Financial Planning Tips for Specific Life Stages, Part 3

financial tipsThe following information was published
by the Massachusetts Society of CPAs.

Home Ownership

Here are some tips that will keep the dream of buying a home from turning into a nightmare.

  • Decide first whether this is the right time to buy.
  • Investigate financing early on. Shop around for the best rates and terms.
  • Be certain you can afford the monthly mortgage payments. A rule of thumb: mortgage should never exceed 30% of your gross income.
  • When budgeting, include amounts you’ll pay for real estate taxes, insurance, utilities and general repairs.
  • Secure the services of a real estate attorney, at least for your closing.
  • Always consider the future marketability of your home. You never know when you will need to sell or move.
  • Secure adequate home owner insurance.

Life Crisis

A good plan can provide a financial safety net at a time when it’s most needed.

Unemployment: Having a rainy day fund can be an enormous help in warding off financial disaster. Your goal should be to save 6-12 months of expenses or take-home pay. Also, take full advantage of everything your company, the government and your
community offer.

Divorce: Whether or not you hire counsel, you should consider the following issues: What are your wishes regarding custody, visitation, and child support? Do you earn enough money to adequately support yourself? Which assets do you really want, and which
are you willing to let your spouse keep? Do you want/can you afford to keep the family home?

Disasters: Disasters can take many faces: health crises, fire, flood, earthquake, death of a spouse. Whatever the disaster, there are some common financial strategies that will help you weather the crisis: get advice from professionals such as insurance agents, financial
advisers and/or lawyers, locate important documents and financial records, evaluate short term income and expenses, avoid making hasty decisions.

Sandwich Generation: That’s the term coined for those caught in the middle between raising and educating their kids and tending to the needs of aging parents. First, you need to identify priorities: setting aside funds for retirement, paying for your kids’ schooling, and helping your parents with the cost of long-term care. Also, it’s vital to learn about your parents’ ailments so you can make a realistic budgeting assessment. Elder care experts can be especially helpful.

To be continued…


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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