Last updated 1 day 13 hours ago
When talking about finances, we sometimes neglect a certain topic because well… most of us don’t want to think about it. I’m referring to the subject of death, and what becomes of our finances after we’ve passed on. We should all make some preparations to ensure that the process is as smooth and painless for those family members being affected. And it goes beyond just finances. We should ultimately be prepared to pass on our bank account info, funeral instructions, important documents and passwords and an updated will.
When it comes to bank accounts, it is important to think ahead. Many times we have seen accounts and assets disappear completely after death because of lack of planning. A common option is to add a name to your bank accounts, especially if you are single, or if your primary bank account is listed in your name only. If you are married, add your spouse’s name to your account. When you are gone it will be much easier for your family if there is someone with access to your cash assets.
If you can, prepay for your funeral. There are many unforeseen costs associated with funerals such as transportation of remains, casket, plot, urn, burial, services, and receptions. You can either prepay for it or add that amount to your life insurance policy. In addition, you can ease the burden of loved ones by deciding the very details, such as pallbearers, music played, funeral service location, readings, flowers and type of casket. This would also help ensure that the tone at your funeral is accurately represented.
Make sure that any important documents are thoroughly created, but this alone is not enough. They must be properly notarized, organized and properly stored at the attorney’s office, safety deposit box, or personal safe in your home. And be sure to let a trusted person know where to find them. In addition, be sure to leave instructions about your online accounts so that they can be terminated. What are they? What are the passwords? Either leave this information with a family member, or there are websites dedicated to this exact purpose.
A will states exactly where you want your assets distributed when you die. Some of the important matters covered in a will include designating an executor, the dispersing of valuables to people, the custody of your children and inheritance instructions. Neglecting to leave a will can prove costly and complicated to those loved ones around you.
In conclusion, preparation is key. Death is truly inevitable, but we have the power to stay a few steps ahead of it. We all want to leave our mark or legacy behind, and following these steps will just ensure that financial frustration and confusion are not part of it.
Last updated 11 days ago
There are many things in life that seem like a good idea...when you get around to it. Organize your bookshelf, review your insurance coverage, wash your car, and learn another language. Investing for the future is also one of the things many people tend to put off “until tomorrow.” It seems like a good idea, but often it just seems to be low on the priority list.
It takes years of study, research and actual investing to become a sophisticated investor. Often, the biggest risk in investing is the actual person making investment decisions. Improving your financial intelligence is key to making better decisions. Here's a few quick but fundamental tips to help you get started in investing:
1. Have an investing budget
This step makes all the others possible. Are you paying yourself first? The essential principle is this: before paying bills, set a bit aside for YOU. The common percentage used is 10%, but you can start with any percentage. The important part is to start. Make this as automatic as possible, which isn't that hard (especially if you have direct deposit).
This is where your investing budget comes from and allows you to have cash ready to take advantage of windows that open. "Once in a lifetime opportunities" come along often enough, but the window doesn't stay open forever. You have to be able to take advantage when they do. This fund also provides a safety net for the potholes in the road of life.
2. Start investing
This one sounds simple, but way too many folks with good intentions just sit on the sidelines, hoping to score a financial touchdown. It doesn't happen that way. Ever. You have to be in the game, on the field, and ready to take advantage of that opportunity. Sure, you may take a few hits, but you'll learn from your mistakes and this helps you score.
It's amazing how much folks financial IQ goes up when they have money in the game rather than just reading about it. There's an old line about wanting to win the lottery but having to start playing first. The same is true for investing. You can't win if you don't play.
Start small, with an amount you’re comfortable with. There are tons of investment opportunities. A lot of minds immediately think of "paper" investments, such as stock and bonds. The reality is there are many other options out there. Vending machines, small businesses, real estate, and precious objects are all examples of other investment vehicles that are out there.
3. Invest in what you know
There was a very good reason Warren Buffet stayed out of the .com boom in the late 90's: he didn't understand the business and their futures. Many thought him way behind at the time, a relic. Time proved him more savvy than could have been imagined when most of those companies went under.
If you don't understand an investment, odds are, there is someone who does and can explain it. If you still don't understand it, move on to something you do. Very often, people invest in what they "should" be investing in and bet the party line. This sets them up for average results, at best. Investors often take a beating investing in what everyone else invests in. If you want uncommon results, you have to take uncommon action.
There is also a very good reason, that most millionaires run their own businesses. Depth of knowledge, freedom, and control are hallmarks of being the captain of your own ship. Working inside of a business, being "in the stream" in the words of T. Harv Ecker, will give you firsthand knowledge that is invaluable in your investing experience. If this is true of a part time job with a company, how much more so a business you have authored?
4. Seek mentors and advisers
A mentor can take you much farther, much faster in nearly every area of life. There are reasons that people employ personal trainers in gyms, coaches in sports, and consultants in business. These people have done the research and have the experience to save you literally years of time and large amounts of money. Yes, you have to choose an adviser wisely, but if they are a few steps ahead of you in a critical investing area you can learn a lot.
Learning directly from someone who has been successful in that particular (or at least similar) type of investing is key. You want to know what your adviser is investing in and how they have made their money. If they are asking you to put money in an area they don't invest in themselves, be wary. The upside from learning real estate from someone with a bunch of rental properties, businesses from someone who has built one successfully, and stocks from someone with great returns year after year, is that they will help take you where you want to go: to the top!
Last updated 12 days ago
Do you ever feel that your money doesn’t go as far as you need it? You may completely identify with the country song about there being "too much month at the end of the money." The simple solution is not always the most popular: developing and sticking to a budget.
Good budgeting isn't necessarily about cutting back on $4 lattes or things you love. It's about knowing where your money is going and balancing things out for when you have weak moments. Far too many articles are about austerity and scrimping. Honestly, this is a waste of time for most people. It might work for a little bit and then, like a crash diet, people give up and go on a binge.
What's needed is something automated and easy. We are, in the words of Ramit Sethi, "cognitive misers" who have limited mental effort to give on a daily basis, and need that effort taken up by important things. Below are 2 steps anyone can do that take a minimal mental toll - leaving your concentration and energy free to focus on the really important things.
1. Pay Yourself First
"Out of all you make, part of it is yours to keep." You pay the electric, the rent, the groceries, the cell phone, the credit card, the student loans...but do you pay YOU? Most don't. This gem of wisdom comes from a book by George Clason, The Richest Man in Babylon. Paying yourself first, taking a percentage off the top, before anyone else can claim it, allows you to build a reserve for surprise expenses, and investing.
With direct deposit available, it's very easy to set up a separate savings account and direct a certain percentage to savings instead of checking. The common percentage used is 10%. The important part is not the percentage; the important part is starting the practice. If you're in the service industry, and you make most of your money in cash, you're not excluded by any means. Get a cash box from an office supply store, and put 10% of your nightly cash take into the box when you get home. Every week or two take the saved cash and take it to deposit at the bank.
2. Use Envelopes for Common Expenses
Take a set amount for certain normal daily expenses, and put that in a couple of envelopes. This is things like food, entertainment, or happy hour "beverages." This is mainly for things in which you may overspend, or not know where your money is going, and causing a leak in your checking account. It's hard to overspend on certain things like cell phone bills or gas, but other expenses can get away from you without noticing. You set a budget for that category for the week, put the money in the envelope, and that's your money for that week. If you run out before the week is up, you have to borrow from another category. For example, a few too many high dollar lunches may leave your happy hour or movie theater popcorn fund empty. In the end, the equation balances, and sometimes you're able to splurge. In some cases, with a couple of days left you will have extra left in the category. You can then splurge with the money left, without any guilt, shame, or having a buying binge hangover, when you get the credit card bill next month.
The beauty of this system is in its simplicity and its automation. It doesn't take that much mental effort on a weekly basis. You're already super busy and don't need anything taking up your precious mental space. All you need for this system is a few direct deposit forms, and going to the ATM at your bank once a week - that's it. Period. Give it a shot, and tell us how it went for you. We'd love to hear your stories!
Last updated 26 days ago
Life can be a bumpy ride, but some smart thinking and wise decisions can make it smoother. One of the things that would help a college student (or any twenty-year-old) experience less frustration is through sound personal finance practices.
For those of you still reading after the mentioning of personal finances, (yes! both of you!) There are a few things that many wish they had known and consistently practiced after high school.
1. Pay Yourself First
This principle comes from a little book published back in the 1920's, but holds timeless wisdom, The Richest Man in Babylon. The essential principle is this: before paying bills, set a bit aside for YOU. The common percentage used is 10%, but you can start with any percentage. The important part is to start. Make this as automatic as possible, which isn't that hard (especially if you have direct deposit). Many folks who have done this have reported that they didn't miss the small percentage. In fact, they said that the remaining 90% went farther than before. Yes, it seems like a bit of financial hocus-pocus or metaphysics. Just ask anyone who's ever done it and see what they say. This practice allows you to......
2. Have a Reserve
If you follow point number one, paying yourself first, you will build up a reserve of cash you don't normally touch. This reserve is for investing, education, and true emergencies. Life is full of surprises, some of them foreseen, many of them not. Let's face it, stuff happens. Having a reserve will allow you to sail through many of these inconveniences with use. Yes, forking out for a new tire, a dropped cell phone, or expenses after a job loss will sting. Having backup will let you sleep easier at night – and get you through those times a curve ball is thrown your way.
3. Invest in Yourself Wisely
Your schooling is one thing, your education is another. A great many things are not taught in schools, including personal finance advice. If you want the most out of life, you will be a lifetime-long learner. This means books, courses, seminars, networking events, and even mentors. Knowing more than the guy or girl in the next cube can be a big leg up on your career. It's more than essential if you want to do any side-projects, or become an entrepreneur.
4. Buy Quality Once
Many buy cheaply because it's a good deal or a low price. Clothes are a great example of this. How many pairs of $20 discount special jeans or shirts can you own? You'll own a closet full of things that wear out quickly, and don't look amazing in the first place. Shoes are another great example. Yes, nice dress shoes can make your eyes water at the register, but well cared for dress shoes can last up to a decade. That's a bit better than your Nike gym shoes - by many miles. Literally.
5. Have a "Fun" Jar
This flows back into point number one - pay yourself first. Too many times, folks get their heads down, and focus on the essentials. That's fine if you want a cabbage soup existence. If you want a buffet, full of choices and wonders, a fun jar is needed. This is different that your reserve mentioned in point two. This method is notably proposed by T. Harv Ecker, a self made millionaire, and author. This jar must be used up every so often. Save it for a massage, a weekend getaway you've been dreaming about, or riding your motorcycle across China.
Putting these five principles into practice can help you live with more financial freedom and less stress. It’s never too late to start, and Collin Bank can help with personal checking and other banking options.
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Last updated 1 month ago
Having a safe financial future is about more than having a fully funded emergency fund. Proactively protecting your identity and making wise investment decision is also crucial. Get tips on how to spot identity theft and how to choose a small business to invest in below:
PC Mag offers 11 tips for safe online shopping that can help you protect your bank accounts.
Families looking to efficiently use their savings account should regularly check their balance online. Find out more with this Bankrate.com article.
The FDIC insures the nations’ banks in the event of a default. This government agency also published helpful financial news and advice geared toward consumers, like this article about avoiding financial scams.
If you are worried about falling victim to identity theft, look through the Federal Trade Commission’s website to learn more about this serious crime.
Investing in a small business is a high risk-high reward option. Forbes explores the five things to look for in small companies that vie for your funding.
At Collin Bank, we specialize in helping local people and businesses build a strong financial foundation for their future. Give us a call at (888) 699-6401 for more information on how we can help you plan for the future.