A Tip For Estate Planning

Posted By Paul

Hi Everyone,

Having had a recent experience with estate planning I thought I would pass on something that I learned from the experience.

A friend of a friend recently had a relative pass away.  The relative had had a healthy long life, and had left behind some very clear estate planning.

The only downside was that the relative had listed a person as their executor that now lived overseas.  It was difficult to locate and contact this person and created a lot of hassle.

Luckily they listed several alternate executors, but one issue they had was that they chose people that were about the same age as them or older.  It makes sense that you would choose peers to be your executor candidates, but the problem came up that since the relative had lived such a long life the other candidates were all quite up there in years and didn't feel up to handling the role.

There were a few aspects of the estate that needed to be resolved quickly.  The process of tracking down the overseas candidate, and getting the paperwork for them to decline the role took quite a while. Luckily the other candidates were easier to find, but when it was discovered that they didn't want to serve as executor it took additional time to get THEIR paperwork handled and then ultimately find someone to take over the role.  Ultimately it all got resolved, but it ended up being a significant hassle. 

My advice?  Definitely list several candidates to serve as your executor, and try to update your estate documents accordingly if someone moves overseas or has some other event that would make them unable to serve in the role.  Also be sure to let your executor candidates know that they are listed in your estate planning so that they can let you know if for any reason they no longer want to serve in that capacity.

Also I think that it's practical to have at least one executor candidate who is significantly younger than you, to avoid the situation where all of your candidates are in a place in their life where the hassle of handling an estate is too much.

Once my son is an adult I plan on making him an executor candidate, and hopefully I'll keep my estate planning up to date in case something happens that makes an executor candidate no longer able to do the job.

Article: Why Only Thinking About Affordability Makes You Poor

Posted By Paul

I saw this article on a blog that I discovered today.

I really liked the article because I use the term 'affordability' a lot when I talk about money. When people ask me if I think it's okay for them to splurge on something I often ask the question: "Can you afford it?"

This article emphasizes that many people when answering that question are simply asking themselves: "Do I have the money now to cover the payment?"

It talks about how using that definition can lead you into some poor choices.

The article lists a set of other questions you should ask in addition to just basic affordability when making a financial choice:

1. Is it necessary or is it nice to have?
2. Is there a more economical version?
3. Would most people in your situation want to buy it?
4. Would you still buy it if you had time to think about it? In other words, is it an impulse decision?
5. How is that going to affect your short and long term goals?

I especially liked item 5....considering the choice in relation to your financial goals.

I think that now when discussing financial choices with people I'll have to ask the question: "Can you afford while meeting your other goals?" as a starting point for discussion.

Check it out:

Why Only Thinking About Affordability Makes You Poor

Article: 8 signs you're flirting with financial ruin

Posted By Paul

A cool little article. It listed 8 signs of financial ruin.

I thought the 8 signs they listed were good ones and I was happy to see that none applied to me.

I especially liked the signs that they listed like paying late fees on your bills or having bounced checks. The signs that aren't disastrous in themselves but serve as early warning signals of big problems to come.

Here is the article:

8 signs you're flirting with financial ruin

Article: Conspicuously Thrifty

Posted By Paul

There was an article today on the Dollar Stretcher that really resonated with me because it reminded me of one of my very first Frugalize posts (here is the post from several years ago):

Conspicuous Consumption Gone Wrong

I still struggle with the idea of trying to wave the flag of frugality in a world that seems to focus so much more on showing off what you have (whether or not you can actually afford it).

One thing I have noticed is a definite change of attitude since our economy hit a slump. There seems to be a greater appreciation for stretching your dollar. However, I'm disappointed to see a focus on ways to still have a luxurious lifestyle while stretching your dollar, as opposed to the idea of trying to live a simpler lifestyle in general.

I suppose that's no surprise since the most common way I hear about the economic slowdown is in ads that are trying to encourage me to keep spending lavishly despite the situation.

The Dollar Stretcher article was great in that people suggested ways to be proud of their frugality without being overbearing. Several people said how frugality goes hand in hand with modesty, which I thought was a very nice point.

I liked the idea of being 'transparent' where you don't shout your accomplishments from the rooftops, but you do discuss your choices honestly when they come up in conversation.

Also, one of the comments specifically mentioned the book: "The Millionaire Next Door" which I read and reviewed in one of my first posts here:

Review Part 1: The Millionaire Next Door

One thing I have noticed that makes conspicuous thriftiness much easier is having a peer group that also views frugality and savings as something to be admired. I have two really good friends and we're all very practical when it comes to money and spending. It's great having friends who also consider living within your means to be a virtue. We don't try to "out miser" each other, but we also don't enable bad financial behavior.

I've seen people whose peer groups are all terrible with money, and they constantly encourage each other to overspend. It's like each person in the group serves as the "devil on the shoulder" for someone else. Always ready to provide a handy rationalization for a bad financial decision.

I'm sure that if you surround yourself with people who overspend it must feel very awkward to be the one person trying to live a frugal lifestyle.

Anyway here is the full article:

Conspicuously Thrifty

Article: 10 ways to fight frugality fatigue.

Posted By Paul

I saw this article that I liked because it focused on the psychology of frugality and saving, that it is just as much of a mind game as it is a number's game.

The general theme of the article reminded me of an earlier Frugalize post:

Crash Budgeting

Here are a few entries from the list with my added thoughts:

1 - Don't set goals too high: I see this one in so many places. People go from excessive spending to a super-frugal lifestyle, and they try to do it 'cold turkey'. More often than not they can't handle the dramatic change and they fall into their old patterns.

4 - Know your motivational style: This is a great point. I've talked to people about saving strategies and run into situations where their strategy would drive my crazy and vice-versa. It's important to find a system that works for you.

7 - Find a money buddy: This one is great. It is SOOO handy to have a person that I can discuss money items with that has similar goals to me and that can give me an objective opinion without their own agenda (i.e. my money buddy isn't trying to sell something).

9 - Go public: Obviously I like this one since it was what started this whole blog in the first place.

Here is the full article:

10 Ways To Fight Frugality Fatigue

Article: 10 Reasons You Aren't Rich

Posted By Paul

A little article on mistakes people make with money. A nice summary of how different people view their finances and the pitfalls associated with them:

10 Reasons You Aren't Rich

Article: 5 Things You Should Buy Secondhand

Posted By Paul

Here is a link to an article listing 5 things that you should always try to purchase used if you are trying to save money:

5 Things You Should Buy Secondhand

Article: Family's Fall from Affluence Is Swift and Hard

Posted By Paul

I doubt many of us can relate to a sudden inheritance of $10 million, but I thought this article was interesting. If nothing else it is an object lesson on how quickly windfall money can disappear when we are not careful:

Family's Fall from Affluence Is Swift and Hard

Article: Free Stuff Online - Don't Buy It

Posted By Paul

Ever see those 'Free iPad by clicking here' ads? Well this was an interesting article where someone actually tried clicking on the ads to get the free iPad.

Not a big surprise that it was a scam, but it was interesting to learn exactly what kind of scam it was:

Free Stuff Online - Don't Buy It

Article: Spending Tips From Frugal Billionaires

Posted By Paul:

Here is an article I enjoyed about "frugal billionaires". It was kinda cool to read about people worth a billion dollars driving a Corolla.

Check it out:

Spending Tips From Frugal Billionaires

Article: 10 products to always buy generic

Posted By Paul

I thought this was a pretty cool article:

10 products to always buy generic

Now that we have a little one with various toys we seem to go through batteries more quickly and we now just get whatever battery is cheapest and we haven't noticed any difference.

We often buy generic or store brands and only switch back to the name brand if we have a reason.

For example I have a cheesecake recipe that I'm rather proud of and I've noticed that whenever I make it with generic cream cheese it doesn't turn out as well. So I always go for the name brand when I'm going to make that particular recipe.

An interesting little article, check it out!

Article: Financial Peace In Tough Times

Posted By Paul

I liked this article on Debt Kid that talked about how an emergency fund was useful in a time of family crisis. We often think of emergency funds for times where our car breaks down or we discover a hole in our roof, but this was a great example of how having some extra money can also help when a family emergency comes up:

Feeling Financial Peace In Tough Times

Article: America's Biggest Rip-offs

Posted By Paul

A cool article on CNNMoney about the biggest rip offs in America.

It defined a rip-off as something you use or consume that has a REALLY high mark up.

I thought that made some good choices. Ones in the list that I especially liked:

Text Messages - I rarely send text messages (at least in part because I'm not very practiced at typing them out on my phone) but when you think about the amount of data that is being sent, the prices are pretty ridiculous.

Movie theater popcorn - I've never been one to get snacks at a movie (usually because I feel like eating at the same time distracts me from the movie), but it comes as no surprise that movie theater popcorn was one of the major rip-offs. I liked the quote that was listed in this section:

"A lot of theater owners tell me, 'I consider myself working in concessions, not movies.'"

'Free' Credit Reports that aren't - beware of the 'free' services that sign you up for 'credit monitoring' for $15 a month and hope you don't notice.

Worth a read:

America's Biggest Rip-offs

Article: Lifestyle Inflation

Posted By Paul

If you read the article that I posted about earlier:

The secret lives of American debtors

I mention Blake and his blog about trying to get out of debt.

One of his recent articles was entitled:

How to Prevent Lifestyle Inflation

Which I thought was a great article because it focuses on the psychology of spending pressure. He talks about the subtle pressures to spend more based on where you live.

The idea of "keeping up with the Joneses" is nothing new, but I like the fact that his first suggestion is to acknowledge the pressure. No one wants to say that they are experiencing "spending peer pressure" but of course we all experience it to varying degrees. Just like the old saying that the first step to fixing a problem is admitting that it exists, the first step in resisting a temptation is admitting that you are tempted.

I also liked his third point which was to allow yourself to inflate your lifestyle a little. You are not a bad person if you give yourself these little rewards here and there (provided that your circumstances are such that you can actually afford them).

I talk about similar ideas in some of my earlier posts:

My Financial Philosophy

Financial choices: Good Vs Better

Know Your Indulgence

Article: Taking Frugality Too Far

Posted By Paul

I thought this was a good article on when you have taken Frugality too far. I especially liked that they call out not tipping in restaurants as an example of 'frugality gone wrong':

Taking Frugality Too Far

Article and Blog: Hiding debt: The secret lives of American debtors

Posted By Paul

An interesting article today on CNNMoney. It talked all about people who accumulate debt secretly. Trying to hide it from their loved ones, often with disastrous results. It sounds like hiding debt must be an incredibly shameful and stressful secret to have. Hearing people talk about the experience reminded me of stories from people trying to hide affairs or drug habits.

Check it out:

Hiding debt: The secret lives of American debtors

The story of Blake who lost $250,000 ($150k of which belonged to his mom) and tried to hide it was incredible.

I looked at his blog which was mentioned in the article. It looks interesting enough that, I plan to follow it:

www.debtkid.com

Article: Overcome marriage money challenges

Posted By Paul

I read an article on the dollar stretcher that I really liked. So many aspects of the article reminded me of things that my wife and I do to handle money in our marriage, such as:

-Using rewards credit cards (never carrying a balance but splurging with the reward money)

-Saving up for expensive items (which also gives you time to decide if you really want or need the item in the first place)

Worth a read for all married couples, whether or not spending is a source of friction in your marriage:

Overcome marriage money challenges

Article: To act like the rich, be frugal

Posted By Paul

I'm a big fan of the book 'The Millionaire Next Door' as you can see by the previous posts:

The Millionaire Next Door Pt 1: Big Hat No Cattle

Millionaire Next Door Review Pt. 2: UAW or PAW

Millionaire Next Door Review Pt. 3: Economic Outpatient Care

There is an article with the author where they ask him about trends in purchasing of certain "status" items. His findings and opinions are interesting. Here is an interesting excerpt from the article:

"For example, most prestige makes of cars -- 86 percent -- are driven by nonmillionaires. Yes, people with very high incomes, high levels of wealth are more likely to drive status automobiles. But in sheer numbers, the largest consumer segment for pricey cars, vodkas and homes is not the millionaire population, it is the aspirationals. These are people who think they are acting rich via their adoption of prestige brands, but in most cases they are only acting like each other."

Here is the link for the full article:

To act like the rich, be frugal

Article: Stop paying for things you don't need

Posted By Paul

This article reminded me of an earlier post on Frugalize called:

Stuff to look at when it's time to cut back

It was an article that suggested ways to avoid spending money when you don't have to. I especially liked their suggestions for avoiding bottled water (which I mention in an earlier post: Save On Drinking Water) and also their suggestion to avoid buying a bunch of ring tones and apps for your cell phone.

The second suggestion reminds me of a friend that bought a new cell phone but wasn't aware that there was a charge involved when it came to downloading ring tones. My friend happily updated their ring tone at least every day and ended up with a giant cell phone bill at the end of the month.

Here is the article in full:
Stop paying for things you don't need

Article: 5 scams spreading like a virus in recession

Posted By Paul

I read an article today about scams that proliferate during a recession.

Here is a quick summary of the scams they describe:

1. Government grants scam - all this talk of the stimulus makes it easy to think there is free money for the asking. Be wary.

2. Instant credit repair - you pay for services you never get plus leave yourself open to identity theft.

3. Cash for gold - I've seen TV commercials for this. Apparently a common scam is that they send you a check that is much less than the worth of the gold but delay sending it to you so that by the time you get it the 'refund window' has already closed.

4. Mystery shopping scam - you get a check for a lot of money you are asked to cash it, secret shop and then send the cash to an account...later you discover the check is a fake.

5. Social networking scams - someone posing as a loved one on a social networking site needs money for an emergency. You send it and never see them again.

Here is the full article:

5 scams spreading like a virus in recession

It seems like a common thread in scams is the sense of needing to get your money quickly for some reason or another. Always beware when you are asked to do something that involves money with an urgency that keeps you from really seeing what's going on.