Kenneth Boyd's Blog, page 29

5 Things You (Maybe) Didn’t Know Were Tax Deductions

Most of us, whether running a business or filing taxes as an individual want to ensure that we are as efficient as possible at holding on to as much money as possible and reducing our tax burden as effectively as possible. However, many of us simply are not aware of the various deductions we could be making, which means we end up paying more tax than strictly necessary.

 

With that in mind, let’s take a look at a few things you may not have known were tax deductions… consult with a CPA regarding tax issues.

 

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Sales taxes

 

If your state doesn’t have an income tax of its own, you can save a money by deducting sales tax paid on asset purchases. Using the sales tax break could still give you a better deal if you happened to make a particularly large purchase, such as a vehicle, in a particular tax year.

 

 

 

 

Teaching materials

 

Due to budgeting issues, most teachers will have needed to buy extra supplies for their classes. If you’re one of them, it may be worth noting that these could be tax-deductible. Providing you’re a K-12 teacher, you can deduct as much as $250 for supplies, which may not seem like a whole lot, but every little helps. Oh, and you don’t even need to itemize, which is a nice bonus.

 

Lawsuit settlements

 

If you run a business and you are subject to a lawsuit, which is within the time limits for filing a lawsuit, and which is successfully filed against you, you may be able to claim the settlement as a tax deduction.

 

However, this is a tricky area of the law, so you may want to talk to an accountant and a legal professional to see what your options are and if you’re eligible to file it as a deduction before you go ahead and do so.

 

Health insurance

 

As you will probably know if you’ve ever been sick, medical expenses can be huge; life-changing huge, and expensive. So, it’s good to know that the IRS acknowledges and respects this fact, some of the time at least.

 

If you spend more than 7.5 percent of your gross annual income on medical expenses, including health insurance premiums, then you can claim as an itemized deduction on Schedule A of your personal tax return.

 

If you happen to be self-employed, and you pay for your own health insurance, your allowed deduction may be higher. Speak with your accountant about including it as a deduction if you haven’t already.

 

Social Security Tax (for the self-employed)

 

If you’re self-employed, you probably know that you must pay around 15.3 percent of your annual income towards Medicare and Social Security (FICA tax), but did you know that you are able to deduct the employee portion (7.65 percent) of the total? That’s the equivalent of the employer contribution, and it is a very welcome deduction for anyone who works for themself.

 

Tax laws change frequently, so consult with a CPA regarding any tax issue.

 

 

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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Is Gold Still A Better Investment Than Cryptocurrency?

Cryptocurrency is the big new investment opportunity that everybody seems to be evaluating. There are new coins being released all the time, and the barrier to entry is very low, so a lot of first-time investors are putting their money into crypto. It looks like it could be the future of investing and maybe even the future of the economy, but is it all it’s cracked up to be?

 

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Even though there are some big benefits to investing in cryptocurrency, traditional investments are still just as relevant as they’ve ever been. Gold, in particular, is still an option for all kinds of investors Here’s why gold may be a better investment option than cryptocurrency.

 

Consult with an investment advisor regarding the risks and rewards of investing.

The Market For Trading Gold

If you want to sell some gold, you can always find somebody to buy it. It has tangible, physical value outside of its position as an investment.

 

There are cash for gold companies that will always buy gold jewelry and watches, etc., and if you hold gold as an investment, it’s easy to trade. Even in times of economic hardship when other investments are tanking, people may still buying gold.

 

Some investors move their money away from stocks and bonds and into commodities like gold. The same cannot be said for cryptocurrency, because it’s a new investment and this currency does not have a long track record to analyze. If buyers for a certain coin dry up and nobody is interested in it anymore, you may find it difficult to sell your coins.

 

Security Issues

Your cryptocurrency is stored in a digital wallet or stored locally on your computer. Although there are safety measures in place, there is always the chance that cyber-criminals will be able to steal your investment.

 

When you own gold, it’s much harder for it to be stolen, if a third party holds the investment for you. It can still happen, of course, but that requires somebody to physically break into a security facility, and that’s very unlikely.

Gold May be More Eco-Friendly

A lot of people are interested in ethical investments that contribute to the health of the planet and the success of local communities. If that is a priority for you, cryptocurrency is not the way to go.

 

According to some estimates, mining Bitcoin uses more electricity than the entire country of Argentina every year. If you’re concerned about your impact on the planet, you should think twice about investing in cryptocurrencies that require a great deal of power to mine. Gold, on the other hand, doesn’t have anywhere near as much impact.

Track Record of Value

Cryptocurrencies are volatile. The value jumps up and down a lot, which means that even though you could make big gains, you could also make some serious losses.

 

Gold, on the other hand, trades with less volatility. There are some fluctuations, of course, but they are much smaller and the overall value of gold tends to increase over the decades.

 

Cryptocurrencies do have their benefits and you might decide that they are the right investment choice for you. But before making any moves, consider whether gold might be better.

 

Consult with a financial advisor regarding investing risks and returns.

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance.

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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Understanding the Importance of Accounting in Business

Managing a business involves several things – from monitoring competitors to engaging the market to oversee the production process, hiring and training staff, and ensuring that taxes and all accounting reports are submitted on time. Accounting is one of the most important aspects of a business. Without it, a company can get into hot water with the Internal Revenue Service (IRS) and be subjected to penalties and audits.

Accounting Explained

Accounting is a detailed and systematic process that involves the recording of an organization’s financial transactions. The work is performed by professionals who have a degree and working knowledge in accountancy. The process involves the analysis and the creation of a summary of a company’s financial transactions, including cash flows, profits gained, and expenses incurred. It also includes the creation and submission of reports to government agencies that regulate and collect taxes.

 

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What Accounting Does to a Business

Accounting is categorized into several types. Because of this, accountants may have different specializations, leading them to take different career paths. Some of the more known types of accounting are financial accounting, public accounting, government accounting, tax accounting, forensic accounting, management accounting, and internal auditing.

 

Importance of Accounting

 

Accounting is essential to any business, regardless of size. It provides the company several benefits, including the following:

 

Keeps Track of Cashflow

A healthy cash flow helps a business grow. It also helps business executives manage the business’s finances and hire new employees when needed. Managing cash flows, though, can be highly challenging, especially for novice small business owners. Even large corporations can have a hard time with cash flow management if they do not have their accounting staff.

 

Cash flow is the money that comes in and out of a company’s “register.” Knowing how much money goes in and out and why it is essential to keep track of a company’s health.

 

Helps Measure New Strategies

Business owners need to know whether their marketing strategies and other campaigns are effectively benefiting the enterprise. They need to conduct a risk analysis to determine whether the risks they took are helping the business or not.

 

With accounting, measuring the effectiveness of the strategies taken becomes easier. Since accounting records the movement of funds, it is easier for business owners to make comparisons and see what works and what needs to be improved.

 

Assists in Budgeting

Every business needs to have a set budget for operations. Future projections should also be made to carve the path for success. Accounting helps business owners to make the correct projections and create the proper budget for each plan they have for their ventures.

 

Ensures That the Business Comply with Regulations

The laws and regulations of every state can vary for each business. But, there is one thing that these have in common – the use of proper accounting systems and processes.

 

For instance, a company operating in cold supply chain management is bound to the rules of the Food Safety Modernization Act of 2011. Under this Act, supply chain businesses must maintain the cleanliness and functions of their equipment and follow transportation protocols.

 

Above all, they are required to keep records of all their transactions. The manner of keeping records of transactions is the same as all other types of business. They may differ in how they do business, but they follow the same accounting steps for reporting their transactions to the proper government bodies.

 

Helps to Detect Fraud

Fraud can happen in a business at any time. Customers, suppliers, and even employees may sometimes perform fraudulent acts that may hurt the company in some way. Thievery is rampant in many small businesses without the business owners knowing that they are being duped and robbed of their hard-earned money. With accounting, everything can be traced. Owners will have a way to see who spent the money or where the money went.

 

Guides in Decision-Making

There are common mistakes in business that make ventures fail. For instance, a business owner can overspend or underspend the finances meant for the business operations. It can be very easy to fall into these traps, but with proper accounting in place, owners can keep track of the amount they are allowed to spend to maintain the overall health of their companies.

 

Business owners can perform accounting by themselves. But sometimes, they may not be able to efficiently record every financial transaction because of the many other responsibilities they carry on their shoulders. For this, hiring a professional accountant is often the best choice. The accountant can perform every job related to the accounting aspect of the business and can help the company grow using its available assets.

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

 

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

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Why You Shouldn’t Wait To Write A Will

Everyone will tell you that you should be planning in life. Planning for a home, a marriage, a retirement and more – there is a lot of planning involved in a life. One of the things that you shouldn’t wait to plan for is your Will. There is no perfect time to write a Will, because you should be writing one today if you don’t have one.

Why you need a will now

You may think that you’re too young to write one, but you’d be wrong. Your Will is going to dictate exactly what you want to happen after you die, and if you don’t have one in place, your family and friends are not going to know your wishes.

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In your Will, you should also include things like your funeral, which cemetary headstones you want and how you want your wake to go – if you want one. There is never a nice time to think about this stuff, but given that death is a guarantee it’s just smart to ensure that you have your ducks in a row. So, with this in mind, we’ve put together a few of the reasons you should be writing your Will now.

 

You provide instructions. If you don’t dictate where you want your money and assets to be, the state will dictate it for you. A Will enables you to tell the world how you can manage your money and assets after your death. So, if you want to ensure that you can provide for the younger members of the family in the form of college money or money for their future, a Will is the place to start.

 

Offering security. Did you know that if you are unmarried but with a partner, your partner won’t automatically get to be a part of your Will? If you want to ensure that a long-term partner will get a piece of your life, you should have a Will in place. Your ability to share will depend on whether you write it down.

 

 

You can name an executor. You get to choose someone to read out your Will and ensure that everyone you choose to be a part of it receives what you need them to get. You may not want your parents going through your information; you might choose someone else, instead. There’s a level of privacy that comes with a Will, and you get to be a part of it!

 

Your pets will benefit. Yes, this is a thing! You can be obsessed with your pets as much as you like, and you can even include them in your Will if you want to. Pets can be left in your Will and you can ensure that they are left with the best possible care when you die.

 

 

You get to remain organized. It’s so important that you keep your life as organized as possible, right? Well, you should concern yourself with keeping your death organized, too.

A Will is a must and there’s no reason to wait until a Monday to get it sorted out! Consult with an attorney to properly set up your will.

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

 

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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4 Alternatives to a Traditional Savings Account

Traditional banking savings accounts these days pay little to nothing in interest. This is touted as one of the main reasons consumers are increasingly opting for other investments to boost their savings funds, including those with a higher risk.

Consult with a financial advisor regarding investment risks and rewards.

Higher Yield Money Market Accounts

Obtaining a money market account is one of the easiest alternatives to deposit money in a conventional savings account. Money market deposits, including normal savings and checking accounts, are insured by the Federal Deposit Insurance Corporation (FDIC), up to specific dollar amount limits.

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Money market accounts provide restricted checking account services and pay higher interest rates than regular savings accounts. The maximum number of checks a customer can write on their account per month is normally between five and ten, depending on the bank.

Money market account holders enjoy a higher interest rate than those available for conventional savings accounts in exchange for adhering to the withdrawal restrictions. For example, a bank that pays just 0.10 percent interest on regular savings accounts may pay 0.25 percent interest on a money market account.

Online Banks and Credit Unions

Simply transferring a savings account to a different financial institution, whether one down the street or one accessible through the internet, may also result in a higher interest rate. Credit unions are similar to banks in terms of operations, but they usually provide less in financial services. The National Credit Union Share Insurance Fund (NCUSIF), the credit union counterpart of the FDIC, insures credit union accounts.

Since credit unions are nonprofit entities, they often offer slightly higher interest rates on savings accounts than banks. For example, by switching from a conventional bank to a credit union and opening a savings account, a person could increase their earnings from 0.09 percent to 1.25 percent. This is one of the safer unbanked alternatives for consumers wanting to protect their money.

Peer to Peer Lending

Peer-to-peer lending networks, which are typically run by websites, have grown in popularity in recent years. Individuals searching for personal loans can get them without going to a bank, thanks to peer-to-peer lending.

Individual lenders and borrowers can gain high returns on their money by financing the loans with their lending account deposits. Individuals on the lending side provide loan collateral for individuals on the borrowing side through websites such as Prosper.com.

High Yield Checking Accounts

Several high-yield checking accounts pay a higher rate of interest than savings accounts. Compared to lower savings account rates, some checking accounts may pay up to a 2.00 percent annual percentage yield.

Customers must normally meet certain conditions to qualify for the higher interest rates, such as maintaining a minimum balance, setting up direct deposit or bill pay, or making a certain amount of monthly debit card transactions. There is normally no penalty if account holders fail to meet the conditions for earning the higher rates. They are often given the bank’s usual lower checking account rate.

It is important to remember that any investments carry risk, even if it is a small one, and by investing your money, you may lose what you invest at any time.

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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Be Sustainable With Your Accounting, A Green Future, A Profitable Future

Today we know that the tax prep industry is expected to grow by 4% compounded annually. This is why now more than ever, it is important to learn some of the rudiments about taxes and bookkeeping to stay on top of your business, and also adhere to some of the new ways in which people are dealing with accounting in 2021.

 

You may know how to generate invoices and manage your taxes but it is likely that things are going to go beyond this in 2021. The world is turning digital – and sustainable -and businesses need to try and catch up. Once upon a time, the term “ green business ” was only associated with businesses that dealt directly with clean energy or in the fields of the environment but today “green business” is not characterized by a particular activity and does not have to be related to the environment at all.

 

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What is a green business?

 

A green business is a company that is active and supports business practices that do not contribute to environmental pollution and global warming. And the trend is clear: more and more businesses are moving to green activity and are committed to reducing as much as possible any polluting activity.

 

These firms invest in things for the greater good that will benefit their businesses. For example, a lot of big businesses as well as huge corporations are moving to cleaner office lighting – replacing the old incandescent bulbs and energy-hungry ones (neon and halogen bulbs ) with economical LED bulbs. Now there is even an online business management system and online invoicing systems!

 

Understanding green software

 

It is important to mention one more significant virtue of the transition to these green software: improving the image and reputation of the business. Using advanced internet functions for management and communication with customers/suppliers will give the business an image of a sophisticated, young, serious and reliable business.

 

It is much easier to track and recognize customers’ needs when all their data and past purchases appear on the screen in an orderly and organized manner, and customers can also be impressed by you and trust you more in future purchases.

 

Why you should embrace automation

 

And after the purchase, sending an invoice online to the customer’s email also contributes to the fresh branding of the business and increases the customers’ confidence in your efficiency and corporate culture, especially if the invoice is designed and branded in a respectful manner. Whilst this is all well and good, you must first have the skills to be able to create the invoices and manage your finances.

 

That is truly where the fun and games begins. No business can input any amount of money into the pot to buy new equipment if they are not handling the books well. So, learn about financing, be on top of the trends and the facts about taxes and more. This way you will be able to make more educated decisions on the matter and create a profitable future, even after the coronavirus crisis!

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

 

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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Should You Perform A Life Audit?

Have you ever conducted a life audit? Life can get messy, and as such, it pays to evaluate everything you have going and any goals you are trying to work towards. We all know how important it is to conduct a financial audit regularly to make sure your finances are in the best possible shape, but applying that to all areas of your life can help you to take stock and make my changes you need to make.

How do you perform a successful life audit and how do you know if you need to take stock of your life and evaluate where you are headed compared to where you want to go and what you want from your life?

Choose An Area to Audit

Break your life down into different departments, then list them in order of urgency or most beneficial to you.

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Areas you can audit can include;

Fitness levelsDietPersonal loansSubscriptionsSleep qualityHealthHabitsCareerHappinessHomeChoose your Defining Metrics

You need to be able to measure your success in each area, and as such, you need a measure of how successful you are or might not be in each area to evaluate fully.

For example, if you want to measure your happiness, why not try setting the alarm on your phone every few hours and jotting down how you feel. At work, write about how well you are advancing in your career, what is blocking you, and working for you for your career path.

Maybe you want to set yourself some questions to answer to fully gauge where you are at in each part of your life.

Chart Your Audit

A successful audit requires you to take records on where you are now and where you need to be. Seeing this written down in a spreadsheet, graph or chart can help you visualize the audit better and give yourself a starting block for changes.

Compare your ‘where you are now’ chart to one showing where you want to be compared.

Create an Action Plan

Once you have your current starting place and your end goals, you can get yourself from the now to projected changes.

Ask yourself why you feel the need to change things, how you can effectively change it and how long you think you need to get there realistically.

This could be taking those driving lessons to help you get a car and potentially change your career if you want to do this. It could be you feel you need to overhaul your diet and you want to make sure you are eating better, so buying cookery books, taking cooking classes, or limiting how many times you dine out each week can be a start.

Make adjustments

As you follow this journey on the outcome of your life audit, you may find some goals or changes are unrealistic, and as such, allowing yourself to make any changes needed to refocus. Doing so regularly will allow you to assess your goals, re-audit your lifestyle and focus on new changes you want to make or new life goals you wish to incorporate.

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance.

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

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5 Services That Will Save Your Business Time and Money

Outsourcing certain services for your small business may have an initial cost, but over time it can work out as a good investment.

 

If you’re running a small company, it can be time-consuming trying to manage different departments, particularly if you don’t have training in these areas. You can also outsource services for your business on a short-term basis, rather than paying overhead for full-time staff. Here are a few examples of services that could save your business time and money:

 

Outsourced accounting

 

Filing your tax return is complicated for individuals, and the more your business starts to grow, the more time-consuming it can become. It’s also vital to ensure your business is operating above board and that your finances are in order. If not, this could cost you more money in the future, and have a detrimental effect on your reputation.

 

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It’s advisable to search for an affordable cpa near me, who can help you manage your finances and taxes.

 

Assistance with human resources

 

There are also financial considerations related to staffing that may be confusing and time-consuming. If you’re hiring new employees, it’s a good idea to outsource certain human resources tasks.

 

An agency of trained professionals will be able to take care of payroll, contracts, sick pay, and more. These issues can be a bit of headache for small businesses owners otherwise.

 

Managed IT services

 

It’s essential to ensure that your data and systems are protected, as no business is too small to be at risk of a security breach. If you outsource your IT, you can take advantage of encrypted cloud hosting, advanced cyber security, disaster recovery, and proactive IT.

 

You can rest assured your networks are being closely monitored by the experts. There are also several ways to pay for managed IT services and save money. By hiring proactive IT services to protect your business, you reduce the risk of downtime caused by a data breach. This could otherwise cost you in loss of business and affect your reputation.

 

Help with digital marketing

 

Developing a strong online presence for your brand is the best way to reach out to potential customers in today’s market. This means you need a robust digital marketing strategy.

 

Unless you have specific experience in this area, it may be helpful to work with a digital marketing agency. There are many ways a digital marketing agency will make and save you money. They will help you create more effective campaigns and advise you on how to assign your budget for each.

 

Dealing with office rental

Rather than investing in commercial property, why not take advantage of the benefits of coworking spaces? You can hire office space on a temporary basis where necessary.

 

This is particularly useful if you want to make a better impression on new clients, or collaborate on a project together in person. This can also help to boost productivity. Many startups and small businesses use office rental options, and save their budget for other areas. In order to save your business money, you could do the same.

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

 

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

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How to Know Exactly What Your Home Insurance Covers

Buying homeowner insurance is something everyone should purchase. Have you ever wondered exactly how much it would cost to replace every single thing you own and how easy it would be to pick your life up again after a major event?

 

While many of us don’t want to think about the worst happening, for some people, it does, and having to pick up the pieces and start over can be a hard and emotionally draining prospect, not to mention expensive if you aren’t adequately covered.

Factors such as your local neighborhood, the vicinity of a local fire station, and the size of your house all play a part in making up your home insurance quote.

However, not all home insurance policies are made the same. Different providers have different stipulations, and the terms and conditions can vary from one carrier to the next.

When it comes to purchasing something as important as home insurance cover – which some landlords may stipulate you need as a renter and all mortgage providers insist upon for homeowners, the last thing you should be doing is skimming over the small print. In fact, the small print should be investigated thoroughly. Usually, contents insurance is covered by homeowners insurance, rental insurance, and condo insurance.

So what should you be looking for when taking out a home insurance policy?

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Cash Value or Replacement Cover

One of the main differences you should be looking for in a home insurance policy is whether your contents are covered for their actual cash value or a replacement product.

Actual cash value means you will get the cost of the item for what you paid for minus any depreciation. Value for a replacement product means choosing an equivalent replacement product that is the closest match as a replacement item.

If you choose to have the cash value reimbursement, be aware that you will only get the cost of what the item is worth when you claim, not when you bought it. Worth bearing in mind if you have older items that might have changed in price since your purchase.

Coverage Limits

Do you know exactly how much it will cost to replace every single item in your home? If not, take an inventory to help you decide on your coverage limits. The coverage limit you choose is the limit the insurance company will pay minus your deductible.

For example, if your limit is $50,000 and you have a $1,000 deductible, then the insurance company will pay you $49,000 to account for your deductible. In some cases, insurance companies may try to pay you the absolute bare minimum and not the full amount of cover you are claiming for. In this case, look for a home adjuster near me to find a home adjustment company who will work with you to get the best price for your claim and avoid being underpaid by your insurance company.

There may also be individual limits on items in your home, for example, $1,500 per item, meaning if you own something more expensive, such as a laptop or gaming setup, you may need to purchase an additional cover to account for this.

Understanding Exclusions

It is always worth checking what exclusions apply in your policy before you agree to purchase it. If you are moving, your contents will likely be insured for the process. However, not all policies cover damage made by the movers, meaning you may need to purchase a movers insurance policy. The same applies to putting items in storage.

Also, check any limitations such as weather damage or natural disasters. If you live in an area prone to flooding or experience frequent hurricanes or inclement weather that can cause damage to your home, be careful of the wording of your policy to ensure you are still covered should an extreme weather event destroy all your belongings.

This also applies to Mold in your home damaging the property or your belongings and sewer lines that may back up and cause damage inside your property.

If you are unsure of exactly what your policy covers, make sure to consult with an insurance agent to fully explain what you are covered for, and what falls outside of the policy. It may be that you need to add or remove certain clauses to make sure you are suitably covered, especially if you own items of a higher value or you are at risk of losing your personal belongings due to high crime rates, weather conditions, or the standard of living in your home.

Consult with an experienced insurance agent on these issues.

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

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Smart Tips To Manage Your Household Budget

You can manage the budget for the home even if you are not good at finance. Once you are good with money and know how to limit your spending, you should be more than capable of managing your household budget.

 

Managing your household expenditure does not only mean keeping the light and heat on. It also means making intelligent payments such as smart arrangements with mortgage brokers to settle debts and still have enough to keep aside in case of an emergency. Here are a few tips to help you manage the budget for your home.

 

Know your finances

 

The first step to managing a budget for the home is to know your finances. You can do this by writing down your total income. This will provide you with a better understanding of your financial position. If your income is not stable or fluctuates, use an average figure that reflects your income. This is to know how much you earn on average and will help you when tracking your expenses.

 

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Calculate your expenses

 

A budget is made up of a lot of expenditure. So it is logical to enumerate all your fixed expenses such as rent, utility bills, taxes, debt, groceries, and transportation and calculate them.

 

For other expenses that vary, use an average figure that reflects your use. Please do not leave out even the smallest detail; capture everything and then sum it up. This total reflects how much you spend in a month.

 

Get your net income

Net income refers to the amount of money you have left after making all your expenses. Take the total of your expenses and subtract that from the sum of your income. The figure you have left is your net income.

 

If it is negative, it means you spend more than you earn. If it is a small figure, you are spending almost as much as your earnings, and you will have to change your spending habits. If the figure is positive, it means you are spending less than you earn-which is great.

 

Recheck your expenses

Now that you know your net income, you have a better idea of where you spent most of the money. You will be able to identify the unnecessary expenses.

 

Now what you need to do is create a list of your expenses and separate them into needs and wants. Needs here refer to expenses that are necessary, such as utility bills and transportation. Wants refer to expenses that you can do without paying a premium subscription to streaming services.

 

On the wants list, figure out which ones you do away with entirely or reduce to a minimum. This should help you figure out your spending habits and begin to spend more prudently.

 

Create an emergency fund

 

The money that you can save from the unnecessary wants list should go into an emergency fund that you can rely on when something comes up. You may not see the value of it in the beginning, but as time progresses, you see how much money you were spending on things you did not need. With a reasonable sum of money going to your emergency fund, you do not have to touch your savings if you need some extra cash for something.

 

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

 

 

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