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Financial planning: Crucial Documents for Every 20-year old

by Andy Masaki

For a lot of young adults, wills and estate planning does not figure out in their list of to-dos when they are in their 20s or something. But, the fact is, it is important that all people regardless of their age have a proper plan in place for their estates right from the very beginning.
For starters, they usually do not require any sort of complex set of tasks to complete; only a strong understanding of some fundamentals regarding financial planning will suffice, especially about some selected documents.

So, here are some of the crucial documents that would help these young minds jumpstart their financial and estate planning endeavors.
Basic documents of financial planning you must have
When planning your finances, it is important that you get in place the below mentioned key personal finance documents:

• Powers of attorney – These documents provide the authorization to an individual, better known as attorney-in-fact, to discharge all the legal as well as financial liabilities and make the decisions pertaining to the same, on the actual owner’s behalf. Moreover, a power of attorney is considered as a what-if document. Being a young adult, it may seem to be unnecessary from your perspective at this moment. But, it is very important and that you need to think seriously over this issue, nevertheless. This is because these documents provide the assigned person an unlimited access to all the assets of the owner, upon his or her unanticipated incapacity. However, most of the time, a power of attorney becomes effective immediately after signing on the dotted line. The problem starts when the assets end up at wrong hands where they could be misappropriated or misused, or even get stolen. Hence, the key is to name only a trustworthy person as your power of attorney.

• Health Care advance directives – Most of the time people get surprised on learning about the rule that prevent them from taking decisions on medical matters that affect their relatives and friends, unless authorized by the person concerned. These instructions are generally mentioned in advance directives. These documents acts as the authorization letter allowing a named individual to take crucial, life-altering decisions on behalf of the other, especially during medical emergencies when the doctors are at a fix and cannot arrive at a concrete decision. To deal with these issues each state has its own set of laws in place that would govern the process of creating advance directives. You could access some of the sample online forms available for free that have been developed by various states.

• Beneficiary allotments – For a lot of young adults, assets linked to their trade or work like group term life insurance or their retirement accounts like 401(k) plans are some of the most precious assets they would ever have. Assets of these sorts are usually passed on to the beneficiaries of the owner. There are forms provided by the employer to access these assets instead of the will created by the owner. Most of the times, young adults like you are ignorant of these provisions and even if some of them are, then those people are found to be least bothered about filling up the necessary forms to safeguard their assets from future catastrophes. Failing to assign a proper beneficiary would actually make it tough for your immediate family members to access and use the legacy that would leave behind in the event of your sudden demise.

• Prenuptial contracts – A lot of has already been said and discussed regarding prenuptial agreements on various websites and textbooks. However, it is worth another mention here, as a lot of you will marry in your 20s or at least meet your life partners eventually. Financial planners encourage young adults to have a proper prenup in place before exchanging marital vows. This is not only to defend their existing wealth, but also the assets they share that could be divided in case of a divorce. The prenup includes gifts from family and friends, business interests, future inheritances, and so on. Though the list could go on and might overwhelm you in the process, yet all the above mentioned documents barring the prenups are most straightforward in nature and affordable. Moreover, there are some selected documents like advance directives that are free. According to the financial experts, the most suitable time to put these essential documents in place is before you need them. On the contrary, it might be too late to get hold of these documents once you actually need them.

This goes without saying that women should plan their finances well in advance as they are more prone to financial dependency over their husbands. Staying prepared for the worst could help you to avert a larger financial crisis and prevent unnecessary monetary hassles at a later stage in life.

What Should You Do With Your Tax Refund?

by Patrice C. Washington

Tired of hearing about what not to do with your tax refund? Here’s a look at 5 smart and actually powerful things you can do with this year’s tax refund. They’ll not only help you get the financial house in order today, but they’ll help you keep on track for the long term!

1. Create an Opportunity Fund – An opportunity fund is nothing more than the typical emergency or rainy day fund you normally hear about, but with a spin. I believe that what you verbalize, you visualize and therefore run a greater chance of magnifying or magnetizing in your life. So, if you’re running around asserting that you need an “emergency fund” then what will happen? You’ll probably have an emergency! Instead, think about the things you really want to accomplish and life and allow that to be your motivation. . . .Will emergencies still arise? Well, duh, of course they will. But, now you have the opportunity to make what would have once been a crisis a simple inconvenience. There is nothing pleasant about an emergency, but knowing that if one came up, you’ve psyched yourself into saving to handle it with ease is definitely a blessing.

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Need Student Loan Help?

by Patrice C. Washington

Since I’ve had the honor of answering all of the financial questions on the Steve Harvey Morning Radio Show lately, I’ve received literally hundreds of e-mails around student loan debt and default alone.

One thing I can tell you for sure is that no matter where you are in the process, YOU ARE NOT ALONE! This is a battle that many people are facing and fortunately, there are a lot of great (although little known) resources online to help you get through the process.

Here are a list of quick tips and websites to help you navigate your student loan repayment options ASAP:

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Are You Dating A Financial Deadbeat?

by Patrice C. Washington

On the surface a lot of guys can come across as “ballers,” but its up to you to be alert and pay attention to the waving red flags that make it clear this stud is really being a bum with his money.  Before dating becomes “I do,” look for these warning signs and clues I mention in Real Money Answers for Every Woman.  If you find them, run OR go through some serious counseling before walking down the aisle! Remember, most marriages end over financial disagreements, but be clear that people who enter marriage with bad money habits don’t magically begin them because they’re married.  They were showing signs all along!

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Should I Say Yes to My Future Mate’s Debt?

by Rhonda J. Williams

So you say you’re in love and it seems like the most perfect relationship ever, eh? You almost know each other’s thoughts at this point and you can’t imagine life without each other. That’s beautiful!

There’s an old saying that goes “money can’t buy you love”, but being broke doesn’t buy it either. Not talking about money is one of the top 10 mistakes couples make in marriage. Quite often couples are so drunk in love they don’t take the time to explore deeper issues that could create problems when the “love high” is gone. Here’s a small suggestion, before you dive head-first into the sea of love without a life jacket, take the blinders off and have a tall glass of reality. Schedule a “Debt Discussion Date” before you make your trip down the isle of wedded bliss. Here are five things you must know before you say yes to the debt.

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Are You Ready to Negotiate a Higher Salary?

by Patrice C. Washington
If you’ve already cut down weekly beauty regimens and Friday nights out on the town or totally cut off the luxury of cable television and still don’t feel a little relief, then the problem may not be your “outgo,” but your income.
The recipe for financial success is the highest income you can achieve coupled with the lowest expenses you can maintain for your personal standard or quality of life.  For some reason, people always assume that means that they have to stretch the few hours they do have after a day job, children and church to create a side hustle. Although I love and indulge in the “hustle while you work” mentality, that’s not always the case.  Some can truly create additional income on the same job by negotiating a higher salary.

Do You Have a Fear of Investing? 5 Steps to Get Over It

Doing anything new can be terrifying. Investing is no exception. 

There are scary techniques to master, rules to follow, terminology to learn, and brokerage websites to navigate. Plus, the prospect of spending your money with uncertain return can be frightening.

But you can learn slowly and then advance as you overcome your fears.
For example, when I started riding a road bike (with cars and trucks passing me at 35 mph and faster!) I struggled with everything – how to dress, how to change gears, and more. There was so much to learn and do that despite the pleasure, I had intense anxiety, which sadly lasted for years!

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Do You Need to Break Some Bad Habits?

by Patrice C. Washington

For many of us, New Year’s resolutions symbolize achieving a new goal, but what about letting go of bad habits?

As a personal finance coach, most goals I hear surround money. Often people want me to tell them how they can fire their boss, make more money and live happily ever after. Many are stunned and for some reason frustrated, however, when I reveal that it’s not about their boss or how much money they are making. It’s about them, the money they are wasting and the bad habits that are holding their lives and personal finances hostage.

Check the list to see if you find any bad habits that may have kept you broke last year.

1. You are hopelessly insecure. Every time you make a decision, and in this case purchase, based on what you believe someone else will ‘think’ about you as opposed to what’s best for you and your situation, you make a decision to take one step closer into Brokedom. There will never be a way for you to achieve your financial goals if you continue to care what others think about you. Once you learn to stop giving a damn about what other people think about what you drive, where you live or what kind of purse you’re rocking, you may actually have a chance to build some wealth!

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Do You Really Know What Personal Finance Is?

by Patrice C. Washington

If you were embarrassed by that question, don’t be. More people should actually ask and more personal finance “gurus” should stop assuming that everybody knows!

Personal finance deals with your individual relationship with money. It serves as your financial outline; speaking to the way you obtain, budget, save, spend and manage monetary resources overall.  These behaviors are assessed at various stages throughout your lifetime, taking into account a mixture of financial risks, as well as major life events like getting your first job or getting married.

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