What Is a Legacy Drawer?
By Dave Ramsey
Author, The Total Money Makeover
These days it pays to be smart about money. That's why it's important to take this wise counsel from financial expert Dave Ramsey.
Breaking down the legacy drawer
I’ve heard you talk about something you call The Legacy Drawer. What exactly is this, and what goes into it?
One of the best ways I know to tell your family how much you love them is by having your financial act together and organized in a central location. The Legacy Drawer is a collection of your essential financial documents in a safe place where they can find them when you die, or if you’re sick or disabled.
All of the pieces of your financial life should be in this drawer. I’m talking about your will, living will, estate plan, investment statements, insurance policies, and property deeds. You should also include stuff like power of attorney statements, access information to lock boxes, and other instructions to family and loved ones.
Make sure it’s really well-organized, too. It should be laid out simply enough that anyone who can read could open it up and find exactly what’s needed in just a few minutes. The stress of having a loved one die or become seriously ill is bad enough. You don’t want to make it any harder on them by leaving your finances in a mess!
How much income do I put toward buying land?
My wife and I make about $85,000 a year. We’re debt-free, and we have no kids. We’d like to start saving money to buy some land in the near future. What percentage of our savings should we put toward this?
I don’t know if there’s necessarily a specific percentage for this kind of thing. Since you guys are already debt-free you need to make sure that you’ve got a fully-funded emergency fund of three to six months of expenses in place, along with retirement funding. In your case, anything else you have sitting around after that is simply wealth.
If you’ve got $50,000 sitting in a savings account in addition to these things, and you’d rather have $50,000 worth of dirt instead of a bank account, I’m cool with that. It’s really more a matter of ratios than percentages. Now, all this might change if you make $15,000 a year instead of $85,000 a year. I’m not going to put retirement on hold for 10 years to save up to buy dirt, either.
There needs to be a sensible balance, and you’ve got to make sure you have the important things covered first!
For more financial advice and a special offer to our readers, please visit www.davesays.org.
Dave Ramsey is a nationally-syndicated radio talk show host and author of the New York Times bestselling books, Financial Peace Revisited and The Total Money Makeover. His life-changing advice in the area of personal finance helps people get out of debt, stay out of debt and build wealth that will last a lifetime and beyond.
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