Help With Managing Personal Finances, Organize Personal Finances Management Budget Template

Our advice is that you apply to your help with managing personal finances, organize personal finances management budget template the same skills required to run a company. The technique: Apply business skills. Hold periodic reviews of family finances; keep family members informed about changes in financial status. Checklist for review:

Balance sheet. Updating it will show changes in the family's net worth (the difference between assets and liabilities) since the last review.
Income. Salaries, business profits, stock dividends, capital gains, etc. Categorize these as either regular or nonrecurring income.

Next item on the managing personal finances is Debts. Personal, automobile, life insurance policy and other loans, as well as installment purchases and charge account balances. Make sure the wife has her own credit line.

Current budget. This spending guide helps assure achievement of short- and long-term goals. While it must be realistic, it shouldn't be so restrictive as to create family tensions. See personal finances for more information.

Contingency budgets. Revise, if necessary, the budgets that would apply if either wage earner died.

Home. Determine the current market value of the house and the principal balance on the mortgage. The difference is your equity, all or part of which would be available if the house were sold or refinanced. Does the fire insurance reflect current value? Using life insurance to payoff a mortgage is a useful estate planning element. Generally, husband and wife should own a house jointly.
Life insurance. A review of assets, resources, and the revised contingency budgets will show whether present coverage should be increased or decreased. It mayor may not be wise for each spouse to own the policies on the other's life. Since interspousal gifts and bequests are 100 % deductible, consult your estate planner to find out what is best for your family.

Social Security and pensions. Check for changes in retirement and death benefits. If an employment-related pension is vested, find out its current value. If applicable, check for potential death benefits from the Veterans

Administration and from unions, professional association, or fraternal membership. Update data on your Individual Retirement Account (IRA) and/or self-employment (Keogh) pension plan.

Health insurance. If existing coverage (obtained through employment or otherwise) is inadequate, consider supplementing it with a major-medical policy that will pay $1 million (or more) above other benefits.

Other insurance. Have your auto, homeowner's, fine arts, jewelry and other property and liability policies been increased to keep up with inflation? Rather than raising individual liability policies, consider buying a low-cost umbrella policy to cover claims against you of $1 million (or more) above your present coverages.
Banks. Make a list of checking accounts, regular and time-deposit savings accounts, and the contents of your safe-deposit box. Do both spouses have access to that box? At death, a person's assets, for tax and probate purposes, are frozen. To make certain that the survivor has funds with which to operate, each spouse should have a bank account in his or her own name. Do not store wills, life insurance policies, and other documents that would be required shortly after death in a safe-deposit box, which normally would be sealed by the bank at the owner's death. (Note: Boxes in a corporate name are not sealed.)

To help with managing personal finances, organize personal finances management budget template - Top

Securities. List all your stocks, bonds, commodity-futures contracts, Treasury notes, and other securities, showing where they are stored and whether they are individually or jointly owned. For tax purposes, keep careful records of dates and prices of all purchases and sales. Names of the investment brokers also should be noted.

Other investments. Follow the securities review pattern in dealing with investments in real estate (other than your home), gems, precious metals, art objects, ete.

Charitable contributions. Reappraise the list of recipients and the sizes of gifts. Would a widowed spouse, or an estate, be liable for pledges or commitments made while the spouse was alive?

Pension plans. Business owners and the self-employed can take advantage of special pen?sion options open to them. If you are making $100,000 a year, you could easily put away $30,000 pre-tax into a defined benefit pension plan. Greater earnings may justify even larger contributions. Compounding tax-free dollars gives an enormous investment edge.

A favorite tax-planning tactic is to have a minor child work for the family-owned busi?ness. The first three thousand dollars earned by the child is tax-free, and further income is taxed at low rates. In addition, the company gets a deduction for the child's salary. Now, a dramatic taxpayer victory shows just how effective this tactic can be.

The taxpayers owned a mobile home park and hired their three children, aged 7, 11 and 12, to work there. The children cleaned the grounds, did landscaping work, maintained the swimming pool, answered phones and did minor repair work. The taxpayers deducted over $17,000 that they paid to the children during a three-year period. But the IRS objected, and the case went to trial. Court's decision: Over $15,000 of deductions were approved. Most of the deductions that were disallowed were attributable to the 7-year-old. But even $4,000 of his earnings were approved by the court.

Key: The children actually performed the work for which they were paid. And the work was necessary for the business. The taxpayers demonstrated that if their children had not done the work, they would have had to hire someone else to do it.

Types of jobs children could do: Write checks or send out bills for your business, do simple maintenance and painting for invest?ment real estate you own, etc.
Set a spouse up in business. Most male executives don't realize the tax benefits they could get from encouraging their wives to start a business. Some of the benefits: As long as the business shows a profit for three of the first five years, the IRS generally won't challenge the right to deduct losses in the other two years. These losses can be offset directly against the high-earner's high-tax bracket income.

Source: Consumer Information Center

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