When I was younger I always pictured end of life planning as something only old people do. Now that I am no longer a spring chicken myself, I understand that it can be important for all adults, regardless of age or social standing.

Having worked in the health care industry for many years I have seen people of all ages with lots of different health issues. But one thing they had in common is that they didn’t plan on coming to the end of their lives so unexpectedly.

Even though all of their lives mattered, it was more difficult to see sick or dying children and young people. In fact, it brings me nearly to tears right now to think about some of the patients I knew and loved that passed away.

Of course, no amount of end of life planning will bring these people back. However, the truth is, there are 5 reasons millennials need to do end of life planning as much as anyone else.

1. Pets

Young people tend to feel as if they are immortal to a degree. I know because I felt that way when I was younger.

Unfortunately, being a millennial doesn’t exempt you from passing away from illnesses or accidents. If you have furry friends that you love you probably want them to be well taken care of should something happen to you.

The law generally regards pets as property which means they may end up in a shelter or worse if something happens to you. Setting up a will, however, gives you the ability to make provisions for their care including a guardian and even a trust.

2. Personal Belongings

Even if you don’t have a whole lot of stuff you probably have some things that are of sentimental value to your family and friends. Should something unexpected happen to you that ends your life these are the people who should receive these items.

However, without a will, the state will decide who gets your belongings. Unfortunately, it may not be the person or people you would choose.

3. Social Media

Another reason millennials need to do end of life planning is for social media accounts. Nearly every young person has at least one type and some have several.

What happens to them if they pass away? It’s possible they could remain a visible reminder of your loss every day since they aren’t automatically deleted or inactivated.

To remedy this, you can name a digital executor regardless of the legality of it. Take an inventory of your digital files and assets and appoint someone as the person to handle them.

4. Kids

Some millennials, married or not, have children they will leave behind if they pass away. Setting up end of life planning can include making a choice about who should care for them when you are gone.

Naming someone to watch over your children is a decision that is not easy. Nevertheless, it can prevent the court from making the judgement in the absence of any documentation from you. It can also squash family battles that could arise over your child or children later.

5. Expenses

Should something unexpected happen that ends in your death, the expenses for those you left behind can be more than they are able to pay. That financial hardship could be avoided, however, if the proper steps are taken.

End of life planning can include building up your savings, purchasing life insurance, setting up an estate, and creating advance directives. You should also consider having a power of attorney for your health care as well as one for your finances. Although these could be the same person they do not have to be.

Everyone’s life is important, but so is planning for the reality that we all pass away sometime. As you can see, millennials are not exempt. There are at least 5 reasons millennials need to do end of life planning just like the rest of us.

Have you completed your end of life planning yet?

Jeanne is a married mother of 2 grown children who works as a full-time freelancer and also helps out occasionally on the farm she and her husband own together. Her background is mostly finance and medical office management.  She’s currently working to improve her financial well-being and hopes to help others improve theirs as well.

If you’re new to financial planning and you want to learn how to manage your finances on your own without hiring a professional, there are a few places you can find the information you need. And, it’s free. Fortunately, there are a number of free online courses that can help you learn what you need to know. Here are some of the best ones I’ve found.

CNN Money – Money Essentials

This is one of the best resources for money advice, tips, and learning. It includes 29 lessons with everything from setting goals to managing debt to home ownership and insurance, all the way through to retirement planning. Pick and choose just the topics you need or the things you’re most interested in learning now. It even includes glossaries of terms you need to know and quizzes to help make sure you’ve learned what you need. And best of all, it makes learning easy.

Money Management International

Money Management’s online Financial Education site offers a variety of tips for long-term planning and short-term needs. If you want to know how to save money on holiday shopping or how you can earn more money, they’ve got you covered. Need information on bankruptcy, credit reports, and understanding your credit reports? That’s there too. Need help with a home loan or debt management? It’s all there. Even tips on teaching your kids about financial matters.

University of California-Irvine’s Fundamentals of Personal Financial Planning

This online course offers lessons on creating your financial goals, doing the math to figure out what you need, creating a financial plan, and getting started with your plan. Once you have a plan together, it will help you figure out things like insurance, long-term care, social security, and medical care. Like the other courses, you can start anywhere you’d like and skip the courses you don’t think you need or aren’t ready for yet. Even though this is a college-level course, it was designed to help regular consumers at all levels of their financial education make better informed decisions about their money.

Purdue University’s Planning for a Secure Retirement

This 10-module course will help you plan your retirement to make sure you have all the money you need to get through. It includes several helpful tools to help you plan including personality profiles and risk tolerance calculators. This course is at-your-own-pace and it’s easy to understand no matter your financial education level.

The American Financial Services Association Education Foundation’s MoneySKILL

This course is designed for those who are new to financial planning to help you gain a basic understanding of money management. It covers topics like income, expenses, savings, investing, building credit, and obtaining insurance. It’s a high school and college level course to teach teens and adults alike the basics of money management and planning.

Learning what you need to know about financial planning can seem overwhelming and confusing, but with free courses like these that teach you everything you need to know in an easy to understand manner, there’s nothing to stop you from becoming financially independent.

Frugality and common sense go hand-in-hand. If you are a homeowner, it behooves you to consider your options with home warranty companies. There are many benefits to signing up for a comprehensive and affordable home warranty service. The recent growth in home warranty popularity is notable.

Homeowners are increasingly aware of the financial risks they run by not covering the contents of their home against damage, and everyday wear and tear. The fact of the matter is that it is extremely expensive to repair and replace appliances, gadgets, and devices inside your home. When real estate transactions are concluded, home warranties feature prominently. Believe it or not, when buyers are provided with protection against loss, damage or wear and tear of the appliances in the home, houses and apartments sell a lot quicker. Provided the right home warranty coverage is offered at the right price, the long-term benefits are well worth the cost.

How do home warranties work?

Home warranty companies provide homeowners with policies that cover things like spray sprinklers, spas, Jacuzzis, dishwashers, HVAC, insinkerators, alarms, washing machines and the like. The type of coverage you get is often associated with the price you pay. The greater your coverage and optional extras, the higher the home warranty prices. But there are many important factors to bear in mind when choosing a home warranty provider. For example, credibility is paramount. The trust factor weighs heavily on your decision to choose one home warranty over another.

It’s important to read client reviews online, consider word-of-mouth assessments, and follow reports of home warranty companies in newspapers and the media. Other important determinants of choosing one home warranty company over another include the terms and conditions of each policy, and the pricing. Anyone considering saving money in the long term will do well to read a detailed overview at ReviewHomeWarranties. It is extremely time-consuming to gauge the services, costs, and reliability of all market players in the home warranty business. For this reason, aggregator services are your best bet when comparing one company with another.

Home warranties cost between $300 and $500 per annum on average. Once the policyholder pays for coverage, they will be issued with a home warranty policy. This policy details everything that the home warranty company is prepared to repair/replace in the home. Typically, this covers systems and certain appliances. If one of the items stops functioning, or breaks, the policyholder/homeowner will contact the home warranty company and file a claim. Next, the home warranty company will dispatch a service provider to the homeowner.

Certain home warranty companies allow the homeowner to contact a contracted professional at their leisure. The service fee for each repair ranges from $50 – $100, and depending on the severity of the problem, a new appliance, device or mechanical part may be ordered. Otherwise, the contracted service provider will repair the appliance on the premises. In terms of payment, the homeowner may pay upfront for all the repairs and get reimbursed by the home warranty company. It is important to read the fine print and the coverage of each home warranty plan that you sign up for.

How can home warranties help you save money?

One of the things about home ownership that is different to rentals is that refrigerators, washing machines, dishwashers, garbage disposal units, hot tubs, Jacuzzis, spas, garage doors and other appliances and systems are not replaced by the landlord. When these things go on the blink, it is incumbent upon the homeowner to repair or replace them. In terms of frugality, it is possible to save $300 – $500 per year by not having a home warranty, but the cost of just one item that stops working can exceed that. Consider that washing machines and refrigerators routinely cost upwards of $300, so it pays to be smart and frugal by opting for a home warranty.

New to financial planning? Start with the overview. Then understand cashflow, learn about insurance planning and risk management, or pump up your investment planning.

As your income and investments grow, so will your tax responsibility. After all, Uncle Sam wants a little bit of your good fortune too! There are a few tips and tricks to lowering your tax responsibility though and they can really help you out when it comes time to file. However, you don’t want to wait until April 14th to start looking for deductions. You’ll need to start sheltering some of your funds before the end of the year to qualify for them.

Here’s what you need to know when it comes to basic tax planning:

Plan Your Deductions

You have a choice between standard and itemized deductions when it comes to determining your taxable income. A standard deduction is pretty straightforward, it’s a dollar amount set by that government that you can claim without calculating any expenses that typically make up an allowed deduction. Itemized deductions on the other hand are just what they sound like, an itemized accounting of actual expenses allowed for deductions. If your expenses over the year are more than the standard deduction amount, you’ll want to go with itemized deductions. You’ll pay less tax and get a larger refund.

One thing to keep in mind though, itemized deductions require proof of expenses so you’ll need receipts and any other documentation showing these expenses or they won’t be allowed. If you believe that the itemized deductions will work in your favor, be sure to set up a good filing system for holding on to your receipts. Regardless of which deduction method you choose, it’s always a good idea to hold on to receipts so that you can make a better decision come tax time.

Retirement Savings

Retirement accounts are a great way to reduce your taxes as well as have income for the future. A qualified individual retirement plan can create a tax shelter of income that is not taxed. For instance, at a 25% income tax rate, depositing $15,000 into a qualified retirement plan can save you $3,750 on your tax return and you won’t pay taxes on your deposit until the money is withdrawn. If you wait until the required age for withdrawal, you’ll even avoid paying most of the taxes on these deposits. There is a maximum allowance for yearly deposits into these accounts though so be sure you know what the limit is for the fund you select.

Other Savings That Are Tax-Sheltered

There are a few other options for saving money and getting deductions that allow you to defer or even avoid paying taxes altogether.

Health Savings Accounts including medical savings accounts and flexible spending accounts can be funded by you or your employer, or both. Both contributions and withdrawals are tax-free.

529 College Plans are funded with after-tax deposits and qualifying withdrawals are also tax-free. The 529 Plan allows you to choose with a prepaid tuition plan or an education savings plan.

Dependent Care Savings are flexible spending plans focused on helping you pay for childcare while you are working. They are held in separate fund and qualifying deposits and withdrawals are tax-free.

Keep in mind though that any withdrawals made from these accounts that are not for a qualifying expense are taxable at the time of withdrawal.

Tax Credits

Be sure to look for tax credits that apply to your financial situation; they’ll help reduce your tax and can even give you a refund. A few to look for include:

Earned Income Tax Credit is for low-income earners. Your annual earnings, filing status, and number of dependents will determine if you qualify.

Child and Dependent Care Credit helps cover childcare and/or disabled dependent care when you are working.

American Opportunity Credit helps cover some of the costs associate with post-secondary education during the first 4 years of college. There is a maximum credit of $2500 per student and 40% of the credit is refundable.

New to financial planning? Start with the overview. Then understand cashflow and learn about insurance planning and risk management.

Investment Planning is one of the best things you can do to set yourself up for financial success. And the sooner you get started, the better off you’ll be when it’s time to use some of those funds for retirement living. But getting started can be confusing and overwhelming. Let’s break it down a little to help you feel more confident about getting started.

What is the purpose of your investments?

No doubt you have several short-term financial planning goals that might include a big vacation or down-payment for a house, but investment planning is best for long-term goals like retirement. Keep that in mind as you create your investment plan.

Allocating Your Assets

The younger you are when you start investing, the more risk you are able to take because you have a longer time to make up any losses and increase your funds. A good way to allocate your investment assets is with 70% stocks and 30% bonds.

Stocks can be both in the US stock market and the international stock market, so split your investments to 50% in each.

It’s good to divide your bond investments as well into 50% Treasury Inflation-Protected Securities (TIPS) and 50% in intermediate-term nominal US Treasury bonds.

Your overall allocation should look something like this:

35% – US stock market

35% – International stock market

15% TIPS

15% Nominal US Treasury bonds

It’s good to keep your investments at this split throughout your lifetime, keeping in mind that as you get closer to retirement you’ll want to keep a few years worth of cash easily accessible. The invested portion of your funds can stay at this same allocation.

Investment Selection

While the above may seem complicated, it’s not as difficult as you may think. All of these asset allocations can be accomplished with just four funds, all through Vanguard.

• Vanguard Total Stock Market Index Fund Admiral Shares for US stock market
• Vanguard Total International Stock Index Fund Admiral Shares for international stock market
• Vanguard Inflation-Protected Securities Fund Investor Shares for TIPS
• Vanguard Intermediate-Term Treasury Fund Investor Shares for Nominal US Treasury bonds

This gives you a nice mix of both low and high risk investments. If you hold your investments directly with Vanguard, there are no commissions to pay for buying and selling so your expense for each fund is anywhere from .05% to 20%. These funds provide a great way to allocate your investment account for very little money.

Why This Allocation?

There isn’t an exact science to investing and there are no “rules” about how much you need to invest and where, but this kind of split will give you good access to the stock market which is where your long-term financial growth will come from.

For the stock portion of your investments, a 50-50 split allows you to maximize your diversification while investing both in the US and internationally.

The bond investments of your portfolio are less about providing returns and more about offering protection when the stock market is down. Choosing US Treasury bonds are safe and guaranteed, providing peace of mind if the stock market is experiencing some lows.

Maintaining for the Future

Keeping your investment percentages static will allow for the most growth, versus changing your investment allocations year after year. Over the long-term you’ll see the most growth by just maintaining this balance.

With that said though, you’ll want to keep an eye on your investments and keep an open mind about possible changes you may want to make if you see an area not performing as well as you’d like for an extended period of time. You may also find that you need to make adjustments based on your own personal circumstances.

Getting started with investment planning doesn’t have to be difficult, the most important thing is to just start investing and grow your investment funds over time. The sooner you get started, the better financial shape you’ll be in when retirement comes around.

Learn more about financial planning by reading up on tax planning.

New to financial planning? Start with the overview. Then understand cashflow. 

While preparing for the future and your retirement may not be at the top of your to-do list when you’re young, it’s the best time to do it. The more years you have to invest in your retirement, the better off you’ll be when you get there. And insurance planning and risk management should be at the top of your to-do list.

When it comes to insurance, you want to make sure your family will be well provided for if something should happen to you, but you also want to plan for your own needs. Let’s take a look at what you need.

Life Insurance

Let’s hope your family never needs this, but if they do, a life insurance policy will provide much need income for your loved ones. Not only will it help them survive without your income, it will also help to provide for funeral expenses and your financial liabilities. Plus the benefits are tax-free. The younger you are when you apply for life insurance, the better rate you’ll pay. Waiting until your older to get life insurance will only increase your premiums. Look for a term policy and reevaluate your financial needs regularly so you can increase your coverage if need be.

Disability/Long-Term Care Insurance

Should you ever become disabled (temporarily or permanently) through an accident or illness, disability insurance will help to replace your lost income. It provides immediate cash flow to help you maintain your lifestyle and cover additional expenses resulting from your disability. Likewise, long-term care insurance will cover expenses and cash flow for daily living should you require longer care or need in-home nursing, rehabilitation, or a memory care facility. Everyone should have this, but if you can only afford it for one spouse, women are more likely to need it then men as they tend to live longer.

Homeowner’s or Renter’s Insurance

If you buy a house, your mortgage company will require you to have a homeowner’s insurance policy to cover the financial loss should you experience a break-in, fire, or natural disaster destroying your home and your belongings. But if you rent, your personal belongings are not covered under your landlord’s insurance policy. Be sure to have your own policy just in case of a disaster or theft.

Auto Insurance

Most states require you to have auto insurance if you drive and will ask for proof of insurance when you get or renew your driver’s license. But cover yourself a little better than the minimum standards just in case you’re ever in an accident. You’ll need liability coverage for both personal and property damages, personal injury protection, collision coverage to cover any damage to your car, comprehensive coverage in case you have a different type of accident (like a tree falling on your car), and uninsured motorist coverage in case you are hit by someone who does not have insurance and can’t pay for the damages.

Now that we’ve covered insurance needs, let’s talk about your risk management.

First of all, what is risk management?

Basically it’s identifying and analyzing how much risk certain investments have, will they grow and by how much. It occurs everywhere in the financial world including stocks, bonds and even insurance (determining how much you need and if you will actually need it). It is not a perfect science so mistakes will be made, but it’s about making informed decisions with the information you have.

How does it affect you?

Simple, it involves making decisions based on your future needs (or what you think they will be) and the financial situation you are working towards. When it comes to investing, you are able to take higher risks with your money when you are younger, leading to a higher return on your funds, because you have more time to invest. The older you get and the closer you get to retirement, the less risk you’ll want to take because you don’t want to lose a significant portion of your savings and not be able to rebuild.

Insurance planning and risk management involving your investments are a great place to start your financial planning from the ground up. Looking at these items will help you build a strong foundation for increasing your investments and making sure you’re covered for any unexpected events.

Learn more about financial planning by reading more on investment planning.

New to financial planning? Start with the overview. 

How confident are you about your financial future? If you’re not sure, you’re not alone. Research suggests that only one in three Americans have a budget that they work with to manage their finances. Taking control of your spending habits and creating a plan to save and invest is the best way to gain financial security and freedom. If you’re not working with a budget, you need to be. If you’ve never budgeted before, don’t worry, this step-by-step will help you.

The first step is to determine your cash flow; that is to say how much money is coming in and going out. Your total income is the amount left over after taxes and deductions like 401(k) contributions. If you’re self-employed or you’re paid on a commission basis, take a look at the past four to six months of income to get a monthly estimate.

Now list all of your fixed expenses, the things that are non-negotiable like school loans, car payments, mortgage or rent, and food. Also list any essential utilities like electricity, gas, water; your cable bill is not included as essential.

Don’t forget things you pay annually or semi-annually like auto insurance and repairs (oil changes, new tires, etc.), and property taxes. If you have pets, don’t leave out annual vet exams. Take the amount you pay each year and divide it by 12; this is the amount you need to budget monthly.

Next up is variable and non-essential expenses. This would include items like going out to dinner, cell phone bill, cable bill, monthly or yearly membership fees and subscriptions. If you would still like to enjoy these simple pleasures, YourBestDeals.com can give you discounts. Make sure to create a category for “extras” that you usually don’t remember buying or add into your budget like trips to the local coffee shop.

If you’re not sure how much you’re spending on these things, it’s a good idea to figure it out. You may be surprised. Go through your bank records for the last three months and calculate how much you’ve spent on small, non-essential expenses. You may find areas that are large financial drains where you can cut back. Take what you think is a reasonable amount to spend on these non-essentials and add them into your budget.

The last step is to figure out what’s left. When you take your after-tax income and deduct all your fixed and variable expenses, what’s left is money that can be put toward your financial goals like saving, insurance, and retirement.

Saving should definitely be a higher priority than spending so if what’s left isn’t enough to put something aside each month, you may want to review where your money is going and find more ways to cut back.

Now that you have a budget in place, you’ll want to review it regularly, once a month or so, until you’re certain that it’s working for you. A good rule of budgeting is the 50/30/20 rule which says that 50% of your income should be put towards your fixed expenses, 30% towards variable expenses, and 20% towards saving and investing. If you can manage to work within these parameters for your budget, you should be off to a good start for your financial future.

Learn more about financial planning by understanding insurance and risk management.