Financial Tips for Unmarried Couples

Financial Tips for Unmarried Couples

Presented by Jared Daniel of Wealth Guardian Group

If you are in a long-term, committed relationship, you have many of the same financial concerns as married couples. However, you lack many of the legal protections and advantages that married couples enjoy. Here are some tips that can help you and your partner stay on the road to financial security.

Talk about your finances

One of the first financial decisions you'll have to make as an unmarried couple is whether you should handle your finances separately or together. Sit down with your partner and discuss each other's financial values, priorities, and goals. Being open and honest now will help you and your partner avoid the arguments about money that plague most couples, married or unmarried.

How will you handle household expenses: separately or jointly? If you prefer a simple financial arrangement and want to avoid some of the liability associated with joint accounts, you can keep your finances separate. One of you pays the bills and collects money from the other, or you each pay for certain things separately. However, for the sake of convenience, many unmarried couples opt to pay household expenses together, as most married couples do. Keep in mind that if you do open a joint checking account, you'll each be responsible for all checks drawn (or overdrawn) on the account.

What about the rest of your income and other personal expenses? Will you pool all of your finances or keep some income separate for your personal use? Even if you decide to pay your bills together from a joint checking account, you can always keep separate accounts for personal expenses.

Finally, will you hold joint credit cards? You can open joint credit card accounts or add your partner to an existing account as an authorized user. Remember, though, that with a joint account, you are each fully responsible for all charges on the account, including charges that your partner made.

Plan for retirement

As an unmarried couple, you and your partner don't have to give up on planning for retirement together, but it may be harder for you than for married couples. Neither partner will be eligible for spousal benefits from two key sources of retirement income: Social Security and defined benefit pension plans (i.e., traditional pension plans). However, if you're a little creative, there are other ways that you can provide an adequate living for your partner in retirement:

·         Designate your partner as the beneficiary of your retirement plan (e.g., 401(k)s, 403(b)s), if permitted, and of your IRAs.

·         Increase your savings now to replace the spousal benefits your partner won't receive from Social Security and your defined benefit pension plan.

·         Consider using life insurance to fund your partner's retirement. As long as you can prove that you have an insurable interest, you can purchase an individual policy that names your partner as the beneficiary.

Before you jump into planning jointly for retirement, however, consider all of the possibilities. Although it may seem unlikely now, your relationship could end before you retire, leaving one or both of you with inadequate retirement income. In some cases, it may be wiser for each of you to plan for retirement on your own, even if you plan on being together forever.

Make estate planning a priority

Proper estate planning is essential for unmarried couples. The laws that protect married couples don't apply to you. Without proper protection, your surviving partner could be ordered out of a house that you share, and your next of kin could dispose of your estate however they choose. Your partner could also be left out of financial and medical decisions if you become seriously ill or incapacitated. You owe it to yourself and your partner to ensure that your estate will be handled according to your wishes. Here are some ideas to consider:

·         Consult an experienced estate planning attorney to help you protect your assets, your partner, and your family.

·         Prepare durable power of attorneys for health care and finances, and name your partner as your representative.

·         Execute a will if you want to leave certain property to your partner. Without it, he or she has no legal right to inherit your estate.

·         Sign a domestic partner agreement. It won't replace your will, but it can support your will and your partner's right to jointly held property by stating your wishes and intentions.

Jared Daniel may be reached at www.wealthguardiangroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

Organizing Your Finances When You Spouse Has Died

Organizing Your Finances When Your Spouse Has Died

Presented by Jared Daniel of Wealth Guardian Group

Losing a spouse is a stressful transition. And the added pressure of having to settle the estate and organize finances can be overwhelming. Fortunately, there are steps you can take to make dealing with these matters less difficult.

Notify others

When your spouse dies, your first step should be to contact anyone who is close to you and your spouse, and anyone who may help you with funeral preparations. Next, you should contact your attorney and other financial professionals. You'll also want to contact life insurance companies, government agencies, and your spouse's employer for information on how you can file for benefits.

Get advice

Getting expert advice when you need it is essential. An attorney can help you go over your spouse's will and start estate settlement procedures. Your funeral director can also be an excellent source of information and may help you obtain copies of the death certificate and applications for Social Security and veterans benefits. Your life insurance agent can assist you with the claims process, or you can contact the company's policyholder service department directly. You may also wish to consult with a financial professional, accountant, or tax advisor to help you organize your finances.

Locate important documents and financial records

Before you can begin to settle your spouse's estate or apply for insurance proceeds or government benefits, you'll need to locate important documents and financial records (e.g., birth certificates, marriage certificates, life insurance policies). Keep in mind that you may need to obtain certified copies of certain documents. For example, you'll need a certified copy of your spouse's death certificate to apply for life insurance proceeds. And to apply for Social Security benefits, you'll need to provide birth, marriage, and death certificates.

Set up a filing system

If you've ever felt frustrated because you couldn't find an important document, you already know the importance of setting up a filing system. Start by reviewing all important documents and organizing them by topic area. Next, set up a file for each topic area. For example, you may want to set up separate files for estate records, insurance, government benefits, tax information, and so on. Finally, be sure to store your files in a safe but readily accessible place. That way, you'll be able to locate the information when you need it.

Set up a phone and mail system

During this stressful time, you probably have a lot on your mind. To help you keep track of certain tasks and details, set up a phone and mail system to record incoming and outgoing calls and mail. For phone calls, keep a sheet of paper or notebook by the phone and write down the date of the call, the caller's name, and a description of what you talked about. For mail, write down whom the mail came from, the date you received it, and, if you sent a response, the date it was sent.

Also, if you don't already have one, make a list of the names and phone numbers of organizations and people you might need to contact, and post it near your phone. For example, the list may include the phone numbers of your attorney, insurance agent, financial professionals, and friends--all of whom you can contact for advice.

Evaluate short-term income and expenses

When your spouse dies, you may have some immediate expenses to take care of, such as funeral costs and any outstanding debts that your spouse may have incurred (e.g., credit cards, car loan). Even if you are expecting money from an insurance or estate settlement, you may lack the funds to pay for those expenses right away. If that is the case, don't panic--you have several options. If your spouse had a life insurance policy that named you as the beneficiary, you may be able to get the life insurance proceeds within a few days after you file. And you can always ask the insurance company if they'll give you an advance. In the meantime, you can use credit cards for certain expenses. Or, if you need the cash, you can take out a cash advance against a credit card. Also, you can try to negotiate with creditors to allow you to postpone payment of certain debts for 30 days or more, if necessary.

Avoid hasty decisions

·         Don't think about moving from your current home until you can make a decision based on reason rather than emotion.

·         Don't spend money impulsively. When you're grieving, you may be especially vulnerable to pressure from salespeople.

·         Don't cave in to pressure to sell or give away your spouse's possessions. Wait until you can make clear-headed decisions.

·         Don't give or loan money to others without reviewing your finances first, taking into account your present and future needs and obligations.

Jared Daniel may be reached at www.wealthguardiangroup.com

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

Merging Your Money When You Marry

Merging Your Money When You Marry

Presented by Jared Daniel of Wealth Guardian Group

Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

Discuss your financial goals

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.

Prepare a budget

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.

Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.

Bank accounts--separate or joint?

At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.

Credit cards

If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.

If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.

Insurance

If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.

It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.

Employer-sponsored retirement plans

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:

·         If both plans match contributions, determine which plan offers the best match and take full advantage of it

·         Compare the vesting schedules for the employer's matching contributions

·         Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs

·         Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision

Jared Daniel may be reached at www.wealthguardiangroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

I'm Getting Laid Off. How Am I Going to Survive Financially Until I Find Another Job?

I'm getting laid off. How am I going to survive financially until I find another job?

Presented by Jared Daniel of Wealth Guardian Group

Question:

I'm getting laid off. How am I going to survive financially until I find another job?

Answer:

There are a number of ways you can smooth the transition to your next job. To begin, you'll want to plan on your job search taking six months and budget accordingly. Your budget should reflect the money you'll need to use while looking for your new position.

Because you're being laid off, you may be eligible for unemployment benefits from your state as well as severance pay from your employer. If you have an emergency reserve set up, you can count on that, as well. Otherwise, you might have to dip into your savings account. You can consider taking a part-time job to supplement your income. If your search takes longer than expected, you may have to consider more radical ways to come up with income, such as borrowing against a life insurance policy that has cash value, borrowing from relatives, or withdrawing money from a tax-deferred retirement account. Each way has its drawbacks, but you'll want to be particularly careful with retirement accounts because you may incur fees and penalties.

Review your budget to identify where you can lower or perhaps cut out expenses for entertainment, dining out, and vacation or holiday travel, for example. You can also reduce expenses in small ways that add up: cancel magazine subscriptions, eliminate extra phone services, and stop your cable service. Negotiate with your creditors to lower interest rates or receive temporary deferments, and review your car insurance policies to increase your deductibles or drop certain coverages.

If you have time to prepare for unemployment, you can take some steps immediately to help yourself. A home equity line of credit can give you funds to draw on (though you'll have to make monthly payments) and may allow you to pay off credit card loans with higher interest rates. You can reduce or stop contributions to retirement or education funds and put the extra money into your emergency funds. Finally, you can also consider increasing your withholding allowances to reduce the amount taken from your paycheck.

Jared Daniel may be reached at www.wealthguardiangroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

Buying a Home

Buying a Home
Presented by Jared Daniel of Wealth Guardian Group

There's no doubt about it--owning a home is an exciting prospect. After all, you've always dreamed of having a place that you could truly call your own. But buying a home can be stressful, especially when you're buying one for the first time. Fortunately, knowing what to expect can make it a lot easier.

How much can you afford?

According to a general rule of thumb, you can afford a house that costs two and a half times your annual salary. But determining how much you can afford to spend on a house is not quite so simple. Since most people finance their home purchases, buying a house usually means getting a mortgage. So, the amount you can afford to spend on a house is often tied to figuring out how large a mortgage you can afford. To figure this out, you'll need to take into account your gross monthly income, housing expenses, and any long-term debt. Try using one of the many real estate and personal finance websites to help you with the calculations.

Mortgage prequalification vs. preapproval

Once you have an idea of how much of a mortgage you can afford, you'll want to shop around and compare the mortgage rates and terms that various lenders offer. When you find the right lender, find out how you can prequalify or get preapproval for a loan. Prequalifying gives you the lender's estimate of how much you can borrow and in many cases can be done over the phone, usually at no cost. Prequalification does not guarantee that the lender will grant you a loan, but it can give you a rough idea of where you stand. If you're really serious about buying, however, you'll probably want to get preapproved for a loan. Preapproval is when the lender, after verifying your income and performing a credit check, lets you know exactly how much you can borrow. This involves completing an application, revealing your financial information, and paying a fee.

It's important to note that the mortgage you qualify for or are approved for is not always what you can actually afford. Before signing any loan paperwork, take an honest look at your lifestyle, standard of living, and spending habits to make sure that your mortgage payment won't be beyond your means.

Should you use a real estate agent or broker?

A knowledgeable real estate agent or buyer's broker can guide you through the process of buying a home and make the process much easier. This assistance can be especially helpful to a first-time home buyer. In particular, an agent or broker can:

·         Help you determine your housing needs

·         Show you properties and neighborhoods in your price range

·         Suggest sources and techniques for financing

·         Prepare and present an offer to purchase

·         Act as an intermediary in negotiations

·         Recommend professionals whose services you may need (e.g., lawyers, mortgage brokers, title professionals, inspectors)

·         Provide insight into neighborhoods and market activity

·         Disclose positive and negative aspects of properties you're considering

Keep in mind that if you enlist the services of an agent or broker, you'll want to find out how he or she is being compensated (i.e., flat fee or commission based on a percentage of the sale price). Many states require the agent or broker to disclose this information to you up front and in writing.

Choosing the right home

Before you begin looking at houses, decide in advance the features that you want your home to have. Knowing what you want ahead of time will make the search for your dream home much easier. Here are some things to consider:

·         Price of home and potential for appreciation

·         Location or neighborhood

·         Quality of construction, age, and condition of the property

·         Style of home and lot size

·         Number of bedrooms and bathrooms

·         Quality of local schools

·         Crime level of the area

·         Property taxes

·         Proximity to shopping, schools, and work

Making the offer

Once you find a house, you'll want to make an offer. Most home sale offers and counteroffers are made through an intermediary, such as a real estate agent. All terms and conditions of the offer, no matter how minute, should be put in writing to avoid future problems. Typically, your attorney or real estate agent will prepare an offer to purchase for you to sign. You'll also include a nominal down payment, such as $500. If the seller accepts the offer to purchase, he or she will sign the contract, which will then become a binding agreement between you and the seller. For this reason, it's a good idea to have your attorney review any offer to purchase before you sign.

Other details

Once the seller has accepted your offer, you, your real estate agent, or the mortgage lender will get busy completing procedures and documents necessary to finalize the purchase. These include finalizing the mortgage loan, appraising the house, surveying the property, and getting homeowners insurance. Typically, you would have made your offer contingent upon the satisfactory completion of a home inspection, so now's the time to get this done as well.

The closing

The closing meeting, also known as a title closing or settlement, can be a tedious process--but when it's over, the house is yours! To make sure the closing goes smoothly, some or all of the following people should be present: the seller and/or the seller's attorney, your attorney, the closing agent (a real estate attorney or the representative of a title company or mortgage lender), and both your real estate agent and the seller's.

At the closing, you'll be required to sign the following paperwork:

·         Promissory note: This spells out the amount and repayment terms of your mortgage loan.

·         Mortgage: This gives the lender a lien against the property.

·         Truth-in-lending disclosure: This tells you exactly how much you will pay over the life of your mortgage, including the total amount of interest you'll pay.

·         HUD-1 settlement statement: This details the cash flows among the buyer, seller, lender, and other parties to the transaction. It also lists the amounts of all closing costs and who is responsible for paying these.

In addition, you'll need to provide proof that you have insured the property. You'll also be required to pay certain costs and fees associated with obtaining the mortgage and closing the real estate transaction. On average, these total between 3 and 7 percent of your mortgage amount, so be sure to bring along your checkbook.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.