10 Reasons Not to have a Will

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We say we want to simplify our finances but do you always find an excuse when it comes to certain financial topics. One topic many of us fail to consider when simplifying our personal finances is estate planning or just the simple step of having a will drafted. This is one subject many of us do not like to discuss. Since we do not like to discuss it, we usually do not plan for it. Having a will not necessary help you simplify your finances but will help simplify your finances for the loved ones you leave behind. Even though we all know having a will in place can make the settlement of your estate large or small much easier on our loved ones the majority of us do not have a will in place. So what is your excuse for not having a will?

Here are 10 reasons many of us have not drafted a will:

1. Attorney fees – Why should I pay to have my will done? All the attorney will do is type my will instead of hand writing where I want my assets to go to. I think I will save a few hundred bucks and type it myself. Also what value will the attorney add for the money that I will end up paying.

2. Not alive why should I care – I will not be around so why should I plan how my assets will be divided. I believe my ex-spouses and children are more than capable of dividing my assets evenly so that everyone is happy and gets their fair share.

3. Like to see family fight - When there is a disagreement they just argue until everyone gets what they want. Its actually entertaining to see who will win. So why make it easy on them by telling they who gets what.

4. I enjoy paying taxes- I believe contributing 50% of my estate to the government is a good use of funds. I will not need it so why not give it to a good cause.  Also my family can live on 50% of my assets any way.

5. My elected officials can handle it better than I can Since I have elected these individuals to represent me, I believe they have my best interest at heart and will implement laws that will benefit me and my family. They will know how my assets should be distributed.

6. My spouse can survive without me – My spouse is more than capable of handling my estate. I am sure a how to handle an estate book can teach them what to do.  Right. Better yet my spouse has a job and can survive on just one salary.

7. I have no assets or money why bother – I have more debt than assets what’s the point. The debt collectors will take my assets any way.

8. My minor children will be in good hands with a state agency I don’t need to name a guardian for my children. The state child care services will be just fine.

9. My spouse and children can handle large sums of money Usually when my family receives money they just spend it so why bother restricting what they can do with it. I don’t want to tell them what to do with it. I want them to enjoy it.

10. I will never die – I am still young and in good health and I don’t plan on dying in the near future. I want to enjoy these birthday freebies forever. So what is there to plan for.  When I am ready to die I will plan for it.

So which one of these is your excuse for not drafting a will. Yes we don’t like to talk about death but it is something that will occur in our life time. We just hope that you have planned for it. Having an executed will will make life much easier for those who you leave behind.

TAKE ACTION take some time to think how you want your assets distributed and who you want in charge of managing your affairs when you are not around. Make sure you put some thought into it and then find an attorney to draft a will based on your circumstances. Trust me its worth it.

Til next time take one step at a time to simplify your personal finances.

 

Simplify your Mortgage Refinance with these Seven Questions

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With interest rates at their lowest in decades many of us are considering refinancing our mortgages.

Refinancing your mortgage can help you simplify your personal finances since interest rates are so low? Should you refinance now is a good question to ask yourself but it will depend. There are several reasons why you should consider refinancing and low interest rates are only one of the reasons why.  Yes a lower interest rate can save you money but make sure you consider these questions before you decide to refinance your mortgage.  It will help simplify the refinancing process.

#1 What is your current interest rate? Before you consider if you should refinance or not you must know what your current interest rate is.  Is your current interest rate a fixed rate or an adjustable rate?  If you currently have a fixed rate, what is the difference in your existing fixed rate and the current market rates.  If you have an adjustable rate it is important to know the difference in your existing rate and current rate but you also want to know when your adjustable rate will adjust.  This can significantly impact when you need to refinance or not.  Also what will the rate adjust to on the adjustment date?

#2 What type of mortgage do you have? Is your existing mortgage a 30 year fixed, 15 year fixed, or 7 year, 10 year, or 5 year adjustable rate mortgage?  Understanding your current terms will help with your decision.

#3 What is the estimated value of your home? You want to know if your home has increased in value or decreased in value.  The reason you want to know this is because a decrease in value can have a impact on the refinancing of your mortgage particularly if you owe more than your home is currently worth.

#4 What will be your estimated closing cost?
You want to know how much the refinancing will cost you.  Do you have the funds available?  The closing cost will include title work, appraisal fees, and any leader fees they may charge.  So make sure you ask before you start the refinancing process.  Your lender should be able to give you an estimate of what the closing cost will be.

#5 How much will refinancing save you? Saving over the long term is the reason most people refinance.  So calculate your total monthly and yearly savings.  Also remember to add in the closing cost when calculating your total savings.  You don’t want your closing cost to negate your savings.

#6 What is your lenders underwriting criteria? Due to the current economic conditions many lenders have tightened their underwriting standards.  Be sure you understand their criteria.  For example,what type of credit score is required?, What are their loan to value standards? and What financial documentation will be required?

#7 How long do you plan to stay in your existing home?
This helps to understand what terms are best for your situation.  For example, if you know you will be moving or purchasing a new home within 5 years do you want a 30 year fixed mortgage. Maybe or maybe not. If you plan to stay in your current home for the next 10 years do you really want the 5 year adjustable rate mortgage just because the rate is lower rate.

TAKE ACTION by answering these seven simple questions before your begin the process of refinancing of your mortgage. Remember take one step at a time to simplify your personal finances.

If you would like more tips to help you simplify your personal finances make sure you subscribe to simple financial lifestyle email newsletter and subscribe to RSS feed for blog updates.

Financially Prepare your Spouse in order to Simplify

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Simplify your personal finances by making sure your spouse or loved ones have an understanding of your financial picture. In many households the husband or the wife is the sole chief financial officer in the household. This means that the chosen individual handles all or the majority of the family financial matters without the much involvement from other spouse. This can cause financial stress if the CFO of the household becomes ill and unable to manage the household finances or even worse passes away. This leaves the other spouse the non-CFO trying to figure out what is going on and is left to manage the finances of the household. This can be very challenging task especially for someone who has never managed the finances before and all of a sudden is forced into that role. To lessen the burden on your spouse and loved ones who must now manage the family finances here are some tips to help simplify your finances:

Make them aware of the location of all financial documents – Whoever will handle your finances should know where to find such documents as the will, account statements, life insurance, retirement statements and banking account statements. Many of us use online banking so make sure that individual has your passwords for all online access. Make a list of all family accounts and account  numbers.  Take the time to update this list whenever you open or close an account.

Know who to contact – This is just as important as knowing the location of the documents. Make sure they know the name and contact information your accountant, attorney, and investment advisor as well as bank representative. Any other person who has knowledge of your finances.  By knowing these individuals your spouse will be able to reach out to them for help if needed.

Know investment objective – How are your assets currently being managed? If something happens to you or your spouse your financial circumstances will change and your investment objective may change as well. You want to make sure your investment objective is in line with your current circumstance. For example, if you have a growth objective and now you will need income from your investments you will have to adjust your investment objective.  So make sure you are aware you how your investment are currently invested. This free investment advice may help.

Know your current financial picture – You want your spouse to know all of your income sources, assets, and debts so they can step in an manage your finances immediately. Knowing this information puts them in a better position. Provide full disclosure. Keep an updated personal financial statement with your financial documents.  Your personal financial statement should show all of your assets and liabilities as well as your income sources.

Know what funds are available – If something happens to you will your loved ones have sufficient funds to take care of you as well as funds to support them. Discuss what life insurance is in place if any and if there is disability insurance in place to replace your lost income.   Review to make sure its enough if you are not there.

TAKE ACTION by making sure the non CFO in your household is aware of all five tips in case something happens to you. Its always better to be prepared then unprepared. By knowing this your spouse will have a much easier time handling the finances if you are not around. They will have enough to deal with if your not around so simplify it for them while you can.

Remember in order to simplify your personal finances you must take one step at a time.

Simple Sunday Financial Blogger’s Round Up – World Cup Finals Edition

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This week’s edition of Simple Sunday features some recent articles I have read that will help you simplify your personal finances. Here are some of the best from this week:

To live a simple financial lifestyle you can not live paycheck to paycheck. Studenomics helps you with this in Live Within My Means? How?

Simplify your next major purchase with these tips from No Credit Needed Creating A Financial Timeline

To simplify your finances you need to reduce your debt. Far Beyond the Stars shows you steps to help you in minimize your finances in 7 Simple Strategies to Liberate Your Finances.

De-cluttering can help you simplify your finances. This post Warning: Are Any of These 5 Things Keeping You From Being Frugal? will give you some tips on de-cluttering.

We all want to save money but sometimes saving money may end up costing us more money. Liz Weston offers 3 money-saving strategies that can backfire to help avoid this from occurring.

OTHER WEEKLY PERSONAL FINANCE ROUNDUPS

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There are so many personal finance posts each week it is not always easy keeping up with all of them. A great way to find out the best posts of the week is to read a personal finance blogger’s weekly roundup. There were several good roundups this week that I thought you may find valuable as well.

Financial Highway offers Weekly Round Up World Cup Finals

Len Penzo Dot Com offers Black Coffee: My Favorite Blogs, Money News & Opinions #54 (The LeBron Who? Edition)

Oblivious Investor offers Investing Blog Roundup: Target Date Funds and Wrongness

JoeTaxpayer offers A Bastille Day Roundup

Darwin’s Money offers Weekend Reading: Return of the Russian Cold War Spy Game Edition

Mrs. MoneySaver offers Frugal Friday- Link Up and Blog Hop!

Canadian Financial Blog offers Friday Links

Personal Finance by the Book offers GRABBBR Giveaway Deadline is This Week! / Weekly roundup

Frugal Dad offers Weekly Roundup – Smarty Pig Edition

Budgeting in the Fun Stuff Weekly Favorites and Gratitude!

If you would like learn more tips to help you simplify your personal finances make sure you subscribe to simple financial lifestyle email newsletter and subscribe to RSS feed for blog updates.

Til next time take it one step at a time to simplify your finances.