It’s never too early to invest in your family’s future, and even a small investment can make a big impact when allowed to compound over time.
Reaching Your Goals
Sometimes just getting your short- and long-term financial goals on paper can assist you in putting together a plan to reach them and help you stay focused. If you would like help mapping-out your goals and finding tools to help you reach them, talk with us!
Balancing Liquid Cash With Investments
Liquid cash – or cash that you can access easily without penalty – is a must. This is simply the money that sits in a savings or checking account. It’s important to keep a percentage of your money liquid so you can access it to pay bills, pay living expenses, and even have some tucked away for emergencies.
However, it’s also important to make investments with a portion of your net income. This is money placed in non-liquid products that typically do incur a penalty if you withdraw it outside of pre-determined timeframes. Often times it’s recommended to invest 10% of your net income into these products.
How to Invest
There are many different ways to invest these days: by phone, online or through a broker, who can set up an investment account that suits your needs. The important thing is that now, more than ever, it’s easy for you to learn about, understand and then choose an investment plan that’s right for your family.
Sharing Money & Accounts
You’ve taken the step to get married or enter in to a long-term relationship with your partner. So now the question is – whether or not to combine finances?
When you and your spouse or partner decide to share finances (which can include sharing accounts, debt and savings/investments) a whole new world of opportunities and challenges can arise. It’s important to sit down and discuss who will manage the finances – or if it will be a shared responsibility. It’s equally important to ensure you come to an agreement as to how money is spent, who will pay for what if you have separate accounts, how debt will be tackled, who will be named as beneficiaries on investments, and ultimately to create a budget to ensure you stay on track (see the “Budgeting” topic below). Midland Credit Union can help you with this discussion and setup accounts to make tracking your finances rather simple and pain-free. Just ask!
Creating Joint Accounts
While sharing finances doesn’t necessarily require sharing accounts, many members choose to do so. With any joint account you should both agree beforehand what the account is for and how much money each of you is able and expected to contribute.
Keep in mind that it’s still important for you both to maintain your credit ratings as individuals, and many members find it helpful for each partner to have their own (separate) account for personal expenditures. After all, you don’t want enter your anniversary gift on the monthly budget sheet!
In some ways, budgeting for two can be easier than budgeting for one. Fixed living expenses can be paid out of a joint account, and, with both of you making regular contributions, you may even find the account accumulating money over time. In any case, it’s especially important for partners with joint accounts to budget carefully and discuss their finances regularly. An open, honest approach will prevent any hard feelings, especially if one partner earns significantly more than the other, or one is a “spender” and the other is a “saver,” which is often the case…as they say, opposites attract!
You and your partner should definitely make long-term investment goals and plans together. If you have children or are planning to have children in the future, you may want to consider starting an education fund. Midland Credit Union offers a variety of solutions to help you segment your long-term savings from other funds, and invest to earn a higher dividend.
Estate & Will
Estate and will planning isn’t just for the rich and famous. Everyone should have some sort of estate plan in place to ensure their financial matters are resolved quickly and expediently, and their family and loved ones lose as little as possible to taxation.
The Importance of a Will
The most important part of estate planning is ensuring that you have a valid, up-to-date will. If you die without a will, the government will distribute your estate in accordance with provincial law. Only a will can ensure your wishes are fulfilled.
The best and safest way to create a will is to work with an expert, as many do-it-yourself will packages can leave details open to legal interpretation. Your will should be updated periodically and in consultation with your professional advisor, especially as you acquire new assets. You should also update your will if you have a new child. You should also be aware that if you marry, your existing will becomes invalid.
How to Distribute Your Estate
Distributing your estate is more complicated than simply dividing things among your heirs. You’ll need to determine all of your assets from pensions, to investments, stocks and bonds, real estate and personal property. It’s a big job, and typically done best with the help of an expert. If you don’t have a trust estate advisor, talk with us. We work with experts in the field on a regular basis.
Today you can find insurance for just about everything – travels, valuables, even pets! It’s important to shop around for the best deal with adequate – but not inflated – coverage, and to ensure you’re comparing apples-to-apples. Midland Credit Union works with TruStage to offer discount coverage to our members on Life, Homeowner’s, Car and Health insurance. Be sure to ask about it!
While it’s never enjoyable to talk about life insurance, it needs to be done. The basic purpose of life insurance is to make sure that your family will be able to continue living in the manner they’re used to after you pass. Your job is to determine the amount of insurance you will need to make this possible. Talk with a trusted advisor who looks beyond the dollars and cents and takes in to account your life goals, beliefs and morals to ensure you’re getting insurance that truly suits you and your family’s needs.
This is a policy that usually insures the holder’s house and the contents inside it as well as other buildings on the property. It’s strongly advised that homeowners get insurance as soon as they gain ownership, even if the house is still in the construction stage. The levels of coverage vary widely, so learn as much as you can about getting the best coverage for the best price…but make sure you’re not over-insured.
Of course it’s required by law that all drivers possess some vehicle insurance, but the level and cost of the insurance you carry is largely determined by the make, model and year of your vehicle, as well as your ability to pay out-of-pocket expenses should you have an accident. Be sure to shop around for the best deal – car insurance costs can really vary – but also make sure your quotes offer equal coverage.
When requesting a quote, be sure to ask about group discounts! Often times you’ll receive a discount as a AAA member, and Midland Credit Union works with TruStage to offer discount coverage to our members.
Bundling Insurance for a Discount
If you’re searching for life insurance, car insurance and/or homeowner’s insurance, you can typically get a discount if you bundle them together under the same policy. Be sure to ask!
Every American is eligible to receive Health Insurance, and definitely should carry at least a minimal policy. Midland Credit Union works with TruStage to offer discount coverage to our members. Be sure to ask about it!
Very few people get excited about tax time, but it’s a necessary part of being an American! There are a few ways you can make it a little less painful.
Prepare for Tax Time All Year
Rather than waiting until tax time to locate all of your tax documents, gather them throughout the year. Create a folder (in your filing cabinet and/or on your computer) for tax documents. As you receive important documents and receipts (such as school registrations, charitable contribution receipts, W2s, 1099s, etc.), drop those documents in to the tax folder. When tax time rolls around, you’ll be ready to go!
Be Aware of Changes that Will Affect Your Taxes
Getting married, having children, losing a spouse, starting a business, and other major life changes will impact your income taxes. Be sure to talk with a trusted advisor about these changes long before tax time so you have time to prepare for any potential tax implications.
Do You Need a Tax Expert?
While we would never recommend NOT using a tax expert, it may be quite easy to figure and file your own taxes if your income and expenses are relatively “normal,” and you don’t own a business or make significant changes in the last year. Midland partners with Turbo Tax to offer discounted tax preparation and eFiling services that walk you step-by-step. Visit our Home Page for details (during tax season), or contact us if you have questions.
What to do if You Owe Taxes
It’s never fun to hear that you owe taxes. Simply take a deep breath and know you have options. You can contribute to an IRA through April 15 of the following year to help ease your tax burden for the previous year (so April 15, 2015 for the 2014 tax season). If the amount you owe is greater than the liquid funds you have, talk to a Midland Lending Professional. We can provide some solutions.
However, be sure to increase your withholdings the following year to help ensure you don’t have to pay-in again next year!