Life Crises: How to Achieve Your Financial Goals

Budget Your Way to Success

• Use personal finance software• List sources of income• Identify major expenses

o Record every expenditureo Cut expenses if possible

• Monitor regularly

Budget Your Way to Success

• Cut expenses but pay yourself first• Emergency funds and loans• Sell unnecessary items• Insurance and taxes

How to Handle Bankruptcy

• Affects your credit• Discharges some debt• Two primary types

o Chapter 7o Chapter 13

How to Handle Bankruptcy

• Chapter 7o Liquefies assets not exempto Restricts who can file by incomeo Can use only once every 6 years

How to Handle Bankruptcy

• Chapter 13o Can retain essential propertyo Must complete in 3 to 5 yearso Must pay at least $100 monthly

How to Rebuild Credit

• Credit counseling serviceo Nonprofit is preferableo Helps organize budgeto Check credentials

How to Rebuild Credit

• Debt management plan• Debt negotiation programs

How to Rebuild Credit

• Secured credit cardo Limited to deposited amounto Available after bankruptcy

discharge

Staying Out of the Red

• Negotiate severance pay• Apply for unemployment• Keep up insurance

Protect Yourself with Insurance

• Health insuranceo Compare policieso Know limitations and exclusionso Customize

Rider Endorsement

Protect Yourself with Insurance

• Health insurance alternativeso COBRAo Individual coverageo Trade groupo State-sponsored

Protect Yourself with Insurance

• Medicaid (Medi-Cal)o Available for certain groupso Directly pays providerso Apply through social services office

Protect Yourself with Insurance

• Disability insuranceo Deducted by stateo Offered by employero Purchase on own

Tax Breaks for Job Hunting

• Must seek similar work• Cannot deduct if too long of a gap• Cannot deduct costs of first search• Cannot deduct reimbursements

Tax Breaks for Job Hunting

• Possible deductionso Résumé o Travelo Relocationo Medical Costs

Reducing Taxes on Your Estate

• Estate planningo Minimizes tax consequenceso Needed if worth $1.5 million or

moreo Ensures how assets are disposed

Reducing Taxes on Your Estate

• Make annual gifts• Shield property• Use trusts• Make charitable gifts• Fund a life insurance trust

Preparing for Your Funeral

• Funeral home not necessary• Be sure to comparison shop

o Get itemized price listo Consider package offers

Preparing for Your Funeral

• Cemetery considerationso Religious connectiono Restrictions on memorialso Incidentalso Endowment careo Veteran burial

On behalf of AICPA and CalCPA, thank you!