Financial Progress Checklist

We are coming to the end of November and it is only 50 days left in the year 2007. In case you haven't noticed, the Christmas season is upon us AGAIN!!!.

For many people, the holiday season are not very productive as far as accomplishing our most important goals for the year are concerned. Some have given up on their goals for the current year completely. Others make an effort, but they're already beginning to live in the New Year.

I certainly won't advise that you do any of these; as i won't be doing them either. Why am i saying that? A lot can still happen in the next 50 days!!! You can still accomplish some - if not all - of the things you've been putting off since the beginning of the year!!. Revise your goals and go for them again one last time.

While you are at it, below is a Financial Checklist that i know will assist you in setting the goals for the coming year. The aim is for you to finish this year on a high note and start the new year with the same momentum - whatever your age.

In Your 20s and 30s

• Write your will
• Set up a savings account (ISA in the UK)
• Buy a house
• Invest for growth in at least one Unit Trust (Mutual Fund)
• Get disability insurance, and life insurance (if you have children)
• Begin contributing to a retirement plan
  

In Your 40s and 50s

• Do all of the above if you haven't already
• Invest for income as well as for growth
• Put part of your portfolio in tax-exempt investments
• Fund your retirement plan to the max
• Draw up adurable power of attorney or living trust, and a living will
• Consult a Solicitor if your estate is worth more than the Inheritance Tax threshold
• Pay off your mortgage before you retire
  

In Your 60s and at retirement

• Invest more for income but keep some growth stocks
• Aim to reinvest income and gains to beat inflation
• Review your will and estate plan
• Revise your will if it is out of date
• Investigate retirement housing
• Talk to you family about your estate plans and funeral wishes

You may want to add to this list or just make a comment, you are welcome to do so. Just click on the comment button below.

Yuppies Are 'Struggling'

Do you know that it usually takes about 2 to 5 years of consistent overspending for major signs of financial difficulties to show? A newspaper article yesterday told of the difference in the lives of 'Yuppies' in the 80s and now.

According to the article, nearly half of people who were dubbed Yuppies in the 1980s say they are now struggling financially. High-fliers living the champagne lifestyle were infamous for splashing out on Filofaxes, gadgets and expensive dining. But 20 years on, 45% of former Yuppies are no longer so flash with the cash, said insurance company Liverpool Victoria. A spokesman said "They are worried about meeting bills and how they will fund their old age". many feel they should have saved more in the 'greed is good ' boom.

The same may be true for all of us. What we do with our finances today may in reparation of our mistakes of yester-years OR preparation for years to come. Which one are you doing now?

What's A Little Loan Between Friends?

Borrowing money from friends or relatives may be a life-saver when you are in desperate need for the fact that there is no interest added (usually!!) and the friend may accept payment of a small sum of money each month or over a fixed period of time. However, the situation can become tricky if you are still in financial difficulties when it comes to pay/begin-to-pay it back.

During this time you may need to consider how your behaviour is perceived by others. If you are seen to be spending 'anyhow', this may not be appreciated by your friends. After all, you we them money and if they see you spending on what they see as unnecessary products or services it could damage your relationship with them.

Dave Ramsey said in his book the Total Money Makeover Workbook that "If you GIVE money to your friend, you get the joy of giving and your friend has the pleasure of RECEIVING. If you LOAN money to a friend however, your friend is no longer an equal in the friendship - rather your friend is 'under' you in a way that's difficult to explain psychologically but true nevertheless. You will have changed the power-balance in the relationship to suddenly being 'on top' with your borrower friend 'below'. Resentment can build up in both persons, as well as a great deal of anxiety, frustration and even anger."

"Avoid the hassle and keep your friendships as FRIENDSHIPS. Don't loan money to friends and relatives."

I can add that all these negative feelings mentioned above arise when the loan remains unpaid and/or the borrower is making no effort to acknowledge or paid back the loan.

The last thing i am sure will be beneficial for us all (Lenders and Borrowers) of what the Bible says in these 2 verses:

Psalms 37:21 "The wicked borrows and does not pay back, But the righteous is gracious and gives."

Psalm 112:5 "It is well with the man who is gracious and lends; He will maintain his cause in judgment."

Family Debts Continue To Soar

Children loosing money to their parents is not only source of family financial fiasco, the reverse is also true because members of many families are mentioning finances as the main cause of conflicts.

According to a survey commissioned by Skipton Building Society, more than half of the UK residents owe money to relatives and the national family IOUs stand at about £25.6billion. This is an increase from £14billion a decade ago. Typically, an average sum of £1928 are lent by a parent.

20% of the people surveyed have fallen out with a borrower in the family. Of those who fell out, 7% said they were taken advantage of. The same number claimed that the borrower had made no effort to repay them again.

What can we deduce from these, maybe we have mismanaged our finances, now we are latching on to others' and family members, because of their benevolence, seem to be easiest targets. This is a sure sign of personal financial trouble. Make arrangments to pay back what you owe; your relations with your family will improve.

The Bible say "The wicked borroweth, and payeth not again" Psalms. 37:21

Children Prefer Piggy Bank To Parents

Naturally children often take some actions innocently in many respects but sometimes it may just be due to what they have observed and are reacting to.

A Press Association article last week brings this to light like i have never seen it before. Referring to a poll for the Personal Finance Education Group (Pfeg) and HSBC Bank, only 18% of seven to 11-year-olds said they would trust their parents to save for them, while some worried that mum and dad would spend the money 'by mistake' while 42% of pupils said they saved in a traditional piggy bank or money box.

Overall, three-quarters of the age group said they were saving money, while one in 10 were putting money to one side for university, a house or a car in the future.

Wendy van den Hende, chief executive of Pfeg, said: "Even by the age of seven, children are aware of the impact of money in their lives. Learning how to respect and manage money in their early years will give them the confidence to make responsible financial decisions as adults."

These children, in my opinion, have seen some aspects of their parents' (or relations') financial lives that they don't want to fall victims to; so they are taking action now. We can learn something from this, can't we?

The lession here is: if Mum and Dad can make sure that their Income is more than Outgoings, then they won't be tempted to spend their children's money 'by mistake'.