Tag Archives: planning

Getting Your House In Order

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In a recent Money Magazine article, a survey revealed that 61% of adults with children don’t have even a basic will in place. Many don’t want to think about death, and some believe that wills are only for people that are elderly or “rich”.

In reality, visiting an attorney and discussing your situation is money well spent.  Even if you don’t think you need one, you might.  Do you own your home? Do you have things that you want a specific person to have when you pass away? Do you have investments outside your retirement accounts, or want to use your money to provide for future generations? If your answer to any of these is “yes”, it would be wise to seek out an attorney who works with estate planning.

The American Bar Association (ABA) has a great FAQ section on estate planning, which can give you some additional items to consider, and can be found here. Should you decide contacting an attorney is right for you, ask your family and friends who they’ve used, reach out to other professionals like your CPA, or use the ABA’s website to find an attorney near you.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Is College Worth It?

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For many years, there has been a certain expectation among those graduating from high school.  Whether it’s put on student by their parents, teachers, or themselves, the expectation is that once you leave high school that you will continue on to college, preferably a four year college and the eventual Bachelor’s degree.

In more recent years though, that nearly automatic decision to continue on in education has come under increasing scrutiny due to the cost of a college education.  Others believe they don’t need a college degree for their future career.  To that point, 57% of American workers reported that they do not need a college degree to do their jobs.

Since 1982, the cost of a college degree has increased a staggering 740%, while earnings of college graduates have increased just 145%.  More and more families are falling into the “financial aid gap”, finding themselves too wealthy to get much, if any financial aid, but without the resources to finance a college education.

This increase in costs has led directly to an unprecedented level of student loan debt for college graduates as they and their families try to finance an increasingly expensive education.   A recent survey of college graduates shows the average student loan debt to be $35,200.  Student loans are relatively inexpensive in terms of interest costs, but they are one of the most difficult debts to be relieved of.  Most cannot be discharged in bankruptcy, and many private loans require a creditworthy co-signer who can be left on the hook for the loans if they student fails to make the payments.

Due to the cost and hazards of taking on student loans, it’s important to weigh the monthly payments that will result from borrowing against the income the graduate can reasonably expect to make.  For example, taking on significant debt to attend an expensive private college in order to work in a rewarding though relatively low paying profession, like social work or the fine arts may not be the best use of resources.

Not all the news is bad when it comes to higher education though.  Those with a Bachelor’s degree make on average $1.1 million more than those with only a high school diploma, while those with a graduate or master’s degree make $1.4 million more.  Those with a college degree experienced an unemployment rate during the height of the last recession that was roughly half than those with a high school diploma, and routinely report they are more satisfied in their work than those without advanced education.  The benefits continue into retirement, where those with a college degree typically earn 3 to 4 times more in retirement than those without a college degree.

With pros and cons on both sides of the debate, the key is to shop around and know what you’re trying to get out of your education.  Private schools generally have smaller class sizes and more manageable campuses, but the cost of tuition is on average three times as much as a public school.  Many less expensive public schools have large campuses and larger student bodies, making it easier for a student to feel lost among their peers.

When a student it working to find the right college for them, it’s important to take a hard look at the economics of the decision in addition to the academic reputation of the school and how well the student feels they would fit in socially.  Once that balance is struck, they can undertake what for most is the most exciting and eye-opening time of their lives.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Disaster Preparedness

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As the East Coast works to recover from Super Storm Sandy, and closer to home, Duluth and other areas of North East Minnesota do the same after last spring’s significant, unexpected flooding, now seems a good time to go through a few tips for preparing for what you hope never happens.

  • Keep important documents, such as birth and marriage certificates, Social Security Cards, and titles to cars and homes in a portable fireproof safe.  If you live in an area prone to flooding, be sure to store it in a high place, such as an attic.
    • If you live in a place where you are likely to need to evacuate, such as flood plains or areas prone to wild fires, keep your financial and legal documents in the safe as well.  Also consider scanning them and keeping a USB flash drive loaded with them in a safety deposit box or with trusted family outside the potential danger zone.
    • Keep the receipts for your major purchases, such as cars, furniture, appliances, electronics and sporting equipment in the same manner.  These can help if you need to file an insurance claim.
  • Keep copies of tax returns, as well as the documents to support them, in a waterproof container.
  • Take the time to make a “video tour” of you home, and keep it offsite in a safe location. Narrate the video to describe the makes and models of your valuables, and be sure to record things like valuable landscaping or upgrades that might be easy to miss.
  • Discuss flood insurance with your insurance agent, and be sure you understand what is, and isn’t, covered under your current policies.  Also be sure to keep your insurance for personal possessions (everything inside your house) up to date over the years.

The Deadline is Approaching!

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The post this week is a quick one.  If you extended your personal tax return, it’s due a week from today, with no more extensions available.  This deadline tends to sneak up on people.

After that deadline passes, we’ll be turning to year end planning for many of our clients.  Taking an hour or two to discuss taxes this fall will make next spring a far less surprising time, and allow us to help proactively plan for year end taxes.

As always, we’re here to help.