Category: Blog

What to Do When You’re A Saver and Your Spouse is a Spender (or Vice Versa)

Hi everyone, Sierra here! (I know, where is Dennis? He let me take over this one because he loses his mind for a few months after tax season)

Dennis and I have had numerous talks about how much of a saver I am while my wonderful husband, Landon, is on the complete opposite end of the spectrum. It’s funny because Dennis and his wife, Robin, are pretty much the same as us in this regard (sometimes I think Landon and Dennis are two peas in a pod with how similar they are, which is definitely not a bad thing!)

We get asked a lot (especially by our parents) what we do to handle the different way we view finances. I’ll be honest…IT’S HARD! As much as we have in common, this is not one of them. If it were up to me, every bit of spare money would be put into the savings account, and he would take that as an opportunity to buy a new video game. So, we have to work together to make sure there is balance, and these are a few ways we do:

**Have A Game Plan**

I like having a plan for everything possible, and Landon usually goes along with those plans. That’s how we operate. We allocate a certain amount to savings each month that is automatically taken from our checking account and transferred to our savings account (you know Dennis preaches the importance of this!). We also decide if we want to add anything further to our savings. We have to talk about finances together (everything about what comes in to what goes out). If you’re in the same situation, communication is more important than anything!

**Have a Budget/Be Aware of Monthly Bills**

Landon and I have a list and a shared Google calendar that lists all of our bills and when they are due. Both of our phones buzz with a reminder every time a bill is due, and we have most of them set up on auto-draft (pro tip: sometimes phone companies or other services will knock off a few bucks off of your bill every month if you sign up for auto-draft every month). We know we have to budget for those items and we also take into account groceries, household items (we have kitties to support here!), and we also try to account for any miscellaneous things that might pop up throughout the month (like if school requires me to get another book or if we need new work clothes). It’s important to us to have an idea of how much money we have left over every month, especially if we are allocating some as “fun money”. Priorities come first (that means any debt you have too)!

**Set Aside Some Fun Money for Your Spender**

Allowances. No, I’m not saying you should treat your spouse like a child, but coming to an understanding is important. It’s like a diet. If you totally take limit yourself, you’re going to miss that chocolate cake and find yourself standing in front of the fridge at midnight stuffing your face. You have to set aside a little money for fun things. They don’t have to be extravagant, and you don’t have to blow hundreds of dollars to have a good time either. Our idea of fun is a trip to the comic book store sometimes (I know, Nerd Alert!). So, we set aside a certain amount of money each month for our hobbies, activities we do together, etc. This is much easier for Landon than it is for me. I get the urge to just send that money to our savings account. This is where the balance comes in. He knows I need to do things for myself sometimes, and I know when he needs to reign things in sometimes.

**Don’t be Afraid to Take More of the Lead**

Over the almost six years we have been together, Landon has realized that sometimes it’s better if I take over our finances a little more than him (you can tell I married him for his intelligence). He knows he isn’t always the most responsible for money, so any major transfers or bill money allocation is on me…and that works for us! Currently, only I have access to our savings account and our credit cards, and Landon is totally on board with that. Compulsive spending is a trait he and most of his family share, so he understands that we have to have “protections” in place. I know what you’re thinking, “Shouldn’t he have enough self-control to not go overboard?” One day, I know we’ll get there, but right now we have agreed that this works for us. It doesn’t mean I don’t trust him, this is just a work in progress. Sometimes when you combine finances with a spender, you have to do what’s going to make the relationship successful and able to flourish.

Note that these tips work for us, but the best way to figure out how to reach a good financial place with your spouse is to TALK ABOUT IT! Don’t learn that the hard way, and don’t let money problems dominate your relationship.

Alright, I know you miss the boss man and his silly self, so I’m signing off!

Sierra

Here’s Probably All You Need for Your Taxes This Year

I remember seeing a study in the Journal of Personality and Social Psychology (Jun 2012) by Wilhelm Hofmann a few years back about resolutions, temptations, etc. and how we can control them — or be controlled by them. It’s probably worth sharing with you the key bit (and lest you think I’m a psychology nerd, I’m pretty sure I saw it referenced in an article in the NYT, but I’m not able to immediately find that particular link)…

Essentially, people with the best “self control” are those who end up having to *use* self control the least. They set up their lives in order to minimize temptation and create systems by which they are able to avoid being put into the position of being tempted. They conserve their energy and outsource as much self-control as they possibly can.

Sometimes our best method for sticking to our resolutions (both financial and otherwise) is not to “gut it out”, but to allow others, and our own pre-set boundaries, do the heavy lifting for us.

Which, of course, brings me back to the tax preparation process. If you’ll pardon the somewhat-clumsy segue here, may I humbly suggest something? Let us help you this year.

I truly do pity those who attempt to wade through all of the different tax codes and forms on their own, and not devote a week’s labor to the transaction. It really doesn’t pay to “go it alone” for certain tasks.

Dennis Bridges’s
“Real World” Personal Strategy Note
Documents You Need for Tax Preparation in 2018 (TY2017)
“If you do not think about your future, you cannot have one.” -John Galsworthy

Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful checklist.

Before you get overwhelmed: yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our clients. Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.

Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…

Personal Data
*Social Security Numbers (including spouse and children)
*Child care provider tax I.D. or Social Security Number

Employment & Income Data
*W-2 forms for this year
*Tax refunds and unemployment compensation: Form 1099-G
*Miscellaneous income including rent: Form 1099-MISC
*Partnership and trust income
*Pensions and annuities
*Alimony received
*Jury duty pay
*Gambling and lottery winnings
*Prizes and awards
*Scholarships and fellowships
*State and local income tax refunds
*Unemployment compensation

Health Insurance Information
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)

Homeowner/Renter Data
*Residential address(es) for this year
*Mortgage interest: Form 1098
*Sale of your home or other real estate: Form 1099-S
*Second mortgage interest paid
*Real estate taxes paid
*Rent paid during tax year
*Moving expenses

Financial Assets
*Interest income statements: Form 1099-INT & 1099-OID
*Dividend income statements: Form 1099-DIV
*Proceeds from broker transactions: Form 1099-B
*Retirement plan distribution: Form 1099-R
*Capital gains or losses

Financial Liabilities
*Auto loans and leases (account numbers and car value) if vehicle used for business
*Student loan interest paid
*Early withdrawal penalties on CDs and other fixed time deposits

Automobiles
*Personal property tax information
*Department of Motor Vehicles fees

Expenses
*Gifts to charity (receipts for any single donations of $250 or more)
*Unreimbursed expenses related to volunteer work
*Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
*Investment expenses
*Job-hunting expenses
*Education expenses (tuition and fees)
*Child care expenses
*Medical Savings Accounts
*Adoption expenses
*Alimony paid
*Tax return preparation expenses and fees

Self-Employment Data
*Estimated tax vouchers for the current year
*Self-employment tax
*Self-employment SEP plans
*Self-employed health insurance
*K-1s on all partnerships
*Receipts or documentation for business-related expenses
*Farm income

Deduction Documents
*State and local income taxes
*IRA, Keogh and other retirement plan contributions
*Medical expenses
*Casualty or theft losses
*Other miscellaneous deductions

We’re here to help. Let me know if you have any questions.

Warmly,

Dennis Bridges
(770) 984-8008

Bridges On Finding Blessings in Whatever Financial Situation You Are In

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

Bridges’ 6 Ways to Climb Out of Your Credit Card Debt

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