contributions and desired tax liabilities. Finally, evaluate your risk tolerance. For example, if you are young and starting a retirement fund, you may be amenable to higher risk, but if you are close to retirement, you may prefer lower risk.

Assess Managers and Firms

References, referrals and reputations are important. However, search for a fiduciary, as they are legally required to act in your best interest. In addition, identify your prospective financial managers’ longevity in their positions and how many different companies or funds these managers have worked for.

Review the manager’s investment record to identify steady long-term growth. Also, do not limit your investigation to specific periods, such as three years or a previous recession, as these periods may not reflect the advisor’s actual skill.

Assess the services the advisor and firm offer. Investigate the firm’s financial strategies because your manager will be subject to these strategies. For example, are there investment minimums; will the advisor buy and sell without your consent, known as discretionary management; and what types of investments does the firm prefer? In addition, will your moral and ethical requirements be respected?

Estimate Fees

Research the firm and manager’s fee schedule. Some charge a flat monthly or yearly fee, whereas others charge a percentage of your assets. Therefore, if you have $2 million in assets and your manager charges a 1% fee, you may be paying up to $20,000 in fees each year. This fee amount will also increase as your portfolio value increases. Finally, some services, such as retirement or college funds, may have an individual flat fee. Determine if the service you receive is worth the fee you will pay initially and over time.

After you identify your financial planning needs, research the companies and planners available and estimate your fees, you are ready to sit down with your chosen financial manager and start preparing for your financial future.