Search results matching tag 'estate planning'

Michael Jackson’s credit score: 564

Karen Datko — Mon, 31 Aug 2009 18:22:00 GMT

TMZ, the news source for all things Michael Jackson, expressed amazement that MJ had terrible FICO scores.

"Here's a shocker -- Michael Jackson had an abysmally low credit score," said a story at the Web site. In 2007, TMZ says it has learned, Jackson's scores from the three major credit bureaus were 592, 524 and 575, averaging out to just under 564.

It's really no surprise, considering his well-documented ultra-extravagant spending and financial woes, including the fact that Neverland Ranch nearly slid into foreclosure. But there's a lesson for everyday people in the specifics that caused the King of Pop to have poor scores.

Here are the reasons given in the TMZ report:

A derogatory public record or collection filed.
The amount owed on delinquent accounts.
Number of accounts with delinquency.
Too many inquiries in the last 12 months.

To put this in perspective, FICO scores have a range of 300 to 850. A score under 620 puts you in the subprime market. (Experian offers a state-by-state look at average scores and debt.)

Michael Jackson may have made a mess of his finances, but he did prepare a solid estate plan, including a will, a living trust, and trustees and executors who are experienced and knowledgeable.

All told, Jackson's estate is worth hundreds of millions -- a number that's still being figured out. The total is expected to be considerably larger than his estimated $435 million of debt. Plus, the size of the estate has grown by $100 million since he died on June 25, and is expected to make $50 million to $100 million a year, The New York Times says. Compare that with the $55 million Elvis Presley's estate earned last year. The NYT also said:

In life, Mr. Jackson faced a precarious financial future, as he piled on debts to finance his tastes in art, to travel on private jets and to keep up Neverland. In death, his estate may enjoy the financial security he never had.

Jackson will be buried on Sept. 3, according to the Glendale News Press.

King of Pop's estate-planning guide

Mistakes that disinherit heirs

What bad credit really costs you

Preparing for the worst

Karen Datko — Wed, 26 Aug 2009 16:35:00 GMT

This guest post comes from "vh" at Funny about Money.

If you were killed or incapacitated in a car accident, if you had a stroke or heart attack that put you out of commission, would the people who had to take over your affairs know where to start?

Would they know where your bank accounts are? What insurance you have? Where your paycheck is deposited? What bills have to be paid? And if you have minor children, will friends, relatives, or the authorities know where you want the kids to stay?

If the answer to any or all of those questions is either "no" or "I dunno," now is as good a time as any to start writing down the answers.

I'm in the process of compiling a complete record of all the things my son will need to know if anything happens to me. It's a pretty big job, one that will take several days to complete. The product will be two three-ring binders, one to keep at his house and one to keep at mine.

Here's what's going into it:

My employer

Health care card (whereabouts, ID number, group number).

User names and passwords*.
URL of page to access pay information*.

Amount of my salary.
Benefits.
COBRA and how to get it.

Community colleges

Salary for adjunct teaching.

User names and passwords*.
URL of page to access pay information*.

Insurance: vendors, policy numbers, and telephone numbers.

Health.
Life.

Including credit union and other groups with membership policies.

Homeowners.
Automobile.

Credit union

Accounts.
Direct deposits.

Automatic transfers.
Location of statements.
User name, password, and URL for online access*.

Automatic bill payments.
Hard-copy bill payment.
Credit card payments.

Credit cards

List of credit card issuers and customer service numbers.
Photocopies of cards, front and back.

Social Security

List of necessary documents, and where to find them.
Instructions for how to get SS started.
Phone number and address of local SS Administration office.

Medicare

Documents needed to start Medicare; location of originals.
Information on how it works.
Instructions for what is desired.

Investments

Whereabouts of statements.
Contact and phone number at management firm.
Usernames, passwords, and URLs for online access*.

Financial records

Personal.

Excel.
Quicken.

Corporate.

Excel.
Quicken.

How to generate tax reports in Quicken and Excel.

Lawyer/tax preparer

Name, phone number, e-mail, and address.

Taxes

Whereabouts of past income tax returns.
Taxes for S-corporation.
Property taxes; fund for paying.

Deed to house

Will

Living Will

Doctor

Name, phone number and address.

Dog

Feeding, care, eccentricities.
Veterinarian's name, phone number and address.

Downtown house

Loan documents.
Homeowners insurance policy.
Legal documents.

Blog

Username, password, and URL for dashboard*.
Adsense.

Username, password, URL*.
Arrangements for pay.

Bluehost

Username, password, URL*.
Name and contact of tech consultant.

Freelance clients

Names, phone numbers, e-mails.
Instructions to advise that deadlines will be missed.
Where to find work in progress.
Name and e-mail for subcontractor(s).

Final arrangements

How to dispose of the remains.

* Important: Don't save any pages with this information to a computer or a flashdrive. As soon as I finish typing a section, I print two copies for the two binders and then close the file without saving. Another strategy: Simply delete the sensitive information before saving to disk, but be sure you've erased every reference to a Social Security number, user name, password, or any other vulnerable data.

Kids

If you have minor children, you should make arrangements for someone to care for them should both parents be killed or incapacitated -- something that could easily happen in a car wreck. Decide who should be the caretakers and discuss it with them. Once they've agreed to take responsibility for your children in an emergency, put it in writing. Have them sign it and you sign it in front of a notary public. Give them a copy and keep a copy for your own records. If the person who will take charge of your affairs is different from the person or couple who will care for the kids, be sure that person also has a copy.

You should also name the desired child caretakers in your will. The person who is to take charge of your affairs should be named as your will's executor, unless your lawyer advises otherwise.

If you have sole custody of children from a divorce and you do not want the children's other parent to assume custody in an emergency, you should state the specific reason that this is undesirable (abusive? drug user? alcoholic?) in the document that designates the emergency caretaker.

Security

By the time you finish, this binder will contain some very sensitive information. You don't want it to fall into the wrong hands. My son is very responsible, and so I feel comfortable about giving him a binder full of printouts containing my Social Security number, usernames, and passwords. However, my name and address will not appear in the thing. If your adult children can't be trusted, consider hiring a lawyer to handle your personal affairs and storing the information at her or his office. Alternatively, choose a trustworthy friend or relative, ask him or her to take charge in an emergency, and give that person the information.

Surprising, isn't it, how much a person needs to know if she or he is to take over your personal affairs in a pinch? My life is quite simple: no minor children, no child custody decrees, no alimony or child support, uncomplicated investments, no special health care issues, no homeowners association, no mortgage or rent, no employees, no vacation home, or the like. The data of a young or middle-aged couple or a single parent would be considerably more involved.

As circumstances change, you'll need to remember to update certain pages. If you've saved those pages that contain no sensitive information, this task should be fairly easy. If not, you'll have to retype entire pages -- a hassle, but better than having them reside on a computer that could be hacked or stolen.

Plan to spend several days to a week thinking through and compiling the information another party would need to access important accounts; pay your bills; get your insurance to cover your costs, or collect life insurance; deal with doctors, lawyers, and your employer; care for your property; and find accommodations for your children and pets. With any luck, it won't be needed. But if it ever is needed, someone will thank you.

Related reading at Funny about Money:

Earth to GOP: Define health care ‘rationing' ... rationally, please

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Car upkeep!

Burial plots for sale and other morbid trends

Karen Datko — Tue, 25 Aug 2009 16:46:00 GMT

Even death can't take a holiday from the great recession. Consider:

More people are selling family burial plots to cover living expenses (unlike the Beverly Hills woman who auctioned off a crypt above that of Marilyn Monroe -- see below).
More people are dying broke and are cremated or buried at potter's field -- because their families are too strapped to help out. "This problem used to be unique to just indigents who either had no family or were living on the street or homeless," P. Michael Murphy, the county coroner in Las Vegas, told Time. "We are now seeing folks expressing this concern who are recently unemployed or their house is in foreclosure ...."

No firm statistics are available on how many people are selling burial plots, but the number of for-sale-by-owner and plot brokerage Web sites is a good indication.

"Baron Chu, owner of California burial resale site Plot Brokers, says listings have grown at least tenfold in the past year," Las Vegas Sun reporter Abigail Goldman wrote.

(We even found a site that suggested you buy burial plots now and resell them later at a profit. That's cold.)

Often the people who are selling are desperate for cash. Debbie Jenkins, who'd lost two homes to foreclosure and was living in an unheated garage, advertised two plots -- for more than half off the $8,000 they were worth -- on Craigslist, according to The Washington Post. "Shoot, I'd probably sell them for $1,500 to be able to eat or fix my car," she said.

Meanwhile, hard evidence mounts that more people are being cremated or buried by their local county as indigents.

Las Vegas: The number of indigents buried or cremated by Clark County, Nev., grew by 22% in the last year, Abigail reported in another Las Vegas Sun story.
Detroit: "Across the board, I'm finding the numbers are on the rise of either families who are not coming forward to claim bodies or they're signing releases saying they can't afford to bury someone, which taxes the county resources because then the county is responsible for burying these people," Albert Samuels of the medical examiner's office in Wayne County, Mich., told Time.
LA: The Los Angeles Times reports, "The county morgue, which is responsible for the indigent and others who go unclaimed, saw a 25% increase in cremations in the first half of this year over the same period a year ago, rising to 680 from 545."
An Associated Press story noted an increase in Ohio, North Carolina and West Virginia.

What do you need to know in these situations?

Don't expect the cemetery to buy a burial plot back, and don't count on a quick sale. Abigail said the average time a gravesite spends on the market is 15 months.
Cremation generally costs $500-plus, and the median cost of a traditional funeral is $7,300, according to AP. The no-frills county service costs taxpayers about $150 for cremation and $1,400 for burial. For more information about your options, visit the Funeral Consumers Alliance Web site.
If you are planning a funeral, keep it simple if cost is a concern. Read "A funeral needn't be costly."

For levity's sake, we'll mention the story of Elsie Poncher, who auctioned her husband's crypt on eBay so she can retire the mortgage on her Beverly Hills home. The crypt, purchased from Joe DiMaggio years ago, is prime real estate, right above Marilyn Monroe's resting place.

The LA Times reports that the highest bidder, at $4.6 million, subsequently backed out. Other high bidders are being contacted. Poncher's husband will be moved to the crypt purchased for her. She's opting for cremation.

Related reading:

Plan a funeral for $800 or less

Steps you must take when someone dies

Plan -- and pay for -- your own funeral

A funeral needn’t be costly

Karen Datko — Fri, 07 Aug 2009 12:58:00 GMT

This post comes from partner blog The Dough Roller.

The memorial for Michael Jackson cost the city of Los Angeles $1.4 million, according to The Associated Press. While most of us won't be remembered at the Staples Center in front of 11,000 people, funerals are expensive.

According to the Federal Trade Commission, a traditional funeral costs about $6,000, and many funerals run well over $10,000. Costs include the casket, embalming, the service, cemetery site, and grave liner. In short, death is big business in the United States.

Bing: Find out more about funeral costs

And to make matters worse, most of us plan a funeral while dealing with the emotional trauma of the death of a loved one. We find ourselves making important financial decisions in the midst of an emotional crisis with very little time to consider our options. Our sadness for the loss of a loved one, moreover, sometimes expresses itself in high cost funeral decisions.

With a little effort, however, we can plan a respectful memorial without breaking the bank. What follows are a number of tips, resources and links to help you plan a low-cost funeral.

Know the Funeral Rule

The Funeral Rule, which is enforced by the FTC, requires funeral directors to provide you with certain information. For example, if you ask in person about funeral arrangements, the funeral home must give you a written price list of the goods and services offered by the home. The idea is to prevent a funeral director from showing you only the goods or services he or she wants you to purchase. And if you want to buy a casket, the funeral provider must show you descriptions of the available selections and the prices before actually showing you the caskets.

Here are some additional requirements of the Funeral Rule, as stated by the FTC:

You have the right to choose the funeral goods and services you want (with some exceptions).
The funeral provider must state this right in writing on the general price list.
If state or local law requires you to buy any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law.
The funeral provider may not refuse, or charge a fee, to handle a casket you bought elsewhere.
A funeral provider that offers cremations must make alternative containers available.

The FTC offers additional information on the Funeral Rule.

Here are other things to consider:

Direct burial or cremation. With direct burial, the body is buried shortly after death. A direct burial avoids the cost of embalming, and a memorial service can still be held at the cemetery or after the burial.

Likewise, direct cremation occurs shortly after death. As with direct burial, direct cremation avoids the cost of embalming. It also avoids the cost of a casket.

Keep in mind that state laws vary on whether the deceased must be embalmed. In some instances, it depends on how quickly after death the body is buried. Here's one resource that lists the state laws on embalming.

Caskets. The cost of caskets can range from a few hundred dollars to several thousand dollars. The average casket costs about $2,000, although some mahogany, copper, and brass caskets can exceed $10,000. According to the FTC, "Industry studies show that the average casket shopper buys one of the first three models shown, generally the middle-priced of the three."

If you've opted for direct cremation, the only purpose of the casket is to transport the body to the crematory. Some funeral homes even rent caskets for this purpose. And if you've elected for direct burial, a simple casket can be purchased for about $1,000. In addition, you don't have to buy the casket from the funeral home. Shop around, and if the best deal is found somewhere else, the funeral home must be willing to use the casket without an additional fee.

Veterans. All veterans are entitled to a free burial at a national cemetery and a free grave market. This benefit also extends to spouses and dependent children, to some civilians who have provided military-related service, and to some Public Health Service personnel. You can find more information by visiting the Department of Veterans Affairs' Web site or calling (800) 827-1000.

Additional resources

Here are some additional resources that you may find helpful in planning a low-cost funeral:

Related reading at The Dough Roller:

Freecreditreport.com vs. myFICO.com: Do you know the difference?

Citi college student credit cards offer double rewards

Best Web hosting for blogs and small businesses

More outrage about collecting debts of the dead

Karen Datko — Wed, 18 Mar 2009 21:57:00 GMT

Another blogger has joined the tiny chorus of personal-finance writers outraged about what The New York Times calls the "newest frontier" in debt collecting -- going after debts of the dead.

Why the outrage? These bill collectors are asking surviving family members to pay when they're often under no legal obligation to do so.

"Is this the height of tackiness or what?" said Andrea of Fools and Sages in a post called "From dead to worse."

It amazed us that a TV piece we saw about this trend almost suggested it was kind-hearted. The employees of a firm that specializes in going after dead people's debt, DCM Services, get special training in how to talk to the bereaved.

How sensitive. (Do you hear sarcasm in our voice?) Apparently not everyone in this line of work is so thoughtful. Liz Pulliam Weston wrote at MSN Money:

One of my readers told me a collection agency insisted he had a "moral obligation" to repay his father's debts. If this happens to you, take a moment to savor the irony of being lectured about morals by a clearly unethical collector. Then hang up.

Andrea explains what generally happens when a person with debt expires: "Most of us know that when we die, our estate can be drawn upon to pay outstanding debts before it is passed along to heirs. If there isn't enough in the estate to cover the debts, lenders have to just write it off."

According to Andrea, DCM says it starts out by contacting a legal representative of the estate. But if there is no estate, family members may get a call and are always told that they're under no obligation. (Let's hope that's the case.) A bill-collection consultant said the industry wants the dead to "rest easy" knowing their bills have been paid.

Andrea says, "I wonder if the dead can rest easy when their relatives are getting charmed out of their own assets that they need to, you know, pay their own still-living bills?"

She also explores a DCM Web site that encourages you to sign up for free information about post-death debt. She wonders if it's simply a way to build a data base of future targets for collection efforts.

Andrea leaves us with her impression: "Overall it's creepy, it's squirrely, and if you have anyone in your family who passes away and you get called by a debt collector, please please do your own research on the laws in your state before sending in any money."

Related reading:

Bill collectors target debt of the dead

Sleazy new debt-collector tactics

'Zombie' debt is hard to kill

When your parents die broke

Bill collectors target debts of the dead

Karen Datko — Thu, 05 Mar 2009 00:18:00 GMT

Here's a new trend we can do without: Having trouble collecting bad debts from the living, bill-collection agencies are increasingly going after the debt of those who no longer share our space.

It appears to be working, says a story in The New York Times. Relatives of the deceased are scraping together payments -- when they are under no obligation to pay.

The story says: "The law varies from state to state, but generally survivors are not required to pay a dead relative's bills from their own assets. In theory, however, collection agencies could go after any property inherited from the deceased."

MSN Money's Liz Pulliam Weston shines more light on the matter in an article called "When your parents die broke."

She writes that "children aren't on the hook for their parents' unsecured debts -- credit cards, personal loans, medical bills -- unless they had agreed to take on the responsibility" by co-signing a loan or being a joint account holder (as opposed to an authorized user) of a credit card. (The rules are different for debt that's secured by a house or a car.)

Generally, the deceased's debts may be paid if they left an estate that goes through probate. If they die penniless, that's that.

Not renowned for their charitable attitude, bill collectors are getting special training to talk to mourning relatives, who likely aren't expecting such calls. One firm, DCM Services of Minneapolis, calls it "empathic active listening." Another company will offer to transfer family members to a grief counselor if the call doesn't go over so well, the NYT story says.

The process is producing success -- most likely because of survivors' sense of duty to put a family member's obligations to rest.

We prefer this man's reaction. The NYT story says:

Eric Frenchman, an online consultant, said a DCM agent inquired about his late father's $50 Discover card balance before the bill was even due. Since Mr. Frenchman had been planning to pay it anyway, he emerged from the experience vowing never to get a Discover card himself.

Or, as Liz suggests, just hang up.

Feel free to sound off below or at a Your Money message board thread called "Readers talk: My mom passed away. Do we need to pay her debt?"

Related reading:

Steps you must take when someone dies

‘Zombie' debt is hard to kill

Executors can inherit an unholy mess

Sleazy new debt-collector tactics

Post-divorce: 7 steps to rebuilding your financial house

Karen Datko — Thu, 04 Dec 2008 15:38:56 GMT

This post comes from Nora Dunn at partner blog Wise Bread.

My, how life changes when you close one chapter of your life and open a new one.

Severing a conjoined life and combined finances as a result of divorce is painful through and through. The jump to a single-income lifestyle paves the way to feeling a cash crunch, and if children are involved it is even more pronounced. Even if the breakup is liberating, there is still some mopping up to do after the storm.

Here are seven things you can do to set your new life up on the right foot.

Joint banking be gone. Close all joint bank accounts, joint non-registered investment accounts, and credit cards. Not only is this a tangible form of evidence to demonstrate a date of separation (in locales where you need to be separated for a time prior to applying for divorce), but it also protects each party from destructive actions the other may take in anger or apathy.

Remove all beneficiary designations. Here is a list of items you may need to look at in terms of removing joint or beneficiary designations:

life insurance policies.
retirement funds.
auto insurance.
credit card insurance.
pension funds through work.
health care plans through work.

If you are required to designate a new beneficiary and are not sure whom to choose just yet, simply choose your estate for now, or until you hear otherwise from your lawyer/accountant/financial planner. Although an estate designation may not be the most tax-efficient option, it will keep things simpler until all the divorce paperwork is properly nailed down and you get on your feet again.

Create a new budget. Flying solo means creating a whole new budget -- a crucial step of the process. You may or may not have been actively involved in the finances while married, so creating a new budget could be an exercise in learning how much things cost, or simply reallocating income streams accordingly.

Update your will. Updating a will doesn't have to be a laborious process. If it is simply a matter of changing beneficiaries, a codicil (a one-page addendum that attaches to the will) can suffice.

Review your estate plan. Although you will have covered most of the bases with reassigning beneficiaries and updating your will, your estate plan may incorporate some larger issues or opportunities given the new financial structure of your life.

For example, your previous estate plan may have been mindful of your ex-partner's parents who are -- or will become -- financially or physically dependent. Or maybe children from a first marriage have been incorporated into the estate plan and now the structure of trusts or income streams needs to change.

Don't blow the financial settlement. Just in case you had eyes for a new stereo system or a bigger house, you may want to seek counsel before spending any financial settlement that arises as a result of your divorce. From tax efficiency to your overall financial plan, there could be ways to greatly help or cripple your finances by virtue of what you do with the settlement.

If you are the one doling out the settlement, then refer to the following point to help you sort through the noise.

See a financial planner. Your financial planner will be instrumental in helping you with many of the above chores. Many financial planners can help with the transition and separation of accounts, but if you are uncomfortable meeting with the same planner you used as a couple, then ask around for a referral to a new planner you can trust and establish a new relationship with.

You face lifestyle changes (in some cases drastic ones), income differentials, emotional transitions, tax plan modifications, and investment timeframe readjustments. Your asset allocation plan may change, either because your investment personality is different from your ex-partner's, or because you plan to utilize your investments differently (i.e., your time horizon is longer, or you need to draw down on some investments now).

As crushing and stressful the trauma of severing your life from a loved one can be, you must try to maintain a level head throughout the process. By covering the bases above, and keeping your eyes on the road ahead, you can survive the ordeal and move forward without falling into so many of the traps that lurk along the way. Life will go on, and in some cases, may even improve.

Other articles of interest at Wise Bread:

Can you afford to have a baby?

Why couples fight over money and what to do about it

Personal-finance advice forums

50 financial skills every person needs to have

Karen Datko — Tue, 02 Dec 2008 15:30:37 GMT

This post comes from partner blog Blueprint for Financial Prosperity.

Popular Mechanics created a list called "100 skills every man should know," which naturally gravitated toward DIY/physical skills like jump-starting a car and splitting firewood. The Frisky listed "30 skills every woman should have before turning 30," which actually touched on more than physical skills (though No. 12 is physical), with a handful of financial skills (Nos. 17-20).

The following isn't a checklist of things you necessarily need to do in your life. It's a list of things you should know how to do in case the need arises.

Banking and credit

Open a checking and savings account.
Deposit checks into an ATM.
Manage your bank account online.
Establish a certificate of deposit ladder.
Pay your bills online.
Open an online savings account.
Link bank accounts using routing and bank account numbers.
Request and review your free annual credit report.
Contest errors or inaccuracies on your credit history.
Apply for a loan (car loan, mortgage).
Get a bank or credit card fee waived.
Get a document notarized (or signature guaranteed).
Exchange currency.

Investing

Open a Roth IRA.
Open a brokerage account.
Roll over your 401(k) to an IRA.
Request a hardship loan against your 401(k).
Re-balance your investment portfolio.
Read a stock chart.
Read a mutual fund prospectus.
Buy stocks, bonds, ETFs or mutual funds.
Buy Treasury bonds at a bank and/or through TreasuryDirect.
Read (and understand) a company's annual report (including the financial sections).
Day trade.

Taxes

Prepare your taxes (using software is OK).
Know how marginal tax brackets work.
E-file.
Handle an IRS audit.
Request a tax filing extension.
Pay estimated quarterly taxes.
Amend a tax return.
Legally shelter income from taxes.

Living and spending

Create and track a budget.
Establish an emergency fund.
Comparison shop.
Sell something online (eBay, Craigslist).
Mail in a rebate (and then get on them when they try to screw you).
Bribe someone (like a maitre d').
Buy adequate insurance (car, life, home/renters).
Negotiate with a vendor.
Threaten to cancel a service to get lower rates.
Negotiate your salary, pay raise, or benefits.
Apply for a passport.
Bid in an auction.
Barter for goods and services.

End of life

Prepare a last will and testament.
Prepare a medical directive.
Be executor of an estate.
Assume power of attorney.
Work with a funeral home/mortuary.

Finally, the other financial skills you need to learn and do -- and this is a bonus pair -- are how to register to vote and then vote. Who gets into office, at any level, has a huge impact on your finances.

Are there any that I missed? (I'm sure there are.)

Other articles of interest at Blueprint for Financial Prosperity:

401(k)s and IRAs are for suckers

Kiplinger's best discount brokers

OPEC despises you, stop buying so much oil

Tackle financial fears with a rational plan

Karen Datko — Thu, 20 Nov 2008 14:20:31 GMT

This post comes from Trent Hamm at partner blog The Simple Dollar.

Most people have financial worries in their lives: How will I pay the bills? What will happen if I'm suddenly injured and unable to work? What if I lose my job?

I'm in the same boat. Although I've come a long way in the last few years, I still have a lot of concerns. What would happen if I were to pass away suddenly? What if my wife were to die?

Many people bury their concerns and don't consciously think about them. They hide them deep under the surface and live life pretending such things could never happen. Under the surface, though, worry builds up -- and bursts out when they hit a bump in the road.

I've seen it, both in my own early adult life and in people I know. Everything is fine for a while until suddenly you need $1,500 for a truck repair and panic sets in. There's no money to pay for it. My financial low point, for example, occurred when I pulled a pile of bills out of my mailbox and realized that I didn't have the cash to pay them.

I discovered that the best way to soothe a financial worry is to have a plan in place to deal with it. But how can you do that rationally?

For me, it wasn't easy. It took me quite a bit of fishing around in the dark. I eventually realized that the quicker you begin to take steps -- both general and specific -- to lay your worries to rest, the quicker your mind can begin to be at ease and you can focus on other areas, like getting ahead in your career.

Here's how I'd tackle things if I had to start all over again:

Have a healthy emergency fund to deal with any bumps in the road. Each and every week, I automatically transfer some money out of my checking account into a savings account that I keep for emergencies. Then, whenever an emergency happens, I have cash to take care of it. If you start saving $50 a week, it takes only a few months to have an emergency fund with $1,000 -- and that'll take care of a lot of hiccups.

Don't be tempted to spend that emergency fund on unnecessary things. When you do have some cash built up, it's tempting to grab it and buy yourself something fun as a reward for your hard work to save it. Don't. That undoes all the hard work you put in, and normal human luck dictates that the second you do it, an emergency will pop up.

Make a list of the things that worry you. What are those things that keep you up at night and cross your mind when you're driving home from work -- the nightmarish scenarios you hope never happen? Instead of just shuddering and packing them away, write them down. Make a list of the things that are bothering you and get them out in the open where they can be addressed (and likely fixed) with a little bit of focused concentration.

I've been lucky enough to take care of a lot of my worries over the last two years, but even today I still have a few. My biggest one revolves around the long-term stability of my work. What can I do to keep my writing career stable over the long haul?

For each problem you write down, investigate a solution. Perhaps the solution is as simple as making out a will and deciding what will happen to your children should you die unexpectedly. That relieved some significant concerns for us. Perhaps you're worried about your career. The best path might be to become proactive about looking for another job or casting about for a new career.

Come up with things you can do to take control of those fears. Some solutions will seem easy. Others will seem painful, likely involving a conversation you don't want to have. Others will seem very difficult or even impossible.

Take care of the easy ones immediately. Get that will drafted. Look into life insurance and get that policy set up.

For the painful ones, ask for support from trusted people. If you think it's time to talk to your parents about their future plans and how they're managing things, consult your siblings or trusted family friends. Take it slowly and gently, a piece at a time. Make an appointment. Set aside time specifically to handle such things. You'll be glad you did when it's over.

And what about the big, difficult ones, like helping your children pay for college? Break things down into the smallest pieces you can. For example, can you put $5 away each day? Do it entirely in cash for a while until you get the hang of it. When that becomes easy, make it automatic with a $150-a-month transfer into a college savings account.

In the end, taking the time to address those worries will pay huge dividends. Not only will those worries be addressed by your own actions, but you won't have to expend mental or emotional energy worrying about this stuff anymore. Instead, you can use that energy to build a better career, be a better parent, and succeed in whatever avenues of life you choose.

Tonight, go home and start addressing whatever problem is eating you up inside. What do you need to do to make that worry go away? Then, if you can, take that action and start making a positive change. That first step makes all the difference.

Other articles of interest at The Simple Dollar:

The talk: Tips for difficult financial discussions

Love, marriage and money: Should a couple combine their finances?

Educating children on fiscal responsibility

Creating a will: Not as scary as you might think

Karen Datko — Mon, 17 Nov 2008 14:58:00 GMT

This post comes from J.D. Roth at partner blog Get Rich Slowly.

My friend Sparky called the other day. We chatted about work, we chatted about the economy, and we chatted about investing. We also chatted about our families. We talked about my mother and her health problems, and then we talked about his parents and their health problems.

"I can't believe they haven't updated their wills," Sparky said.

"What?" I said. "Are you kidding me? How old are they?"

"They're both about 65," he said. "Maybe a little older. They haven't updated their wills since I was 5. If you go by the paperwork, when they die, I have to go live with one of my aunts. I'm almost 40."

We both laughed. "At least it's my favorite aunt," Sparky said. "If somebody has to become my guardian, I'm glad it's her."

Though Sparky and I were making light of the situation, estate planning is serious business, and not just for those near retirement age. I don't mention it often, but I do believe creating a will is a crucial part of personal finance.

Despite this belief, my wife and I dragged our feet on our own estate planning. For two years we told ourselves we'd get to it -- next month. This year, however, we finally followed through.

I called my attorney, Dave, and he guided us through the process. Turns out creating a will wasn't difficult or scary at all. In fact, the most time-consuming part of the process was organizing the information, but that task was made easier with this handy will-planning document (.pdf), which I've provided with Dave's permission.

This form collects information about your family and beneficiaries, your assets (including bank and investment accounts), and your debts. (Compiling this information is an excellent idea even if you're not creating a will.)

After we submitted our planning forms, Dave asked us to clarify our intentions regarding certain points. (Just what do I want done with my comic book collection when I die, anyhow? And, just for the sake of argument, if Kris and I both die at the exact same time, and so do our designated beneficiaries, then who gets our stuff? We both picked our alma mater, even though we hadn't discussed doing so.)

After we'd given him all the information, he created drafts of the wills for us to approve. When we were sure that everything was satisfactory, we met at his office to sign the paperwork.

In a way, preparing our wills was anticlimactic. I've always believed the process was a big deal, and involved a lot of red tape. It wasn't like that at all. We simply gathered some information, answered a few questions, and then signed on the dotted line.

For some people, there's more to estate planning than a simple will, but my wife and I don't have complicated needs -- yet.

Other articles of interest at Get Rich Slowly:

A brief guide to creating a will

An overview of estate-planning software

Celebrity deaths highlight the need for proper estate planning