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Two weeks ago, I wrote an article about Financial Documents You Should Save. This list is a little different. Some legal documents are more important than others. Some you don’t need, and some you need. Some legal documents everyone should possess at all times.

Will
A will is a legal, signed document that states your wishes regarding disbursement of your property after your death. Making a will when you are healthy and in sound mind, can save your family a lot of time, energy and money when you are dead. If you die intestate, which means without a will, a large chunk of the money from your estate will likely go towards higher legal fees as well as additional taxes. If you’re wondering where is the safest place to keep your will, you could keep a copy of the document in your bank locker. Make sure you appoint an executor to the will and keep your will in a place where this individual or entity will find it easily. The executor of your will could be either an attorney or a family member or even a trust company. In the event of your death, the court will appoint an executor if you have not named one.

Letter of Instruction
It would also be a good idea to leave a letter of instruction, which is a letter informing your family about your last wishes including the funeral or burial arrangements you’d like to have and who you’d like them to notify upon your death. This letter cannot and will not be used as a substitute for a will. It is an informal letter. You could also include details about where your will and other important documents are located, the money that you owe to various people or the money that is owed to you by various people.

Trusts
Contrary to popular notion, trusts can be used by everybody and are not only for the super rich. In fact you should talk to your financial planner or lawyer about creating a trust. Whatever assets you place in your trust will automatically be given to the beneficiaries; there are no probate costs involved. A revocable living trust states who will have control over your assets while you are living as well as when you are dead.

Durable Power of Attorney for Health Care
This legal document ensures that in case you were to become incapacitated, your affairs will be looked after as per your wishes. If you have not named one, the court will appoint someone they deem most appropriate. It is also called a living trust and the person nominated will be responsible for taking care of your health care as well as your financial arrangements.

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Build and Succeed mentions a podcast where 26 year old Timothy Sykes says he turned $12,000 into $3,000,000 using Hedge Funds. I recently purchased a Zune on Woot.com for $99.00. As soon as it arrives I’ll be listening to these podcasts. Yes, the title is cheesy, but I like to straight to the point sometimes…

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Our friends at Build and Succeed explain how to turn 5000 per month into 1 Million dollars.

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Some people have a hard time controlling their financial fears. There are various simple situations that often get out of hand because of unfounded fear. Let’s take a brief look at them and see how we can handle them.

Fear of Not Knowing What You Want
Problem: You have a good job; you make a lot of money. Yet, you’re not satisfied with your life. You feel like something is missing.
Solution: Step back. Take a look at your life and what you’ve done so far and what you would like to do. Make a list of things that you’ve always wanted to do. Pick the most significant ones and work out steps to accomplish them. Use the money you make whenever needed.

Fear of Society and keeping up with the Jones
Problem: You make a good sum of money each month but your judgment and belief goes against spending too much of it. Yet, assuming that society won’t accept you the way you are, you proceed to spend large amounts on things you don’t even want or need.
Solution: Take a look at the bigger picture. Many years from now, how you lived is not going to count but how much you were able to save or invest will be vital to your well being. Make small but powerful decisions on how your lifestyle should change.

Fear That You May Go Broke
Problem: You’re scared stiff of falling ill or getting into an accident that will cause you to stop working and lose all your savings. You can’t have enough money right now.
Solution: Letting a probable situation affect your daily functioning is unhealthy. Every day living poses a little risk in some way, but it should not interfere in your life. Make sure you’re well-insured against potential situations and invest in a savings plan so that you can live a comfortable retired life.

Fear of Breaking Bad News about Money to Your Partner
Problem: You’ve been in debt for too long and it seems to be getting worse. You can’t let your partner know for fear of what they might say to you or what actions they might take.
Solution: Remember, your partner is just that, someone to stand with you and by you through every circumstance. It may come as a shock to them when you reveal the truth, but it is far better for them to know now, than later, when your financial standings get you into more trouble – like being denied a loan, mortgage, etc. Sit down together and make a long-term plan. Decide how to save and spend from now on, make detailed strategies and stick to them. It will help both of you in the long run.

Fear of Wealth
Problem: You’re entitled to a raise but you don’t know how to ask for it. Secretly, you think you don’t deserve it and that is what the bigger problem here is, probably.
Solution: Taking care of yourself is something you should be determined to do. Never be afraid to ask for something you know that you have earned. Make sure you are responsible for yourself and your future by accepting raises or inheritances passed down to you.

Fear of Taking Control
Problem: You know you have to start investing your money and save for the future. However, it all seems so intimidating that you’d rather not think about it now, although you know you’re wrong.
Solution: Start small. Read a few good books about investing and talk to a recommended financial consultant. Make a small investment and learn from it. Slowly explore and understand until you’re able to take bigger steps. Make sure you’ve got a savings plan too.
Overcoming these fears may not be the easiest task, but taking small, deliberate steps can get you through quicker than you realize!

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Many people save no financial records or papers whatsoever. If you are one of those people, allow me to tell you that this is a very bad idea. There are many cases in which you will be extremely relieved that you saved certain papers, or had the correct things on hand. However, with lots of financial transactions going on, it can be hard to know which ones you need to save, and which ones would be fine to throw away. Here are some of the records that you need to save.

Bank Records. You should keep bank records for at least a year, but if storage is not an issue then it couldn’t hurt to keep them forever. You can sort them according to their importance. If your checks represent large purchases, business expenses, or anything pertaining to taxes, then they are more important in the long term. You can shred the rest.

Savings Records. If you contribute your money towards a retirement or savings plan account, you should save the statements you receive. If you get monthly or quarterly statements, save those temporarily. Once you get the annual summary, make sure it matches up with the previous statements, then get rid of everything but that. Be sure to shred it thoroughly to make sure nobody else can retrieve your personal information. You should keep the annual statements forever, or at least until you are finished with the account.

Tax Records. It may seem paranoid, but it is probably a good idea to save everything related to your taxes. This includes returns, records, checks, and receipts. The IRS performs many audits each year, and these can be a nightmare if you haven’t got the proper records. But, if you’ve got everything sorted out and you’re as honest as possible, you can get through it with minimal stress. The IRS has a certain period of time during which they can put you under suspicion for anything they notice in your filing. This period is 3 to 6 years depending on what exactly the problem is. So, you should keep all tax-related documents for a minimum of 7 years.

Bills. You should keep your bills for about a year. Once a year, go through the ones that you have saved up. If the transaction is finished and everything went smoothly, feel free to shred it. However, if the bill is for a big purchase, you should hold on to the bill permanently. It will come in handy if you ever have to deal with warranties or insurance, in case the item gets damaged, stolen, or lost.

Filing 101 - What to do next A good way to make sure they are in order is to keep a filing system. Start by identifying convenient areas for 1. Regularly used or “current” files. 2. Hardly used or “dead” files 3. A safe deposit box that would store any document that are expensive or hard to replace

If you’ve got documents and you aren’t sure whether to keep them or not, it’s probably a good idea to keep them. You never know when it will come in handy to have proof of your financial activity.

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Financial Dominance has as new owner. My name is Marcel Pamphile. Our objective remains the same. We are dedicated to helping others take control of their financial situation.

We will provide helpful discussion and advice on any topic that threatens to suck the life blood out of your finances.

So what else is new ? Goodbye to the M-Network. If you own a blog dedicated to personal finances please do contact us. We might be able to add you to the blogroll.

Guest blogging is welcome.

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