It is rarely that I recommend software and even more rare that the software I would recommended is free.  However, I came across this program yesterday that everyone needs to download, install and USE!!

When working with clients, I ask them to quantify their household possessions.  Most have no idea what they have nor what the possessions would be worth.  In the event of a loss, they would be hard pressed to quantify their loss to their insurance company.

What You Own, is a great FREE piece of software that I would highly suggest you put into action on your computer.  It will take some work to input all your possessions, but in the end you will have an complete list of what you have, how much it cost and what it would cost to replace.

You will have this on your computer so normal backups are something that you must be doing, but you can also print a list and keep in a safe place(s).

Get it today and get it filled in.   Wow, its free!!  www.whatyouown.org

This morning I did something good.  As my wife came in the kitchen, I asked her if I could make her the same wondeful money saving breakfast that I was having.  She tried, politely, to say she appreciated the offer and then kindly pointed out why she was turning down the offer.

She went on to inform me that my money saving, delicious breakfast had 200 calories in the meat portion alone.  Wow, what a wakeup call.  She did not get on me for my desire to partake in the fine breakfast, but just pointed out for her that it was not in her plans of watching what she was eating.

You see, this year we both set goals to eat healthy, lose weight and get in better shape.  Honestly, she has done a very good job and, as her comment this morning indicates, continues to do so.

However, where am I according to my plan?  To be honest, not like I would like.  Yes, everything in the world has got in the way of my plan, but I let those things get in the way.

My question to you is – how are you progressing to your plans and goals for this year?  Are you on track or have you let things get in the way?  Did you know tomorrow marks the end of the first one third of this year?

Is today the day to review what you had planned, where you are and, maybe, taking steps to get back on track.  No more home-made breakfast sandwiches for me….

Over the last few days, I have had  several people ask me if they should buy a house now.  My answer is that they should if they have the cash to buy now.  Houses and property are on sale and purchasing now will prepare you for the future.  This preparation will only be successful if you purchase with cash.  That tends to stop many people.

However, over these last few days the question has been more in time with the expiration of the $8000 tax credit that expires at the end of this week.   Should you buy or not.

The simple answer is this – can you afford to buy?  If you are not in a position to buy then the answer is no.  If your finances allow you to buy, and you are working according to your plan, then take advantage of the tax credit and buy a house.

Most people think they are missing out on something if they do not get this “huge” credit.  While the tax credit is nice, what will that credit do if you wind up unable to pay the mortgage.  What will the $8000 do when the “joys” of being a homeowner actually kick in and you have already spent the $8000?  By the way, to those of you who have never owned a house, the “joys” are things that break down that we are typically financially unprepared to handle.

For me, as a coach, I have not and will not encourage someone to buy a house to get any tax break unless they are ready to take on the challenges that home ownership provides and are financially set to manage a mortgage.

What about you – buy or pass?

Today marks a change in the way we have been communicating, through email, with our contacts.  Today marks the first attempt at incorporating the blog with our communication to you.  The timing has been held up to coincide with the new website.

Each week, a snapshot of the Financial Focus blog will be sent and you can decide which ones you wish to read.  That way we limit the number of emails you get and allow you to make the choice of what is important to you.

Some will prefer to receive the blog daily and that option exists.

I hope this communication helps you.  If you have questions or things that you would like to see us include then send those to me in an email – coach@myfinancialfocus.net .

There have been times when I have been accused of being a pack-rat.  Honestly, sometimes the accusations have been true.  However, when it comes to financial paperwork many of you may have a similar problem.  It is very easy to hoard more than we should and sometimes even easier to just pitch it out.

What is the best direction in keeping financial paperwork?  Really, it depends.  Lets look at some different items.

Checking/Savings/CD’s

In most cases, you should retain your monthly statements for one year.  Once you have received your final statement of the year you can eliminate the earlier statements from your file.  That final statement, and any cancelled check, should be kept for seven years if there is anything tax or business related.

Any loan discharge documents that you may receive – like when you pay off your home – should be retained forever!

Investment/Retirement Accounts

Typically, unless you have monthly activity in your accounts you will only receive a quarterly statement.  Those quarterly statements should be kept until you receive your annual statement and you validate the final statement.  The annual documents need to be retained until you transfer or close the account.

Any equity purchase or sell statements should be retained until you have satisfied any tax needs such as a cost basis for any capital gains or losses.  This is primarily important for taxable accounts and not necessarily for your 401(k) or IRA accounts since you are not paying taxes on your transactions.

Finally, if you rollover your 401(k) or IRA it is important that you retain those transfer documents until you transfer or close that account.

Monthly Bills and Credit Cards

In most cases, bills can be discarded once a cancelled check has been received.  The exception would be any bills that may be used for tax purposes and those should be kept for the same 7 year period.  This also applies for credit card receipts and bills.

Pay Stubs

Wow, the important one that allows us to pay those bills and invest!  Each one of your stubs should be retained through the year until your W2 is received and matches up to your pay stubs.

Taxes

The area that we all love!  The general rule is to retain tax paperwork, and supporting documents, for at least seven years.  This would include both your state and federal tax filing papers.

Be aware, the IRS has up to three years to audit your taxes from your filing date for that year.

Home Improvement Receipts

Any receipts you have for improvement work on your home should retained for purposes of reducing your capital gains taxes on the property you have improved.

Easy Storage, Easy Retrieval

One thing to remember is to keep your documents in a safe place, but also in a place that they are quickly retrievable.  Recent disasters should help us understand why this is important.  Having your documents in one place will allow you to always find them but also allow you to find them quickly if the need arises.

Technology can be our friend here too.  With the availability of scanners and computer storage capacity ever increasing, many people are finding it easy to scan their documents for storage or request their statements be sent electronically.  There are many software products available now that simplify this process of storing and retrieval.  Remember, if you store digital documents you must maintain frequent backups.

Shred, Shred, Shred!!

However you decide to manage your documents, make sure you protect yourself by properly shredding those that you are planning to discard.  Identity theft is a growing problem and taking steps to properly destroy your personal information that is no longer needed is extremely vital.  Protect yourself and your family by shredding anything with your name, address, social security number and account information.

For many people, last Thursday marked the end to another tax season. For many more, it has just begun. For those who have just begun, they have learned that they did not withhold or pay enough and now they owe a large sum of money to the IRS and/or their state depart of revenue.

Many of those people are today scrambling and trying to find how they are going to pay their tax debt. Will they rob their savings, borrow from a family member, seek a loan, put it on a credit card or work out a payment plan with the tax office? Decisions, decisions, decisions. Call it what you want, but unless we saved the money to pay for the taxes we owe, we most likely will go into debt to pay the tax bill.

Can I suggest a better way? My suggestion will not take care of what you owe now, but it will prepare you for your 2010 taxes.

First, if you are an employee, take advantage of the IRS withholding estimator  (http://www.irs.gov/individuals/page/0,,id=14806,00.html ) and modify your W4 so that the correct tax dollars are taken out. This tool’s goal is for you to owe nothing and get nothing back as a refund.  What a feeling each year to know that all your taxes have been paid and, even better, you are getting nothing back!  Yes, you read it right – no refund.  You received your full income each paycheck and that allowed you to follow the financial plan in your life.

Second, for small business owners, contractors, etc. – save money for taxes and file quarterly payments.  Setting aside a specific percentage of your income each month will allow you to file the quarterly taxes that will put you at or very near a break-even point each tax season.

Both of these scenarios involve planning.  Proper planning will keep you from owing that large sum next year and keep you from getting a huge refund.  Now is the time to make the changes for the 2010 tax season.

How’s your plan working for you?