More Than Half Of Americans Don’t Have These Essential Estate Documents, Do You?

February 25, 2019

It’s no surprise some Millennials perceive estate planning as no more than a tax-dodging scheme for the old and rich.  Contrary to its nefarious reputation in the news, an estate plan in its simplest form consists of legal documents that define our wishes for the greatest certainty in all of our lives: death. Still, more than half of Americans don’t have a basic plan, according to a Caring.com survey. Regardless of our age or wealth, spelling out what happens if you pass away ensures your money goes to the people or causes you care about most. Although some Millennials recognize these benefits, we tend to focus more on enriching daily life than making plans for a seemingly far-off future. While this short-term mindset might allow us to live happier lives today, overlooking essential estate planning could cause heartache down the line.

Jonathan Schwartz, an estate attorney and associate at the New Jersey-based law firm of Sherman Wells Sylvester & Stamelman LLP, has worked with Millennials to implement documents like living wills, last wills and testaments, trusts and powers of attorney. I spoke with Mr. Schwartz about how these documents can benefit Millennials regardless of wealth. Like me, Schwartz thinks those who see past estate planning misconceptions and establish a basic plan can create a legacy that benefits the people and causes that matter most.

Living Will & Health Care Proxy

It’s hard enough to talk about money in general, but pushing someone to think about death and dying doesn’t really brighten the day. Mr. Schwartz says he prefaces every client discussion by offering up a blanket “heaven forbid” regarding the hypothetical situations he goes on to discuss. While such scenarios are rare and certainly not fun to contemplate, it’s important for Millennials to recognize the unfortunate reality that bad things can and do happen. While we know we will die at some point in the future, we should consider the chance we become seriously injured or sick before we die.

In such an event, a document called a “living will” specifies what medical treatment doctors can provide (or withhold) if we become unable to communicate our wishes. Possible treatments include things like resuscitation, artificial nutrition and hydration and ventilation. In addition, a health care proxy appoints a specified person to have access to our medical records and make medical decisions as needed (even if you’re going to make a healthy recovery). “Defining these preferences helps families avoid conflict and can lessen the burden of making difficult judgment calls,” says Schwartz. Though often associated with terminal illnesses, health care proxies can prove beneficial in less dire situations by permitting an appointed agent to speak directly with health care providers or even to pick-up test results.

Beyond our medical wishes, we need to consider how, for example, a spouse would manage basic financial matters if we become incapacitated. A newly married couple obviously isn’t going to spend the honeymoon thinking about estate planning. Still, we should at some point start thinking about ensuring our spouse has access to our assets in the event we unexpectedly become disabled. “I find many married couples still have separate pots of money and have, for various reasons, opted to forgo the often-tedious process of retitling at least some bank accounts into their joint names,” says Schwartz.

For assets not held jointly, what’s known as a power of attorney can enable our spouse to act on our behalf when it comes to basic financial decisions. Mr. Schwartz explains to clients that even the simplest things like paying the mortgage and other bills become problematic when most of the assets are in the name of the person who becomes disabled and can’t go to the bank. “By empowering your spouse as your attorney-in-fact under your power of attorney, you’re making things easiest in a time that may otherwise be very difficult,” says Schwartz.

Last Will And Testament

It’s difficult for Millennials to come up with wishes for something that feels so far away. As our feelings, values and family relationships can often shift over time, last wills and testaments are never set in stone. “A will isn’t final until we die,” explains Schwartz. Whether we die tomorrow or many decades from now, a will should reflect our current values and ensure our family is not left scrambling to figure out how to distribute assets. In the document, we can assign someone to dispose of our assets in accordance with these specified wishes.

We should also recognize that creating a will is about more than our money. Rather, it’s about extending our values beyond our life and creating a legacy. To that end, a will can establish a guardian for surviving children rather than leaving the decision to the courts. Mr. Schwartz explains that a guardian should be someone you trust and who shares your values. Other than a legacy to our children, a will can carry out our charitable giving, often enabling us to support our most important causes more than ever before.

Trusts

While the word trust might evoke images of “trust fund” kids in polo shirts and penny loafers, these legal structures can benefit more than just the wealthy. A trust typically created upon death will usually include provisions detailing when and how our kids can access our assets if we pass away. “It doesn’t always make sense for our kids to inherit everything right away, especially if they’re not necessarily mature enough to handle the responsibility that comes with money,” says Schwartz. Setting an age when our children inherit money can help instill our values and protect from poor decisions.

As part of the trust itself, we must select a trustee for the children who can further carry out our values. Trustees should understand certain basic concepts about how to manage money, but perhaps more importantly, have the courage to refuse to hand out money when our kids want to take it all to Vegas. We need to pick someone who could serve in this role for many years and who could appoint a successor if he or she is no longer able to serve.

Millennials who see past misconceptions in the news will recognize that a basic estate plan benefits more than just the old and rich by defining what we want to accomplish now and in the future. “We’ve wrongly been conditioned to think that creating legacy requires wealth,” says Schwartz. “If you work hard and you save, you owe it to yourself to protect the fruits of that labor and whatever else matters most to you.” While there’s nothing wrong with prioritizing short-term planning that benefits daily life, we should recognize that planning ahead isn’t about fixating on death, but about celebrating our youth by ensuring our values can endure.

For additional help, Argent Investments & Retirement is available »

Author: Zack Conway of Forbes.com

How to Eat Healthy on a Budget

January 7, 2019

Many people have become more health conscious in recent years. By exercising and eating a healthy diet, we know we’ll live happier and longer lives. Unfortunately, processed foods tend to be cheaper than lean meats and fresh fruits and vegetables. That’s due in part by government subsidies to farmers growing corn, soybean, and wheat, the main ingredients in processed foods, which keep those prices down.

When you’re on a tight budget and always in a rush, it’s sometimes easier to hit a fast food restaurant or just microwave a frozen dinner– meals full of sodium, sugar, and saturated fat. So how can you eat more healthfully? Here are a few tips:

1. Slow down. Eating healthy requires a little time and attention. Many people rush through their days, wolfing down their meals mindlessly, so they can hurry to the next appointment. Give yourself a little time to shop mindfully, prepare your food, and fully savor your meal.

2. Buy produce in season and freeze it.  
Fruits and vegetables cost more when they have to be shipped from far-away sunny lands that can still grow produce in November. Buy these items locally, in season, and freeze them for use in the winter.

3. Start your own vegetable garden. You can easily grow lettuce and tomatoes in small planters on a balcony or, if you have a yard, stake out a few feet to grow even more. You’ll even get a little exercise while you do it.

4. Buy in bulk.  Many grocery stores offer dry goods in bulk, saving you the usual packaging costs. You can also save on meat by buying in larger quantities and rewrapping in smaller, meal-sized portions. Freeze those portions to use for weeks to come.

5. Check your dining-out habit.  
If you eat at restaurants often, the habit is taking a big bite out of your wallet. On average, a restaurant meal costs almost 5 times more than a home-made meal. Save dining out for special occasions.

With the money you save, consider opening a Certificate of Deposit.

Income Tax Filing Tips for January

Although income tax returns are not due until April 15, it’s always good idea to plan ahead and file early, especially if you expect to get a tax refund. Here are six steps to take now:

1. Get ready for the arrival of records. If you don’t already have a Tax file, select a single location (even if it’s just a large envelope) to collect your W-2s, statements, and other tax-related documents as they arrive. If you receive records electronically, create a “2018 taxes” folder or subdirectory.

2. Contribute to an individual retirement account (IRA). Most Americans can contribute $5,500 to a Roth or traditional IRA for 2018 ($6,500 for those age 50 and older) until the tax filing date.

3. Decide how you want to do your taxes. Do you like to do it yourself or do you want to hire a pro? Do you prefer pen and paper or a computer? Now’s the time to decide.

4. Find your forms. If you file by paper, you can get forms from a public library or at IRS.gov. If you file electronically, get your software.

5. Consider electronic filing. Taxes filed electronically are processed faster than paper ones, and refunds are issued within 3 weeks. Alternatively, if you file your tax return on paper, it will take 6 to 8 weeks to receive your refund. This filing season, taxpayers with an adjusted gross income of $66,000 or less in 2018 can file Federal taxes for free via the IRS program.

6. Use direct deposit. Regardless of whether you file electronically or on paper, consider having your refund check directly deposited into your credit union account. You will need our routing number, which is: 251082233. It’s another way to get your return faster.

The Tax Cuts and Jobs Act was enacted in December 2017 which made changes to tax rates and Federal income tax withholding. To learn about these changes and how it will affect filing, go to the IRS website.

Stressed Out About Money? 5 Things to Do

October 26, 2018

No one likes to be stressed. And unfortunately, money can be a huge source of stress if you aren’t careful. Whether it’s an unexpected expense, a job loss, or inability to meet your savings goals, money stress is real, and it can completely derail you.

Fortunately, while you can’t avoid every money woe, there are plenty of ways you can better prepare yourself to avoid sticky money situations. Not only that, but you can work on altering your reaction to money stress so it affects you less. Here are 5 things to do if you’re stressed about money.

1) Get Organized

Living in a chaotic state can cause you more stress than you may even realize. Like anything else, it pays off to take time and organize your finances.

When you organize your money, you know exactly when each bill is due, how much money you will have in your bank account at any given month, and you can know exactly how much you need to save in order to meet your financial goals.

To start organizing your finances, one tip is to create a money calendar. First, you can write down every pay day. Then, write down when every bill is due. From there, you can calculate to ensure that you have more than enough money in your checking account to cover every bill without over drafting.

2) Build an Emergency Fund

Peace of mind is priceless. Without an emergency fund, you may be left in financial despair when a sudden, unplanned event occurs. If you stress over wondering how you will pay for unexpected expense (and even if you don’t stress), an emergency fund is a must.

And you can start small. Even an extra $500 can go a long way to cover you if you’re ever faced with a financial emergency.

3) Change How You View Your Budget

Budgets don’t just exist to tell you how to spend your money. This view of a budget can feel restricting, and you may grow to hate your budget. Instead, view your budget as an invaluable resource to bolster you to your financial goals. In fact, your budget is the way you can afford the things you dream about spending money on.

So instead of focusing on what a budget prevents you from spending money on, key in on how a budget allows you to spend money on the things you care most about. This mindset shift is imperative to removing financial stress from your life.

4) Stop Comparing Yourself

Keeping up with the Joneses is stressful. Ultimately, the Jones effect happens when you compare yourself and your lifestyle to those around you. Most of us are guilty of feeling pressure to keep up with what our peers are doing. And it’s a fascinating phenomenon – we spend a lot of money and create a ton of stress for ourselves by trying to keep up with our peers who we may not even like, or share the same interests with.

Once you free yourself from comparison, you can focus on spending money on the things that truly are important to you.

5) Learn More

You don’t need to be an expert in every job, responsibility, or area of life. Everyone, however, needs to be educated about money because, like it or not, money plays a huge role in most everyone’s life.

There’s no shame in admitting you could stand to learn more about money – in fact, even most financial gurus will admit there is always more to learn. Commit to educating yourself. Fortunately, there are endless resources at your disposal for little to no cost. From blogs to books, and from podcasts to newspapers, you can always find a new tool to help teach you more about money.

Bonus: Side Hustle Your Way to Financial Freedom

Would you be as stressed about money if you simply made more? Increasing your income is easier to do than most people think. And having a higher income means you can meet all of your financial goals faster.

You don’t have to leave your day job in order to increase your income. Side hustles are a great way to earn more, and you can start a side hustle today. Whether you choose to become a part-time dog walker, a blogger, or a freelance writer, there are thousands of ways to earn extra cash on the side.

 

Source: Young Adult Money

How to Refinance a Car Loan

October 9, 2018

Refinancing an auto loan can save you hundreds of dollars in interest payments. When most people hear the word “refinance,” their minds automatically jump to home refinancing. After all, your home loan is likely the one that will take you the longest to pay off. So it’s the one that typically benefits the most from a refinance.

But did you know you can also refinance your car loan? This is an especially good option if you could get a much lower interest rate on a new car loan. This can save you tons of money and also help you pay off your car more quickly.

Interested in refinancing your auto loan? Here’s how:

Know When to Refinance

First, you will, of course, want to keep an eye on whether or not you should refinance. You’re likely a good candidate to refinance if one or more of the following applies to you:

  • You’ve seen auto loan interest rates drop. It’s a good idea to keep an eye on industry trends to be sure you’re still getting a good rate.
  • You’ve boosted your credit score. According to this auto loan interest rate calculator, your credit score can make a huge difference in what you’ll pay in interest on your car loan. On a $10,000 used purchase loan, you could pay an average of 15.58% interest with poor credit, or an average of just 2.73% with excellent credit. That’s a huge difference! If your credit score has increased several points since you financed your car, look at your new expected interest rate.
  • You just didn’t get that great a deal on your financing. Maybe when you bought your car you didn’t know how to get the best financing deal.
  • You need to decrease your payments. Are you struggling to make your car loan payments? In this case, a refinance could get you into a lower payment by extending the repayment term. This isn’t a great option, if you can avoid it. But it can be a reasonable way to trim your budget without having to give up your car.

If one or more of these situations sounds familiar, you should at least find out what deal you might get by refinancing your car loan.

Find Your Break-Even Point

Before you actually refinance your car, first find out if it’s actually a good idea financially. Sure, saving a few percentage points on your interest rate seems like a good idea right off. But there are costs involved with refinancing. So be sure your savings will outweigh your costs.

To do this, you need to calculate your break-even point. This is the point–usually a number of months–at which your savings will begin to outweigh your costs.

To calculate your break-even point, first figure out if there are any fees involved with refinancing your car. This might include early termination fees on your original loan, transaction fees for your new loan, and potentially new state registration fees. Some states require borrowers to re-register their cars after a refinance. Add all that together, and that’s how much your refinance will cost.

On the savings side, get an estimate of how much you’ll pay on your refinanced loan. Find out how much that will save you per month. Then, divide your overall cost by your monthly savings.

This is easier than it sounds. Let’s say your refinance will cost you a total of $500 in fees, but you’ll save $50 per month on your loan. It will take you 10 months to break even. After 10 months of car payments, you’ll start saving money.

Shortening Your Term

Calculating your break-even point can be tricky if your refinance leaves you with a larger or similar loan payment because you’re also shortening the term. If you can significantly cut down on your interest, you can pay off the loan more quickly for the same monthly payment. This is a good option if your payment is affordable and you want to get out of debt more quickly.

In this case, though, you’ll need to calculate your overall expenses versus your overall savings. You can do that using an amortization calculator. Put in your current car loan terms and current principal. See how much you’d pay in interest over the rest of the life of your loan as is. Then put in your current principal with the new loan terms. What’s the difference in interest payments?

In our first scenario, where a refinance would cost $500, if you save $501 by refinancing, you’re saving money. Of course, it’s up to you to decide how much you need to save in total to make the effort of the refinance process worth your while.

Get Your New Loan

Getting a new auto loan is typically pretty simple. You get your documentation together, usually including the car’s information and documentation about your income. Then you fill out the application for funding. In the last step, you may have filled out preliminary applications. At this point, you’ll likely need to provide things like actual proof of income.

If the new lender approves the terms, they’ll typically work behind the scenes with your existing lender. The new lender will pay off the balance on the loan, and then they’ll take over the title. Once you pay off that loan, they’ll send you the title to the car that you now own free and clear.

Refinance with Argent Now!

 

Source: DoughRoller