Personal Finance¶
Dave Ramsey¶
The 7 Baby Steps
Envelopes; physically separate envelopes
Personal Budget¶
Example / starter personal budget spreadsheets: https://www.reddit.com/r/personalfinance/wiki/tools#wiki_redditor-created_spreadsheets
Personal Income¶
Occupational Outlook Handbook¶
Personal Expenses¶
Technically, an expense is an event in which an Asset is used up or a Liability is incurred. In terms of the Accounting Equation, expenses reduce owners’ Equity.
TODO: types of expenses
Personal Debt¶
Interest¶
Compound interest¶
Doubling time¶
Rule of 72¶
Taxes¶
See:
Accountant (Accounting)
Income tax¶
Property tax¶
Capital gains tax¶
Gift tax¶
https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States
In the USA, in 2015, you must pay gift tax on any amount over $14,000 (per donor, per beneficiary).
So, two parents, for example, must pay taxes on any amount over $28,000.
Gift tax does not apply to e.g. trusts and, for example, direct payments for e.g. school tuition.
This affects eligibility for financial aid.
See also:
Charitable contributions¶
In the USA, charitable contributions to qualifying (501(c)(3)) non-profit organizations are tax deductible.
Retirement¶
Pension¶
Defined benefit pension plan¶
401(k)¶
403(b) – non-profits
457(b) – governmental employers
401(k) match¶
401(k) rollover¶
IRA¶
Roth IRA¶
Healthcare¶
Health insurance¶
https://en.wikipedia.org/wiki/Health_insurance_in_the_United_States
Health Savings Account¶
A Health Savings Account is a tax-advantaged savings account.
An employer can contribute to a Health Savings Account pre-tax.
An employee can contribute to a Health Savings Account pre-tax (*).
Health Savings Account funds roll-over from year to year.
Long Term Care¶
Advance Care Directive¶
“Advance Care Directive, Living Will, Personal Directive, Advance Directive, Advance Decision”
Estate planning¶
“Probate”
Trust¶
Will and Testament¶
Estate tax¶
https://en.wikipedia.org/wiki/Estate_tax_in_the_United_States
http://money.howstuffworks.com/personal-finance/personal-income-taxes/inheritance-tax1.htm
Estate tax is paid by the estate (after debts are paid).
Inheritance tax¶
Inheritance tax is paid by the beneficiaries. (“double taxation”)
Intestacy¶
If there is no will defined, the estate is “intestant”.
https://en.wikipedia.org/wiki/Intestacy#United_States_and_Canada
State laws differ.
Not all states go by the Uniform Probate Code:
https://en.wikipedia.org/wiki/Uniform_Probate_Code
http://www.uniformlaws.org/shared/docs/probate%20code/upc%202010.pdf
“SECTION 2-103. SHARE OF HEIRS OTHER THAN SURVIVING SPOUSE.”
It is more complicated than this, but, roughly, if there is not a more specific will, the first matching class takes everything (after debts are paid and then federal (and state) estate taxes):
.0. Surviving spouse
.a.1. decendents (children)
.a.2. parents (equally)
.a.3. parents’ decendents (e.g. siblings)
.a.4.A. 1/2 each to paternal/maternal grandparents
.a.4.B. 1/2 each to paternal/maternal grandparents’ decendents
.a.5. [… speak with an estate attorney …]
.b. deceased spouse’s decendents (equally)
https://en.wikipedia.org/wiki/Uniform_Simultaneous_Death_Act
Note
If the default state order of succession applies (e.g. when there is no other will defined), for one matching class to gift all or part of their inheritance to others, they then must pay both Inheritance tax and Gift tax on any amount over the annual exclusion for the year.
Social Security¶
https://en.wikipedia.org/wiki/Social_Security_Wage_Base
https://en.wikipedia.org/wiki/Social_Security_Trust_Fund
“The Trust Fund is required by law to be invested in non-marketable securities issued and guaranteed by the “full faith and credit” of the federal government. These securities earn a market rate of interest.”