When you are trying to get your finances in order, there are different things that you need to consider. Depending on the reason that you have decided to attempt to get your finances in order, you need to think about certain things that could contribute to your estate in total. Your estate is made up of all the personal items that you own, and even things that you might not think about when someone discusses this with you. In this article, we are going to be looking at what some of these considerations are, and why they are important.
The first thing that you need to think about is whether you have any savings somewhere. It doesn’t matter whether these are in a bank, or under your mattress in cash, they need to be considered when you are looking at your finances. This is probably one of the largest sums of money that you have, next to the amount that is tied up in your property. You need to decide what you are going to do with it, and what is the best way to proceed with this. For example, are you going to put it into a trust fund for your children or grandchildren that they can access when you pass on? Or, are you going to keep it and use it in your budget for your later years?
Either way, you need to have a clear and concrete plan so that you know how to proceed. Many people don’t take this into account when they are looking at their finances, but this is a huge mistake. You are leaving out a large sum that could help you to leave money as an inheritance, or make your twilight years that little bit more comfortable. Neglecting to take them into consideration essentially leaves them as a waste.
Do you hold any shares in companies? If you do, then you need to find out how much they are worth, whether they are returning on your investment or whether they are just eating away at the amount you invested. If you are making a profit from this, then you should only go on what you have already made. Be aware that trying to predict what will happen is a risky business and one that could give you a rude awakening if it does not go your way. That is why when you are organizing your finances, you should only use hard data when it comes to looking at your shares.
Of course, you always have the option to withdraw or sell your share should you decide that you no longer wish to participate in these companies. The person that you have appointed to help you organize your finances should be able to give you some advice on the best thing to do with your market shares, i.e. whether you should sell them or keep them. It is always going to be a game of luck, so don’t be too disheartened if something doesn’t go your way. Or, you could just leave these out of this process entirely. It is not the same case as your savings because it is not always money that you have right now, rather it is money that you could or could not have in the future.
The next thing that you need to be considering is any property that you own. Depending on how many properties you own, you might need to pay different levels of taxes on each. If you are organizing your finances so that you can write a will, then you need to look at what house is where and decide who to pass it onto when you are gone. But, if you are looking for things to sell to give you some more money, or just to see what you have in the various locations, you want to look at how much the properties are worth.
Hire an expert evaluator so that you know you are getting the most accurate market price. Even just the knowledge of how much all of your properties are worth is going to be a big help when trying to organise your finances. You will know that you have so much tied up in one home, and so much in another. Add up the grand total, and you will find out how much you have altogether tied up in property. Alternatively, if you don’t want to hire a professional, you can always go onto a property website and find out what other homes like yours are selling for at the moment. This method is far less accurate but is a simpler way of finding out an estimated value.
Some people have a lot of loans in their name, or their business name. If this is the case for you, you are going to need to work out how much you currently owe and how long this is going to take you to pay back. Be honest with yourself here because some people don’t want to admit that they owe a lot of money and end up skipping this step. The issue here is that when you are gone if you have outstanding debts, they will be taken from your estate when this is sorted. As such, it is no good working everything out and forgetting that you owe so much to certain companies.
If your debt is small and you know that you are going to be able to pay it off within the next few months, this is not going to be as much of a concern. We are talking about if you owe thousands to different lenders and are going to struggle to pay it off. Loans can be quite difficult to pay, but if you organize your finances in the right way, you might even be able to find some extra money to pay off this debt and start fresh with your finances once you have done this.
We hope that you have found this article helpful, and will use the advice set out above to organise your finances. As you can see, there are a variety of things that you need to think about, and we would encourage you to double check that you have included all of them in your latest organisation.