Set Your House in Order

This spring, make some landmark decisions that will forever affect your personal finances.

By Howard Dayton, Christian Post Guest Columnist Friday, March 23, 2007

Before the days of paved roads and house-cleaning services, people in the north had a tough time keeping houses clean in the winter, when family members trudged through snow mixed with dirt and then tracked it inside.

Spring was a long-awaited event because it melted the snow and allowed people to take their rugs and furniture outside to remove the dirt that had accumulated in the coldest months of the year.

This "spring cleaning," as we call it today, represented a new beginning, and it's still a good idea that we can apply to other aspects of our lives, including finances.

That's why I encourage you to make spring 2007 a time of landmark decisions that will improve your life and the lives of those you love.

Who gets what you have?

One of the biggest financial issues facing your family is what would happen to your assets in the event of your death. There is a legal device for solving this problem—a will—but it's being overlooked by most Americans. A survey by FindLaw.com looked at 1,000 adults and found that 59 percent did not have a will. In the 18-to-34 age group, only 11 percent had a will!

Most people in this group probably view estate planning as something people do in a later stage of life. But death is not bound by our personal timetables or by statistics on average life expectancy.

Among those who suffer most when there is no will are minor children. If both you and your spouse should die without naming a guardian, one will be appointed by the courts, and it might not be the individual or couple you would have chosen.

Yet, a survey by LegalZoom.com showed that 74 percent of parents with minor children did not have a will, and one-third said they had never even thought about drafting one.

Even wealthy people are guilty of overlooking the importance of wills. Among individuals with $10 million or more in investable assets, 37 percent did not have a will, according to a survey by PNC Advisors.

As I noted in my new book, Your Money Map, all of us have only three choices for who will receive our estates:

• our heirs,
• nonprofit organizations,
• the government.

Many people unintentionally make the government a beneficiary by paying estate taxes they could have avoided or reduced through wise estate planning, including a will.

When this happens, your heirs lose valuable assets that could help them maintain financial stability in the event of your death.

In addition, you lose assets you could put into God's Kingdom work through a nonprofit Christian organization.

Because gifts to nonprofits are 100 percent deductible from your estate, I encourage you to honor God in your planning by leaving something to His work.

And, by all means, don't neglect your heirs by failing to plan for the future.

Find it in 30 seconds

Another key decision I encourage you to make this spring is to become organized. "What does that have to do with finances?" you ask. According to the National Association of Professional Organizers, organized people earn more and are more likely to be promoted on the job.

They accomplish more because they waste less time, and their children perform better in school than others with the same IQ.

Patty Chirico, a professional organizer and frequent contributor to Money Matters, says being organized is the ability to find anything you need in 30 seconds.

"Being organized does not imply perfection," she adds, "nor does it mean that everything will always be clean. It means that when you are trying to find something, you know exactly where to look."

That being said, do you know where to look for your money? It may sound like an odd question, but unless your organizing includes a spending plan, it's possible you don't have a clear idea of where all your money is going.

For example, have you ever dropped by the ATM, taken out $50 or so, and then wondered a few days later where all that money went?

There have probably been times when you wondered if you'd lost or misplaced some of your money.

But then you started thinking about everything you bought in the past few days—a little here, a little there, and pretty soon your entire withdrawal was gone.

The same thing happens to many Americans on an even larger scale every day.

One credit card bill for a lot of forgotten purchases can leave you in the red and longing for payday.

Without a spending plan, you'll have even more forgotten purchases between now and the time your next paycheck arrives, pushing you deeper into debt.

Finally, consider that in the process of organizing, you might find items handed down for generations that are lying around in your basement or attic. Sometimes, appraisers value these items at thousands of dollars.

And, such a windfall could be a tremendous help to you in making progress on the Crown Money Map™.

Replace your income

One other item that's a key part of setting your house in order is to determine the amount of life insurance you need. Like wills, this is a topic that people find unpleasant because it involves death.

However, if you have family members who depend on your income, life insurance can replace your income if you die. The Insurance Information Institute lists several other uses of life
insurance:
• paying your final expenses, including funeral and burial costs and probate costs;
• creating an inheritance for your heirs;
• making significant charitable contributions;
• paying federal and state death taxes; and
• creating a source of savings.

Cleaning time

This article has addressed just a few of the highlights of setting your house in order.

Chances are that when you get into the process of "spring cleaning," you'll find other issues that need to be addressed.

Regarding your spending plan, I want you to know that Crown has three types of resources to fit your preferences and personality.

If you're a person who likes things on paper, try our Family Financial Workbook and Cash Organizer. If you want a computer-based spending plan, we offer the Crown Money Map™ Financial Software.

And, if you'd like to have a Web- and Mobile-based option, Crown™ Mvelopes® Personal will give you secure access and convenient bill-paying capability. Use one of these options now to develop your family's spending plan.

Organize your home. And, take time now to deal with estate planning issues, including your will and life insurance.

You'll have greater peace of mind and be better prepared, better organized, more in control of your money, and in a better position for success.

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Howard Dayton is the cofounder of the Crown Financial Ministries.