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Making a Will Online: 3 DIY Options

A will ensures your possessions go to the right people after your death. You must compose yours carefully, but if your personal situation and estate aren’t complicated, you might be able to create your own without help from an attorney.

Even if you go it alone, it’s important to have trustworthy guidance. Here are three ways to create a do-it-yourself will with online resources, along with the pros and cons of each method.

(Not sure how wills work? See our will-writing primer.)

1. Use an online will template

Type “will writing” into your browser and you’ll find many sites offering templates. This is one step up from typing the full document on your own, as you might if you were using a will-writing book.


  • Many sites offer templates tailored to your state’s regulations and your personal needs
  • Templates are often free
  • You can complete your will on your own schedule


  • Templates might be outdated. Double-check current laws to make sure the one you’re using is valid.
  • Some template providers require you to register or enter personal information. If you’re concerned about privacy or future sales calls, this could pose a problem.
  • Most templates are free, but if you need a special form, it could cost you
2. Use will-writing software

Your online search will probably also turn up software such as programs offered by Rocket Lawyer or LegalZoom. These guide you through the will-writing process in a more supportive way than a plain-text template might.


  • The software should include your state’s legal requirements
  • The standardized language that programs use helps to remove any confusion about your wishes
  • A guided approach helps ensure you don’t overlook any information or steps
  • As with a template, software lets you write your will when it’s convenient for you


  • Software isn’t free, though it’s generally cheaper than hiring an attorney
  • You’ll need to research online reviews and other resources to find reputable software
  • Will-writing programs might not account for special situations, such as naming someone to care for your pets or safeguarding a special collection
3. Go the hybrid route

With this option, you start writing your will yourself, using either a template or software, and then ask an attorney any lingering questions.


  • By starting the process, you’ll have answered or anticipated most questions a legal adviser would have
  • You’ll be able to discuss your concerns with a professional — and learn about concerns you might not have considered
  • Because you’ll have done much of the work before consulting the attorney, your fees might be much lower than what you’d have paid if you started with a visit to the lawyer’s office


  • Even a partial lawyer’s fee is more expensive than the other will-writing methods
  • Working with a professional is more time-consuming. You’ll have at least one appointment at the attorney’s office, which might mean taking time off work or other inconveniences.

Regardless of the method you choose, the most important thing is to complete the process. Virtually any kind of will is better than nothing. Remember, too, that you’ll need to update your will, either on your own or by contacting your attorney, whenever your life circumstances change (think having a child or getting divorced).

If your estate is complex or large, it might be worth your time and money to consult an attorney right away. For more tips on distributing your estate efficiently, see NerdWallet’s estate planning basics.

What to Buy (and Skip) in July

July is nearly here, and as temperatures rise, you can expect prices to drop on popular products.

Make the most of midsummer sales with our guide to what you should buy (and skip) during the month of July.

Buy: Patriotic items

Each year around July 4, stores pledge allegiance to the red, white and blue with sales on just about everything that has stars and stripes on it. Expect clothing discounts at department stores and decoration discounts at party supply shops. Wait until close to the holiday to buy your items at the best possible price.

Some stores extend their sales to other products. Last year, we located Fourth of July deals on food, appliances, mattresses and more. Keep your eyes peeled for star-spangled savings.

» MORE: What to buy every month of the year

Skip: Back-to-school supplies

We know: While you’re working on your tan, school is the last thing you want to think about. And you don’t have to. Retailers begin their back-to-school sales as early as July, but you’ll save more if you don’t buy your backpack or laptop just yet. School-oriented deals historically reach their peak in late August and early September, when stores are more motivated to clear shelves.

In August 2016, for example, Best Buy offered up to $100 off select Dell computers. Carter’s took up to 50% off school apparel styles, and Wayfair dropped dorm supply prices by as much as 70%.

Buy: Summer apparel

By July, tank tops, shorts and flip-flops have been on display for several weeks — and in some cases, several months — so it’s finally time to stock up.

By this point of the season, don’t settle for anything less than a sale price on summer apparel. Look for storewide discount events and coupons specifically for clothing departments. Designer brand Coach, for instance, has already launched its Summer Sale, as have apparel and accessory shops Forever 21 and Old Navy. And July 21 marks the beginning of Nordstrom’s anniversary sale.

Skip: Lawn mowers

July isn’t an ideal time to purchase large, outdoor items, such as lawn mowers. After all, you aren’t the only one thinking about tending your yard, and higher demand traditionally means higher prices.

By the time August and September roll around, outdoor items will see steeper discounts, so hold off for another month or two.

Buy: Travel

July’s a great time to book your travel — as long as you’re planning a trip for later in the summer. On average, buying a flight for August travel will be 7% cheaper than buying one for July, according to a 2017 report of expected daily flight rates by, an online travel agency.

If you absolutely have to fly this month, CheapAir recommends traveling on Tuesdays and Wednesdays instead of weekends. And July 4 flights are expected to be more affordable than flights on the days before and after.

Bonus: Black Friday in July

If last year is any indication, expect Black Friday-esque deals this month in an assortment of categories, such as apparel and electronics. Retailers often offer these discounts in an attempt to boost typically sluggish summer sales — but they can also spell real savings for consumers.

Last year, Amazon hosted its second annual Prime Day on July 12, with limited-time deals on products across the site. Walmart, Target and Forever 21 have hosted Black Friday in July blowouts in past years.

Keep an eye out for similar midsummer blowout sales again this year. They could be a solid opportunity to buy things you’ve been holding off on for a while.

And … ice cream

July 16 is National Ice Cream Day. Use it as an excuse to indulge in your favorite flavor. If you work it right, you can get your cone on the house.

Last year, some ice cream shops offered free or discounted treats. PetSmart PetsHotel locations even gave dog-friendly ice cream to four-legged friends. You’ll usually be able to find promotional announcements and coupons on social media.

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @courtneynerd.

Updated June 23, 2017.

How to Split Insurance in a Divorce

Amid the grief and complicated logistics of breaking up, insurance may not be top of mind. But getting your coverage in order should be high on your to-do list. The right insurance creates a financial safety net for the fresh start ahead.

Here’s a breakdown of what to do.

Insurance checklist for a divorce Health insurance Get health insurance if you’ll lose coverage through divorce Make sure the kids are covered Car insurance Notify the insurance company if you’re moving during the separation Get separate policies when the cars are split up List teen drivers on one or both parents’ policies Home and renters insurance Maintain home insurance in both names as long as the house is jointly owned Moving to an apartment? Consider renters insurance Remove the ex-spouse’s name on home insurance if you become the sole owner Life insurance Change beneficiaries on life insurance policies if necessary Buy life insurance on a spouse who’s paying child support or alimony Disability insurance Buy disability insurance to cover your income Make sure an ex-spouse providing alimony or child support has disability insurance Health insurance

You can keep your health insurance. But if you’re a dependent on a spouse’s workplace plan, in most states you’ll have to start paying the full bill for that insurance. Or you’ll have to buy different coverage. (The kids can stay on either parent’s plan as dependents.)

What to do if you’re a dependent on a soon-to-be-ex-spouse’s health plan:

Option Good to know Enroll in a plan at your workplace. Employer likely pays most of the cost You can sign up outside the open enrollment period due to divorce Talk to the employee benefits department Keep the coverage through the ex-spouse’s workplace plan and pay for it. A federal law called COBRA lets you continue the coverage at your own expense for up to 36 months Talk to the ex-spouse’s employee benefits department about how to sign up for COBRA Be prepared for sticker shock. The premium can be high when the employer no longer pays. Buy a health plan on the government health insurance market. Go to for information Depending on your income, a tax break might be available to help pay the premium Buy a health plan outside of the health insurance marketplace. More plan choices are available when you buy directly from insurance companies No tax breaks are available to help pay the premium Low income? Check to see if you qualify for Medicaid. Eligibility varies by state Only those who meet low-income requirements qualify

“Health insurance is a big component of expenses that really need to be projected and thought through when someone is moving toward a divorce settlement,” says Cheryl Glazer, president of the Association of Divorce Financial Planners and a financial consultant in Philadelphia.

As you weigh health plan choices, understand the benefits of each and the out-of-pocket costs such as deductibles, copayments and coinsurance. Making apples-to-apples comparisons among health plans takes time, and you may need help, she says.

Where to find help choosing a health plan Buying a marketplace plan Check for the health insurance marketplace in your state Buying a health plan outside the marketplace Health insurance agent. Some agents sell coverage from a single company; others sell plans offered by a variety of companies. Signing up for coverage at work Your employer’s human resources or employee benefits department

» MORE: COBRA health insurance eligibility and alternatives

Auto insurance

Notify the insurance company about changes, such as moving during the separation. Car insurance rates are based in part on where the car is garaged. Once the property is divided, both ex-spouses will need their own car insurance policies.

“When buying a policy, look at the details that are behind the front page,” says Chris Chen, a certified financial planner with Insight FInancial Strategists in Waltham, Massachusetts. He is also treasurer of the Association of Divorce Financial Planners.

Teen drivers? Both parents may need to list the kids on their policies if they share custody. That’s because the teens will likely regularly drive both parents’ cars. Call the insurer to find out.

Home insurance

Some ex-spouses jointly own the family home after the divorce, usually to accommodate the kids until they finish school, Chen says. In that case, both should be listed on the home insurance policy. Contact the home insurance company to remove an ex-spouse if you become the sole owner.

Renting a new place? Consider buying renters insurance, which covers belongings and provides liability insurance. Even if you’re still named on the family home insurance policy, that coverage won’t extend to an apartment.

» MORE: Find the best renters insurance

Life insurance

Life insurance is often required in a divorce agreement when child support or alimony payments are involved. The life insurance replaces this money if the ex-spouse who makes the payments dies prematurely.

Buy individual life insurance rather than depending on group coverage through work, Chen says. Employer-sponsored life insurance typically ends when you leave a job, and it may not offer enough coverage anyway.

Chen says it’s best for the beneficiary to own the policy insuring the ex-spouse. The policy owner pays the premiums and has control over the policy. This way, you never have to worry about an ex-spouse “forgetting” to pay the premiums or changing the beneficiary.

Review beneficiaries on life insurance and other financial accounts, and change them if necessary.

» MORE: The best life insurance companies

Disability insurance

Disability insurance replaces a portion of income if you become disabled or sick and can’t work for an extended period. The coverage is important, but often overlooked, Chen says.

The chance of disability is higher than you might think:

  • A healthy 35-year-old man with an office job has about a 20% chance of becoming disabled for three months or longer during his career
  • A healthy 35-year-old woman office worker has about a 25% chance
  • The chances rise to 45% for the man and 41% for the woman if they smoke and are overweight, according to the Council for Disability Awareness, an insurance trade group

Back injuries, cancer and heart disease are common causes of long-term work absences. Some employers offer disability insurance, or you can buy individual coverage from an insurance company.

» MORE: Disability insurance explained

Barbara Marquand is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @barbaramarquand.

How to Untangle Your Finances in a Divorce

Financial decisions get complicated amid the emotional upheaval of a split. “So many people say, ‘Oh, it’s going to be an amicable divorce,’ and three months later, they are keying each other’s cars,” says Kitty Bressington, a certified divorce financial planner in Rochester, N.Y.

Don’t let your emotions derail your economic well-being. Here are three major areas where you’ll need to make clearheaded decisions — sometimes well before anyone visits a lawyer.

Credit accounts

First, make sure you have an independent credit identity, says money coach Patricia Stallworth, author of “How to Get Divorced Without Losing Your Blouse.” Pull your credit reports and understand every account: Is it solely your account, or a joint account, or are you an authorized user on your spouse’s account? If you have no individual credit accounts, apply now, while you can use joint income to qualify.

Before you divide accounts and balances due, Stallworth advises making a budget based on after-divorce income to see how much debt you can handle. It’s also smart to consult an attorney and a financial advisor familiar with your state’s laws on debt responsibility.

Existing credit accounts — credit cards, car loans and personal loans — can be handled three different ways:

Agree to pay off and close accounts now: Wipe out balances, then close joint accounts and remove each other as authorized users on individual accounts. This cuts out the risk that a spouse will run up charges or fail to pay debt as it’s divided later.

Agree to close now and pay off later: Close joint accounts and revoke authorized user privileges, but leave the balance to be addressed later in negotiations. This stops new charges, but you’re still at risk. Creditors aren’t bound by your divorce decree and may come after you for joint debt if your ex doesn’t pay as agreed. When splitting debt, consider insisting on a balance transfer of your ex’s portion to a new account in his or her name alone.

Do nothing: It is not illegal to leave an ex-spouse on a credit account — it’s just extremely risky.


Emily Doskow, an attorney in Oakland, California, wrote the “Essential Guide to Divorce” and has seen her share of testy property settlements. She says deciding what to do with a home comes down to three basic options:

One spouse buys the house from the other: Reaching an agreement on fair market value is just one step in the process. People may think they can just “take the selling spouse off the loan,” Doskow says. “Of course, the bank doesn’t want to do that. Because then one person is responsible for the loan that two people used to be responsible for.”

The usual answer, refinancing, can be a reality check: One spouse must be able to qualify for the loan. Even then, Doskow says, “there’s often a gap between the amount of the loan someone can qualify for and what payments they can actually make.”

You sell and divide the proceeds: The local market will determine the home’s value, reducing that source of dispute. The difficulty may be accepting the necessity. “I think it’s very common for people to be very attached to their home,” Doskow says. It’s a matter of “being realistic about what’s possible and knowing that sometimes selling is your path of least resistance.”

You continue as co-owners: This has a high level of difficulty. All contingencies — taxes, maintenance, what to do if either of you faces financial hardship — need to be spelled out in a co-ownership agreement as part of the divorce. “Essentially, the spouses are entering into a separate business relationship, post-marriage and post-divorce,” Doskow says. “So, it’s a real estate ownership contract, in some ways.”


Before you agree to any division, “it is really important for the receiving person to understand the nature of each investment,” says Lili Vasileff, a certified divorce financial analyst and president of Divorce and Money Matters, a practice specializing in wealth protection. Taxes and fees can make the true dollar value of an asset a lot lower than it looks on paper. Consider:

If the investment is right for you: If your spouse is the more aggressive investor, you might not choose to keep assets with that risk level. It’s generally better to sell before dividing the account. “If you … liquidate it after the fact, then you bear the entire tax impact,” Vasileff says. That capital gains tax bill could be a doozy.

The type of account: Assets in a qualified retirement plan — like a 401(k), 403(b) or pension plan — get preferential tax treatment. Splitting the money under a qualified domestic relations order, or QDRO, lets you keep that tax-favored status as long as you do a direct transfer; think IRA to IRA, or a rollover from a 401(k) into an IRA.

Fees for liquidating accounts: An investment firm may see divorce as a signal that it’s about to lose half of an account. To make up for lost business it may charge fees for outgoing transfers. These are sometimes negotiable, Vasileff says, or you may avoid fees by opening separate accounts at the firm.

Hal Bundrick, Bev O’Shea and Dayana Yochim are staff writers at NerdWallet. Email:, and

5 Times Your Credit Card Issuer Can Raise Your Interest Rate

The Credit Card Act of 2009 made great strides in protecting credit card users from some unfair practices that used to be common. For instance, issuers can now raise your interest rate only under specific conditions — meaning no more arbitrary increases without notice. But that doesn’t mean your credit card’s APR can never go up. Here are 5 times your credit card issuer can raise your rate — and what to do if one of them happens to you:

1. Your promotional rate is ending

If you took advantage of a 0% balance transfer offer to pay down credit card debt, you probably saved a bundle during the interest-free period. But a 0% APR or other promotional rate doesn’t last forever. Promotional rates typically last six to 12 months. After that, your issuer is free to raise your rate. Your new rate will depends on multiple factors, but your credit score will be a big one.

The Card Act specifies that issuers must give you at least 45 days’ notice before making a major change to the terms of your account — but an expiring promotion is exempt from this rule. It will be up to you to keep track of when your 0% period is up, so make it a priority to pay off your balance before interest kicks in.

» MORE: How is credit card interest calculated?

2. You’re 60 days late on your payments

Paying a credit card bill late is never a good move. It will usually trigger a late fee, and if you’re 30 days late, it could damage your credit score. Things get even worse when you’re 60 or more days late. At that point, your issuer will be able to impose a penalty APR, which could be as high as 29.99%.

In most cases, the Card Act prevents credit card companies from raising the interest rate on an existing balance. In other words, if your rate goes up, the new rate will apply only to new charges going forward. But if you get hit with a penalty APR, your issuer is permitted to apply it to outstanding balances. What’s more, you’re probably going to be stuck with this sky-high interest rate until you’ve made at least on-time payments.

So make every effort to make at least the minimum payment on your credit card bill on time every month.

3. Your credit score has dropped substantially

Credit card issuers periodically review your account and personal information. If it spots a change it doesn’t like — such as a significant drop in your credit score — it can raise the interest rate on a card you already have.

However, this is a case in which the Card Act requires that you get 45 days’ notice of the change. Also, the rate applies only to new purchases — not your existing balance. If you choose not to accept the change, you have the right to close your account with no penalty (provided you pay off the outstanding balance).

If your rate goes up because of a drop in your credit score, your issuer is required to review your account in six months for signs of improvement. If your score goes back up, the issuer must consider reducing your rate.

4. You have a variable APR and the prime rate is going up

Most credit cards have a variable APR, meaning that that the interest rate on the card is tied to the direction of interest rates in general. Most credit card companies set rates linked to the prime rate, which is the rate banks charge their biggest, best customers for loans. For example, if your rate is “prime plus 15%,” and the prime rate is 4.5%, then your rate is 19.5%.

The prime rate rises and falls based on decisions made by the Federal Reserve. If the prime rate rises, the interest rate on your credit card will rise, too. This is another situation in which your issuer is not required to give you 45 days’ notice of a change to your APR.

There’s not much you can do about an increase in the prime rate. It’s not something your issuer has control over, and it will affect almost all credit cards on the market. But if you’re paying your balance in full every month — and therefore not paying interest — you probably won’t even notice the change.

5. You’ve had the card at least 12 months

One provision of the Card Act says issuers generally can’t raise the rate on a card you’ve had for less than a year. There are exceptions to this, including a 60-day delinquency or a change to the prime rate. But if a year passes and your issuer wants to raise your rate, it’s permitted to.

Again, though, you must receive 45 days’ advance notice of the change; if you find yourself in this situation and aren’t sure why your rate is going up, call your issuer right away to find out why. It might be the case that an error has popped up on your credit report. If so, you’ll need to take steps to correct it— pronto.

This article has been updated. It was originally published Aug. 15, 2014. 

Value vs. Growth: 2 Investing Styles Explained

Investing is often categorized into two fundamental styles: value and growth. Value investors look for stocks they believe are undervalued by the market, while growth investors seek stocks that deliver better-than-average returns.

Often growth and value are pitted against each other as an either-or option. It’d be as if you walked into an (admittedly boring) ice cream shop that offered two flavors — chocolate and vanilla — and assumed you could only choose one. But like ice cream cones, portfolios have room for more than one flavor, and together value and growth investments can complement each other.

Before you scoop up a fund of the growth or value variety, here’s what you need to know.

Value and growth at work

Value- and growth-based strategies are among the many asset allocation tools you can use when deciding how to invest in stocks. Some people create their own criteria for picking stocks based on growth or value characteristics. Others let the professionals do the work and invest in mutual funds or exchange-traded funds (ETFs) that adhere to these styles.

If you have a 401(k) or individual retirement account (IRA), you probably have the option to invest in growth and value funds — so that’s one likely place you’ll encounter these strategies.

Value investing 101

Value investors are on the hunt for hidden gems in the market: stocks with low prices but promising prospects. The reasons these stocks may be undervalued can vary widely, including a short-term event like a public relations crisis or a longer-term phenomenon like depressed conditions within the industry.

Such investors buy stocks they believe are underpriced, either within a specific industry or the market more broadly, betting the price will rebound once others catch on. Generally speaking, these stocks have low price-to-earnings ratios (a metric for valuing a company) and high dividend yields (the ratio a company pays in dividends relative to its share price). The risk? The price may not appreciate as expected.

Benjamin Graham is known as the father of value investing, and his 1949 book “The Intelligent Investor: The Definitive Book on Value Investing” is still popular today. One of Graham’s disciples is the most famous contemporary investor: Warren Buffett.

Growth investing 101

By comparison, growth investors often chase the market’s highfliers. You’ve likely seen the disclaimer from financial companies that past performance isn’t indicative of future results. Well, this investing style is seemingly at odds with that idea.

It’s essentially doubling-down: Investors bet a stock that’s already demonstrated better-than-average growth (be it earnings, revenue or some other metric) will continue to do so, making it attractive for investment. These companies typically are leaders in their respective industries; their stocks have above-average price-to-earnings ratios and may pay low (or no) dividends. But by buying at an already-high price, the risk is that something unforeseen could cause the stock’s price to fall.

This style’s “father,” Thomas Rowe Price Jr., developed his philosophy in the 1930s and later went on to found the asset management firm that still bears his name: T. Rowe Price.

How growth and value overlap

Each school has devoted followers, but there’s a lot of overlap. Depending on the criteria used for selection, you’ll see stocks that are included in both value and growth funds. What gives?

In part, it’s much ado about a distinction that’s not set in stone. For example, a stock can evolve over its lifetime from value to growth, or vice versa, says Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. In addition, investors in each camp have the same goal (buy low and sell high); they’re just going about it in different ways.

“Value investors tend to focus their attention on valuing the continuing operations of a firm, while a growth investor tends to look more at the growth opportunities of the companies they invest in,” Jacobsen says. “It’s important to remember no stock is purely value or purely growth.”

Not an either-or decision

The stock market goes through cycles of varying length that favor either growth or value strategies. The stocks in the Russell 1000 Growth index have outperformed those in the Russell 1000 Value index during the current bull market that began in 2009, but that’s not the case on a year-by-year basis. Value outpaced growth in 2016.

What’s an investor to do? Invest in both strategies equally, advises John Augustine, chief investment officer at Huntington Bank. Together, they add diversity to the equity side of a portfolio, offering potential for returns when either style is in favor. A 50-50 split also helps investors avoid the temptation to chase trends — “and that’s important because consistency is the key to 401(k) investing.”

Investing in growth and value funds adds a layer of complexity to an investment strategy, which is why Augustine recommends it as a secondary step — after diversifying across asset types (stocks and bonds) and classes within (size or region, for example).

Because the market goes in value-growth cycles, these strategies may require a more watchful eye, especially if your 401(k) doesn’t automatically rebalance. When market fluctuations shift your allocations, rebalancing brings it back to your original goal so you’re not unintentionally over- or underinvested in any asset. (Here’s more on rebalancing your 401(k).)

Augustine recommends investors rebalance at least twice a year — a good reminder: “when the clocks change” — or once allocations have gotten out of whack by 5% or more.

Common misconceptions

In addition to the myth that investors must be growth or value purists, Jacobsen says many people don’t realize these styles ultimately whittle down to an industry discussion. About one-third of “pure growth” stocks in a subset of the Standard & Poor’s 500 index are in the technology industry. Financial stocks have a similar weighting in the “pure value” index.

Finally, don’t get too caught up in the idea these distinctions are make-or-break — effective diversification matters more. Many investors who piece together a portfolio by stock picking stumble upon growth and value unintentionally, Augustine says.

“They’ll find some things that are out of favor and some that are in favor — that’s growth and value,” he says. “The key to value is when you buy. The key to growth is when you sell.”

Anna-Louise Jackson is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @aljax7.

Are You Afraid to Look at Your Finances?

Credit counselor Linda Humburg understands why many of her debt-burdened clients don’t want to open their mail. What bothers her, though, is the sheer volume of untouched bills and collection notices that some bring to their first counseling appointments.

“The shoeboxes (full of bills) don’t make my heart drop as much as the grocery bags and garbage bags,” says Humburg, counselor manager for FamilyMeans Financial Solutions in Stillwater, Minnesota.

Not wanting to confront unpaid bills is a perfectly understandable, if unfortunate, reaction to a bad financial situation. And it’s not just people in extreme debt who might be afraid to look. Many people avoid checking their credit scores or using retirement calculators because they’re afraid of what they might find.

The problem is that delaying action usually makes matters worse.

“There is a price tag for denial,” Humburg says. “And it can be very costly depending on how long it’s allowed to happen.”

The cost of not looking

Retirement savings is a good example. People fear running out of money in retirement, so they don’t calculate what they need to save and procrastinate on saving, says Barbara O’Neill, a certified financial planner and distinguished professor at Rutgers University’s cooperative extension.

That means they lose out on company matches in retirement plans, tax breaks on contributions and the compounded gains they could be earning, she says. The longer it takes people to start saving for retirement, the harder it is for them to catch up — and the more likely it is they will run out of money.

Turning around credit also takes time, so putting it off usually means living with bad credit longer. That, in turn, can mean paying more through higher interest rates, pricier insurance premiums and larger utility deposits. Bad credit also can make it harder to rent apartments and get jobs.

Ignoring bills will, at best, cost people more in late fees. At worst, it can lead to eviction, foreclosure, lawsuits and wage garnishment. People who might have qualified for repayment plans or debt consolidation loans when their financial troubles started end up having to file for bankruptcy.

“The longer you put something off, the fewer the options for resolving the situation,” Humburg says.

When push comes to shove

Many of Humburg’s clients ignore their finances, hoping their financial situations will improve, but “that day never arrives,” she says. Others are crippled by anxiety and depression that’s exacerbated, or sometimes even caused, by unpaid bills. The shame her clients feel over their debts makes it even more difficult to get started, she says.

Breaking out of the tunnel of denial isn’t easy. Some people are propelled into action when they’re turned down for a loan or, in writer Beverly Harzog’s case, their last credit card is canceled.

“That was a rock-bottom moment for me,” says Harzog, a former CPA who in her 20s maxed out seven credit cards by racking up over $20,000 in charges.

Harzog started educating herself about personal finance and credit — and built a budget that allowed her to pay off the debt in two years. She wrote about her experience in a book, “Confessions of a Credit Junkie.”

You don’t have to do it alone

Breaking any task down into smaller pieces can help people get started, O’Neill says.

They can begin by making an appointment to get help, signing up for a class to educate themselves — or opening the latest bills to get a clearer picture of what they face.

People who want to learn more about money can find resources through public libraries and financial education programs run through counties, states and universities, O’Neill says. If you want advice on how to get out of debt, it’s available online.

Those who need a helping hand can turn to low-cost, nonprofit credit counseling agencies, she says, that provide budgeting help and debt management plans. Another option for those able to pay: financial coaches, with referrals available via the Association for Financial Counseling and Planning Education. The cost can vary from a few hundred to several thousand dollars, although many coaches offer a free or low-cost initial assessment.

Bankruptcy attorneys also offer free consultations.

Taking action — any action — makes people feel less powerless.

“Just do it, no matter how difficult the situation is,” O’Neill says.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: Twitter: @lizweston.

This article was written by NerdWallet and was originally published by The Associated Press.

Don’t Let Divorce Ruin Your Finances

Divorce is an emotional trial — but it’s also a financial one.

According to a 2012 report by the U.S. Government Accountability Office, divorce or separation led to a 41% drop in income for women and a 23% drop for men.

Though data from the Centers for Disease Control and Prevention show that the divorce rate has been trending down, most people need only look around their social circle to see that splits are still a common fate. It’s a life-changing event, but it doesn’t have to ruin your finances — or your retirement. Here’s how to protect your financial future if your knot comes untied.

Take stock of your cash flows

Having some idea of how money comes into and goes out of your bank account is always a good idea, whether a divorce is on the horizon or not. But this kind of information is especially important when you’re about to split up. You need to know not just where your money comes from — how much you partner earns and how much you earn — but also what your expenses are.

Once you have a current picture, you can go down the line and estimate how each expense will change with the divorce. Some items, like housing, may fall. Others, such as auto insurance, can rise when you’re a single buyer rather than part of a married couple.

Get creative about income

Now that you’ve taken stock of your expenses, you’ll have good insight into how much income you’ll need post-split and whether you’re looking at a shortfall. If statistics prove true, there’s likely to be a gap, so the next step is to consider how you can fill it.

People are often loath to downsize — there are so many emotional ties to your home — but it may be the best way to lower costs. Also, consider ways to earn more income in a pinch: Rent out a room, open extra space to a service like Airbnb or moonlight at the local coffee shop.

If your divorce happens when you’re on the brink of retirement age — the rate of such so-called “gray divorces” has doubled since 1990, according to the National Center for Family and Marriage Research — you may have more leeway. “You may have delayed applying for Social Security, but maybe you need to do so when you’re divorced,” says Lili Vasileff, a certified financial planner and president of Divorce and Money Matters, a financial planning company based in Connecticut. “Or maybe your investments are positioned for growth, and now they need to be positioned to generate yield.”

If possible, bide your time

There are plenty of situations in which this wouldn’t be an option, but in the case of a friendly separation, you might consider putting off the full legal split if you’re bordering on a financial milestone. Two examples Vasileff offers: Medicare eligibility at age 65 and the 10 years of marriage needed to be eligible for Social Security benefits on your ex-spouse’s record.

If you’ll lose health insurance coverage by dropping off your spouse’s insurance and you’re bumping up against Medicare eligibility, waiting can save you significant money. Medicare can be considerably cheaper than COBRA or an individual health plan.

Younger partners who aren’t close to qualifying for Medicare may still benefit from some extra time on a spouse’s health insurance, perhaps until landing a job with their own coverage.

Examine your shared retirement benefits

Marital property — a term that includes retirement assets — is divided up equally in community property states. In other states, the law may require equitable distribution, which means what it sounds like: fair, but not necessarily equal.

In either case, you may be granted a portion of your spouse’s 401(k) under a qualified domestic relations order. You’ll typically want to roll that balance into an individual retirement account to preserve its tax-deferred status. (Here’s more on how to roll a 401(k) into an IRA.)

Be sure to weigh the tax treatment of assets as you divvy them up. While $100,000 in a brokerage account sounds equal to $100,000 in a traditional IRA, the tax treatment of those accounts changes the value significantly. Because a traditional IRA holds pretax contributions, distributions will be taxed as ordinary income in retirement. A $100,000 balance could quickly turn into $80,000 or less after taxes. Money in a brokerage account, on the other hand, will carry a much lower tax burden on capital gains, interest and dividends.

Revisit your beneficiary designations

It makes the news when a big-shot mogul accidentally leaves all of his assets to a previous wife, leaving his current one in the lurch. But it happens to lower-net-worth folks, too, and it can be just as damaging to your heirs.

The beneficiaries you designate on retirement accounts and life insurance policies trump any wishes you’ve outlined in your will, which means keeping them up to date should be a top priority. Everyone should do an audit once a year or so, but it’s crucial to give everything a deeper look after a major milestone like divorce.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @arioshea.

Updated June 22, 2017.

How to Responsibly Handle an Inheritance

There are plenty of horror stories about sizable inheritances squandered on fast cars and glittering parties. But careful planning and good advice can help people use their good fortune in a way that creates lasting value.

Consider these steps to make sure the money you receive after a loved one dies is used to best advantage.

Keep your own counsel

“Don’t tell anybody,” says Johanna Fox Turner, a certified financial planner with Milestone Financial Planning in Mayfield, Kentucky. “People would just come out of the woodwork wanting you to invest in their good ideas.”

Turner advises talking to a trusted family member or friend who has no expectation of receiving a share of the money. She also favors fee-only financial planners who are paid a straight hourly rate for giving you advice instead of making commissions on the investments they sell you, which can lead to conflicts of interest.

Take your time

“Take a deep breath,” Turner says. “Talk to advisors. Get some perspective.”

She has seen many people who are anxious about letting a significant sum of money sit in a savings account earning very little interest then rush to make investment decisions and make mistakes as a result. She says the potential gains from quick moves are outweighed by the risks of poor choices.

When Jamie Schweser (who later changed his surname to Schwesnedl, after marrying) received $1 million at the age of 26 because his parents sold their business, he spent a lot of time talking to other young people who had been in similar situations. Schweser found them through Resource Generation, a nonprofit organization that helps younger heirs learn about charitable giving. His parents encouraged him to think carefully about how he used the money, but didn’t discourage him from making his own decisions.

“We trust your judgment, but think about it before you do anything,” Schweser remembers his parents telling him.

Make a financial plan

Before you decide whether to use part of the money to pay off debt, to invest for your future or to donate to charity, it’s best to create a long-range financial plan. Then it can become easier to put the money to work.

For many, an inheritance doesn’t top five figures. Yet others may be more fortunate. Among families in the top 5% by wealth, the average inheritance was $1.1 million, according to 2014 information from the Federal Reserve.

No matter how much you inherit, however, having a plan for what to do with it is a good idea.

“People think financial planners are for rich people,” Turner says. “They’re really more suited to middle-income people.”

She estimates that a comprehensive financial road map takes around 5 hours for a qualified planner to help you develop, and the result is a clear set of priorities that enables you to allocate resources efficiently to achieve your goals.

Consider taxes

In most cases, inheritances aren’t taxed unless you live in a state that has an estate tax. At the federal level, an estate tax kicks in when the total value tops $5,490,000 for one person this year. When it comes to gifts to family members, taxes are levied after you receive $14,000 in one year from the same person.

Ultimately, Schweser says, he ended up giving away 75%  — $750,000 — of his parents’ gift. He kept enough to buy a house and top up a rainy day fund to serve as a cushion against emergencies. Later he went to work for Resource Generation for a time. Now 44, he owns a bookstore with his wife in Minneapolis and receives income from a couple of rental properties.

But even if extreme giving isn’t your priority, modest charitable contributions can be a win-win, both emotionally and from a tax standpoint. Turner says some of her clients feel guilty about taking tax deductions for charitable contributions, but she disagrees.

“Once you have the motivation to give, why not take advantage of what the law allows?” she says.

Enjoy it

Depending on the size of an inheritance, it’s not a bad thing to have a little fun. Once you’ve made a financial plan and allocated the money accordingly, there’s something to be said for treating yourself.

For smaller inheritances, Turner recommends using 10% as fun money. If it’s a larger amount, she thinks $10,000 is a nice round number that could be spent on something enjoyable. But she emphasizes that a financial plan is crucial before this decision is made. Otherwise, it’s too easy to buy a nice car. And then another one three years later. And then another.

“If you envision yourself five years from now or 10 years from now and looking back,” Turner says, “do you want to have a lot of used cars?”

No matter how you use the money, you have to live with your decision.

“Do something that will be a story that you like telling,” says Schweser, who still feels good about his decision to give the bulk of his windfall away. “Whatever you do, you’re going to end up telling that story to yourself over and over again, or to other people, so make a good story.”

Turner recommends thinking about the person who left you some of their wealth.

“This is their hard-earned money,” she says. “This is in their memory. You want to honor that memory and be a good steward.”

What does good stewardship look like? That part is up to you.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @vcmcguire.

Image via iStock.

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