So much of life boils down to the simple idea of risk. Every choice we make has some chance of a negative result, and being able to assess the chances of that negative result helps us figure out which choice to make.

In day to day life, we make tons of quick risk assessments all the time. Jumping down from this ledge is too risky. Speeding a little is worth the risk, but speeding a lot is not worth that added risk. Is it worth the risk to our friendship to tell my friend what I really think?

However, the more complicated the situation, the worse we tend to get at such quick risk assessments, but we still rely on them far too often.

Is the risk of this car loan worth it in order to get that shiny new car?

What about the risks associated with buying this not-really-necessary item and raising our credit card balance?

Should we put our money into stocks or leave it in a savings account?

So often, the reader mailbag questions I get boil down to a simple question of risk assessment. A person is having a hard time determining which path in their life is more risky and they’re asking for my input.

In the end, what I usually do is put myself in their shoes and use the same simple rule for risk assessment that I use for myself when I’m unsure of a situation.

Here’s that rule. Whenever you’re thinking of taking some significant risk, ask yourself this simple question: is the worst (reasonable) case scenario tolerable for me? If it isn’t, find a more conservative option. If it is tolerable, then that risk is acceptable.

Of course, actually knowing what that worst case scenario is and how likely it is requires some research in most cases.

For example, if you’re trying to make a decision about an investment of some kind, it’s good to know the history of such an investment and the history of such similar investments. This way, you can understand what the worst historical scenario is, and I usually assume that the worst case scenario for me is about 10% worse than the worst historical period of the same length.

Another example: if you’re trying to make a decision about life insurance, imagine that you pass away two days after getting the insurance. What happens to your family in that case? Is the money you’re leaving behind via the insurance and your estate enough to cover their needs with some room to breathe?

I’ll give you a third example from my own life. My wife and I have been struggling with various health care options as she returns to work, since she has something of an open enrollment period now. One of my assessments of the options – perhaps the most important assessment – was a scenario in which one of the members of our family had a very long illness, such as cancer, that required extensive care. What would happen to us under each health care plan? Would we be able to survive? We eventually chose a plan that offered a high deductible for individual treatments, but great coverage for such long-term illnesses, as that plan offered a benefits package that matched what we could do for ourselves financially.

The worst case scenario is a spectacular guide for every major financial decision you need to make in your life. What happens to you in that worst case scenario? Is it something you can financially live with or not?

Sometime during this week, I’m planning on sitting down with my siblings and my parents and hashing out the specific details of their estate – who will be the executor, how it will be split up, and so on.

My parents don’t have a large estate, but they do have a number of personal items that different individuals are going to want. Some of these items have significant value. I am almost sure that there are going to be some hurt feelings by the end of this meeting and, frankly, I wouldn’t be surprised if the discussion was quietly postponed.

But not by me.

Having watched this process begin to unfold – and having watched similar processes unfold with other families that I care deeply about – and coupling that experience with a lot of personal finance reading, I’ve come to a number of conclusions about this process that I thought I would share with you today. Perhaps, during the coming week, this will give you food for thought as you meet with your family.

Don’t put it off. Don’t. This is going to be a difficult discussion for many families, and it’s often tempting to postpone the discussion so that the day can be pleasant instead of challenging. Don’t. Every time you postpone, you put your estate at risk of being handled by the court system instead of according to your wishes. Not only that, you’re allowing the concerns of others in your family to go unresolved, too. Don’t let the problem just sit there – solve it, together.

Don’t exclude anyone. Everyone who has a stake in the situation should be involved in or at least aware of the decisions involved. This can be quite difficult, but the ramifications of not doing it are worse. By excluding some, you’re ensuring infighting, mistrust, and anger among those involved. While doing it face-to-face is not a perfect antidote, it at least can minimize the problems that can arise.

At the same time, don’t be afraid to talk about this beforehand with the people you care for the most – and trust the most. Let these people be your advisors and help you to come up with a plan for your estate. Yes, some of them may have a stake in it, but if you’re concerned about them giving you false ideas out of a desire for a bigger chunk of your estate, are they really worth bequeathing things to? Seek trusted people while you’re hashing out your ideas.

The relationships post-estate have value. One big factor that many people don’t consider during this process is the state of relationships after the estate is resolved. Will siblings and other family members be able to get along, or will they not be on speaking terms and only see each other in court? Will they embrace each other and help each other after the funeral, or will they be mourning not only you but the loss of their relationships with their siblings?

Your estate doesn’t just contain financial assets. It also contains a great deal of impact on the feelings and relationships of those left behind. Those have significant value – in my eyes, in many situations, the value of those feelings and relationships are more valuable than the items left behind.

If someone makes an unusual offer or claim, get it in writing or ignore it. These situations can be emotionally charged and people might make statements along the lines of, “I want no part in this.” If you hear things like that, wait for the emotions to cool, then ask them to state their wishes in writing so that it’s recorded and clear for everyone. If they won’t give that to you, then it’s clear that their statement was merely blowing off steam and should be disregarded. If you insist on emotional responses being binding, you’re doing nothing but damaging long-term relationships.

This is the estate holder’s property; they can do with it what they choose. If you’re involved with such a process, recognize that the person or people making the decisions about the estate are human beings. Just like you, they have lots of feelings about lots of different things. They are close to some people and not as close to others. They have human failings, just like you do. What they choose to do with their estate is their decision and it’s based on all of these factors. If you’re angry about the decision, remember that in the end it’s their decision – no one else is responsible for it. Don’t let jealousy of what someone else is getting cloud your vision of the situation. Most of the time, it’s due to either the flaws of the estate maker or due to a lot of time and care shown by the person getting more that you could have done – but you made a different choice.

(At this point, it might be clear to reader that I’ve seen some very messy estate situations.)

Do it correctly. Once the plan is in place, do it correctly. Have the will or trust properly executed and notarized and leave the documents with a trusted individual, such as a family lawyer. Make sure that it’s binding and that there won’t be questions after the estate holder passes on.

The big thing is to keep the process as open as possible. If you set things in stone or make changes, make those actions clear to everyone involved who may be impacted by the choice. This will offer the best route to long-term family peace.

Right now, my office is a mess. There’s a huge pile of things waiting to be filed. There are a few stacks of books that need to be sent out for PaperBackSwap. I have several pieces of correspondence that need addressing. The closet is overstuffed with all sorts of different things. The floor has a large number of boxes that need breaking down and storing (or disposing). My desk really needs to be cleaned up, too, with countless things that need to be dealt with sitting around.

Yet, whenever I look at the whole mess, I get the feeling described in the title of this post. Instead of dealing with it, I feel a bit overwhelmed – and I also feel like there are more urgent things pushing at me to get finished. Like writing this article, for instance.

So many of the projects that we feel overwhelmed a bit by are ones that fall into that “important but not urgent” category. Things like starting a good filing system, switching our accounts to a new bank, keeping in regular contact with old friends and key work associates – all of them are things we know we ought to be doing, but we put them aside.

Don’t.

Those things that are important but don’t feel urgent are the very things that are the keys to building the life that we want. It is the special person – the one on the path to success – who can put aside the countless “urgent but not important” things in life – like the new season of American Idol, the interrupting phone call, the latest social event in a long series of them – and replace them with the “important but not urgent” things.

Instead of going on and on with a lot more words, I’m going to stop this article right now and take my own advice. I’m going to go clean the entire office. Since this article is a nice, short one, why not take the few minutes you might have otherwise spent reading a longer article here and get a real start on that project that overwhelms you a bit.

See you later.

In 2003, shortly after getting married, I had an ambitious goal of saving for a 20% down payment on a house by the end of 2007. Over the next year, I did make some savings progress, but I kept falling behind my milestones. Eventually, fed up with myself, I gave up and more or less just spent the money freely. I thought of myself as a complete failure.

When I made that choice, I was exposing my own idiocy in several different ways.

First, I was demonstrating a complete lack of commitment to a goal. Rather than making small sacrifices to fulfill a big long-term dream, I let the dream fall by the wayside in the name of instant gratification.

Second, I didn’t step back, revise, and rework the plan. When I realized I wasn’t making the goals I had set, I didn’t sit down and re-evaluate things. Instead, I acted like an idiot again and just spent the money with reckless abandon.

Third, I allowed that failure to define myself more broadly as a failure at money management. I just believed I didn’t have what it took to be successful at saving. I let myself believe I was a broader failure just because I couldn’t handle that goal.

Setting a big, audacious goal for yourself is inspiring. It makes you feel good about yourself and pushes you to accomplish things beyond what you believed to be possible for yourself.

I’m going to be debt free in three years.

I’m going to have six months’ of emergency fund in the bank by the end of this year.

I’m going to have seed money for my business idea an a year.

We conceive of these great goals, we plan for them, we sacrifice for them.

And then they fail.

Something changes along the way. An unexpected event occurs. We make a few bad spending choices. We overlooked some key element that completely alters the picture.

And we’re left with that empty feeling of failure. We didn’t make that goal. Instead, we just messed it up, like countless other things in our lives (yes, everyone messes up – a lot).

I could sit here and list my own goal failures all day long – as if the one starting this article wasn’t bad enough – but one thing this failure has taught me is that failing at a goal doesn’t mean you’re a failure or even that the goal or the plan was a failure. It just means you need to go back to the planning stage for a bit. Here’s how.

First, never define yourself as a failure because you failed to accomplish a goal. The inability to accomplish a goal is, yes, in part due to your mistakes, but there are usually countless other factors involved as well. A breakdown in a plan merely means that you need to step back, look at what went wrong, and re-work the plan.

Second, look for the root cause of what went wrong. There’s usually an obvious answer, but that’s not the one you want. I suggest using the “five whys” game when figuring this out. State why it seems that the plan failed, then ask yourself why. When you answer that, ask yourself why again. Repeat it until you get down to a root cause that can’t be broken down again. Often, it takes five or so “whys” to get there.

Third, address that root cause. It might be something you can take care of immediately. It might be something that you’ll have to slowly modify over time. Whatever it is, figure out a plan for addressing that specific root cause and focus on changing that.

For me, the real root cause of many of my financial troubles was a lack of persnal control. I would constantly sacrifice the long term for the short term, because I loved the rush of instant gratification. So, the first step for me towards completing a lot of my bigger goals was to simply break that addiction to instant gratification. I mostly did this by utilizing the other changes in my life (having a baby, mostly) and finding ways to get that gratification rush without spending money (like snagging a hot book on reserve at the library, for example).

You may find that your bigger goal has to be delayed a bit while you deal with the more immediate problem. Maybe you need to work on your own behavior, or maybe you found you need a bigger emergency fund. Get the smaller goal finished first – the bigger goal can wait.

Fourth, ask yourself if the big goal was something you really wanted in the first place. You may find that, after fixing the root problem, your perspective has changed. The long term goal you had in the past doesn’t reflect the new understanding of yourself that you now have. If that’s the case, great. It’s a powerful sign that you’re growing as a person. Don’t be afraid to abandon a goal that no longer matches what you want or the person that you are.

Finally, try again. Start over on your modified goal or give some thought to a new goal. A failure doesn’t mean that you should give up on your big dreams. Instead, it’s just more insurance that you’ll make great progress towards your goals.

Over the last year, I’ve been gradually moving away from a paper calendar (I used a Moleskine desk diary for it) to using Google Calendar for keeping track of all of my appointments, important dates, and other such information. It’s been a slow process – I’ve been using paper calendars for more than a decade, so the transition wasn’t immediate and I often fell back to using the paper calendar.

There were several big reasons that finally made me transition completely. What I found, though, is that most of those reasons actually directly helped me manage my personal finances, believe it or not. It turned out that my money was one of the biggest reasons to finally make that transition.

Here are nine ways I use Google Calendar to make my personal finances that much easier. Many of these can be done using paper calendars, but in most cases, GCal makes it easier to do them.

1. Keep track of bill due dates
This is perhaps the most obvious use of using a calendar for personal finance. When you know a bill’s due date, add it to your calendar, then pay the bill when you see it’s coming close to its due date. So, for example, our mortgage payment is due on the 28th of each month, so on my calendar, on the 28th of each month, there’s a note that our mortgage payment is due. It helps me keep track of our payments.

How can I do this? It’s simple. Log onto Google Calendar. First, I recommend creating a new calendar specifically for bill due dates if you haven’t already – this makes it easy to highlight them. Then, click on the day the bill is due, create a new event, and add the appropriate information – the amount and the type of bill, at the very least. If this bill recurs on a regular basis, make the bill a repeating event. You might also want to add an event reminder so you’re emailed a few days in advance of the bill due date.

Free from Broke offers a nice visual guide to adding a bill due date to your calendar.

2. Plan ahead for gift-giving occasions
My family has always been really into gift-giving and it’s considered a serious faux pas to forget someone’s birthday. In order to make sure I don’t forget a parent or a niece or a nephew, I schedule all of those important days right into Google Calendar.

How can I do this? I use almost exactly the same technique as for the bill due dates. I have an “Important Personal Days” calendar and I add birthdays, anniversaries, and the like to that calendar, scheduling them to recur every year. I also have two email reminders for each one – one about twelve days in advance, and another about five days in advance.

3. Pencil in key dates for sales
Let’s say I’m shopping around for a washing machine, and I’m looking for the best deal I can get. I discover that the local appliance store is having a sale on washing machines next month and given that their prices are already decent, I want to take a look at their numbers. But I might forget the sale! Not any more – I just pencil in the dates of the sale in the calendar, reminding me to check out the sale during that time frame.

This works for any sale that you come across. But, as with any sale, it’s important to distinguish between buying something because it’s on sale (bad) and buying something you already need and taking advantage of a sale to do it (good).

How can I do this? Again, this is just a simple scheduling of an event, except that I set the event as a multi-day one, with the start date and the end date matching those of the sale. Since this isn’t too regular, I have a “Miscellaneous” calendar where I put such events.

4. Keep track of milestones for big goals
As I’ve mentioned a few times on here, I have a handful of pretty big goals: finishing my second book (here’s my first one), running a 5K, and saving for a van. For each of these goals, I have some milestones along the way. I try to make my best attempt at a 5K each week, for one, and I have a word count goal on the first draft of my book each week, too. So I schedule these milestones. I just create an event each Friday saying something like “Book word count target: 30,000.” On Sundays, I have a “Walk/run your best 5K” penciled in.

How can I do this? Just pencil in your milestones whenever they occur. I have a “Goals” calendar that I put these under. Why so many calendars? It allows me to make groups of things appear and disappear at will when I’m looking at the calendar, which makes it very easy for me to keep track of what’s going on.

Dal, Chilean style, with chickpea curry, which I discussed in this earlier article.

5. Schedule meal plans intelligently
Remember my post about making multiple casseroles? As I mentioned there, it’s usually worthwhile to eat those casseroles within two months or so. So, in that example, I made four casseroles on a Thursday afternoon. We ate one that Thursday night, then I actually scheduled the casserole again for three weeks, six weeks, and nine weeks later. Then, when we sat down to plan for the week, my calendar would show me that we already have a meal in place for one night that week, meaning we can plan for fewer meals and save money at the grocery store.

If you do these in multiples, it gets really neat. Let’s say you cook six pounds of chicken breasts on a Tuesday in a slow cooker and freeze four and a half pounds of them. You’ll want to use these within a month or so, so I’ll mark down the following Tuesday, the Tuesday after that, and the Tuesday after that that we have 1 1/2 pounds of cooked chicken that need to be used. This keeps us from “wasting” food in the freezer. You can do the same thing with any frozen item you buy in bulk – for example, we often buy beef in bulk from a local butcher because of the quality and low prices, so in order to avoid freezer burn, I’ll pencil in when we should use the meat. Again, having this information right there drastically reduces our grocery bill and fits in perfectly with planning ahead for meals, which is itself a huge money saver.

How can I do this? I use a “dinner” calendar to manage these things. I just create recurring events for both of the cases above, and when we plan meals once a week, I create events with what we plan for meals those days. I usually label any ingredients we need to use by saying “Ingredient: ” right in the name of the event. That doesn’t mean that we’ll use the ingredient on that exact day, but it works as a reminder when I sit down to exactly plan meals that we have, say, chicken breasts to use that week already in hand. I schedule a meal each night and include the recipes in it – we even usually pencil in a “leftovers” night about every third or fourth night. This really works well.

6. Plan ahead for scheduled maintenance
Home maintenance saves you money, period. Taking a bit of time on a regular basis to do things like change furnace filters, check fire alarms, check vents for clogging, and so on can make an enormous difference in the life of your appliances, the appearance of your home, and the energy efficiency of your home.

I speak from experience here. When we first moved into our home, we didn’t realize that our dryer occasionally ejected a very small amount of lint into the ventilation, which led directly outside the house. After several months of use, our dryer seemed to not work very well. We had to run it two or three times to dry a reasonably-sized load. We puzzled over this and considered calling a repairman, but my two year old son actually figured it out. He came walking over to me with some lint in his hand one day. I asked him where he found it and he walked me straight to the vent. A few finger sweeps later and the dryer suddenly ran as good as new.

The problem is remembering the numerous little home and auto maintenance tasks you need to take care of. The solution? A home maintenance calendar, which tells you when you need to change filters and when you need to do a walkthrough to check on things – and, yes, when you should check vents. I made a big list of home and auto maintenance tasks – picking out the ones you use and scheduling them can save you some serious change over time.

How can I do this? Again, with a “maintenance” calendar. These are almost all recurring events on different schedules – some every month, some every three months, some every six months, some every so many weeks (so that I don’t have days LOADED with tons of such tasks). If I see some maintenance tasks for that day, I just do them and then I know that things are being maintained.

7. Take control of your portfolio planning
I often encourage people to just put their retirement savings in a “target retirement” fund and just forget about it, but many people like to have more control than that. They want to balance things themselves. Perhaps they want more risk than those plans give, or maybe they want less risk. They might also want low risk investments in their retirement accounts but very high risk investments in their taxable accounts.

Either way, rebalancing those investments regularly is key. On a regular basis, it’s important to sit down and think about whether or not your investment allotments match up with what you really want to be doing. You might change your contributions significantly – or you might even actually move your investments around.

It’s important to do this regularly, and that’s what a recurring event is very useful for. I “rebalance” every three months or so, mostly by just altering my contributions. I’m fine with using a “target retirement” fund, but I actually enjoy digging in and tinkering with things myself.

How can I do this? If you’re involved enough in your investing to rebalance it regularly, just set up a recurring event with a reminder of what you want to be doing, as a note. So, you might have a “Rebalance my Roth IRA” event, with a note that says “I want to have 10% in this fund, 20% in this fund, 30% in this fund, and 40% in this fund.” I actually keep mine on my “maintenance” calendar.

8. Set up seasonal reminders
Different times of the year bring different things we should think about with our personal finances. Charles Schwab has a very useful article listing many of these seasonal concerns, some of which may apply perfectly to you.

Some things we all might want to do: get a copy of our credit report every four months from the FTC at AnnualCreditReport.com (you get one from each of the three agencies each year for free, so just get one from one agency in January, another from another agency in May, then again in September), start budgeting for the holidays in the spring or summer, plan seasonal charitable giving or volunteer work, and so on.

How can I do this? I put these in my “miscellaneous” calendar, but many of these are recurring. For example, I remind myself a few times during the summer to look for Habitat for Humanity dates, and I also prod myself regularly to put aside money for and shop ahead for Christmas. I also snag my credit report like clockwork and I also remind myself to occasionally touch base with my parents about their financial needs (a will or a master information document or anything else like that).

9. Remind yourself of the things that really matter
If you’re putting forth this effort into saving money, you ought to be doing it for a great reason. For me, my children are my big motivation – I want to make a truly great life for them. Of course, a great life means that I spend a lot of quality time with them, so I plan ahead for that. Aside from the “evening block” that’s devoted every day to family time, I often pencil in other events. Some of them are known – soccer practice and the like – but others are surprises, like whisking my kids away for a long afternoon at the Science Center of Iowa or going to story time at the library.

Make sure you’re taking time out for the things that actually matter in your life. It’s easy to see the big reasons before we get started, but often when we’re involved with projects and get so drawn in, it’s sometimes hard to remember to take time for the reasons why we’re doing this.

How can I do this? I have a calendar called “Family” where I schedule things like this. When I look at the week ahead and see a trip to the library or a trip to the Science Center or something like that, I feel like my week is more … complete.

An effective calendaring system has almost unlimited uses. Just remember that it’s a tool – the calendar doesn’t have meaning, your life does.

My grandmother passed away a month ago and, frankly, I’m still reeling from it in some ways. She was a daily part of my life for my entire childhood, a regular phone companion, and a person I visited (at least) monthly, even though she lived four hours away.

My mother took the loss even worse, especially since she was the one charged with taking care of my grandmother’s affairs in the days after her passing. Unfortunately, we came to find out that my grandmother’s papers and information were incredibly poorly organized, with my mother finally resorting to digging through boxes of old papers and calling numbers just to put the pieces together.

With such organization, it was really clear that my grandmother’s financial organization relied entirely on her ongoing health and sharp state of mind. If she had fallen into poor health, either physical or mental, it would have been impossible for someone to step in and take care of her affairs. In her passing, she left a lot of confusing papers in her wake, adding up to a lot of painful hours for the people left behind, sifting through all of this information to take care of such things.

After this experience, I realized that I never want my family – my wife, my children, my parents, or anyone else – to wind up in this situation. I resolved to go far beyond my old master information document and create a resource that my family could turn to in any painful situation – my loss of life, my loss of good mental or physical health, and the potential loss of our property in a disaster.

I’ve been collecting all of this information in a binder of my own design. I took a serious look at several prepackaged solutions for this type of situation – Life.doc, Know Where You Are, and several others – but all of them failed in some respect. They left out something I considered important. They weren’t customizable enough. I couldn’t just print off more forms. So, I decided to assemble my own.

What follows is a detailed description of the document I’m still assembling with enough detail that you could easily make your own. My advice? Copy and paste all of the text below into a Microsoft Word document, then start filling in the blanks. I would turn each section into a big header – perhaps on its own page – so that it’s easy to find, and I’d use separators to keep the sections apart.

If you have the same kind of worries that I do, assembling this binder will take a big load off of your mind.

Ready to dive in? Let’s get started.

What You Need
To assemble this, you’ll need several items.

A three-ring binder Since you’ll be moving pages around, a three ring binder is the best way to go. Although you may save this documentation electronically, you’ll want to have a hard copy sitting in a safe place (like in a deposit box at a bank) so that you can turn to it in times of need.

A computer with a printer This is optional, but highly worthwhile. Recording all this information in an electronic fashion makes it much easier to make updates later.

A three-hole puncher This makes it easy to punch holes in the pages so that they’ll easily fit in the binder.

Dividers You’ll want 15 to 20 section dividers for the binder to make it easy to flip to the place you want.

A camera, preferably a digital one You’ll likely need to take pictures of many of your items. A digital camera makes this quite easy, though a film-based one fills the need, too.

A writing utensil and some notebook paper As you prepare this document, you’re going to take a lot of notes along the way. Be prepared.

Plenty of time This will take quite a long time to assemble. Don’t expect to do it all in an hour or even in an afternoon.

A Basic Emergency Plan
Every family should have an emergency plan. Where will you meet in times of disaster? What key people do you need to call? What key items should be extracted from the home? Where are the shut-off valves in your home? It’s worth your effort to start this process by developing a simple emergency plan and keeping a copy of it in your home as well as in this binder. Here’s what you should include.

Immediate emergency plan Identify two locations where you will meet in the event of an emergency. One place should be about 500 feet from your home. The other place should be a location outside your town that all family members can easily locate – say, the home of a grandparent. That way, all of you know where to go if there’s a disaster at your home – or a disaster in your area.

Emergency item list You have five minutes. What do you grab out of your home? Spend some time thinking about this and make a list of five or so items that you (or family members) could quickly grab in the event of a disaster. Old photos, a backup hard drive, and a portable safe might be good things to list.

Household shut-down information What do you need to do to effectively “shut down” your home? Know where the turn-off is for the gas and the water and note them here, as well as fire extinguisher locations. If you keep emergency food or water stored somewhere in your home, note that here, too. If you have a burglar alarm in your home, make a note of this, too, as well as any plans you have related to that (such as calling an alarm phone).

Three (or more) emergency contacts Who should be contacted in the event of an emergency? You should have their contact information at the ready, particularly every possible phone number for them. Good people to consider for this role include your parents, your siblings, your lifelong friends, and your pastor/clergy.

Who possesses keys for your home? Keep a list of the people who have keys to your home/automobiles, as well as their contact information. If you keep a key hidden outside, I would not note this in the document.

Key contacts You should keep a list of key contacts – work, school, and organizations where you (or your spouse) hold leadership positions are good to note here. You should also include contact information for your primary care physicians.

Key Information About Each Family Member
You should maintain some basic information for each person who is dependent on you – you, your spouse, your children, and any other people who you’re responsible for (such as disabled or elderly relatives). What information is worthwhile for each person?

Key personal information Full legal name and birth date should be recorded as a minimum. Social Security number is optional – it could be very useful, but it’s also something of a security risk. Perhaps just write it on the copy stored in the safe at the bank.

Home, work, and school addresses, phone numbers, and emails In other words, the most complete contact information you can assemble for each person.

Key work contacts Such information as your work identification number(s), your department at work, and any other key data from your job should go here. You should also note the name and contact information for your work supervisor, any key assistants or subordinates that you have, a human resource contact, and a pension/401(k)/403(b) contact. If the person is a student, contact information for the school and any school identification numbers are key.

Health insurance information Make absolutely sure you have health insurance information for each person – the policy number, the provider, and contact information for the provider.

Medication list What medications is the person actively taking? What dosages? What pharmacies? What doctor(s) prescribed the medication?

Diseases or other health concerns A simple list of the diseases and other major medical conditions of the person is useful, as is an allergy list. Blood type can also be useful, as can whether or not the person is an organ donor.

Complete physician and pharmacy list with contacts Every doctor that a person sees on any regular basis should be noted (name, specialty, contact information).

Other medical history A medical history can also be useful in a medical emergency, such as surgeries and past conditions.

Copy of will, living will, power of attorney, trust documentation A copy of all of these documents is useful. These can be photocopies, as long as the location of certified versions is identified.

Details on All Insurance Policies
For each policy that you have of any kind, make a list of the insurance type, the insurance company (and contact info), the policy number, the agent’s name, and the agent’s phone number. A copy of the policies can also be useful, but at the very least, you should jot down a quick summary of each policy under the contact information.

Types of insurance to remember: homeowners’ insurance, automobile insurance, renters’ insurance, other property insurance, life insurance, health insurance, dental insurance, disability insurance, long term care insurance, liability insurance, pet insurance, and mortgage insurance. There may be others.

Details on All Accounts
A complete listing of all of your accounts is essential.

Banks You should maintain a list of all banks where you or anyone in your family holds an account. You may want to note account holders as well. Account information is optional here – I would perhaps write it in by hand on the copy in the safe, but not keep it electronically.

Investment accounts The same information should apply to all investment accounts, retirement or otherwise. This includes pensions and any other potential sources of income.

Key property title locations The location of the titles of all homes and automobiles you or your spouse own is useful.

Legal partnerships A list of all legal partnerships that the person is involved with is vital, along with a contact person for each one.

Key financial personnel Contact information for your accountant, your stock broker, and/or your financial planner(s) is key here.

Mortgage and other debts A full list of every organization with which you hold a debt is also useful.

Credit cards Keep a list of every bank with which you have a credit card, as well as the phone number for that card. Don’t include the account numbers – they’re not necessary and are a bit of a security risk.

Real estate holdings A full list of your real estate holdings is very useful, along with the location of any and all deeds.

Legal representation You should also have contact information for your lawyer.

Location of other legal documents Depending on your situation, you may need to note other legal documents of importance. You may want to note the location of any birth certificates, adoption papers, custody agreements, divorce agreements, military papers, lease documentation, passports, real estate deeds, pre-nupital agreements, marriage licenses, wills, trusts, living wills, contracts, powers of attorney documents, and any other contracts that may be relevant.

You can include copies of any of these as you see fit, but you should keep all of the original documents gathered somewhere (preferably in a safe in a bank).

Service Providers
This piece is simple. Every business or individual that provides a service to you should have their contact information listed in a central place (so that they can quickly be contacted to postpone or eliminate services).

Services to remember: your child’s caregiver, your housekeeper, your baby sitter, your pet sitter, your gardener, your pool maintenance company, your gas company, your telephone company, your cell phone provider, your electric company, your cable provider, your garbageman, your lawn service, your pest control service, your computer repairman, your building superintendent or landlord, your alarm services, your cleaning services, and any other services you might have.

A Thorough Inventory of Your Possessions
This will perhaps be the most time consuming part of all. For insurance purposes, it’s incredibly useful to have a thorough inventory of all of the possessions in your home (and elsewhere). Here’s the exact procedure I would follow.

First, make a list of every room in your house, all external buildings, and any other key locations where there’s a significant amount of your property. This is essentially a location checklist, to make sure every place where you have property is accounted for. Don’t forget the attic or the basement or the shed in the back!

Next, go to each of these rooms/locations and make a careful list of all of the items with significant value in the room. Don’t worry about specifics – just make sure you’ve actually noted all of the valuable items in the room. It’s more important to hit all the big things than to get bogged down in items worth just a dollar or two that prevent you from ever getting this done, so I propose a rule of thumb: only note things with a value of $20 or more. If you want to note more items, come back later and do this again, but don’t write down the items on the first time through if the value is that low.

Don’t forget drawers, jewelry boxes, under beds, in closets, or other such locations that are easy to overlook. Take your time with this process.

Once you have this big list of possessions, document it as much as possible. Write down any serial numbers you can identify. Take photos of as many items as possible (including large collections, like books, DVDs, and so on). If you have a digital camera, this isn’t a problem – thoroughly document your items. Make estimates as to the value of the items. For larger items (anything worth more than, say, $100), note the date and place of purchase, the purchase price, and keep a copy of the receipt (you can scan the receipt and save it in the document if you wnat).

This will take a long time. Don’t sweat it. Take your time and do it right.

Updating Your Document
I recommend several avenues for maintaining and updating the document.

First, keep both an electronic and a hard copy of the document in a safe place. I recommend keeping them in a safe deposit box at your bank. Keep the electronic copy on a CD or on a memory stick.

Second, update your local copy of the document electronically every time you notice a change. You can print off updates for each change if you like, but don’t sweat it too much.

Every six months or so, review the document carefully for changes. Add new possessions and remove ones that have been sold or given away. Then, print out any updated pages and replace them in the binder that’s in your safe deposit box, as well as replacing the electronic copy.

You’ll Be Glad You Did It
Even aside from the peace of mind that will come from having this document, there will come some point in your life where having all of this information at hand will come in handy – your house burns down, or your spouse passes away suddenly. During those times of crisis, having all of this data available easily to you will make all the difference in the world, taking a healthy dose of stress away from that painful and challenging moment.

One of the biggest themes running through The Simple Dollar is the drive to get one’s financial house in order – eliminate that high-interest debt, learn how to live cheaper, build an emergency fund, and focus on spending less than you earn. Once that becomes a standard of your life, though, it is inevitable that you will eventually reach a point where your finances are under control. Your high interest debt is gone. Your saving habits are such that you are accumulating money in the bank.

And you’re left wondering what’s next?

I dealt with this question in my own life in late 2007 and early 2008. What was next for me was changing careers and doing something I had always dreamed of doing – writing for a living, and doing it with enough flexibility that I could spend tons of time with my family, particularly with my children while they were young. That was my dream. Before that, writing for a living and having such huge schedule flexibility was a seemingly inaccessible dream.

So I did that. I had good enough spending habits (and no big debts breathing down my neck) that I could afford the steep pay cut that went with quitting my full-time work. I walked away from the office on March 15, 2008, and I haven’t really looked back.

What’s next for me now? What big dreams am I pursuing today? Right now, my focus is on enjoying my children’s youth and improving as a writer. I read voraciously and write voraciously – The Simple Dollar is only a portion of what I write in a given day. (I’m a big believer that the only way one can become good at something is by doing it a lot and admiring and studying the work of people who do it well.) I block off huge chunks of the day to spend it with my family, too – every evening is an adventure of reading books, exploring nature, playing in the park, asking questions, trying new foods, and so on.

As my children grow older, what do I want then? As my skills grow as a writer, I fully intend to branch out publicly into other topics. I also intend to travel with them quite a bit so they can see the world (meaning we’ll go to different places and go off the beaten path), and I would genuinely like to have a house in the country, with a big barn in the back and the tools to do a bit of small-scale farming, with some chickens and a huge vegetable garden.

What’s next for you? Most likely, it’s something different than what I want for my future. I know the people around me have a lot of interesting plans. One of my close friends wants to spend his time building houses. Another friend wants to start a winery.

Whatever your dream is, it likely has a lot in common with what’s next for me:

What’s next seems almost like a mirage right now. It feels unreal, something that you really can’t attain from where you’re at right now, mostly because you see all of the obstacles in the way.

What I find is that many people just simply accept that their vision is unreachable, so they settle into a steady day-in day-out life, doing the same old thing over and over. They let their spending fill up their income and abandon the dreams of anything else, secure in the small comfort of a nice car and a few escapes.

If you choose that route, what’s next will just be more of the same. For some, that’s the right answer – for me, it’s not.

What’s next will require quite a bit of money in the bank. If nothing else, a major life change demands a healthy emergency fund – cash to get you through the transition. Most of the time, the dream requires some serious pocket money.

That means saving. It means spending as little as you can and putting the rest away into some sort of investment. It often means being fairly aggressive with your investments.

What’s next will require some sacrifice and difficult choices right now. This summer, our family’s vacation will be a camping trip to a state park. We drove our previous car almost into the ground, to the point where there were so many necessary repairs coming up that we were afraid to drive it very far.

What’s next for you? What are you doing to get there?

File this one under “interesting, but hopefully I’ll never have to use it.”

For a long time, my wife and I discussed making out a will. Who would we leave our children to should something unexpected happen to us? Where would our assets go? After a lot of soul searching and discussion, we figured out what we wanted and created a will stating these things.

However, that didn’t cover all of our bases. I wanted to make sure that several personal items of mine would go to specific people in the event of my singular death. Although I completely trust my wife to handle this for me, I still desired to have a clear and legally binding explanation of what I wished to happen to a handful of personal items.

Upon hearing about this, one of my wife’s relatives suggested that I make a simple holographic will for those things. “Sure, all you have to do is write down your instructions and sign it in your own handwriting. It’s foolproof!”

It seemed to simple to be true – and it was, for my case. It turns out that I live in Iowa, where holographic wills are not legal (I eventually decided to trust my wife with the disbursement of such items). However, in twenty-five of the fifty states, a document as described above does actually function as a legal will.

You’re kidding, right? According to Lawchek, a holographic will is in fact legally binding in many U.S. states. Some states require a witness, while other states do not require anything of the sort. Check that site to find out the specifics in your state. It may also be useful to call a lawyer in your state just to be sure of the specifics – this is a great question to ask if you have access to free legal counsel at some point.

How exactly do I make a holographic will? All you have to do is write out, in your own handwriting, specifics on how you want your estate (or specific elements of your estate) to be disbursed to people. For example, you may want to explicitly list that certain personal items go to specific people and so on. You may also want to direct that all remaining assets go to someone in specific. You must also sign it at the bottom.

In some states, you may have to have a witness who also signs the document – consult the rules in your state for more information.

It is important that if you make such a will, you are specific and very clear with your wishes. It is probably worthwhile to include a blanket statement leaving the remainder of your estate to someone you trust so that if there are issues of ambiguity, you can have some faith that the person you trust will act in your interest anyway.

When might a holographic will be useful? The most obvious situation is when you are in imminent danger of losing your life. For example, if you’re trapped in a cave during a snowstorm and you’re concerned you might not make it out alive, you may want to write a holographic will. A person might also write one out if they are terminally ill and want to make sure that their wishes are recorded because they believe the end is near.

Should I go this route for making my own will? In short, no. Although it’s something very useful to know if you are in a desperate situation, the inconsistent legal nature of a holographic will makes it something not worth trusting your estate to unless you’re in that desperate situation.

A much safer route would be to write out your wishes in the form of a holographic will as a draft of your real will, but then follow that exercise up with the creation of a true will with those principles. This way, you can be sure that it will be legally binding.