When is the right time to make a Will?

Seven out of 10 American adults do not have a valid will!!

Seriously?? Wow.

After reading the great posts from Canadian Capitalist, Quest for Four Pillars, and The Financial Blogger - I started thinking about it.

Am I too young for a Will?

• I don't have kids
• The only property I own is my automobile and apartment furnishings
• My most complex instruments held are my 401(K) and Roth IRA - composed of mutual funds

How do I know when I need to get in gear?

I started researching the effects of NOT having a will and the distribution of assets when you die intestate: the State laws determine who, what, and where your assets will be paid to in levels of familial relations (spouse; children; parents; brothers & sisters).

Sounds doable, right? WRONG, your liabilities are also settled at the time of your death which could mean "fire sales" where personal belongings and family momentos are SOLD for less than market price to get cash quickly. When I thought about this, it seemed so unfair! and cruel! Here I am, dead in my coffin, with only my remainings for my family to cherish (God willing they would miss me upon death), and my family would have no say in where assets of sentimental value or high market value would end up - meaning more emotional turmoil in the end.

Since the state assigns an intestate estate (your belongings) a public individual to administer the proper State Laws in distribution - they don't know what is sentimental and will attempt to quickly wrap up the process.

REMEMBER, the State wants to distribute the assets and liabilities as quickly as possible, in order to receive the tax money.

How can you stop this process?

Have a will made!!! Whether you "do-it-yourself" or hire a professional should be made with a full picture of the risks:

• A will must be valid as pertaining to State Laws in order to work
• Errors or omissions will work against the survivors since these items are usually disputed
• Complexity = confusion

The assistance of an attorney makes sure you've added ALL components required, discovered all assets and liabilities to account for, and gives you a hand to hold in meeting the lions, tigers, and bears (oh my!) you will meet in the forest.

Some components of a valid will include:

1. an introduction of clear intent
2. directions on how to pay debts and expenses (disposal of your remains, outstanding bills, etc)
3. how estate taxes and expenses will be paid
4. who will get what
5. name and outline executor and trustees
6. provisions for disposal of each asset (if they are a minor, etc)
7. outline the powers of the administrator/executor
8. etc....pertaining to STATE law!

Eventhough it is a lot to take into consideration, a will can mean peace of mind for those you leave behind in this world for the next. A simple will can cost as little as $300 and saves your family much more than leaving your possessions intestate.

Conclusion? I got my will made and some other fun documents (physician directive, remains disposal letter, etc). Thankfully, it does not need to be revised unless I make a large asset acquisition or I change my mind on who gets what.

So think about it...as eerie and disturbing as it is.... it might just help you sleep better at night (specially if you are type A like me)

CNN Money says $400 is the median net worth for my age...

Thanks to a recent post on one of the many blogs I track daily, I followed a link to view the median net worth for individuals at 23 years of age. It was $400. Is this a good thing or a bad thing?

When I think about it, there are many variables that calculate Net Worth (much more than a number) - but what are these variables and should they really excuse us from being more self-empowered through savings?

How many items do we really need?
What services have we just become "accustomed" to but didn't need when we were younger to be happy?

For me, this is a question I asked myself this week in an attempt to reign in my spending even more, and this is the short list I came to:

1. I don't need cable TV, especially for $70 a month: I can watch TV shows online, news online, and other things through iTunes. For movies, there is always netflix.
2. I don't need to have my dog washed and trimmed, I have time and it's a way to bond more with my pup.
3. I don't need to take my car for a wash at a nice place: I bought turtle wax and spent a relaxing morning in the sunshine washing, wiping, and waxing.
4. Anything allowing me to be lazy (not yet fully determined). There is a point where we spend money without connecting with the purchase anymore. This is BAD and leaves us wondering "where did my money go?".

I encourage you to think about it - what services have you recently enjoyed in increasing amounts since getting a job?

Book Review "Strapped: Why America's 20- and 30-Somethings Can't Get Ahead" by Tamara Draut

This book was an interesting read - and I'm sure I've talked about it before, but I can't stress understanding the route of the problem when attempting to understand your financial future, shortcommings, and goals for the ensuing years.

Particularly, in the early years after college, a high level of student loan debt, possible mortgage payments, and the quick use of credit cards for "new home furnishings" can add up. For many students, exiting college and graduating to a full time job are thought to mean you have come into the beginning of an "established" life in action and status.

Unfortunately, our income is at a low level but our want for Ramen-less days are at an all time high! So what does it mean? The beginning of budgeting and learning the many ignored lessons our parents attempted to enfuse in our brains.

Draut identifies the changes in corporate structure and self-support have separated our current state of affairs far from those of our predecesors. For example, the use of credit cards are addressed. Credit card companies incorporate their business in the least ursury regulated states with higher limits on allowed interest charged. Therefore, the companies are allowed to increase interest charged on each dollar we spend through plastic.

In paying off this compounding debt, we are taking away from our future income by more than just the amount spent. With introducing teaser rates of 5% interest defaulting up to the high 30%s for young graduates with little credit history - our $30 dollar random purchases or a large "one ticket item" can accumulate interest in amounts larger than we can accomodate for per monthly payments. This impending "credit crisis" has overleveraged many students in what should be the beginning of a new world, a new life, and a new freedom toward self-development and solidified professional status.

Draut expands this view to other economic and societal views the young graduates carry into a world of "old thinking" as boomers in the top echelons have run corporate ventures in their own way, through a time of manufactured based activities to todays knowledge based industry. By encountering this lifestyle and technologically advanced level in maturity - parental advice is valued but taken with a grain of salt. The new problem is over-leveraged beginnings: dependent on loans, credit, and debt to facilitate the "earned" lifestyle matching our upbringing.

This comfortable level of living is much easier to stomach for some than to truly begin from scratch - identifying true value added expenses and acknowledging self-derived values and the effects our decisions have on our true priorities and needs.

Read the book if you are graduating! Great look at the difference and how it will be harder for our generation to maintain a debt free lifestyle in this complex consumer driven world.... and don't take this the wrong way - I love capitalism and I love Brand names, but I love myself more.

If you were true to yourself, what payments made today really added value to your life and personal wellbeing?
- rushing to starbucks for that $6 coffee?
- paying a higher rent for a large apartment you don't have time to enjoy with a busy schedule of social activities and work?
- paying dues for memberships in clubs or activities you rarely use?

Saving $10 or more on a few purchases a month could end in accumulating compound interest on $50 a month or more. For example, at a 10% monthly interest rate (for example purposes only):
Month...

1. saved: 50 interest: 5 Total: 55
2. saved: 50 interest: 10.5 Total: 115.5
3. saved: 50 interest: 16.55 Total: 182.05
4. saved: 50 interest: 23.20 Total: 255.25

See what I mean? This could be a memorable road trip or another purchase you truly desire toward health, prosperity, or vitality with value added at every turn. :o)

Nutty about finance? Why yes, I believe I am.......