Hi everyone,

We have another guest article from Brittany Fisher at financiallywell.info.

Basic Financial Life Planning Tips

Life planning involves taking stock of your life and figuring out your needs, wants, and dreams. Once you know what you want out of life, the next step is to figure out a way to achieve your goals. There are many aspects to making a solid life plan, but the one that trips people up the most is money.

Creating a solid financial life plan is vital to success. It’s never too early to start thinking about how you’re going to save, and when it comes to investment - time is money. Most financial strategies benefit from early investment. Even if you can only spare a little at this stage in your life, it’s worth it. A little goes a long way.

Here are some basic tips for those just starting to think about a comprehensive financial life plan.

- First, establish an emergency savings fund

You never know when life is going to throw you a curveball. Maybe your car breaks down, or you need a new roof on your house. One of best ways to start a comprehensive financial plan is to start saving for the unexpected.

"You should have three to six months of your normal income in an account that's safe and liquid," Synergy Financial Services’ Roy Laux tells Bankrate.

Saving for both unexpected and inevitable expenses can help you avoid debt in the future.

- Get your debt under control

Before you start thinking about investing in your retirement or your kids’ future, you have to get any debt you have under control.

“Without a strategic debt management plan, you will likely continue to accrue debt which puts you further behind and makes it harder to escape. Debt management includes strategically paying down the most expensive debt first, like credit card debt, then personal loans, then student loans, and then housing debt,” Ajamu Loving, PhD, Professor of Finance at The American College of Financial Services tells Forbes.

- Plan for your children’s future

One of the biggest expenses you’ll face in life is your kids’ college, if you choose to pay for it. Apart from college you have to plan for other intangibles like travel, weddings, school trips, sports, and more.

A 529 plan is the most popular way for parents to plan ahead for their kids’ college. These tax-advantaged savings plans are available in every state. Parents can also opt for prepaid tuition funds or choose to save for college in other ways. If parents want to save back money for their kids but not tie it directly to college, they can look into custodial brokerage accounts. This money can be used for almost anything.

- Diversify your portfolio

Crises sometimes hit without warning. If you have all or most of your money invested in one place, you’re at a bigger risk should things go awry in that area.

Diversify your portfolio to avoid this kind of problem. Keep building as time goes on and consider adding fixed income funds if possible to give yourself even better cushion against market fluctuations.

- Plan for your own retirement

The earlier you can set a goal for retirement the more money you can start putting away and the more interest you can accrue. Most experts says that a combination of automatic 401K savings through an employer and tax-advantaged money makers like Roth IRAs is your best bet for true savings. Depending on your personal goals for a nest egg, you can even try to retire early. Now that’s a dream worth exploring!

The IRS mails millions of letters to taxpayers every year for a variety of reasons. Keep the following suggestions in mind on how to best handle a letter or notice from the IRS:

1. Do not panic. Simply responding will take care of most IRS letters and notices. And, as always, we are here to help if you need us.

2. Do not ignore the letter. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. Read the letter carefully; some notices or letters require a response by a specific date.

3. Respond timely. Notices are often about changes to your account, taxes owed, or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return. A timely response could minimize additional interest and penalty charges.

4. If a notice indicates a changed or corrected tax return, it’s important to review the information and compare it with your original return. Please give us a call if you need help with this.

a. If you agree with the changes, simply note the corrections on your copy of your tax return in your records. There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.

b. If you don’t agree with the changes, you’ll need to respond by mailing a letter explaining why you disagree to the address on the contact stub at the bottom of the notice. Be sure to include information and documents for the IRS to consider and allow at least 30 days for a response.

5. There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the related tax return and notice when calling.

6. Always keep copies of any notices received with tax records. Please be sure to send or bring us a copy of them.

7. The IRS and its authorized private collection agency will send letters and notices by mail. The IRS will not demand payment a certain way, such as prepaid debit or credit card. To make a payment, visit IRS.gov/payments or use the IRS2Go app to make a payment with Direct Pay for free, or by debit or credit card through an approved payment processor for a fee.

Finally, it’s important to understand that the IRS will never initiate contact using social media or text message. First, contact generally comes in the mail. If you don’t know if you owe money to the IRS, you can find out by checking your tax account information at IRS.gov (search for “view your account”).