Financial Trend Blog

Introduction

This article will highlight some of the money issues faced by single people and has some practical suggestions for overcoming them. As we will explore soaring property costs, excessive tax burdens, holiday surcharges and illness can all create financial difficulties for single people.

1. Live at Home, Rent or Buy?

Many developed countries including the US and UK have seen soaring property prices. At the same time more and more people are choosing to stay single or get married later in life. In the UK for example, property prices are so high that it is virtually impossible for single people on average salaries or wages to either rent let alone buy a property. Unlike married couples with dual incomes single people are forced into an increasingly narrow set of options.

Recently I shared the heart-wrenching story of a young soldier who had to deal with the unexpected death of his mother. She didn’t have her affairs in order and now her son has the extremely difficult task of recreating her financial details from scratch. Here are some simple steps you can take to ensure that your loved ones aren’t left in a lurch.

First thing you need to do is create a ‘survivor file’ which will contain all of your important financial and personal information. Secondly, you need to tell someone you trust where to find it should the need arise. Maybe you’ve put your will or living trust in a safety deposit box. Perhaps you have a filing cabinet containing your pertinent financial information. Your computer might hold the bulk of your money details.

Q. Jeff, I want to ask your opinion regarding Health Savings Accounts. On April 1st, the company I work for is changing our current Blue Cross health insurance to Guardian Insurance set up as a HRA. I am single and currently have a $500 deductible. Under the HRA, the deductible will be $2,000.

Currently, the premium is split 50/50 between employer and employee. I pay $205.00 per month. Under the HRA it will still be split 50/50, but the employer is going to fund each employee’s Personal Medical Fund up to $900. As I understand it, my responsibility will be $1,100 of deductible before any insurance coverage kicks in. We have not been given any rates for the HRA insurance, but I imagine it will be lower than the monthly $205.00.

How fortunate are the children who grow up financially literate with solid financial values. How much more productive, efficient and enjoyable will their lives be without added financial stress. This topic is certainly an entire book all on its own. Recently there have been some great books, although this is an area of personal finance that could use further development. The following are some key ideas that have been taken from several books specifically on the subject, and adapted to incorporate some of my own thoughts and research from an adult environment.

The importance of having contingency plans for dealing with a financial crisis cannot be overstated. Whilst you may be fit and healthy now, what will happen if you are unable to pay the bills in the future? This article looks at how you can build a financial safety net to deal with unexpected emergencies.

1. Savings and Investments

Savings and Investments are often a good means of building a short term safety net to cope with a short term health problem or the result of redundancy or a career change. Research shows that you should seek to put aside the equivalent of 3-6 months in wages to deal with an emergency. Savings and Investments are easy to access or cash in, should you need some emergency resources and are a great short term safety net.

There are folks who are willing to sell a living trust to anything that moves. They frequently claim that everybody needs a living trust or two. Well, almost everybody. At the other extreme, there are those claiming that (almost) nobody needs living trusts.

No wonder many of you are confused. So, do you really need a living trust?

A living trust is just one of many different tools in financial and estate planning. But, living trusts can help you achieve goals not possible with other planning tools. At the same time, they require effort, time and resources.

Last week I explained in theory how you can legally avoid paying taxes on gifts and inheritances. Avoiding taxes on gifts and inheritances is based on cost-basis. To help you apply this to your situation I want to share some real-life examples of how my clients use these principles to legally avoid paying taxes on gifts and inheritances.

Most of us have heard that financial stress and incompatibility are responsible for a large percentage of divorces or unhappy marriages. People have a lot of stories about how it all went wrong but what is important is to know how to make it right.

Financial stress shows up in a relationship when couples spend too much, are heavily in debt, don’t feel secure about their financial future or are not working together. Time and teamwork are the best ally for your finances.

Have you ever received a $320,000 payment? Chances are you have but never knew it.

Trusts come in many different shapes and forms. A living trust is one type of trusts. That’s right, there are many different types of trusts. Living trusts are ones created during lifetime. They are also called “inter-vivos”, a Latin term meaning “among or between the living”

The phrase “revocable trust” does not refer to any one specific arrangement. It involves a range of various trusts. Each of them can be used to accomplish different objectives.

Such trusts can be revoked. In other words, they can be amended or terminated altogether. The ownership of property contributed to revocable trusts changes on paper. But, you are still in full control. You can continue to manage and enjoy such property same as before.

Nobody likes to pay taxes. If done incorrectly, though, the way you inherit an asset can result in you needlessly paying tens of thousands of dollars in taxes. Knowing some simple rules will reduce your tax bill and allow you to keep more of what you inherit. And it will also keep you from creating tax headaches for loved ones to whom you wish to gift assets.