Financial Planning & Your Valentine

Financial Planning With Your Valentine

Valentine's Day is a wonderful reminder to tell our loved ones how much we care. Sending cards and flowers is an important visual symbol of our feelings. Less visible, but perhaps more important, is ensuring that all the details are attended to, so you do not leave your loved ones in a lurch in the event you are not here on the next Valentine's Day.

THE painful jabs of slowdown may well have replaced Cupid's arrow this Valentine's. Although it's the season for roses and cards, fear seems to be in the air.

Your best gift this year would be to help your partner feel financially secure and instil some fiscal discipline by enrolling him/her in savings and investment schemes To start with, you can fall back on a time-tested investment avenue.

"Gold “is best suited for occasions like these, as it results in a successful marriage of investment objective and consumption needs,""A gold fund or ETF or Mutual Fund – Gold Fund would be a better option compared to Hard jewelery. The underlying asset is gold, which has shown steady returns even during the most uncertain times.

"If gold sounds old, you can buy health and life insurance policies on their behalf. If you are not comfortable with recurring premiums, you can always opt for a single-premium policy.

You can also look at Monthly income schemes with  mutual fund. you can invest a lump sum and your spouse can earn the interest on a monthly/Qtrly  basis. "The scheme can prove to be a boon in these recessionary times

An equity-linked savings scheme (ELSS) with a good track record would be the ideal choice, as its lock-in feature would eliminate the chances of making withdrawals before three years. Also, if you invest in ELSS now, you will Also Get Tax Benefit

Finally, you can consider writing a will, with your spouse as beneficiary. The convention may be to say it with flowers and candlelight dinners, but the extraordinary times we are living in call for out-of-the-box gift ideas that serve a deeper need and leave a lasting impact.

Valentine Day Financial Checklist

 1. Provide Financial Security for Family. Verify that you have sufficient funds to meet your family's needs. If your investments and other sources of income are not sufficient to meet your family's needs in the event of your death, secure the necessary amount of life insurance. Your need for insurance will change over your lifetime. When mortgages and other debt are paid off, as you accumulate a personal investment portfolio, and when the children are no longer dependent, your need for life insurance will decrease. Measure your financial security each year and make the necessary adjustments.

 2. Document Your Net Worth. Prepare a list of assets & liabilities. For each asset provide more information than just its value, e.g. where located, account numbers, cost basis, etc. For the outstanding loans, indicate the interest rate, payment amount, and the expected pay off date. Update this information on a regular basis and take the time to share an explanation with those who need to know.

 3. Simplify Your Investments. Whenever possible and appropriate, consolidate accounts and reduce the number of institutions that you are dealing with. Look for opportunities to simplify your investment portfolio without sacrificing quality and diversification. Reducing the number of monthly statements will make it easier for you, or your loved one, to monitor and manage the investments.

 4. Prepare List of Advisors. For convenience, list all your advisors with their contact information. This would include your financial planner, attorney, accountant, insurance professional, banker, and any others that you work with on a regular or periodic basis. You may also want to indicate a priority for contacting in the event of your death.

 5. Prepare Letter of Instruction. Put down on paper what you would like someone to know if you are not around. If you have children, you may want to provide the potential guardian with a list of your wishes concerning education, living preferences, or special places you want them to visit. Taking time now to outline your preferences for your burial or cremation will greatly reduce the stress and anxiety experienced by your family members. Keep your wishes in a folder or notebook that is accessible and known to your family and update as needed.

 6. Check Beneficiary Designations. It is worth your time to periodically check the beneficiary designations of your IRAs, life insurance, and employee benefits. If you have recently changed your beneficiaries due to a marriage, divorce, or birth of a child, you should verify with the custodian or the insurance company that your request was accurately recorded. Employer records regarding pensions, savings plans, deferred compensation plans, stock ownership plans, and life insurance should also be verified periodically.

 7. Review Your Estate Plan. Do you have a will or trust that reflects your distribution desires and minimizes the impact of estate taxes? If not, you should place a high priority on having discussions with your attorney or financial planner on this issue. If you die without a will, the state of Indiana will determine the distribution of your assets and the court will decide who serves as guardian of your minor children. If you have an estate plan, you should take the time to review your plan every five years or whenever something significant changes in your family situation.

 8. Have a Trusted Advisor. The greatest benefit that you can provide to your family in time of need is a trusted advisor. This is the person that your spouse and family members can contact who is knowledgeable of your situation and in whom you have confidence and faith. Building a special relationship such as this takes time. If you don’t have a trusted advisor or if the person you trust is not someone your spouse is comfortable with, you need to develop a relationship that works for both of you.

Let each Valentine's Day be a reminder to you to review your financial situation. Keeping your financial house in order and assuring your loved ones will be secure in your absence is a "priceless" gift to your Valentine !

Source : Personal Finance Website (Unknown)