An important aspect of a solid financial plan is having a valid will. Most people understand that they need a will and have every intention of making a will…someday.

There are two reasons people don’t make wills: a reluctance to face their own mortality, and misconceptions about what will happen to their assets if they die without a will.

It you die intestate (without a will) then the laws of the state in which you reside will determine how your estate is managed following your death.

Most people assume that if they are married, the spouse will inherit everything. If assets are jointly owned, this may be true but having a will can expedite the process and save on taxes and administrative costs. Other situations may arise that you don’t foresee. Your spouse could die also, or remarry and your estate could end up in the hands of a second spouse.

Money isn’t the only reason to have a will. Other property and items may have sentimental value. Having a will allows you to distribute these to whomever you wish. If you die intestate, a court may order the sale of all assets so that the money can be distributed among your nearest relatives. Having a will allows you to name an executor of your choosing. Without a will, the court will appoint one for you.

Some are waiting for big changes or to reach milestones in life (such as buying a house) before they get down to the business of making a will. A will is a document that can be altered when the need arises so the perfect time to make a will is now. Changes in your situation can always be reflected in updates and changes in your will.

I can remember a time not so long ago, that I would only buy a few dollars worth of gas at a time, because the price was likely to go down in a few days and it would be foolish to fill my tank with more expensive gasoline now rather than wait for a price drop.

Well, prices are headed up and up and, it seems, up. The price of a gallon of regular is up an average of 21 cents and prices are expected to increase through March.

Rising gas prices may make us groan at the pump as we watch the numbers tick off but because the increase happens over a period of time, we may not immediately notice the impact they have on our budget.

But that is the way inflation and rising prices work. Last year’s budget may not reflect your actual expenditures this year. Because we tend to include increases in income - probably because it makes us feel better about spending - and less likely to include small increases that over time take more and more of that income, our budgets can be inaccurate if not kept up to date.

Take time out, say every three months, to go over your projected expenditures and bills and adjust your budget where necessary. Only by having an accurate financial picture today can you plan and save for your future.

If you made a budget with us this year now is a good time to go over your books and see how well you did in sticking to it and if you made any financial progress this year. If you didn’t make your budget or plan your finances, the end of the year is still a good time to asess your annual income and expenses and check on the fitness of your financial situation.

Now is the time to review any changes in your life that occurred in the last year that will make changes in your financial needs or obligations and project how they will affect your bottom line in 2007.

Review insurance policies to make sure they are adequate. Evaluate your debt and how well you have done in paying it down. Develop strategies for reducing it in the coming year. Make a plan for savings and set a goal for a specific amount by year’s end. Review your assets, do you need a will? Look at refinancing at a better rate as a way to save money on your mortgage. Finally, review your retirement planning to see if it is sufficient and consider ways to save more for your future.

Many years ago I worked in deceased estates and I learned then that making a will is one of the best things we can do to ensure peace of mind financially. It’s probably the last thing we think of when we’re young but having a will establishes clearly what our wishes will be in the event of an accident that incapacitates us or brings down the curtain (you became quite good at euphemisms in the trade). Apart from that, writing a will does turn our thoughts to the future and makes us consider carefully what we would like to happen.

It’s not just about money - it’s about your loved ones too. A will makes clear provisions and can prevent relatives from having to go to court to establish rights. Do them a favor - make a will.

Kiplinger dot com has a good article that explains the basics. It’s well worth a read.