James Pantzis’ 5 Quick Tips for Teaching Kids About Money

James Pantzis’ 5 Quick Tips for Teaching Kids About Money

We’ve seen many parents in our offices these last few months, and we obviously go over tax returns, customized plans for saving more on taxes, as well as a variety of other strategies for handling their assets so that their children will, one day, be financially prepared.

(We certainly wouldn’t want our children and their eventual families to end in a financial crisis like we’re seeing unfold in an entire nation, such as Greece!)

But as we prepare our own house, and make sure everything is order, I’ve sometimes noticed that we don’t give enough thought to helping our children build the kind of financial “house” that they will eventually need so they can withstand the future gyrations of economic life.

You see, I’ve asked a few parents how they handle finances with their young children. Well, I’ve found that some parents have no plan for training their younger children how to understand, and handle finances. (Notice that word: “training”.)

I’d like to help you fix that. We’ve put together some strategic advice to help you raise financially-literate children, in hopes that by the time they reach adulthood, they’ll be contributing to your family economy — rather than draining it!

Let me know what you think …

James Pantzis’ 5 Quick Tips for Teaching Kids About Money
“Today well lived makes every yesterday a dream of happiness and every tomorrow a vision of hope. Look well therefore to this day.” – Francis Gray

Perhaps I’m biased, but I believe that it really is never too early to start teaching your kids about money. Obviously, by doing so, you are preparing them for the uncertain future. You’re also establishing a family culture, wherein money is handled with maturity and openness.

But the best news is that helping them to develop these habits can be fairly simple! I’ve put together some basic steps — many of these may not seem like rocket science, but my job is to be a coach and a goad for you to do the things which you already may “know” to do.

1) Give them an allowance — with strings.

Don’t just give them an allowance for doing nothing — this actually defeats the purpose. You can buy your young children whatever they ask for, so they don’t need “spending money”. Instead, see an allowance as a training tool: your children should learn that money is earned by working. Believe it or not, this isn’t an obvious connection for a young child! Because a kindergartner truly is able to help with small chores around the house, you can put them to work and let them earn their allowance this way. Rather than seeing it as a “bribe”, or some sort of indentured servitude, this is a critical knowledge base for a young child.

2) The old lemonade stand.

Encourage this! And do it with adult supervision. Your child will learn how to make a product, market it and sell it. While the idea is to teach good money habits, they are also learning valuable life lessons — nothing sells itself, after all. (Though with cute kids, that’s sometimes the case!)

3) Saving and investing.

Rather than showering your young child with gift after gift, encourage them to go through the process of working towards a savings goal. You can always “supplement” this process, but having your child save up for an item will teach them that nothing comes for free. In return, children also learn that the items you buy them have real value and should be treated as such.

This might, even, cut down on those “negotiations” so familiar to parents who bring their children into stores.

4) Cold, hard cash.

A lot of children nowadays are so used to seeing parents pay with debit and credit cards that they may not know what actual money looks like! This is a new-generational issue, and it’s important that your children learn that money is more than a mouse click, or a card swipe. Show your kids the different types of money – coins, bills, etc. and tell them the monetary amount for each.

When you go shopping, let your child have a try at paying for certain items. This will help them feel quite grown up, and again — they see that transactions don’t just “happen”, they cost.

5) There’s an app for that.

I just found a great article in US News & World Report that shared 7 great iPod or smartphone apps that also provide a bunch of great lessons. Some families don’t allow their younger children access to these devices, but if you have older children in the house, you could even try some of these apps as a condition for handling the responsibility of using one of these devices. Here’s the article, and they have seven great options that they’ve vetted, ranging from free to paid (but inexpensive): http://bit.ly/1LEjrru

What about you? How have you gone about teaching your kids about money? I’d be interested to hear some other tactics, and may share them with the list next week.

But until then, I remain your kindly tax pro — out to save the world from improper planning, unnecessary taxes … and from young adults still living on Mommy/Daddy credit!

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records

Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records

The events in Charleston last week have left all of us — once again — searching for answers to what feels like a festering wound simmering under the surface of our culture.

But the grace notes we have seen coming from the hearts and mouths of survivors and family members of the victims might, perhaps, show all of us a way towards healing. Forgiveness, rather than offense (even when offense is completely justified), is truly a much stronger force.

In the meantime, let’s take notes on what those brave family members are doing.

Now … well, we’re almost to the end of June, which feels a little crazy to me. But here we are.

These months provide a different rhythm (especially for those who have young children in the home!), and in my opinion, it’s a great time to get organized in a way that you perhaps haven’t been in the past.

It’s amazing to me how many families and households don’t have a workable plan when it comes to handling the flow of paperwork that comes through their mailbox, and for tracking their online world.

In fact, the cloud-based nature of so many financial statements can lead us all into a bit of a lull: “Everything is online, so I can just throw away the paper statements”, or “If I really need something, I can always request a copy.”

And so people have begun letting their household filing system go to the dogs.

The problem with that is …

1) It’s actually not the case that everything can be available online — many statements are only kept a short amount of time “in the cloud”, and unless you are scanning them yourself, you often have to pay fees to retrieve older items.

and

2) Throwing away documents and trusting everything to “the cloud” can leave you vulnerable to ID theft (especially when you don’t employ a shredder!).

So, I’ve put together something that will (hopefully) provide you a simple plan, and perhaps a tiny little kick in the behind to get this into place.

Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records
“You will never win if you never begin.” – Robert Schuller

When we’re privileged enough to have conversations with clients unrelated to estate planning, and more about their general financial world, we’re often asked about setting up a good system for keeping it all organized. Often, one of the major problems for many families is simply keeping track of everything! So here’s what we suggest…

1. Find a good home for your documents.
The best spot to set up a home financial center is where you find the bills and receipts generally piling up–even if it’s in the corner of your kitchen. If you don’t want your financial records on your kitchen countertop, store them away in a corner filing cabinet nearby. Better to use a space you usually go to than to try to form a habit of going to the upstairs study you visit only once a week.

2. Determine what you need to keep and what you can throw away.
Generally, you can get rid of grocery receipts, credit card slips for non-tax-deductible items, and ATM receipts you’ve already reconciled. Toss all your junk mail. You should hold on to receipts for anything that’s tax deductible, as well as medical expenses, past tax returns, and records of charitable contributions. Also keep insurance policies, investment purchase records, mortgage and property bills, and warranties and instructions.

3. Sort your papers.
Use four categories: bills, insurance policies and records, bank and brokerage statements, and other important documents. Then sort those papers into separate folders for each account, type of receipt (like transportation expenses or medical bills), insurance policies, etc. Toss the papers that don’t fit into any category.

4. Spend five to 10 minutes a day maintaining your files (or 30 minutes per week).
Open your mail near the trash bin. Circle the due date for your bills and file them in the proper order. Then save whatever you decide to keep in its proper folder.

I hope this helps.

Until next week then, I am warmly yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis On What to Look For in an Executor of Estate

James Pantzis On What to Look For in an Executor of Estate

We work hard for our clients.

Crafting elegant, tax-saving and easy-to-understand strategies to help you save on your taxes is a joy. And, of course, removing from our clients the annoying hassle of dealing closely with government paperwork, deadlines and personnel — while not exactly a “joy”, does also provide us with great satisfaction because we know that we get to serve our clients and help them not have to deal with stuff that isn’t exactly “fun”.

But sometimes (usually a rare instance), there are circumstances in which, despite great planning and implementation of strategy, things go sideways.

Last week, I wrote about estate planning, and I do want to touch on it one more time here today — despite the fact that it isn’t our primary area of service. It’s such a critical part of a family’s financial picture, but it doesn’t really get focused on sometimes until it’s too late.

You see, even the most well-crafted estate plan can be ruined by a poor choice of executor.

Of course, that said, we can always do our best to help our Brooklyn clients and their families deal with it and navigate through this poor choice, once it becomes apparent — but it’s always better if the choice is made well.

So, this week, I have some words about this, as you consider your current executor of estate, and whether they fit the profile…

James Pantzis On What to Look For in an Executor of Estate
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

Your executor of estate is what is called a “fiduciary” which means he or she must be someone who will act in good faith when handling your affairs. He or she cannot take advantage of his or her position or unfairly profit from financial transactions from your estate. The executor will meet the standard of a fiduciary duty if he or she does a competent, honest job.

You want your fiduciary to be both trustworthy and capable of handling the tasks. You have to have complete faith in him or her. Make sure he or she understands the responsibility of the job and is willing to accept it. This requires a discussion before you make your Will.

It sounds a bit strange, but name someone who is healthy and likely to be around after your death. To be secure, you should definitely select at least one successor executor to serve if your first choice is unable or unwilling to do so when the time comes.

For many people, the choice is obvious — their spouse. Others select a close friend, a grown child or other close relative. If no obvious person comes to mind, make a list of your possible selections and use common sense (and this article as your guide) to make the wisest choice.

Remember, as I wrote last week …

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

So the choice is important.

But lastly, as you make these decisions, consider telling your family exactly what you plan.

This gives you the chance to head off any possible disagreements among your family about how things “should” be handled. If you happen to die or lose capacity, it’s usually too late.

Eliminate surprises and keep those family fights at bay.

Perhaps the LAST thing to say is: make sure you have competent help by your side, in ALL things financial (especially when it comes to your existing finances and tax strategy).

And that, of course, is what we’re here for.

Until next week then, I am warmly yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis Offers Practical Tips For Your Estate Plan

James Pantzis Offers Practical Tips For Your Estate Plan

First off (and this doesn’t necessarily affect all of our clients), just a quick reminder thatthe second quarter estimated taxes are due on June 15th. This is the quarter that always sneaks up on everyone, as it’s only two months after April 15th — so don’t get behind!

Secondly, the summer is a perfect time to assess your financial picture from a holistic perspective. And by that, I mean: let’s look at your big-picture goals and your strategies, and create a workable plan, shall we?

In subsequent weeks, I’ll give you some “back of the napkin” strategies for a tax planning strategy, but I want to remind you of another component to a well-established financial plan today — one that doesn’t usually get handled well (as you will see).

Because the numbers haven’t changed much since last I saw them:

Over 50% of adults do NOT have a will or other estate planning instruments in place to protect themselves and their family. And, perhaps even worse, over 69% of parents have not yet named legal guardians who can raise their children if something happens to them. (And by “in place”, I mean something that would be legally recognized — not an “idea” that hasn’t been properly notated).

Those are scary numbers. Estate plans obviously provide great peace-of-mind for a family … and, of course, they can create a bunch of headaches if not handled correctly.

Believe me, I’ve seen a few doozies in my day.

Which is why it always helps to have someone in your corner. Whether or not we speak into your situation directly, we can also bring in specialized counsel. We aim to be your family’s advisors in all things financial, whether we have “skin in the game”(i.e. we get paid for it) or not. Our clients are our family, and we want to see you treated well by those who serve you.

So … all that said, consider this:

James Pantzis Offers Practical Tips For Your Estate Plan
“The noblest search is the search for excellence.” – Lyndon Johnson

You may have established an estate plan in the past, or you may not have gotten around to it, but it is critical that you ALWAYS have an up-to-date plan.

Most people are smart enough to keep their cars in good working order–it requires tune-ups, an annual physical check-up, etc. But I’m always surprised by the common misconception about how often they should have their estate plan reviewed.

You see, most people see estate planning as something you “do once” and never have to think about again. That’s just flat incorrect.

Just like your health can take a dramatic turn (for the better or worse) in a year, your estate planning decisions can change dramatically in a short period. Sometimes, something as simple happens as the people you’ve identified to serve as the guardians for your minor children moving out of state. That’s just one of many good reasons to revisit your estate planning decisions.

Plus, though there’s been a lot of talk in recent years about the higher estate tax threshold, there are many ways in which out-of-date plans can be “burned”, by not complying with new laws.

Your estate plan is a “living and breathing” plan (at least when done right) and therefore has to be maintained to reflect your life as it is today.

Second, PLEASE ensure you have chosen the proper executor.

Whether you’re dealing with significant sums, or with a more modest estate, choosing the person to handle these transaction is a critical decision for EVERY family.

It’s always a great idea to get professional advice in making these selections. But, if you choose to “go it alone” for some reason, here’s what you need to keep in mind as you consider who will be your executor:

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

Of course, the open probate process is something you will absolutely want to minimize and even avoid. A sound plan does this.

But this right here (the choice of executor), is where it starts. In the future, I’ll have more to say on the subject of an executor and why that choice is so important.

I am, warmly, yours,

James Pantzis
(718) 858-9864
James Pantzis, CPA, PC

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James Pantzis Discusses 11 Traits of the Financially Secure

James Pantzis Discusses 11 Traits of the Financially Secure

Part of my early-Monday news scan this week brought me this story: http://cbsn.ws/1Q0chAV. One of the “highlights”: almost half of all US households could not come up with $400 to cover an emergency expense. They would need to sell something or borrow cash to do so.

If you find yourself belonging to that category, I’m going to help you today, I think. And if you don’t, I urge you to continue to live your financial life in such a way that you remain there. I have some ideas (11 of them, in fact) for you.

In my experience, if you want to get out of a hole, you study the behavior of those who have already made it out. And you do everything you can to copy that behavior.

Yes, some people have been fortunate enough to inherit wealth, etc. But many, MANY more of those who have wealth came about it in a different way.

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Before I get there, a big tax reminder: 2nd quarter estimated taxes are due on June 15th. Make sure to mail your Federal estimate with voucher #2 (1040-ES) and your check payable to the United States Treasury. Include your social security number and the words “2015 Form 1040-ES” on your check. Mail by June 15, 2015.

If you have state estimated taxes due, the procedure is very similar, except you are perhaps-obviously not paying the “US Treasury”, but rather the Department of Revenue for your state of income.
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Now, so that YOU do not find yourself in the unfortunate place of not being able to scrape up $400 in an emergency … read this now,

James Pantzis Discusses 11 Traits of the Financially Secure
“You cannot control what happens to you, but you can control your attitude toward what happens to you, and in that, you will be mastering change rather than allowing it to master you.” – Brian Tracy

Becoming a household that will be able to ride through instability and uncertainty is only going to become MORE important in future years, not less.

So, that being the case, here is a portrait of those who are able to achieve this status.

You’ll notice that these are just as significantly about your mindset as you relate to your finances, as about your behaviors.

Here’s what the Financially Secure look like …

1) He always spends less than he earns. In fact, his mantra is that over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2) She knows that patience is truth. The odds are you won’t become a millionaire overnight. If you’re like her, your security will be accumulated gradually by diligently saving your money over multiple decades.

3) He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

4) She realized early on that money does not buy happiness. If you’re looking for financial joy, you need to focus on attaining financial freedom.

5) He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

6) She’s a big believer in paying yourself first. It’s an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

7) She also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply “declare” to the universe that you want to be financially free. This is not a “Secret”.

8) When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

9) He realizes that stuff happens, and that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner, and can be triggered from multiple sources: the death of the family’s key breadwinner, divorce, or disability that leads to a loss of work.

10) She understands that time is an ally of the young. She was fortunate (and smart) enough to begin saving in her twenties, so she could take maximum advantage of the power of compounding interest on her nest egg.

11) He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four. Little about external “signals” of wealth actually matter to him.

And a little bonus, if you will: She doesn’t pay taxes which could have been avoided with a simple phone call to her tax professional. She plans ahead, before tax time.

Give us a call today: (718) 858-9864

I am, warmly, yours,

James Pantzis
(718) 858-9864
James Pantzis, CPA, PC

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Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist

Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist

Memorial Day weekend often feels a little … jarring, at times.

Burgers, pools, picnics — set against the solemn backdrop of remembrance for the sacrifice of so many thousands who have laid down their lives so we can have those freedoms.

However, when you talk to veterans (as I get the chance to do in the course of our tax preparation work), they do often tell you that these very freedoms (the ones much bigger than backyard barbecues, of course) are exactly why those sacrifices are worthwhile.

So in a sense, parades and picnics are exactly the right sort of thing to honor those men and women who made the ultimate sacrifice.

But let’s do remember that Memorial Day is much more than simply the “start of summer”.

Moving forward … it’s probably accurate to say that with the official start of summer, we are moving into the wedding season.

So I thought I’d give some short advice for the happy couple, whether before they are married or for those with a few years under their belt.

Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist
“The only way around is through.” – Robert Frost

Many young couples start out married life without a clear idea of how to handle their finances — leading to stress, arguments, and long-term marital problems.

And correspondingly, there are some couples for whom finances have become a painful wedge. So, though I don’t fashion myself to be a “marriage expert”, I have seen many financial partnerships work well … and more than I’d like, of those that didn’t.

Here are some ideas for you, a marriage and money checklist of sorts.

1. Confront issues directly.
Whether you are in a pre-marriage stage, or are already working through your partnership, it’s crucially important to learn the skill of conversation about finances. There can be so much mental anguish over shame, fear and past pain that unhealthy communication patterns begin to emerge.

So give yourselves the gift of honesty, and make a list of hard topics that you can tackle over time.

As an example, many couples are afraid to talk about the three D’s: debt, death, and disability. Take time to discuss these fears instead of avoiding them. Planning will help you both feel better.

2. Explore your attitudes.
How we were raised has an enormous effect on how we deal with money. Depending on what your home was like as a child, you likely heard many different attitudes expressed around the dinner table, and they have undoubtedly shaped your understanding as an adult. Whether from poverty, or from abundance, your background is extremely powerful.

So, if you and your spouse’s money attitudes differ, talk about how you were raised and work towards a compromise where you can strengthen each other’s weaknesses.

3. As an exercise, trade financial tasks.
If one of you usually pays all the bills, switch for a couple of months. You or your partner may get a crash course on how much running the household actually costs. Keep track of all spending for at least one billing cycle (usually one month) to actually see where your money is going, and decide which expenditures can be decreased or eliminated. You might even find opportunities to give.

4. Keep some (small) finances separate.
A joint checking account is useful, but maintain some kind of separate amount of money as a “slush fund” or sorts, whereby you can each make purchases without mutual consent. Keep these amounts small (you always want partnership in the big amounts), but a sense of independence (however symbolic) will help both of you feel you have equal footing in the relationship, even if you have a big difference in salaries.

5. Collaborate on some kind of financial planning.
Find a way to work together on a small, money-related project, whether playing the stock market or saving towards some small goal. Pick something that doesn’t carry emotional weight, and see it as an exercise. You’ll find that working together in a small way will help you in a BIG way, as your decisions become more significant.

6. Agree together that you won’t pay excess taxes.
Obviously, this is what we are here for, and perhaps one of the best gifts you can give yourselves is a workable plan as it relates to a tax strategy.

I am, warmly, yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis on 5 MORE Bad Money Habits And How To Overcome Them (Part 2 of 2)

James Pantzis on 5 MORE Bad Money Habits And How To Overcome Them (Part 2 of 2)

With all of the chaos that we are seeing bubble up around us, both in our nation and overseas, it can feel like everything is in flux.

Please, though … if you’ve established for yourself a hedge against financial turmoil, let’s not have you ruin it.

Last week, I posted an article which addressed these issues. It was a bit controversial, but I’m also glad to say that it was very well-received.

You see, in days like we’re facing, it might be a common temptation for my wealthy clients and friends to succumb to wrong thinking — the kind of thinking which they successfully avoided in order to attain the wealth they’ve achieved.

So, I had thought it appropriate to put together a small series on “right thinking”, when it comes to your resources, and this is the second part (of 2).

I’d love your thoughts, again, by the way…

James Pantzis on 5 MORE Bad Money Habits And How To Overcome Them (Part 2 of 2)
“Putting off an easy thing makes it hard. Putting off a hard thing makes it impossible.” – Charles E Wilson

As I mentioned last week, through the course of our work with many successful Brooklyn clients, I’ve made an unintentional — but close — study, over the years, of how money “works”, and just what it is that propels certain individuals and families into great quantities of resources … and what also brings them down.

I hate to see those with resources squander them, simply because they fell prey to the rampant fear.

Watch out for it in your own heart, in that of your children and spouse — and avoid these common behaviors of the poor:

6. Using credit habitually for “lifestyle” purchases: Delayed gratification isn’t something that they’ve heard of, and if they want something, they just put it on credit. After all — it’s at a 0% interest rate for the first 3 months! One purchase leads to another, and before they know it, they’ve got thousands in credit card debt. Debt loads in the wealthy can look different, but the principles remain the same. Avoid leverage these days; keep your powder dry. Your lifestyle isn’t worth expensive cashflow.

7. Always paying more than you have to: Often people who are broke have gotten there because they don’t know how to shop for a deal, negotiate or ask for a discount. You can get a discount on just about anything — from electronics to health care. Never pay more than you have to.

Why is it that the wealthy take perverse pride in paying full retail? It goes before the fall, as they say … so don’t become penny-wise/pound-foolish — but neither should you eschew effective negotiation in multiple categories.

8. Falling prey to lifestyle inflation and “keeping up with the Joneses”: This is a biggie for the wealthy. Even people with higher incomes have problems with staying ahead in their budget because they fall prey to lifestyle inflation. Instead of banking and saving raises, they raise their standard of living — buying a bigger, better house, a new car and a new wardrobe. They feel like they have to keep up appearances with everyone in their neighborhood.

Take a good hard look at what motivates your purchasing, and clean out the dustbunnies of comparison, lest they fill your brain with poverty-thinking.

9. Relying on others to fix your problems: We’ve probably all known someone who is always going to their parents, family or friends to bail them out. They create a pile of debt, and then rely on the kindness of others to get them out of their bind.

10. Forfeiting future gains for fun today: These people often have a hard time visualizing how saving and hard work will pay off down the road, and instead live for the fun and pleasures of today. They don’t realize how saving for tomorrow can improve their quality of life today.

Don’t sacrifice your retirement on the altar of present-ease.

Obviously, I’d like to help you move past these behaviors, if any apply. You may not carry every one of these traits, but just one or two can get you into hot water.

If you feel that you’re slipping into any of these bad money habits, please do let us know … we’re here to help as your Family’s Personal Financial Guide.

I am, warmly, yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis Reveals 5 Ways We Avoid Keeping Better Money Habits

James Pantzis Reveals 5 Ways We Avoid Keeping Better Money Habits

We spend a disproportionate amount of our time around the Team Pantzis offices dealing with government forms and websites.

(Seriously though — can you or I get a gig as a web designer for the government? Those contracts run in the 7 figures … and the designs still look like something built using dial-up.)

But the annual release of this page is pretty fun: behold, the most popular baby names of 2014! (from our phone-and-form friends at the Social Security Administration) http://1.usa.gov/1HcO6ux

Now, moving from the sublime to the weighty: Sometimes it feels like all we face is turmoil. And this feeling is not restricted to those who live “month to month”.

This is especially true if we follow all the Facebook rabbit trails (at least the ones that don’t involve baby names) — it seems like much of the media is perversely incentivized to keep us discontent.

I have spoken of this before.

But it’s not just the media.

You see, I sit down every week with Brooklyn families across a wide spectrum of financial means, and sometimes I notice something interesting, even in the families of those with great resources: “poor” thinking.

With all of the seeming turmoil, it might be a common temptation for my wealthy clients and friends to succumb to this kind of wrong thinking — the kind of thinking which they successfully avoided in order to attain the wealth they’ve achieved.

So I thought it appropriate to put together a small series on “right thinking”, when it comes to your resources. It may be a bit controversial, but I do hope you receive it in the spirit with which I write…. (And, as usual, I’d love your thoughts!)

James Pantzis Reveals 5 Ways We Avoid Keeping Better Money Habits
“Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.” – Booker T Washington

In my line of work, I get to have deep and meaningful conversations with families about the things which they most care about. I LOVE those conversations, and I believe that understanding these deeper passions is “the only way to fly”, when it comes to financial work of any kind (be it tax, or otherwise).

Now, as I do so, I also run into people’s attitudes about their wealth.

I’ve made an unintentional — but close — study, over the years, of how money “works”, and just what it is that propels certain individuals and families into great quantities of resources … and what also brings them down.

You see, sometimes the very wealthy begin to act like they’re poor.

It’s the beginning of a bad problem. And, it’s also something to watch out for in your children — because it will give you a clear picture about what might happen should you bequest your resources to them without a clear plan. I’ve compiled a group of behaviors characterizing the financially-strapped. Avoiding these pitfalls will help you keep better money habits.

You may have resources NOW, but are you …

1) … spending money on things you really don’t need?
I’m sure we’ve all got one of those friends who just loves to spend money, and buy things just to say they have them. The newest iPhone just came out? They buy it even though they already have an older version. A new TV came out with a higher refresh rate than their current one? They buy one so they can say they have the newest and latest technology.

That may be fine for a certain amount of time, but there is something deeper happening in the heart there, which, if left unchecked, can signal a decline in wealth. Because it starts with the iPhones … but where does it end?

2) … ignorant about where your money is going?
Far too often people who are broke find themselves short because they’ve never tracked their monthly cash flow and their small expenses are adding up to consume everything they bring in. They really need to track their expenses for a month or two so that they can set up a plan.

But the wealthy sometimes begin to believe that they’re immune to such proletarian concerns, and allow the same bad habit to encroach into their portfolio. Don’t let up — but, of course, don’t fall into obsession. (E.g., are you checking your accounts every day? That’s also a problem!)

3) … blaming your problems on outside forces?
People don’t like to see themselves as the source of their problems. While people certainly have problems that aren’t caused by something they’ve done, far too often they will also try to shift blame when they should be looking at themselves. They blame their friends, family and the government. They believe that “the little guy just can’t get ahead”.

Are you doing the same thing? “It’s the market’s fault!”, “My financial advisor screwed me over!”, etc., etc. … again, signals of a deeper problem.

4) … more interested in having others think you are wealthy, than actually being wealthy?
People who are always broke like to be seen as wealthy and successful, even if looking that way to others means that they’re actually forfeiting the possibility of being wealthy in reality.

Are you pumping your resources into an image? Are you “investing” in items which, really, are more about how people will see you than how they will help your net worth?

5) … not planning ahead?
For the poor, money is short because they haven’t set up a family budget, and a saving and spending plan. When they set up a monthly cash flow forecast, and know exactly what they’re going to spend in what categories — they’ll do much better. If you fail to plan, you can plan to fail, right?

Again, many resources can lead to laziness in this area. Don’t let up with it.

I will have more to say on this topic next week.

Until then, I do hope you receive this in the affection with which I wrote it.

I am, warmly, yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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Pantzis’ 8 Essentials For Record Keeping

Pantzis’ 8 Essentials For Record Keeping

I get pretty excited about the spring. All around the country, the snow is gone, the trees don’t seem so desolate … and am I right that the angle of the sun is a bit less harsh?

Or maybe it’s just because tax season has finished and I’m getting more sleep? :)

Well, I hope you and your family will have some “spring” this year — in the more figurative sense; whether or not it’s in the next couple of months. The winter always seems longer than it really is (even when it really *is* long!), but I’m also reminded of how necessary it is.

You see, like the lifecycle of an economy, I still believe that it’s a *good* thing to experience a time of dormancy. Speaking biologically, plants and flowers often need that time of “being withdrawn” to survive the “facts on the ground” (really cold temps).

It’s a classic picture of a healthy cycle — pull back a little when it’s harsh, but look for the warmer temps and be ready to bloom.

I don’t know all the details of your personal situation. But I do know that you and I have a choice about how we’re gonna weather our different financial seasons. Keep acting like it’s summer (when it’s really winter out there), and you’ll wither, and suffer for it.

But the opposite is also true — keep staying “shut down” and dormant when the weather is turning up … and, well, you’ll miss your chance to really grow up and blossom.

Fine — I’m a tax pro, not a poet, but you get the point. Don’t be afraid to step out again, just because it’s been cold for awhile out there.

And one of the best ways to KNOW if you can do this is to keep the essential information at hand …

Pantzis’ 8 Essentials For Record Keeping
“Success is simple. Do what’s right, the right way, at the right time.” – Arnold Glasgow

Now’s the best time to get rid of unnecessary paperwork, as well as to ensure that you caught everything for your 2014 tax return.

But before I get to what to do if you find something pertinent to your recently-filed tax return, here are 8 essentials for record keeping (and how long to keep them)…

1. Taxes: Seven years
Pantzis’ Reasons Why:
There are three, actually:
1) The IRS has three years from your filing date to audit your return if it suspects good-faith errors.
2) The three-year deadline also applies if you’d like to make some sort of amendment because you discover a mistake in your return and can claim a refund.
3) The IRS has six years to challenge your return if it thinks you underreported your gross income.
All this adds up to keeping that info for seven years. Beyond that, there’s no reason — except for posterity.

2. IRA contribution records: Permanently
Pantzis’ Reasons Why:
You’ll need to be able to prove that you already paid tax on this money when the time comes to withdraw.

3. Bank records: Usually just one year
Pantzis’ Reasons Why:
Those related to your taxes, business expenses, home improvements and mortgage payments will obviously need to be included for next year’s taxes. But unless there is some sort of emotional or posterity reason, get rid of everything after one year.

4. Brokerage statements: Until you sell
Pantzis’ Reasons Why:
To prove whether or not you have a capital gain or loss for tax purposes; after this point, shred it.

5. Household bills: From one year to permanently
Pantzis’ Reasons Why:
When the canceled check from a paid bill has been returned, you can shred the bill with a clear conscience. However, bills for big purchases — such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. — should be kept in an insurance file for proof of their value in the event of loss or damage.

6. Credit card receipts and statements: 45 days/Seven years
Pantzis’ Reasons Why:
Some families don’t even bother to match up their statements, but if you do so, shred the receipts once you’ve verified everything. There’s no reason to keep everyday receipts beyond this point. For tax-related purchases, you need only keep the statements for seven years — after that, shred it, baby!

7. Paycheck stubs: One year
Pantzis’ Reasons Why:
This is to verify that when you receive your annual W-2 form from your employer, the information from your stubs match. If so, shred all of the stubs … if not, request a corrected form, known as a W-2c. After that’s been handled — shred.

8. House/condominium records: Six years/permanently
Pantzis’ Reasons Why:
You’ll want to keep all records documenting the purchase price and the cost of permanent improvements — such as remodeling, additions and installations as well as records of expenses incurred in selling and buying the property, such as legal fees and your real estate agent’s commission, for six years after you sell your home.

Holding on to these records is important because any improvements you make on your house, as well as expenses in selling it, are added to the original purchase price or cost basis. Therefore, you lower your capital gains tax when you sell your house.

Now, in this cleansing process, sometimes, you’ll find a receipt or a documentation which really would have changed your prior year tax return. That’s when you might have us file an Amended Return. However, this decision should be balanced against the cost of doing so, as well as the expected benefit — often these items can be dealt with the following year.

But here are some other, common reasons to amend…

* You neglected to report some income earned.
* You claimed deductions or credits you should not have claimed.
* You did not claim deductions or credits you could have claimed.
* You filed under one filing status, but you should have filed under another.
* You bought a residence and didn’t claim the First Time Homebuyers Credit (or other credits available).

If you find something like this, let us help you. (718) 858-9864

Regardless, let this be a cleansing process for you, and sleep easy knowing you’ve handled this stuff properly.

Oh, and make sure you use a good shredder!

And for those of our clients who have previous years’ tax returns at another preparer, OR for their friends…

+++++++++++++++++
“No Charge” Return Review
Special
Offer
As a complimentary service this year, we will provide a Return Review To Any Non-Client. We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return. Email our office (using the email button at the top of this page) or call (718) 858-9864 to set up this complimentary service!
Deadline May 8th
+++++++++++++++++

To more of your money staying in your wallet…

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis Explores Five Markers of Financial Health at Mid-Life

James Pantzis Explores Five Markers of Financial Health at Mid-Life

If your tax returns have been filed (as most of our clients’ have), I do hope you’ve taken the ripe chance afforded to you to scrutinize your year, and your financial health. And, even if you’re on extension, it’s good to pause here before summer and consider where you’re headed — financially, and otherwise.

So, I thought that this could be the perfect time to help our Brooklyn tax preparation clients through a little check-up.

(One nifty little tool I ran across last week might also encourage you in your marriage — or, well … it could perhaps give you fuel in that you are doing something worthwhile, even when it comes at a cost!

The stat site, FiveThirtyEight created an interactive graphic to help us see the implications of our tax policy on families (specifically, marriages). Enter you and your spouse’s income, and you can see whether your marital status is providing you a “bonus” or a penalty, under our current, convoluted tax regime. –>http://53eig.ht/1GABRri )

So, even including marital status in the mix, I’d like to give you an objective, “incentive-free” look at what your finances should look like when you hit the half-century mark. If you are close to that mark, I thought it might be useful for me to lay out the “perfect” scenario. If you’re on either side of it, you can see where you’re headed, or from where you should be coming.

And look — if you’re not perfect, at least let it be a benchmark…

[And don’t neglect what I’ve included at the end, especially where your friends may be concerned …]

James Pantzis Explores Five Markers of Financial Health at Mid-Life
“Don’t give up. Keep going. There is always a chance that you stumble onto something terrific. I have never heard of anyone stumbling over anything while he was sitting down.” – Ann Landers

Finances should be viewed as “clear-eyed-ly” as possible, don’t you think?

So, that being the case, let’s set up a landmark on our map towards financial health, shall we? It’s great to know where you should be headed … or, from what place you should be coming.

Here are five signposts for your mid-life financial life …

1) Your estate plan should be fully in place.

Of course, various assets are handled differently. This is the time to make a complete review of how your plan is put together, to ensure that EVERY asset (not just the tangible ones) are still handled properly.

Intangible assets can include such things as what you are passing down to your children in terms of “family ways” and values that you would like to see spreading down throughout your generations. This is an important step at midlife.

2) If college is paid for, consider dropping term insurance.

At this stage of life, it becomes more costly to pay for this service. You are probably at the point where your children are nearing the completion of their education.

Remember that you purchased “peace of mind” (term insurance is not an investment) so that if anything were to happen to you, your home and your children’s education could be paid for. If those things are now moot, it may be time to re-evaluate.

3) Evaluate where you are with your saving and investing.

You may not want to retire for quite some time yet. That’s a wonderful place to be. But you should be considering whether you have saved up enough to match your desired lifestyle spending. It’s a good rule of thumb that you should have saved about 8-10 times your annual lifestyle spending at this point.

If you haven’t?

4) Catch up on your savings.

At age 50, maximum savings in a 401(k) or 403(b) account increases from $18,000 to $24,000 in 2015 (it was $500 less for each amount in 2014). At age 50 or older, Roth contributions also increase from $5,500 a year to $6,500 with these “catch-up” provisions. If we don’t have eight times our lifestyle spending saved, now is the time to press these limits.

Of course, saving well is half the battle; investing well is the other half.

That’s a subject for another day.

5) Lastly, begin considering what you really want out of retirement.

Consider that living a life of purpose doesn’t necessarily mean decades of simple recreation.

Reaching the place where you don’t “have” to work is a wonderful marker of true financial success. But you can make the decision to view your retirement years as an opportunity to do new, meaningful work. Commit yourself to a non-profit, or a ministry endeavor. Find ways to strategically invest your time and your energy into a different work that matters (aside from your first-half career).

Although you can have that attitude at any age, it is especially powerful when redefining the second half of your life.

And don’t forget to email me (you can use the email button at the top of this page) a quick note about your experience with us this year! THANK YOU!

And for those of our clients who have previous years’ tax returns at another preparer, OR for their friends…

+++++++++++++++++
“No Charge” Return Review
Special Offer
As a complimentary service this year, we will provide a Return Review To Any Non-Client. We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return. Email our office (using the email button at the top of this page) or call (718) 858-9864 to set up this complimentary service!
Deadline May 8th
+++++++++++++++++

To more of your money staying in your wallet…

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

Read More