Money is always at the top (or near it) of lists describing issues that most commonly bring stress into our lives. It’s cliche to say that “money is the root of all evil,” but its obvious that dealing with financial issues is a common concern for families of all shapes, sizes, and even income levels. There is so much different advice out there about what you should be doing or could be doing as it relates to money matters that it is hard to distinguish between the useful and the fluff.
One such story posted in Yahoo Finance this week offers a somewhat helpful distillation of seven basic concepts that can be used for those of all income levels and at different life stages. They are referred to as “paradigms” of financial health. The entire list is worth browsing, but a few of the items on the list include:
***If you are a couple with two incomes, you can pay for “essentials” with only one spouse’s income. Those essentials are things like the mortgage, insurance, child care , and similar items that cannot be cut easily. Essentially this is one way to check whether you may be living above your means. It is an easy shortcut to figure out if you can survive in the event of a lost job or other emergency.
***You only have one car payment or a “car replacement account.” This is another shortcut to emphasize the concept of not having too many cash flow demands at any given time. One of the biggest concerns related to financial health is ensuring that you can survive in an uncertain future. One challenge is having too many bills that must be paid each month. Obviously, there is no way around obligations, mortgages, student loans, insurance, etc. However, in those areas where it is possible to cut back (i.e car payments), minimizing obligations is helpful.
***You have conducted estate planning. The article says is succinctly, “Estate planning isn’t just for wealthy people. You’re steps ahead of the game if you have a will and durable power of attorney for finances and health care in place after turning 18, the age at which you’re considered an adult by law.” As we repeatedly remind local residents, taking care of these matters does not hinge on your age, income level, or other life factors. It’s essential.
For help with estate planning or similar issues, please get in touch with our lawyers for guidance. We have offices in New York City and throughout the state. We are proud to work with families in all situations on estate planning and elder care issues.