You know how Thanksgiving as a federal holiday got its start, don’t you?

I’m not talking pilgrims here … but more about why we all have a few days off this week.

Smack in the middle of horrendous civil war, President Lincoln proclaimed the last Thursday of November as a national day of Thanksgiving which should take place every year.

I believe Lincoln understood a fundamental truth in the human soul: how we choose to see our circumstances often dictates the state of our hearts — and, thereby, our future circumstances. After all, if a war-torn nation can turn its eyes upward — so can you and your family.

You should sit in my office with me sometime, watch the procession of “wealthy” and “poor” clients meeting with me and my staff over various things — and watch how the hearts respond. Sometimes my “wealthiest” clients are the most impoverished … and those without many zeroes in their accounts are flat-out rich.

“Rich” is a state-of-mind — and it’s tied to gratitude. It affects how you see savings, retirement, our current economy, and investment. And, of course, gratitude is the enemy of fear. It’s like an opposite magnet for it — walk in gratitude, and fear just melts away.

So, here’s my advice for this week: Whatever financial situation you happen to find yourself in, be thankful. There are hidden blessings in any trial … and hidden fears lying within any windfall. Find and savor the blessings, and watch your family thrive.

For my part, I’m simply grateful for YOU.

I’m grateful for your trust, for your attention to my blogged ramblings (which are taking on a bit of a different flavor this week), for your allowing us to serve you, for your referrals … for so many things.

I don’t forget that it’s people like you who enable me to do what I do — to breathe life and hope into families, and their financial situations. And to help them enjoy the fruit of their labors, while carrying the peace-of-mind that the ever-grasping hand of taxation reaching into their pockets is minimized.

So thank you. For everything.

Warmly,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

I think there are two components to our shared reaction about the events in Paris on Friday. On one hand, we have the grief…

Seeing those gruesome images, imagining the regular families whose lives have been forever upended … it’s all so immeasurably sad. And what makes it worse, I think, is wondering what we are to do in response. Our lives feel so removed from the devastation … Here I am seeing images of horror and agony — there I am grabbing a caramel latte with a double shot of espresso.

So, we pray. We perhaps change our Facebook profile picture as a point of remembrance (and despite what the voices of cynicism may say, there is great value in even the smallest acts of solidarite). And we honor the fallen.

And then, on the other hand … we have the fear.

And fear can lead many of us to all kinds of weird places. Whether private anxiety, social anger, even a form of seeming xenophobia … all of these are probably normal in the face of terror such as this.

But we must remember that WE are the primary target of such terror. Our hearts. Our family’s hearts. (Certainly I don’t mean to imply that the actual victims are mere ornaments to this story … but only that the murders were, indeed, a message). The hearts of our leaders.

We must pray for them all — and remember that national policy, whether military or otherwise, is a separate question from our own response. We have the luxury of choosing love — as well as hope — in the face of such terror. Our leaders (and France’s), unfortunately, may not have that luxury in the same way.

So let’s remember to carry our own hearts well this week, shall we?

And though it’s rather jarring to transition from this topic, the plain fact is that onward we must go. I had been planning to write to you about estate planning this week. And so I will…

Dennis Bridges Exposes Common Myths About Estate Planning in 2015
“For every disciplined effort there is a multiple reward.” – Jim Rohn

As we have seen this past week, life can turn on a dime … and we can’t plan for every one of the specific ways it may do so. But we CAN plan broadly.

And if you have a family, or really anyone who relies upon you, it may be the best kind of holiday gift for you to offer them peace of mind.

For me and my family, we’ve put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we’ve got it all covered.

As of this writing, it’s a fact that almost 60% of Americans don’t have a basic will, and that’s a big problem.

One of the big reasons that most families don’t yet have this in place is because of some incorrect thinking about whether it’s right for them, or if it’s even necessary. And sure, some people just haven’t gotten around to creating a will or trust. Others think they don’t need an estate plan because they’re not rich. I’ve even heard from people that they don’t want to put it in place because when they do, it’s sending some sort of death wish into the universe (or some such).

Well, I’ll start by busting THAT myth: Preparing a plan for your succession will not speed your demise. Easy enough.

But here’s the problem — if you continue without an estate plan, you could leave a legacy of bad feelings and attorneys’ fees.

But, I’ll move off of that easy one, and speak to some of the more common misconceptions out there. I’ll start with two this week, and address three more in a future Note.

1. Only rich people prepare estate plans.
Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state’s “intestate succession” laws. That means your money and property could end up with family members you haven’t spoken to in years, instead of who you’d really like to see control your assets.

I won’t go into all of the different components of a will, trust, health care directive, etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a lawyer to guide you through the process of estate planning.

2. Everything goes to your spouse, if something happens.
Unfortunately, that’s not always the case. We deal with clients from different states around the country, and state laws vary. In fact, in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what’s left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I’ll post a few more in the weeks ahead, but I hope you can already see that things are not always as we “think”.

I hope this helps. To your family’s financial and emotional peace…

Warmly,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

So, last week I wrote you about your holiday spending, and making sure that you don’t find yourself caught up in all the merchandising and hooha — specifically of the retail variety. (Let’s ALL get caught up in the transcendent beauty of the season, shall we?)

And it made me think about some clients that I’ve walked with over the years who fought their way — successfully — out of debt that would have crushed other families.

How did they do that? Today I’ll tell you.

But here’s something they did NOT do: Borrow money to pay off more borrowed money (and call it savings).

That only works for Uncle Sam, apparently.

And speaking of Congress and debt — included in the upcoming highway funding bill for Congress is a small provision that would require the IRS to use private debt collection agencies to go after IRS debt. In my opinion, that would be a problem for many, despite the jobs it might create for these agencies. Treasury did a recent studythat showed that the IRS is better at this than private agencies, and those agencies would naturally be more aggressive.

So, let’s be sure to avoid that IRS debt as well, ok?

By the way, with debt reduction, I’m a big fan of automation — but not in all instances. For example, do NOT “automate” your tax preparation process with off-the-shelf software. Especially of the “free” variety. We have to clean up so many mistakes made by these products (and their users!), that I cannot, in good conscience, recommend them.

Yes, I’m obviously biased. But the facts are the facts. Take a gander at this, for just one small example: http://bit.ly/1iOy9A7

Alrighty then … let’s talk about how my clients get out of debt.

Bridges’ 6 Ways to Climb Out of Your Credit Card Debt
“What simple action could you take today to produce a new momentum toward success in your life?” – Anthony Robbins

The average credit card balance for an American household as of August of this year was $7,529, which is an increase over years previous and not something that any of us really would like to see increase further. And that counts the households that carry no debt, so the figure for those who *do* is even worse.

So, you may be in a better situation … it may also be worse. So, to answer the questions we often get around here from clients facing tough times, I’ve put together a step-by-step process which we often help people work through.

1. First, pay more than the minimums
If you only pay the minimum payment each month, your credit card debt could continue to INCREASE, even if you completely stop using your card. This is called “negative amortization”–where you think you are paying on your debt but the additional fees and finance charges are more than the minimum payment. The bottom line is: Pay more than your minimum or you will eventually be in debt over your head.

2. Create an automated system
With online banking and automatic payment options, there are GREAT tools for ensuring you don’t mess up because of administrative chaos. If you feel you can’t manage all your bills by pen and paper, there are several good software programs available for keeping track of your financial records.

In fact, I recommend that you automate a payment ABOVE the minimum monthly payment, just to be certain that you start getting ahead of the game. Those minimum payments are rigged against you, and the only way to get ahead is to … get ahead. I have some more thoughts on automation in a moment.

3. Yes, you can negotiate
No, you do not need to be an attorney or other professional to negotiate with your credit card company (negotiating with the IRS, on the other hand, is a very different story!). The rising amount of consumer debt in this country has made creditors realize that they need to be more understanding of their customers — if they hope to get any money back. If you file bankruptcy they are only going to get pennies on the dollar, so they are willing to make deals.

4. Proactively contact your creditors — in writing
Open communication always helps. Usually credit card companies get ignored and end up sending delinquent files to a collections agency. So they’ll actually appreciate your openness in contacting them and may be more understanding of your situation. Proactively dealing with your credit card debt rather than hiding will not only help your financial problem, but will make you feel better about yourself as well.

5. Develop a simple tracking system
If you are not able to pay the full amount of your credit each month, you still should still pay something to stay on top of it. You should work off a written budget so you know exactly where you stand. Some experts suggest that you divide your monthly debt budget by the percentage each bill makes of the total and pay that amount.

Here’s an example: If you owe a total of $1,000, and one credit card is $800 and the other is $200, and you only have $100 available to pay for that month… You should pay $80 on the $800 balance, and $20 on the $200 balance. This way you are reducing each debt by the same percentage.

6. Do NOT be intimidated
No matter how forthcoming and honest you are, some creditors have been taught to be mean and downright nasty. Hang in there and don’t let this tactic intimidate you.

Lastly–don’t let the IRS be one of those creditors. Let us help you this tax season, and THAT will be one less creditor to worry about, I assure you!

Warmly,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

It’s hard to believe, but Thanksgiving is THIS MONTH. The October Classic is in the books (congrats to the KC Royals), and parents everywhere are enjoying their parental “Candy Tax“.

It feels like a seasonal page has truly been turned. And right around the corner will come the Christmas and other winter holidays. Stores are already stocking their shelves with gear.

That’s why now is the perfect time to start planning for your holiday spending. Even if you are a family of significant means, it’s a good idea to be strategic about how you go about it.

And by formulating a plan now, you’ll achieve more than just the happiest of holidays. You’ll ensure that the New Year will begin without worries of too little cash flow or that you went unintentionally overboard on your spending (and maybe creating some spoiled offspring in the process!).

Here’s how.

Bridges On How To Make The Most of Your Holiday Spending
“Whatever is worth doing at all is worth doing well.” – Lord Chesterfield

The best place to begin when it comes to planning for this year’s holiday spending is to examine what you did last year.

Dig up the credit card statements online (and maybe the checkbook registers if you still roll with those!), and add up how much money you spent. You’ll also want to take notes regarding where you spent it. Don’t forget to include money used to purchase gift wrapping supplies, cards, postage, food while shopping, entertainment costs, decor, and special-occasion clothing.

Now that the numbers are in front of you, it’s time to form an opinion.

How do you feel about last year’s spending? Did you spend a realistic and appropriate amount, or did you go overboard? Try to be objective. This analysis will serve as the backbone of your plan.

Look at the Present … And That Pun Is Intended
Financially speaking, how have you fared this year compared to last year? Be sure to look at any changes in income as well as expenses. If your finances haven’t changed and you’re happy with last year’s spending, then you’re starting off in very good shape. If your overall financial status has declined, or if you were less-than-pleased with last year’s performance, then you’ve got some work to do.

Begin by looking at the number of purchases you made a year ago.

Which ones would you make again and which ones have you scratching your head? It may be time to reduce your gift-buying list or change the amount you spend on each purchase. The obvious way to accomplish this is to be less extravagant with your selections. A less obvious but often effective approach is to research your potential purchases. Sometimes you end up paying extra for the convenience of one-stop shopping, so look through the newspaper to find which stores are offering deals.

Then check online to see if you can beat their prices by purchasing somewhere else. This practice will cut down on last-minute shopping, which can be an expensive proposition.

Think About Future Years
So, you’ve figured out how many purchases you need to make, as well as which ones need scaling back in terms of price. Now it’s time to create a budget. Once again, there is no magic formula. Creating a budget and sticking to it requires two main things: common sense and commitment. Let’s take a closer look.

A budget should always be based on the money you have, not the money you can borrow. If you are still paying off charges from last year, then you need to avoid using credit cards to make gift purchases this year. The amount of money you decide to allocate toward holiday spending should be based solely on what you’ve saved or what you will save from now until the time you start shopping.

When drafting your budget, start by creating a list of recipients, along with columns for the gifts you intend to buy and the dollar amounts you expect to spend. (Is that too uptight? No, I don’t think so.)

As you make purchases, keep track of the results. If you overspend on one gift, it is imperative that you make it up somewhere else. Your diligence is one of the keys to staying within your budget.

It’s also important that you watch out for potential pitfalls, including impulse shopping. Getting into the spirit of the holidays is one thing, but spending frivolously based upon a last minute decision is something else. You’ve got a list, and your job is to stick to it!

One final thing that may need an adjustment is your overall philosophy. It’s easy to look at the budget you’ve created as a restriction. After all, it’s nothing more than a set of rules. The flip-side is that these rules are there for your protection. Sticking to them will not only help you feel comfortable about your finances before and after the holidays, it will free you from the stress that comes from accumulated debt. When you look at it this way, a budget can be downright liberating. Give yourself the gift of a financially stress-free holiday, by planning in advance.

We thrive based on your referrals, and are truly grateful for them. Thanks again.

Warmly,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA