A woman married to a successful, powerful man is often in the dark about her financial affairs. While capable of understanding and managing her finances she lacks experience because her husband took charge of the finances. To get your financial house in order, start with these four crucial steps.
Make an Inventory of your current assets and debts. Your goal is an up-to-date list of all assets and all debts. A list of your current debts is necessary so you know what payments are due and when thereby avoiding missed payments and late fees. The Inventory will also point out whether your assets are titled correctly so you can make any necessary corrections. Your husband may have prepared something similar to this Inventory. If so, your challenge will be to find and interpret it.
Next determine Cash Flow – your monthly income minus your monthly expenses. To calculate Cash Flow, using paper and pencil or a spreadsheet program, list the type and the amount of income you receive each month. If income is received less often (or more often) than monthly, convert the income to its monthly equivalent. Then list the type and amount of each monthly expense. If an expense occurs less often (or more often) than monthly, convert it to its monthly equivalent.
Subtract your monthly expenses from your monthly income. If, after considering all expenses, your Cash Flow is a positive number and there is enough left over for emergencies, you can maintain your current level of spending. If your Cash Flow is a negative number, you must reduce your expenses to an amount that is less than your income and set aside something for emergencies. This will require a ruthless examination of your expenses and an unwavering elimination of all nonessentials. “Feel good” but unnecessary purchases, while emotionally understandable, are financially foolish. Restraint is essential otherwise a financial crisis is guaranteed.
Determine your immediate and future tax responsibilities and consult your tax advisor immediately if:
· Your total assets exceed $ 3,500,000, or
· You will receive a distribution from your husband’s retirement plan, or
· Your husband was self-employed, or
· You and your husband pay quarterly tax payments.
Finally, with the help of a competent financial advisor, project your lifetime financial needs, develop a plan to meet those needs, and then implement the plan. Be sure to pay attention and stay involved. Your financial advisor, as well as your attorney and accountant, must be competent, attentive, accessible and treat you respectfully. Don’t settle for anything less! It’s your money and they work for YOU not the other way around.
For information about a Free 15-minute one-to-one phone call with the Widow’s Advocate, http://www.widowsadvocate.com/affsque.html.