Kenneth Boyd's Blog, page 49

How to Deal with Unexpected Bills

The unexpected can be frustrating.

 

We’ve all been there, life’s moving along just fine and then- out of nowhere- the washing machine breaks, the car needs major repair work, and you’re left trying to find the money to cover the cost.

 

Meanwhile, there’s the added stress of the fast-growing mountain of laundry to deal with, or the lack of a car when you’ve got places to go and people to see.

 

There’s nothing more frustrating than an unexpected bill suddenly arriving out of nowhere, and if you don’t have the cash readily available to cover it, life can get pretty stressful very quickly. So, what should you do when hit with unexpected costs?

 

Rainy Day Fund

 

Hindsight is, of course, a beautiful thing, but funding a savings account is a good place to start.

 

Having emergency savings is always a good idea, and while it may seem tempting to spend money, rather than have it sat there doing nothing, you will be grateful when a situation arises, and you need it.

 

So, how much should you have saved up in case of emergency? Having enough money to cover three months of your expenses is a useful target. You can use the fund to cover the cost of unexpected bills. If you’re ill and are unable to work, your bills, rent or mortgage payments, and food costs will be covered.

 

Taking charge of your money now will make life so much more comfortable in the future, particularly in those unexpected, expensive situations, like needing essential repair work.

If you’ve had a financial setback, this article can help.

 

Feeling in control of your finances means that you always know how much money is coming in, how much is going out and how much you have left over to spend as you wish.

 

Action Steps To Consider

Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
Consider using a budgeting app to monitor your spending, and
Set up a separate bank account to discipline yourself to save.
Save 5% of your monthly gross income

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

Keep it in the Family

 

 

Approaching a family member may be an option for you, but things can become complicated.

 

Not having savings in place may mean that you need to turn to family members for a loan. Of course, while you may not need to pay your family interest on the money borrowed, there are disadvantages to borrowing cash from a family member.

 

Money and emotion together can be a divisive combination, so issues of resentment and jealousy could enter the mix from siblings when borrowing from the bank of mom and dad for example. It may be worth figuring out a repayment schedule and sticking to it to prevent problems in the future.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

 

Arrange a Loan

 

If you need to get cash fast and you aren’t able to use savings to cover that annoying bill that’s come out of nowhere, taking out a loan may be the option that you need. Nowadays, many lenders make it easy for you to apply quickly for a loan online.

 

Loans come in many shapes and forms, so it is essential to read the fine print before committing yourself, even if you are desperate to get hold of the cash quickly. When applying for a loan, take a look at the repayment rates and ensure that they are affordable for you before signing on the dotted line.

 

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 Take Charge of Your Payroll Process

Growth requires automation.

 

It just does- and there’s no way around it.

 

No business process is more complicated and time consuming than payroll, and it’s critical that you apply technology to this process. In fact, you can limit your ability to grow, if you don’t automate payroll, and many companies outsource the process completely.

 

This post discusses the five important steps for payroll from a QuickBooks article I wrote, and a bunch of reasons why you need to automate payroll- now.

 

Five Important Steps for Payroll

 

To evaluate your payroll system, consider how your manage each of these important tasks:

Data collection: When an employee is hired, you need to collect information to withhold the proper amount of federal and state income taxes, and possibly withhold dollars to pay for company-provided benefits. If, for example, you offer a retirement plan, a worker may want payroll dollars withheld and invested in the plan.

 

Calculating net pay: The net amount you pay each worker is the gross pay less tax withholdings, less any benefit payment withholdings.

 

Payments: You must pay each worker by check, or by an electronic transfer to a bank account.

 

Reporting: Federal and state tax withholdings for each employee must be reported to the IRS and state department of revenue. In the same way, retirement plan payments are reported to the investment firm. Note that retirement plans typically include both a worker and an employer contribution amount.

 

Withholding payments: All of the tax and benefit payments must be forwarded to the taxing authorities, retirement plan firms, and to any other benefits providers.

 

Keep in mind that your business must address changes to payroll, which complicates the process and requires more time. Every year, employees may be added, promoted, or let go. Workers also may change the tax and benefit withholdings based on salary changes or family changes.

 

Your payroll data is a constantly changing, and that’s an issue you have to manage.

 

If you manage a business and want to increase your productivity, I highly recommend QuickBooks accounting software. Read this article to decide if you need the desktop or online version of the software.

 

See the Warning Signs

 

Successful business owners have high degree of self-awareness, and the ability to notice problems and fix them.

 

If you’re noticing problems with payroll processing, make changes before you spend more time and money on a flawed system.

 

It reminds me of my neighbor’s recycling plan.

 

Every week, he puts out a recycling bin that is overflowing with trash- so full that the lid can’t close. Without fail, trash blows into his yard, and across the street into my yard.

 

I pick up recycled boxes and cans, and so does he.

 

And next week, we do it again.

 

It’s nuts- and many business owners do the same inefficient process with payroll.

 

Here two BIG warning signs which indicate that payroll is a problem:

 

Are you gaining efficiency? When you do the same routine tasks over and over, you should become more efficient. If, for example, you’re processing payroll for the same 20 people each month, you should pick up some speed as you do it more often. If you’re not gaining efficiency, you have a flawed system.

 

Repeating mistakes: OK, calculating the wrong dollar amount withholdings is an honest mistake, and you can fix it quickly. However, if you’re making the same mistake over and over, you’ve got a payroll-processing problem.

 

See the warning signs and take action.

 

Use online accounting software to dramatically increase your company productivity. Find out more here: QuickBooks Online Edition – Free Trial

 

 

Don’t Use Excel for Payroll

 

If you started your business and got in the habit of using Excel to calculate payroll, it’s time to make the difficult transition to a better process.

 

Now, that doesn’t sound very uplifting, but using Excel can create big problems over time. I wrote about this topic for QuickBooks, and listed these specific issues:

 

1. Data is scattered.

Using Excel makes it difficult to automatically link the steps needed to process payroll. For example, the data you collect about withholdings will not post automatically into your payroll calculation spreadsheet. Each employee’s withholdings will be different and can change for many reasons, creating lots of error-prone, manual work. The process involves more steps than an automated system, which also makes adding employees difficult.

2. There is a high risk of human error.

Many businesses use linked spreadsheet tabs to process payroll. If the calculation of net pay is in tab number one, for example, the spreadsheet will require additional tabs to compute federal and state withholdings, FICA, and other amounts. Using a large number of linked spreadsheet tabs increases the risk that an individual link has an error.

3. Manual data entry is a pain.

The data you collect from employees must be input into any payroll system. An automated system only requires you to enter the data in one location. If you use Excel, you may need to manually enter data into multiple locations to process payroll. More manual entry increases the risk of error.

 

4. Your workflow probably isn’t documented.

As your business grows, you may need to hire and train new people to handle your payroll process. An Excel-based system is more complex and requires more steps, and a complex process is more difficult to document and to explain. Using Excel will require you to spend more time explaining your payroll process to new employees.

5. Investors and accountants don’t like it.

Finally, using Excel for payroll may communicate that your company is not investing in the right tools to grow the business. If you need to attract investors, you need to demonstrate that your company operates efficiently. Using Excel for payroll may inhibit your ability to grow the business over time

QuickBooks Online Edition – Free Trial

 

Your Payroll Solution

 

Here’s how to create a more efficient payroll process that allows you to leverage your time and grow your business:

 

Automation

 

Start using accounting software, such as QuickBooks, for all of your accounting needs. Software will help you stay organized, reduce the rate of error, and you can back up your data on the cloud.

 

Work with a payroll company

 

Some businesses immediately use software to process payroll, along with all their accounting needs. Most companies, however, start using software and also contract with a payroll company.

 

In this scenario, you input payroll information into your software, and send the data to the payroll company to calculate net pay. The payroll company handles all tax reporting, and you input the wage expense information into your accounting system.

 

Using a payroll company and software is a great next step for companies that are adding employees, but don’t have a full-time accountant.

 

Hire an accountant

 

At some point, your business may grow to the point that you need a full-time accountant to manage your accounting transactions, create financial statements, and to manage payroll. The accountant will likely continue to use a payroll company, because the cost per worker is cheaper than taking the process in-house.

 

Create a procedures manual

 

You need to create a procedures manual, an important tool for businesses of all sizes.

 

Document your current process in a procedures manual, you haven’t already. The manual documents how to perform routine tasks, and you should include each task you perform and who is responsible for task completion.

 

The manual records what you do, how you do it, and who does it. It’s your company’s recipe for doing business, and it’s clarifies how tasks should be completed.

 

Change is Hard

 

 

Change is difficult, but often necessary.

 

If you don’t improve your business procedures, you may not be able to manage growth. Ask for help, and make the decision to change, so you can increase sales and profits.

 

Take on payroll, and grow your business successfully.

 

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/

The post How to Take Charge of Your Payroll Process appeared first on Accounting Accidentally.

4 Money Management Tips All Retirees Need to Know

After decades of living as a salaried employee, retirement marks a significant change in how you manage your money. When living on a fixed income, it’s more important than ever to follow a budget and keep expenses predictable. If you’re nearing retirement and starting to plan your financial future, these are four tips you need to keep in mind.

1. Step Up Your Health Coverage

Most expenses go down in retirement, but health care is a big exception. According to Fortune, while health care only accounts for 8 percent of the average person’s budget pre-retirement, that number jumps to 19 percent by the time retirees turn 85.

One mistake retirees make is assuming Medicare will cover all their health expenses. While it’s true that Medicare Part A is free for most people — that is, there’s no monthly premium payment — in 2018, Part B costs $134 a month for most seniors. However, Parts A and B don’t cover everything, and the gaps can cost seniors a lot of money if paying for care out of pocket.

For that reason, many older adults opt to purchase supplemental coverage through Medicare Advantage plans, such as those offered by Aetna. Medicare Advantage plans expand Medicare coverage to include vision, dental and prescription coverage so seniors to minimize out-of-pocket medical expenses.

If you are eligible for Medicare or are near the age of eligibility, you should take time to learn more about the coverage, requirements and enrollment dates.

If you’ve had a financial setback, this article can help.

2. Know Your Tax Obligations

When you work for an employer, they handle most of the work of paying taxes for you. But once your income is coming from retirement savings and investment accounts, taxes get more complicated.

Retirees should understand how different retirement accounts are taxed so they can minimize their tax burden in retirement. Distributions from tax-deferred accounts like traditional IRAs, 401(k)s, and pensions are taxed at your ordinary income tax rate, while Roth IRAs permit tax-free distributions for individuals over 59½.

Capital gains from investments may be subject to additional taxes, and in some cases, Social Security income is taxed as well. Because the right strategy for minimizing taxes and maximizing income depends on account allocation and tax brackets, retirees should research thoroughly and talk to a financial advisor before they start making withdrawals.

3. Re-evaluate Your Housing

That three-story, 3,000+-square-foot home was great for raising kids, but it might not be as practical in retirement.

Not only are big homes more expensive, which means hefty mortgage payments if it’s not paid off, but they also take a lot of effort to maintain. The multiple stories and big backyard that you enjoyed when the house was packed with kids can also become a safety hazard as mobility declines with age.

Downsizing to a smaller home is an effective strategy to save money on housing and reduce the burden of upkeep during retirement. Downsizing also frees up money for remodeling projects that help seniors age in place safely, like installing hard floors, adding lighting, and creating accessible bathrooms.

4. Calculate Your Discretionary Budget

Most people dream of traveling, dining out and generally enjoying a life of luxury and leisure in retirement. However, retirees shouldn’t assume they can afford the finer things in life until they’ve calculated their budget.

 

Adults nearing retirement should create a budget that accounts for fixed expenses including housing, health insurance and transportation, as well as bills that are harder to predict, like long-term care costs. It’s important to set aside enough for these expenses, including a buffer, before spending “fun money.”

If retirees want to increase their discretionary income, they should seek ways to reduce non-essential expenses or increase income, rather than using money earmarked for other expenses. SmartAsset offers additional advice on creating a retirement budget.

 

If you’ve diligently saved to prepare for retirement, following these tips is fairly straightforward. However, if calculating your budget and expenses makes you realize you’re not as prepared for retirement as you thought, you’ll need to re-evaluate your financial plan to ensure a comfortable retirement.

Finances in retirement are complicated, so consult with a financial advisor to determine your best path forward.

 

About the Author

Michael Longsdon (info@elderfreedom.net) understands the process and challenges associated with helping seniors downsize, and he’s had first-hand experience helping his in-laws downsize and resettle.

The post 4 Money Management Tips All Retirees Need to Know appeared first on Accounting Accidentally.

How To Manage Finances During an Illness

A health problem may require you to do two things at once: follow your Doctor’s advice, and monitor your finances.

 

You can’t balance these two important tasks alone, and you need the help of other people, and a plan.

 

Always Have a Plan in Place

 

The first step is to prepare in advance.

 

Have a plan in place to create a monthly budget, to save for emergencies, and to invest.

If you’ve had a financial setback, this article can help.

 

With discipline and time, most people can accumulate far more wealth than they think is possible. But growing wealth requires change- which is precisely why most people don’t make the effort. The changes I’m suggesting involve an old friend:

Delayed gratification

 

Some decisions are relatively small:

Dropping a subscription music service and just listening to the free version (Pandora, for example).
Making coffee at home two days a week, which means that you stop by Starbucksless often.
Buying afew more generic products when you go to the grocery store and Target. (I’m not going generic on salad dressing, however).

 

Since these are smaller decisions, the amount of gratification you’re delaying is small. You don’t mind listening the commercials on Pandora (I certainly don’t- I just turned down the sound), and the coffee at home isn’t bad.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

Other decisions are much bigger. StudySoup wrote this great article on the average amount of money a college student saves by having a roommate. The average savings over four years is over $15,000. Now, having a roommate is a big sacrifice, because you lose a fair amount of privacy. If privacy is really important to you, it’s a true delay of gratification (until you graduate, get a job and can afford to live alone).

 

So, what do I get?

 

OK- so what do I get out of all this delayed gratification?

You build wealth- which can give you peace of mind.

Here’s a practical example: By making changes to your spending and building a savings account, you create a $1,000 emergency fund. If your car brakes down, you can pay for the repair.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

 

Action Steps To Consider

Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.

 

Create a safety net.

Reach Out to Friends and Family

 

Don’t go it alone.

 

One of the most common reasons that many people end up in financial trouble when their health suffers is that they are just too stubborn to ask for help.

 

We’re all taught that it’s important to be able to stand on our own two, but there’s nothing wrong with needing to ask the people closest to you for a help.

 

Seek help.

 

Talk to your creditors, and negotiate a longer time to pay your debts. Find people who can advocate on your behalf, such as your tax accountant and an attorney.

 

There are options to help you keep your finances in order when you’re sick, such as disability benefits. Companies like San Diego Disability Law Group can help you navigate the complicated process of claiming any money that you’re entitled to when suffering from a disability or any kind of chronic illness.

 

You Can Do It

 

With proper planning, and a group of people committed to help you, you can overcome financial problems during an illness. Make the effort, get through your health issue, and improve your finances.

 

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/

The post How To Manage Finances During an Illness appeared first on Accounting Accidentally.

Important Real Estate Investing Tips

When it comes to growing your money, there’s not always a one-size fits all answer.

 

The most common form of investing is stocks and bonds, but other people

take more risk by day trading, or investing in commodities.

 

Another option is real estate and buying property, and you need to understand the risks and rewards of investing in real estate.

 

Your budget

 

Your ability to create a budget and save money is the biggest factor in investing. You need to consistently save and invest over time to succeed as an investor.

 

Action Steps To Consider

Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.

 

Once you’ve funded an emergency account to cover unexpected costs, such as a car repair, you can start investing.

If you’ve had a financial setback, this article can help.

 

What’s a Reasonable Rate of Return?

 

Before you invest in real estate, you need to consider all investing options, and what you should consider as a normal rate of return.

 

As of 1/22/18, the Dow Jones Industrial Average (DJIA) closed at an insane 26,214.60, up 32.4% in the last 12 months. The DJIA is an index of 30 large corporate stocks. A broader index, the Standard and Poor’s (S&P) 500, closed at 2,832.97 on 1/22, and this is an index of 500 large stocks- a bigger basket of stocks. The S&P 500 is up 24.7% over the last 12 months.

 

Crazy, record-setting performance… and it’s stressful to consider the fact that every bull market ends. Expecting a 25%-plus annual return is simply not realistic.

 

It may seem like everyone around you is getting rich- but that’s normal. In every bull market I’ve seen since the ’87 market crash, most of us think that everyone else is making a pile of money.

 

But there’s a trade-off. The people who are really killing it in the markets these days are taking more risk (Bitcoin, anyone?). They either have larger percentage of their total portfolios in stock (vs. bond or cash), and they’re buying riskier stocks- stocks that have less of a performance history of earnings and sales.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

So, what’s a “normal return” on stocks, if such a number exists? Seeking Alpha (a site I highly recommend) has some great stats on historical returns for the S&P 500 from 1928 to 2015:

 

Over 88 years, the S&P 500 went up 64 years and went down 24 years.
The worst return was -43.84% in 1931 (ouch) .The best return was 52.56% in 1954.
The mean return (think average) was 4122%

 

So, what’s normal? Seeking Alpha says 11%, and other stats suggest 8-10% over a 70-80 year period. The point is that 24-32% isn’t normal.

 

Accept the fact that, over the long-run, you’re not going to earn more than the historical “normal” return.

 

The same is true in real estate, because the long-term rates of return aren’t much different from stock and bond investing. Over time, you’re going to earn the “normal”, or average rate of return on real estate. Investopedia explains that the rate is typically between 9 and 11% annually.

 

So think about some of the real estate markets that are on the rise. If you buy at a low price and wait for the economy to improve, or you buy and develop the property, you may be able to make some money from it.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

Alternatively, you may consider newer developments, such as the KINGSFORD HURAY DEVELOPMENT, that people may be interested in living in. Then, you can invest in a property and take a tenant so that you’re able to make a small amount of money on a monthly basis.

 

Use these tips to save money to invest, and to understand the risks and returns. Find an expert who can help you with specific real estate investing options.

 

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

 

 

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Is Your Money Safe? 8 Ways You Can Protect Your Finances

To build wealth, you need to plan and use self-discipline.

 

Successful investors take steps to create a budget, monitor spending, build a saving balance, and to consistently invest.

 

Use these tips to improve your personal finances.

Short Term
Check your accounts regularly

While it might seem like a hindrance, checking your accounts regularly (daily, to be safest), can help you identify any transactions that you haven’t made.

 

It’s important to also check the transactions you have made and compare them with receipts because quite often, you could be charged more than your receipt shows. Take the time to check your account for errors or potentially fraudulent transactions.

If you’ve had a financial setback, this article can help.

Know what’s going out and when

We all have bills to pay, and it’s easy to forget when they’re going out.

 

This is particularly true, when you have direct debit amounts coming out of your account.

 

Learn what bills go out and when, and check them! If more has gone out than expected, check with the company to find out why.

 

You should also research any payments that haven’t gone out of your account when due, so that you can avoid charges for late payments. Once you get into a routine of knowing your payments it won’t seem like such a chore.

Don’t make impulsive purchases

It’s easier than ever to make a quick purchase – especially online.

 

However, making impulsive purchases can lead to bad financial habits, creating financial problems for you.

 

If you’re planning on buying something that’s of a high cost, sleep on it and make your decision in the morning. More often than not, you’ll decide against it and save yourself money! Also, impulsive purchases can include subscriptions that could lead to you paying out for months on end for something you don’t really want or need.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

 

Only use online banking at home

You may have seen the adverts on television lately about cybersecurity and how important it is to be careful when using the internet. This is especially important when it comes to using your online banking. Keep your money safe by only using your online banking at home or on a trusted WiFi so that you don’t risk hackers stealing your information. It might be worth installing an antivirus on your computer to be extra sure your pc isn’t already infected.

 

Long Term
Invest your money into your future

Work with a financial advisor to determine the number of years you have until retirement, the amount you should be saving each month, and the types of investment (stocks, bonds) you should use.

 

Investing your money into retirement villages will allow you to rest assured that if needs must, you’ll have the care you need.

Learn your legal rights

Knowing your legal rights related to money is important.

 

Sometimes, no matter how careful you are with your credit card it could still be stolen. However, some banks have clauses that will leave you liable for charges made on the card even after it’s stolen. When opening accounts or taking out a credit card/loan, make sure that you learn your legal rights so that if the worst does happen, you’re protected financially.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance  in order to cash flow your business until you can collect receivables from customers.

Create strong passwords and codes

Online banking is a great way of accessing your money quickly. In the simple touch of a button, you can pay bills, transfer money to other accounts or loved ones, and even apply for overdrafts or loans.

 

However, with conveniences like this come cons and in this instance, it’s people stealing your details and accessing your money. We know how hard passwords are to remember, but creating a password that’s an amalgamation of letters, capital letters, numbers, and even symbols will ensure that your information is as safe as possible. Here are some tips on how to create a strong password for your financial needs.

Don’t use suspicious card machines

Finally, some card machines and ATMs aren’t all they crack up to be. By this, we mean that some of them are hacked and can steal your card information. However, when this happens, your details are often kept hold of until suspicions have disappeared, meaning that money could disappear from your account years down the line.

 

Avoid using suspicious ATMs and card machines to avoid this happening to you.

 

Use these tips to improve your personal finances over time.

 

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/

The post Is Your Money Safe? 8 Ways You Can Protect Your Finances appeared first on Accounting Accidentally.

3 Rules For Making Sensible Investment Decisions

To build wealth over time, you need to invest.

 

Before you invest, you need to make an honest assessment about the risks of investing, and the potential rewards. Here are three rules for making sensible investment decisions.

 

Be Willing to Change

 

Successful investing requires a willingness to change.

 

The reason that people don’t diet, don’t exercise, and don’t resolve bad personal relationships is that change is hard. As a result, we don’t really, truly change and grow unless we’re in real pain. When we’re at that point, the pain of change is less severe than that pain of not changing.

 

With discipline and time, people can accumulate far more wealth than they think is possible. But growing wealth requires change- which is precisely why most people don’t make the effort. The changes I’m suggesting involve an old friend:

Delayed gratification

Some decisions are relatively small:

Dropping a subscription music service and just listening to the free version (Pandora, for example).
Making coffee at home two days a week, which means that you stop by Starbucksless often.
Buying afew more generic products when you go to the grocery store and Target. (I’m not going generic on salad dressing, however).

 

Since these are smaller decisions, the amount of gratification you’re delaying is small. You don’t mind listening the commercials on Pandora (I certainly don’t- I just turned down the sound), and the coffee at home isn’t bad.

Bigger decisions requires a larger sacrifice- more gratification is delayed.

OK- so what do you get out of all this delayed gratification?

You build wealth- which can give you peace of mind.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

 

 

Avoid Information Overload

 

Successful investors avoid information overload, and use the advice of professionals to help them invest.

 

Technology gives investors information on thousands of mutual funds, stocks, and bonds, and the amount of data be seem overwhelming.

 

It’s important that you stick to investments that you understand, and to avoid any new investment strategies until you understand the risks and rewards of each new strategy.

 

Looking at the past performance of a stock will give you a good idea of how it’s likely to perform in the future, but a lot of people don’t go back far enough.

 

Review investment performance over the long term, to assess how an investment performs in both up and down markets.

 

If you’re investing in stock options, for example, you can easily find data on historical option prices, and you can use that data to assess each investment’s risk over the long term.

If you’ve had a financial setback, this article can help.

 

Consider Your Sources

 

You might read something in the newspaper that says a company that you’ve invested money in is likely to hit hard times in the next month or two, so you decide that you’ll pull your investment out. But what if their information is bad and it never happens?

 

It’s important that, before you make any decisions about your investment, you consider the source. Is the source reliable, or is there a better source that you can look to for information? If you start making snap decisions based on bad information, that’s when your investments will fail.

Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

 

Use these tips to make informed investment decisions, and to grow your wealth over time.

 

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/

 

 

 

 

The post 3 Rules For Making Sensible Investment Decisions appeared first on Accounting Accidentally.

Hidden Costs Of Buying Your First Home

Buying your first home is exciting, but the costs can add up quickly.

 

When it comes to purchasing property, the price is often much higher than you expect, because there are many hidden costs that can sneak up on you, causing unnecessary stress.

 

To create an accurate budget, here are some costs you’ll need to plan for.

 

1. Legal Fees

 

While it’s possible to deal with the legal aspects of purchasing property yourself, it definitely isn’t recommended. After all, unless you have training and experience in property law, you’re likely to make a mistake or two throughout the process. This could result in you paying more than you needed to.

 

Working with an attorney can help you to avoid any potential problems.

 

2. Mortgage Costs

 

When you apply for a mortgage, you aren’t just expected to pay back the amount of money that you borrowed and the interest. There are other costs and fees that you’ll need to consider, so to find the best loan for your circumstances, you should work with a broker, like Mint Loans. They can help you to compare hundreds of loan options.

If you’ve had a financial setback, this article can help.

 

3. Homeowners Insurance

 

Before you can qualify for a mortgage, many lenders ask that you take out an insurance policy. While each company has its own requirements and criteria, homeowners insurance is a policy that most expect.

 

If you’re going to get property insurance, you may also get insurance for your home furnishings, jewelry, artwork, and other valuables.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

 

4. Home Inspections

 

You may have taken a look around your potential new home yourself a few times, but that doesn’t mean that you’ve spotted everything that could be wrong with it.

 

Rather than risk purchasing a property full of problems, you should pay to have it inspected by professionals. The information that they provide will either give peace of mind or let you negotiate a better deal with the seller.

 

5. Essential Repairs

 

Small faults in an otherwise beautiful property can be easily overlooked during the buying process. However, you will want to deal with these before or very soon after you move in. Many repairs jobs should be left to the professionals, but, if you’re looking to cut costs, then there are a few that you could try yourself. These include replacing light fixtures and touching up the paint.

 

6. Moving Day

 

While the costs associated with buying property are large and many, you can’t afford to overlook just how expensive moving day can also be. From moving companies to packing supplies, there are a lot of things that you’ll need to pay for. After investing so much time and money into buying your new home, you need to make sure that you have enough cash left over to move into it.

 

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

Create and Maintain a Budget

 

The last step in home ownership is to create and stick to a budget, so you can make your house payments.

Buying a house is more expensive than most people expect, so make sure that you write an accurate budget by planning for the hidden costs above.

 

Action Steps To Consider

Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.

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/

(you tube channel) kenboydstl

The post Hidden Costs Of Buying Your First Home appeared first on Accounting Accidentally.

Take Charge of Your Money Right Now

Taking charge of your money is critical, if you want to build wealth over time.

 

It’s important to have good money management habits, and create a monthly budget. Think carefully about what it takes to balance your finances, and to build a savings balance.

 

Working toward stress-free financial management can make a huge difference in your life. The more you do to take charge of your money, the better off you’ll be moving forward. Use these tips to help you look after your money right now.

 

In-depth content, comment, meet peers: Join Conference Room. Watch the video, join here.

 

Hire an Accountant

An accountant is the perfect person to help you with cash management, finance, and your tax returns.

 

Think hard about what an accountant can bring to the table, and how they can help you to make better decisions for the future.

 

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

 

Change Is Hard

 

The reason that people don’t diet, don’t exercise, and don’t resolve bad personal relationships is that change is hard. As a result, we don’t really, truly change and grow unless we’re in real pain. When we’re at that point, the pain of change is less severe than that pain of not changing.

 

With discipline and time, I think most people can accumulate far more wealth than they think is possible. But growing wealth requires change- which is precisely why most people don’t make the effort. The changes I’m suggesting involve an old friend:

Delayed Gratification

 

Some decisions are relatively small:

Dropping a subscription music service and just listening to the free version (Pandora, for example).
Making coffee at home two days a week, which means that you stop by Starbucksless often.
Buying afew more generic products when you go to the grocery store and Target. (I’m not going generic on salad dressing, however).

 

Since these are smaller decisions, the amount of gratification you’re delaying is small. You don’t mind listening the commercials on Pandora (I certainly don’t- I just turned down the sound), and the coffee at home isn’t bad.

Other decisions are much bigger. StudySoup wrote this great article on the average amount of money a college student saves by having a roommate. The average savings over four years is over $15,000. Now, having a roommate is a big sacrifice, because you lose a fair amount of privacy. If privacy is really important to you, it’s a true delay of gratification (until you graduate, get a job and can afford to live alone).

 

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

 

So, What Do I Get?

 

OK- so what do I get out of all this delayed gratification?

You build wealth- which can give you peace of mind.

Here’s a practical example: By making changes to your spending and building a savings account, you create a $1,000 emergency fund. If your car brakes down, you can pay for the repair. Curbing your spending and cutting back on your spending is critically important

Once you create a budget and build a saving account for emergencies, you can use the excess dollars from your monthly budget to start investing.

 

You can choose from a number of investments, including modern homes , real estate, stocks, and bonds. Here some comments on stock investing, which may be the most common investing tool.

 

Common Investing Mistakes

 

If you were an investor in the first few weeks of February of 2018, you probably want to visit a place like Anger Room.

 

“Redirect your frustrations and take it out with us…safely.”

 

It’s a real thing.

 

The huge swings in stock market performance may have you wondering if you’ve made some huge mistakes, and that’s normal when investing tensions are running high. To assess whether or not you’re on track, here’s my list of the most common mistakes investors make.

 

Forgetting your investing goal (or not having one at all)

 

For starters, go back to the reason you started investing in the first place. Specifically, how much money were you trying to accumulate, and for what purpose? How long were you planning to invest?

 

Let’s assume, for example, that your investing now in a 401(k) retirement account, and that you’re 25 years from retirement. You’ll willing to take a moderate amount of risk. If your portfolio is up or down 10% in one year, you can live with it. A 25% change, however, makes your palms sweaty. You invested in mutual funds, with 70% in stock and 30% bonds.

 

That’s the plan- and that’s where you start.

 

Unrealistic expectations

 

As of 1/22/18, the Dow Jones Industrial Average (DJIA) closed at an insane 26,214.60, up 32.4% in the last 12 months. The DJIA is an index of 30 large corporate stocks. A broader index, the Standard and Poor’s (S&P) 500, closed at 2,832.97 on 1/22, and this is an index of 500 large stocks- a bigger basket of stocks. The S&P 500 is up 24.7% over the last 12 months.

 

Crazy, record-setting performance… and it’s stressful to consider the fact that every bull market ends. Expecting a 25%-plus annual return is simply not realistic.

 

It may seem like everyone around you is getting rich- but that’s normal. In every bull market I’ve seen since the ’87 market crash, most of us think that everyone else is making a pile of money.

 

But there’s a trade-off. The people who are really killing it in the markets these days are taking more risk (Bitcoin, anyone?). They either have larger percentage of their total portfolios in stock (vs. bond or cash), and they’re buying riskier stocks- stocks that have less of a performance history of earnings and sales.

 

You need to keep your head and realize:

 

Your goals haven’t changed
Bull markets, historically, come to and end at some point
When (not if) the bull market ends, you may incur some losses in the short term

 

But you can get through it.

 

Plan and Educate Yourself

 

If you create a plan, start investing consistently, and understand risks and potential returns, you can build wealth over the long term.

 

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

 

The post Take Charge of Your Money Right Now appeared first on Accounting Accidentally.

Smart Tips for Moving Abroad

Moving overseas is a big step.

 

You may feel overwhelmed by the logistics of moving, learning a language, finding a home once you move abroad, and your new lifestyle. Use these tips to get started on the right foot and make your move successful.

 

Start Saving Now

 

Now is the time for you to start saving.

 

It’s great to have a year’s worth of living expenses in the bank, or at least somewhere that is accessible. When you have this amount put aside, you can easily give yourself some financial stability.

 

You may need more, or less than this depending on your lifestyle, your job and your family requirements. As a future possible expat, it’s also important that you don’t just plan for the cost of moving abroad. You need to think about the cost of moving back, should you ever have to. You might also have to take a citizenship test too, and you can find some tips here on that subject.

 

In-depth content, comment, meet peers: Join Conference Room. Watch the video, join here.

 

Budgeting

 

Understand the costs of living in the new country, and create a personal budget.

 

If you are not sure how things work, then your savings might not last as long as you’d think. Before you make the decision to move abroad, you need to think about the cost of housing, entertainment, education, utilities, transportation, and insurance.

 

When you have all of this information, you can then begin to know how long your money is going to last. You can find the cost of living for a ton of countries online, which makes things much easier. You might also be able to find sample budgets online and this can be a great help.

Use this site to apply for a loan Find My Rate at Social Finance Pay off credit cards or invest in a major purchase

 

Banking

 

If you know that you are going to a country that has a much less developed banking system, do your research in advance.

 

It’s a good idea for you to focus on the international banking network, and to also find out if they have Visa or even Mastercard. If you want to really protect yourself, make sure that bank deposits are guaranteed.

 

Once you have vetted out a couple of banks and providers, you can then look into interest rates, ATM access and the cost of buying a home. If possible, you should start the application process for opening your bank account before you leave your home country. Sure, you might not be able to open the bank before you arrive, but you can gather all of the documents you need, which will make the process easier once you arrive.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

Research Expat Taxes

 

Find a tax expert who can help you understand the tax impact on your move.

 

In the US, you’ll still need to file returns and pay your taxes when you live abroad. This is still the case if you happen to file a tax return when you are in the host country as well. Taxes paid on one return may reduce the tax liability on the other country’s return, so check with a tax expert.

 

Financial Advice

 

Finding an accountant in your new location.

 

Once you do, find out what regulations you need to meet with your income and to also find out if there are any taxes that you need to pay. This can save you a lot of time and money when you do decide to make the move, and you’ll comply with overseas regulations.

 

Forums

 

Lastly, it is a good idea for you to look on forums, so you can chat with people who have made the move before. You can then find out if they have any tips and they may be able to advise you on your job situation as well. It always helps to have connections in the country of your choosing, so do keep that in mind when you do decide to make that big decision.

 

 

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

The post Smart Tips for Moving Abroad appeared first on Accounting Accidentally.