Finances -- Looking Ahead
Source: AARP.org | August 10, 2006
Determine Your Financial Needs
- Take an inventory of any assets — like investments and savings — that make money for you on a monthly, quarterly, or yearly basis.
- Appraise the dependability of your income.
- Determine your annual income, which consists of your salary (if you work), benefits, and income-producing assets.
- Review your checkbook stubs or cancelled checks to get an idea of what your expenses have been. If your budget comes to less than your yearly income, you are in luck.
If not, you can do one of two things: try to juggle your income-producing assets to produce more income or trim your budget. As much as you can, avoid dipping into capital, the savings or investments that are producing income. You may want to consult a financial counselor.
Your financial resources are not the only resources you have at your disposal. Take inventory of your personal resources and talents also waiting to be tapped.
It is time to look at your financial future. Taking the reins of your family financial affairs can be a frightening prospect for even the most confident. Will there be money when your house needs a new roof? For college tuitions? Do you have a will? Is there enough insurance to cover you and your home? Take time to ask these kinds of questions and find the best answers for your situation.
Taking Control of Your Resources
Understanding what you have and what you need is a process that can range from something as simple as a pencil-and-paper budget to something as complete as a computerized record of all of your expenses and investments. Within the first six months, try to address the following:
- Property: Probate procedures can be a complex matter, depending upon the size of the estate and claims against it. In some states, probate can take a year to complete, so some resources can be tied up. You can get an allowance for living expenses while waiting for all claims and taxes to be determined.
- Taxes: See a tax accountant or lawyer to determine your full tax liability. Federal law requires that an estate tax return be filed within nine months of the death in many cases.
- Social Security: Contact the Social Security Administration for information on current rules regarding benefits for widowed persons and their dependent children and possibly your Medicare eligibility.
- Other Benefits: If your spouse was a veteran, there are many types of benefits that may be available to you, including veterans' insurance benefits.
Household Management
If you own your home, it is probably your biggest single asset. If you are paying a mortgage, it is probably your largest single personal obligation. The financial realities of widowhood may force a reevaluation of your housing situation.
Remember that no matter how attractive the real estate offer may seem, how strongly relatives want you to act, or how difficult it is at first to come home to an empty house, the decision to keep or sell your home must be careful and deliberate. Don't be pushed into a decision you are not ready to make.
- Home maintenance can be arranged informally as a service exchange — yard work or light housekeeping for babysitting or some other chore.
- Home modification can be a way of making staying in your home more comfortable and more convenient.
- Transportation issues can be handled with outside help from a local group or social service agency.
- Cost concerns — look into reverse annuity mortgages, housemates, or other options.
Possible Housing Arrangements
- Share a house, maybe your own, with a friend or relative.
- Take a renter who could help with household expenses as well as chores.
- Investigate moving into an apartment or condominium. If you live in an apartment, consider moving to another one that is more affordable or convenient, if necessary.
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