At some point in your life you may become ill or incapacitated and need someone to act in your behalf. A power of attorney or a trust agreement may be the solution to your problem.

A power of attorney is a legal document authorizing someone of your choice to act for you. The power may be general and broad or limited to specific functions.

A trust can also serve a management function for your financial affairs. A trust is a legal arrangement through which a third party, a trustee for either your benefit or that of your beneficiaries holds your assets.

A number of methods can be used to transfer property including gifting the property to the desired beneficiary before death to leaving property in trust for the beneficiary to receive at some point after your death. Whatever methods you choose to distribute your property after death, carefully planning will enhance the likelihood of an orderly transfer with minimum taxes.

At death, the individual settling the estate for the deceased must locate and list all property. This listing is made so that the court can decide whether any death taxes are due to the state and federal governments, and so that all the property can be distributed to the heirs.

A total of the property owned is called the gross estate, and consists of everything that belongs to a person, either individually or jointly with others. This property may be in the form of land, buildings, equipment, money, or other financial assets and personal possessions.

Florida permits property to be held four different ways. The implications for transferring the property are different for each type:

1. “Sole ownership” (fee simple) of property exists when the title of property is in one name only. It means that you have the right to sell, mortgage or give away the property during your lifetime and to name the recipient of the property after your death.
   
   
2. One type of co-ownership is called “joint tenancy with rights of survivorship”. Individuals who hold property this way have an interest, which is undivided and fractional. That is they all own it together, not in equal shares. When an owner dies, the total property held in this manner becomes the sole property of the other owner(s); so it is said to provide the “right of survivorship”.
   
   This property does not need to be listed in a will, since the owner is already designated. Most joint bank accounts are held this way. At the death of any of the co-owners, the property is divided equally among the surviving co-owners, and does not have to be listed in the will. This doesn’t mean that the transfer will occur immediately or that taxes won’t have to be paid.
   
   
3. The third type of ownership is called “joint tenants in common”. When this term is used on ownership papers, the heirs will receive the portion of the property that belonged to the co-owner who died. Other co-owners will not receive a share unless they are designated heirs.
   
   
4. Tenancy in the entirety. This type of joint ownership is limited to married couples only. Under this type of ownership, both spouses own the property; when one spouse dies, the property automatically goes to the other spouse. Neither spouse can sell the property without the signature of the other spouse.

Prepared by: Dr. Josephine Turner, CFP
Professor, Family, Youth and Consumer Economics
University of Florida

money, financial, Florida, retirement, power of attorney, trusts, wills, co-ownership, joint tenancy

It is not too early to begin thinking about your retirement income. Today’s retirees may need to plan not only for their own retirement income but may need to plan for partial support of a dependent parent, child or other relative.

The earlier you begin planning for retirement finances, the more options you will have and the more risk you can afford to take with your investments. If you are 40 years of age it is important to have started a retirement savings plan.

The first step is to find out if your employer has a pension plan and what benefits you can expect to receive from the plan. There are two basic types of pension plans: a defined benefit plan and a defined contribution plan.

A defined benefit plan is paid by you and the employer and provides designated benefits. A defined contribution plan, such as a profit sharing plan, specifies the contributions made by you and your employer. The amount you receive in benefit at retirement is based on the amount in your account at retirement.

If you are covered under a pension plan, find out the answers to these questions:

• What are the eligibility requirements?
• How old do you have to be to receive benefits and how long do you have to be employed by the present employer before you are covered?
• When do your benefits become vested? That is, when do the benefits belong to you whether or not you keep working for the same employer? Five to 10 years is common for being 100 percent vested in a retirement plan.
• What happens to the benefits if you are laid off or fired from your present job?
• How is the amount of your pension calculated?
• When can you start to receive benefits?
• Will these benefits ever increase once they begin?
• Will they be adjusted for inflation? If yes, how will your pension be affected?
• Will social security benefits be affected by your pension?
• Will all or a part of your benefits be taxed by federal, state or local governments?

Answers to these questions will help you decide if additional retirement funds are needed and give you a basis for determining how much additional money will be needed.

The next step is to project your financial needs in retirement. To do this you need to develop a worksheet. On this worksheet estimate your retirement income needs. Itemize your expected expenses. Some expenses will increase and some will decrease. For example work related expenses such as transportation, clothes, and meals will decrease while medical care will increase. Adjust these expenses for inflation using time value of money concepts. There are time values of money tables or computer programs available to assist with these calculations.

The third step is to estimate the total amount of Social Security and other retirement benefits you will receive.

The fourth step is to determine how long you will need these payments. Most 65 year olds today can expect to live from 14 to 20 years after retirement. Calculate the retirement fund you will need to provide the required income.

Fifth determine the amount of the assets you will have at retirement to assist in meeting your identified needs. Do this by listing assets that you plan to liquidate for living expenses. Don’t include in this list any special bequest or any assets you plan to dispose of before retirement. Subtract any debts that will be outstanding on assets at retirement, this will give you total available assets for retirement planning.

In the sixth step determine the future value of assets, by estimating the number of years to retirement and the estimated return after taxes. Then subtract the projected need from the projected income available to meet the need.

If income is greater than projected need, you are lucky and need no other assets or savings to fund retirement given the accuracy of projections made. However, if income is less than need, determine the amount that needs to be saved on a monthly basis to reach your retirement goal.

Prepared by: Dr. Josephine Turner, CFP
Professor, Family, Youth and Consumer Economics
University of Florida

money, financial, retirement

Question: Interest rates are low and so is the stock market. I’m almost 50 and wonder if it’s too late to start on a plan for my retirement.

Answer: We are all frustrated with our choices right now. However, now is the best time to start no matter how little you’ve done so far. The October 2003 issue of Money Magazine describes a woman who realized when she was 54 that she needed to take charge of her finances for the rest of her life. She paid off her credit cards and started making contributions to retirement plans. After being in charge for 19 years, she is now satisfied with her financial planning.

One source I like to turn to for basic financial information is Jane Bryant Quinn’s book, “Making the Most of Your Money.” She offers a most sensible, do-able philosophy for drawing up a plan for managing money. Regardless of whether you like to keep a close watch on your investments or would prefer to forget it all, try these ideas. They will help you acquire and hold onto your money.

• Keep your plan simple. Simple choices work just fine.
• Diversify. Select some choices for the short-term and others for the long-term. Invest for changes in market conditions, in interest rates, in booming economic times and in tight economic times. This means putting money in 1) easy-to-reach choices such as money market mutual funds and short-term CDs; 2) in bonds (bond funds) for steady compounding of interest; 3) in stocks (stock funds) for growth; and 4) in your home as an inflation hedge.
• Invest some money each payday.
• Reinvest your dividends.
• Select choices that fit your needs. Don’t invest money that you’ll need next year in the stock market. Don’t put all of your retirement money in CDs.

Mutual funds with professional managers are good choices for may investors. The manager’s full-time job is to analyze the market and buy and sell stocks they think will perform well. Your cost for these management services when pooled with other investors is relatively low.

There is an enormous amount of easy-to-understand information about mutual funds. Publications such as Forbes, Money, Kiplinger’s Personal Finance, Business Week, Consumer Reports and the Wall Street Journal provide information about mutual funds including performance, average annual return, commissions and minimum initial investment.

Use safe savings choices (short-term CDs, money market mutual funds) as cash reserves to buffer against job loss or unexpected illness, to provide college tuition needed within four years or for a down payment on a house. Stocks are good choices for retirement funds.

For more information contact your local county extension office.

Prepared by: Dr. Josephine Turner, CFP
Professor, Family, Youth and Consumer Economics
University of Florida

mutual funds, money, financial, savings, retirement

Even though there are many estate-planning tools, a will is considered to be the cornerstone of most estate plans. A will is a written legal document in which you name the persons who are to receive your property upon your death. States differ on the requirement of a valid will. For instance some states require three witnesses. The state in which you reside – your domicile – will determine the validity of your will for all property, EXCEPT land that you own in another state. To name a beneficiary for that land, you must follow the requirements of the state where the land is located. Therefore, it may be wise to have the will witnessed by three people to insure its validity in all fifty states.

For a will to be valid in the state of Florida: (1) the testator (person making the will) must be at least 18 years of age, (2) the testator must be of sound mind at the time the will is signed, (3) the will must be in writing, (4) the will must be dated, (5) the will must be signed by the testator in the presence of witnesses and witnesses must sign in the presence of each other, and (6) the will must be signed by at least two witnesses.

It is advisable to have an attorney competent in developing and executing estate plans to prepare your will. You can minimize attorney fees by preparing, organizing and managing the following information:

1. Goals and objectives for your family and business
2. Your family situation
3. The financial condition of your estate
4. Your own personal desires
5. Select your personal representative and a contingent personal representative (person who administers your estate at your death). Title is different in various states.
6. Keeping your will up to date. Reviewing on a regular basis and change as law change or family and financial situations change.

Who should make a will?

Many consider that a will is only for the rich or elderly. In fact if you die without a will state law determines how your property will be distributed. This may or may not be how you would wish your property to be distributed. Even though you may have what appear to be few assets now, that situation could change.

Where should you keep your will?

Your will should be kept in a safe, secure place, such as a fireproof file cabinet or safe in your home where you normally keep your important papers, is a good location. Do not forget to inform your personal representative where your will is. You also may give its location to other trusted relatives. If your will is destroyed, even accidental, the interference will be that you destroyed it intentionally, unless your executor can prove otherwise by clear and convincing evidence. Accordingly, your property will be distributed as if you had died without a will. Talk with your attorney about the best place to keep your will.

How and when should your will be changed?

From time to time you may wish to make changes in your will. Do not write on the will. The changes can best be made in a codicil or in a new will. A codicil is a separate document in which you state the changes you wish to make to the original will. The provisions in the original will continue to be valid, except as amended by the codicil. The requirements for the execution of a codicil are the same as the requirements for a will. Revisions may be required because of changes in your finances or your family situation. The will should be rewritten if you marry or divorce, or if children are born or are no longer minors. Changes may be needed if a beneficiary dies or a child or grandchild is adopted, or you inherit substantial assets. In addition, if federal and state laws change, your will may need to be rewritten.

Prepared by: Dr. Josephine Turner
Professor, Family and Consumer Economics

If you're planning for retirement, it's important to explore options for health and routine care.

Find out what community programs are available in your area such as homemaker or "chore" services, "meals on wheels" and adult day care centers. Find out the cost of these programs to determine how far your savings and/or insurance will go toward meeting the costs. And find out what your insurance policy will and will not cover.

Begin by asking what happens to your current health insurance policy when you retire. It may be terminated at your retirement, or you may be able to covert it to a private policy. A third alternative is that the insurance may continue with reduced benefits as a supplement to Medicare.

Almost all workers are fully covered by Social Security and eligible to participate in both part A and part B of Medicare.

Part A is hospital insurance, which is part of the pre-paid benefits. Part B helps pay for doctor bills. You purchase part B with premiums withheld from your Social Security check.

Six months before your 65^th birthday, you should visit your local Social Security office and sign up for benefits. Since Social Security is subsidized by the government, it is a good insurance buy for the money spent.

How much, if any, supplemental health insurance you need for acute (short term) and chronic (long term) care, will depend on your current financial situation.

If your income is low, you may qualify for Medicaid, which supplements Medicare, and you may not need additional health insurance coverage.

Four types of individual policies help fill the gaps not paid by Medicare. These include major medical, hospital insurance policies, Medicare supplemental policies (sometimes referred to as wrap-around policies), and long-term care insurance.

The law requires insurance agents selling Medicare supplement policies to provide the prospective buyer with a "Buyer's Guide." This guide is designed to help the consumer determine what gaps exist in his health insurance program and gives the seller an opportunity to show how his insurance fills the gaps left by Medicare.

All accident and hospitalization insurance policies sold in Florida must have a free inspection provision which allows the buyer 10 days to examine a policy. If for any reason the buyer decides that he does not want the policy, he can cancel it by returning it to the agent, and obtain a full premium refund.

When shopping for insurance, some tips to remember are:

• Know the company you are dealing with. The company and the agent should be licensed to sell insurance in Florida.
• Don't drop one policy and buy another one with similar benefits. There could be a delay in receiving benefits and pre-existing conditions could be excluded.
• Purchase policies that can be renewed.
• Be aware of offers that suggest the insurance is government-sponsored. Medicare supplement insurance is not sold by the state or federal government.
• Don't over insure. There are better things to do with your money than pay premiums that duplicate or overlap insurance coverage you already have.
• Pay premiums with a check or money order, so that you will have a record of the transaction.

Check with the Florida Department of Financial Services (1-800-342-2762) if you have questions about the policy you are considering, the agent, or the company he or she represents. The department cannot make a purchase decision for you but can tell you if the company is reputable and if the policy meets state standards.

Prepared by: Dr. Josephine Turner
Professor, Family, Youth and Consumer Economics
University of Florida

There are four ways to hold property in the state of Florida. They are: sole ownership, joint tenants in common, joint tenancy with rights of survivorship, and tenants in the entirety.

Sole ownership of property, sometimes called fee simple exists when the title of property is in one name only. It means that you have the right to sell, mortgage or give away the property during your lifetime and to name the recipient of the property after your death.

Tenants in Common is another way to hold property in Florida. When this term is used on ownership papers, the heirs will receive the portion of the property that belonged to the co-owner who died. Other co-owners will not receive a share unless they are designated heirs.

People who hold property in sole ownership (fee simple) or as tenants in common should write a will, indicating how they want the property to be distributed. Otherwise, in the absence of a will, Florida law will determine how the property is distributed to the heirs.

Joint tenants with the rights of survivorship is another way to hold property. Individuals who hold property this way have an interest which is undivided and fractional. That is they all own it together, not in equal shares. When one owner dies the total property held in this manner becomes the sole property of the other owners; so it is said to provide the rights of survivorship.

This property does not need to be listed in a will, since the owner is already designated. Most joint bank accounts are held this way. At the death of any of the co-owners, the property is divided equally among the surviving co-owners. This doesn’t mean that the transfer will occur immediately or that taxes won’t have to be paid.

Tenants in the Entirety is a form of ownership available only to married couples. This type of ownership requires both partners to sign to sell the property or to borrow money on the property. One partner cannot make any decision without the consent of the other. At the death of one partner the other partner owns the property.

Prepared by: Dr. Josephine Turner
Professor, Family, Youth and Consumer Economics
University of Florida

Retirement Planning Series: To Be Able To Retire, Retirement Planning is a Must!

The "Three Legged Stool" has long been used to demonstrate planning for retirement income. The legs are identified as Social Security, which provided approximately 40 percent of retirement income, a pension plan that provided approximately 14 percent of retirement income and personal savings and investments that provided the remaining 46 percent of retirement income.

With growing concerns about the solvency of Social Security, early retirement, and longer life span a fourth leg is being added to many plans. This leg is continued employment. And for many this fourth leg is not optional. In fact, it may be the only leg they can count on when or if they retire.

This unsettling future is not due to a future crash of the stock market, the collapse of Social Security or a plague of pension fund thieves. The real reason many people will never be able to retire is that they never plan to retire. This is especially true of wage earners with low incomes.
Consider for a moment the decision someone faces when choosing between low-wage-reported income and a low-wage-unreported income (underground economy). The low-wage employment is a taxable income, whereas the underground economy job is never reported. The unreported income job may even pay more than the minimum wage. Reported income may negatively impact other income sources or support. Given that someone making this choice needs more income, not less, the choice made is often the unreported income job.

By selecting the unreported income job, the short-term income benefits rob the person of retirement opportunities as well as other benefits. The unreported income job obviously offers no pension. That's one leg knocked off the stool. At 14 percent of typical retirement income, a pension is the shortest leg of the three. Pension plans are a cost efficient means of attracting and retaining employees; so this represents a real retirement option not taken or an opportunity cost. Worker's contributions to pension funds are often matched by employers and can be tax deferred for the employee and tax deductible for the employer. Unreported income jobs don't offer this.

The unreported income job knocks a second leg off right away. You can only expect future Social Security benefits if you have paid into the system. Not only is the unreported income job not reported to the Internal Revenue Service, Social Security never credits the worker for the employment either. This decision is even more costly when you consider the other benefits that are lost. The unreported income job will not provide income for dependents of the worker in case of the employee's death or disability. Lastly, the unreported cash income won't provide the insurance coverage of Medicare.

That leaves only one traditional leg of this stool, personal savings and investments. Personal savings and investments are still possible, even if a worker only has unreported cash income. Of course, someday the IRS might want to know how someone with no income has money in savings or investments. Given that concern and the fact that it's just pain hard to save on a low income, this is a very unstable leg. Savings and investing may still be hard if the worker chooses instead to take a job with reported income, but it won't get the IRS interested. If just $50 can be saved and invested every month for 30 years with an average annual return of 8 percent, approximately $75,000 would be available for retirement.

The unreported income job also takes away the possibility of the numerous tax credits offered working families with a lower income. Consider also the problems that unreported income employment creates for demonstrating employment histories and credit applications. Buying a home is a sound part of many retirement plans. Mortgages are usually based on income and credit history. The unreported income job doesn't support either of these.

The unreported income job ultimately means that retirement may never happen. Pensions, Social Security, personal savings and investments, however, are all possible at lower wage employment.

Retirement planning is not only for the wealthy. It's for all workers who want to retire.

Prepared by: Dr. Josephine Turner
Professor, Family, Youth and Consumer Economics
University of Florida

The Durable Power of Attorney

The durable power of attorney is a more comprehensive document since it can give an individual or individuals decision-making power when your are disabled or unavailable to handle your affairs. It can cover healthcare decisions and personal matters, but it usually covers financial decisions if you become incapacitated. You might feel more comfortable having someone else manage your financial decisions because of his/her expertise. On the other hand, you might want to grant durable power of attorney to the same person you name as your healthcare surrogate. Your doctor and attorney can assist you in specifying which medical procedures and treatments you want and which you do not want. It is wise to do this now when you are young in case of an accident or other unforeseeable tragic event.

Patient Self-Determination Act

This legislation has been passed to inform an individual of his/her rights to exercise more control over his/her life. Under this act, healthcare facilities must inform all adult patients of their rights to create an advance directive, such as a living will, designation of a healthcare surrogate or durable power of attorney; explain the facility's policies for carrying out patient decisions; and provide education for staff and the community about advance directives, including when and how they may be used. This law, although very important for the terminally ill, applies to any person using the healthcare system. The law states that hospitals, hospices, nursing homes, and all other healthcare facilities that receive Medicare funding must provide patients with written information regarding their rights to accept or refuse any medical treatment.

Representatives You Choose

Substitute Payee. A substitute payee is typically used only for the purpose of providing you with help in cashing and writing checks. Your bank will provide you with the appropriate forms for designating a substitute payee.

Representative Payee. A representative payee is used in a government benefit program such as Social Security. The person asking to be named as representative payee must file an application and must provide the Social Security Administration with evidence of the relationship to the person to whom the checks are made out. The representative payee must use the payments for taking care of the Social Security recipient and must submit a written report on how the funds are actually spent.

Court Appointed Representatives

In some cases, a court will appoint a representative for an individual who can no longer handle his/her affairs and who have not made arrangements for executing his/her wishes. For this to happen, the court must conduct a trial by jury to determine the individual's ability to manage personal or financial affairs. While the specific terms of these positions vary from state to state, they are found nationwide. If a person is judged to be incapable of managing his or her affairs, the court may appoint another person to one or both of the following positions:

Conservator. A conservator is the person who has control in managing the business and financial affairs of an individual for reasons of mental illness or another incapacity. This person can provide assistance either temporarily or permanently depending on the duration of the disability.

Guardianship. Guardianship can be granted for any person who is incapable of managing his or her personal affairs. A district court appoints an individual to act on behalf of the disabled person.

Dr. Jo Turner, Professor, Family and Consumer Economics

Summary

The average American can expect to live 17 or more years in retirement. Yet only 39% of Americans have tried to calculate the amount of money they need to save to fund these years. Planning for retirement is complex and many experts suggest that retirement planning should include topics such as investing and managing assets, tax planning, estate planning, and planning for long-term care.

Sharon A. DeVaney and Janet C. Bechman, Purdue University, developed a distance education web-based course "Planning for a Secure Retirement" to help fill this need. This course can be found at www.ces.purdue.edu/retirement.

Justification for this program included a report from the think tank on retirement planning for the 21st century. This report addressed the need for individuals and families to assume financial responsibility for their retirement. In order to do this individuals and families need education as well as discipline to set goals, assess their financial position, evaluate that position and make decisions about their retirement plan. Yet most people have received no formal education on these topics.

This web-based program includes 10 modules. They are:

1. Are you ready to retire?
2. How much will your expenses be in retirement?
3. When can you collect Social Security?
4. Would you like a quick estimate of income needed for retirement?
5. Are you eligible for Medicare and other health benefits?
6. Do you have a retirement plan that your employer funds?
7. Are you self-employed and responsible for your own retirement?
8. Do you have an Individual Retirement Account (IRA)?
9. What is a lump sum distribution? What should you do with it? and
10. Do you have other concerns?

The authors link to variety of sites for expert information, such as IRS and Social Security. They have included several work sheets to make the course interactive. In addition a certificate is offered for persons completing 5 or more of the modules.

Implications for Extension Programming

The authors are to be commended for their creativity in using this technology to deliver Extension programming. The audience most likely to benefit from this type of delivery system is professionals and/or baby boomers. In the first year of operation over 7,000 individuals registered for the program.

I see this course as a good in-service for Florida Extension Educators as well as a good reference site for retirement information.

Source: DeVaney, Sharon A. and Bechman, Janet C. (2001). "Planning for a Secure Retirement with Distance Learning" in The Journal of the Association for Financial Counseling and Planning Education.

Written by: Dr. Jo Turner , CFP, Professor, Family and Consumer Economics

Family records are an important part of any family money management system. They are needed for proof of property ownership, proof for income, proof of expenditures for tax purpose and as a tool to measure the family’s financial progress. If records are lost or misplaced, extra cost and time may be involved in replacing them.

Most families have three types of records: personal, financial and property. Some should be kept permanently and others for shorter periods.

Permanent personal records pertain to changes in your family situation such as: adoption, divorce, education, employment, military service, health and medical care, marriage, birth or death, and citizenship. Permanent records also include Social Security number and an up-to-date copy of your will.

Insurance records may be personal and financial and should be kept as long as the policies are in effect. They should be reviewed periodically to insure that they provide the protection needed by the family.

Permanent financial records include those pertaining to valuable purchases, important contracts and contents of your safety deposit box.

Safeguard credit card numbers, installment agreements, bank records, investment, budget and expenditure records, but only as long as necessary.

For income tax purposes, the Internal Revenue Service recommends keeping records at least three full years from the time tax is filed, for example: records that support your 2006 income taxes should be kept until April 15, 2010. Some financial advisors recommend keeping the records for as many as ten years.

Property records, such as deeds, improvements on real property, purchase receipts for personal property and an up-to-date inventory of personal and household goods, should be kept current and permanently.

Titles, receipts and guarantees for durable goods, such as automobiles and equipment, should be kept as long as you own the property.

Keep sales records for non-durable goods, such as clothing and household items, until you know the item purchased performs satisfactorily. Keep use and care information and warranties for as long as you own the item.

A spending plan is allocating your income to cover your expenses. This is a simple concept, but a challenging task for most of us. This article should help you make a spending plan (budget) for your family's money.

Budgeting can help you achieve your goals by allowing you to consider spending alternatives within a single framework. Specifically, budgeting can help you save for the things you want. It will help you live within your income and know where your money is going. Since budgeting involves a system of record keeping, it can help you keep an annual record of all expenditures, some of which may provide tax deductions.

It is easier to plan and keep records if you group expenses. One way to begin is to break down your expenditures based on your records into several categories such as food, clothing, shelter, utilities, personal care, entertainment, transportation, and savings. You may need to add other categories such as vacations or contributions. You may want to condense some categories such as putting all housing related expenses in one category.

Another way to begin is to setup categories that someone else has predetermined. You can find these in budget books, publications, computer programs or articles like this one. Of course, some categories may not pertain to you or you may need to add other categories.

The suggested classifications also include a savings and investment category. If you don't budget for savings and deposit the amounts budgeted, you will probably find it difficult to save. It takes discipline to save for things you want such as a new rug or your children's college education. Failure to save leads to doing without or borrowing money and making interest payments that cut into what you can spend on other things.

Regardless of what system you use to classify your expenses, you should observe a few basic guidelines. Keep similar expenses in the same category. Set up enough different categories so that you have a meaningful record for your expenses. Do not group too many different expenses into a catchall category. Keep the number of categories small enough to make bookkeeping simple. Listed below are some budget categories and items that may be included in them. Some of these will fit your family, others may not.

I. Food (food eaten at home, food away from home, snacks, coffee breaks, school lunches, home food production)

II. Housing (house payments or rent)

II. Utilities (gas, electricity, garbage pickup, water, television cable, telephone, cell phone, internet connection)

III. Housing operation or Household Expenditures (laundry supplies, storage rental, paper goods, stationary, postage, cleaning supplies, pest control, safe deposit box rent, home insurance, property taxes, yard care, hired help)

IV. Household Repairs (roof, painting, plumbing)

V. Health (medical and hospital insurance premiums, doctor and dentist bills, medicine, eyeglasses, hearing aids, first aid supplies, treatments or therapy, transportation to receive medical care)

VI. Equipment and Furnishings (furniture, rugs, curtains, pictures, vases, mirror, appliances, kitchen utensils, bedding, linens, china, silver, glassware, equipment repair)

VII. Transportation (car purchase, car expenses - gas, oil, repairs, tires, licenses, insurance, maintenance, taxes - parking fees, bus, plane or train tickets, taxi fares or rentals)

VIII. Clothing (ready to wear, footwear, cleaning and repair, sewing supplies, accessories, alterations)

IX. Personal Care (haircuts, beauty shop, allowances, cosmetics, toiletries, shaving supplies and other personal care items)

X. Gifts (to include wrapping paper, flowers, cards)

XI. Contributions (charitable donations, i.e. church, civic and educational organizations)

XII. Education (school supplies, books and supplies, magazines, newspapers, lessons)

XIII. Business related expenses (union dues, professional dues, business licenses and insurance, tools required for the job)

XIV. Child Care (babysitting, daycare)

XV. Recreation (social club dues, sports, admission, equipment, movies, records, tapes, tobacco, liquor, hobby supplies)

XVI. Pet (food, licenses, supplies, veterinarian fees)

XVII. Banking & Credit Cost (fees for service & interest charged on any credit purchase)

XVIII. Insurance (life, disability, liability - insurance not included in other categories)

XIX. Savings and Investments (might include savings for emergency fund as well as for goals or could have a separate category)

XX. Miscellaneous (legal fees, income taxes) For more information on record keeping, sign up for the "Planning Your Financial Future" Workshop conducted by your local Cooperative Extension Office.

For More Information:

Jo Turner, Ph.D., CFP, Professor, Family and Consumer Economics joturner@ufl.edu (352)392-1945 x228

Mary N. Harrison, M.S., Professor, Consumer Education
mnh@ufl.edu
(352)392-1868 x243

Elaine A. Courtney, M.S., Extension Agent IV, Family and Consumer Sciences
ecourtne@ufl.edu
(850)689-5727

money, bills, spending,budgets, PYFF

Most individuals and families are seeking financial security. But financial security is a nebulous term. We all put a different price tag on it. For some people to be financially secure it would require a large nest egg stashed away some place, for others it might require a debt free existence, and yet for others money to send their children to college. Researchers from the University of Missouri found that perceived adequacy of family income contributed more to satisfaction with life than did the family’s actual income. Whatever your definition of financial security the following six steps can help you reach financial security.

Step 1: Fix in your mind exactly what it will take to make you financially secure. Clearly identify the amount of savings, property, income or employment that will make you financially secure. One study shows that 95 percent of the population does not have clearly defined goals. If you will write out what is needed for you to be financially secure, you are on the way toward achieving your goal.

There are five areas in which clearly defined goals will help. They are (1) self improvement, (2) spiritual, (3) social and family goals, (4) physical or health related goals, and (5) financial goals.

Step 2: Determine exactly what you are willing to give up in return for your desired goal of financial security. Are you willing to give up free time, delayed purchases, recreation, and vacations?

Step 3: Set a specific date for reaching your financial goal. Picture in your mind that date and see yourself having achieved financial security as you defined it. Talk about your goal to a few select people who will encourage you as you work to achieve it.

Step 4: Develop a plan for reaching your goal. Break your plan into small pieces. For instance your goal may be a $100,000 nest egg. You won’t be able to accumulate that this year, but you may be able to accumulate $500 to $1000 toward the goal. Invest this then work on the next piece of the goal. Your goal might be a college degree or an advanced degree. The first steps might be reviewing colleges or universities and applying for admission at one or more institutions of your choice. Once you have made a plan, act on it immediately. Begin saving money for your nest egg or begin collecting information on colleges of your choice. There will never be a better time to start than NOW.

Step 5: Write out your goal. Write in a clear concise statement what you intend to accomplish and by what date you intend to do it. Write out your plan in small steps. You will save X amount by December 31 or by December 31 you will have been admitted to the college or university of your choice.

Step 6: Read the statement of your goal at least once each day and check your progress. What have you done today to move you toward accomplishing your goal? As you read it, see yourself having achieved it. As you repeat it to yourself you will soon learn to believe, and believing that you can do it, is half of the battle. Remember a winning attitude is an important part of obtaining any goal.

For More Information

Jo Turner, Ph.D., CFP, Professor, Family and Consumer Economics
joturner@ufl.edu
(352)392-1945 x228

Mary N. Harrison, M.S., Professor, Consumer Education
mnh@ufl.edu
(352)392-1868 x243

Elaine A. Courtney, M.S., Extension Agent IV, Family and Consumer Sciences
ecourtne@ufl.edu
(850)689-5727

goal setting, PYFF, money, financial, savings