Monday, October 8, 2012

Put and Take vs. Put and Keep Part 1: The Introduction

When you build a house, you want a strong foundation.  It is the same with your finances.  You want to ensure everything is in place so your finances will stand firm and you will be protected.  There are three important pieces to the foundation of your financial house:

1.     Updated legal documents including a will, living will and durable power of attorney.
2.    A delayed spending account, called a put and take account.  This is where you're depositing and withdrawing money for day-to-day expenses and annual expenditures.  This is where you want to practice good budgeting habits and self-discipline.
3.    Appropriate insurance coverages.  Typical insurances here are homeowner's, auto, health, disability, umbrella and term life insurance. 

You cannot build the rest of your solid financial house until you build this very solid foundation.  Where most Americans fail is that they never build a solid foundation of correct legal documents, correct and adequate insurances, and correct use and understanding of the put and take account. 

However important this foundation is, it is not enough for your financial health and retirement planning.  Can you imagine someone showing you their beautiful home with a wonderful foundation but on top of it they have plywood and a tent?  If you ask them to help you understand, they will tell you they never got past building the foundation.   Unfortunately, that's where most Americans are.  They have never got beyond a strong financial foundation.

In the next two blog posts we’ll focus on not just the foundation of a put and take account, but also the critical put and keep account.

Retirement planning can be complicated. If you need help planning your retirement contact us today.

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