Kenneth Boyd's Blog, page 55

Tips To Save For Early Retirement

When do you want to retire?

 

Do you want to retire early?

 

Even though you may still only be in your 20s or 30s, it is never too late to start planning for retirement- particularly if you want to retire early (before age 65).

People who start thinking about retirement earlier are often those who end up retiring a lot sooner. So, if you have plans to quit work at an early age, it’s important that you start to plan for that stage of your life as soon as you start earning a regular income.

 

Ready to think about your future retirement plans and how you will be able to stay financially stable without a job? Here are some key points to bear in mind:

 

Do You Budget?

 

First of all, it is crucial that you establish a budget that covers all of your finances. This needs to detail what you have coming into your household on a monthly basis, and the regular expenses that you need to keep up with.

 

Change is hard

 

Creating a budget may require you to change- maybe to change a lot.

 

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.

 

A great personal finance book I highly recommend. Click below:

 

 

If you want to retire early, your goal may require you to change quite abit.

 

Discipline and time

 

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 Starbucks less 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.

So, what do you get?

 

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

You build wealth- which can help you reach that early retirement goal.

Get Help

 

There are plenty of financial experts out there who can help you achieve your retirement goals. If you are currently a federal employee, you can always get in touch with the Federal Retirement Services , which is an organization that has been set up specifically to help people in your sector.

You can also contact a financial advisor, who can research financial products to find out which are best suited to achieve your financial goals.

 

Are You Funding?

 

If you do speak to an expert about retirement,  they will probably advise you to start paying into a retirement plan (pension plan) as soon as possible. The more you save into a pension plan throughout your working life, then the more you will receive as an income once you hit retirement age.

 

If you’re a full-time worker, you should already be paying into a pension plan via your employer. Fund out what types of plans your company offers, if any.

 

Max It Out

 

Your pension shouldn’t be your only form of savings for retirement, and you should build a savings account to fund an account for pay for emergencies, such as a car repair.

 

You can also fund long-term investments that mature around the time you retire. If you’re 40 and want to retire at 55, for example, you can work with a financial advisor and plan to start taking money out of your investments in 15 years.

Find available dollars in your budget to maximize the amount you can save.

Get Started

 

The sooner you start implementing these ideas, the closer you’ll get to reaching your early retirement goal. You got this!

 

This post is for educational purposes only.

 

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

 

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Reducing Business Uncertainty

Operating your business requires careful planning and thought.

 

You can’t remove unpredictability from your business, but you can minimize it with planning

 

Understanding and forecasting expenses is the only way to keep a business above water. It’s crucial to understand both how much you’re spending, and your expected cash inflows and outflows.

While your profit margins dictate how much you earn, no business can operate without sufficient cash inflows.

 

You have to effectively manage profits and cash to succeed.

 

 

Here are some business situations that can be unpredictable, and how you can manage that uncertainty:

How Much Payroll?

If your team work different hours every month, you’ll have no accurate way to predict what you’ll need to pay- and that impacts how much cash you need to operate.

 

More hours worked often leads to more sales, but it will take time to collect payments from those additional sales. In the meantime, you need to pay payroll.

 

To minimize the impact of this uncertainty, be clear about the number of hours all workers (full time and contractors) will work in a given month.

 

Stick with contracted hours, at least until you’re in a position where you have money to play with. If you need more hours in a given month, use freelancers instead of adding full-time staff.

 

When you’re able to generate a consistent level of sales, you can consider hiring full-time workers,

 

Repairs and Maintenance

 

If you have drivers on the road, you can predict most of their expenses. You’ll know how much vans cost, and should have some idea of what you’ll spend on fuel.

 

Sadly, you can’t predict breakdowns in the same way. If a truck struggles on the road, you stand to fork out large amounts on repair services if you don’t think ahead. To make sure it doesn’t happen, you have two main options. If you’re in the position to do it, you could invest in a service truck like those found on http://www.servicetrucks.com. This would allow you to carry out endless repairs for no extra cost.

 

If your budget won’t stretch that far, why not subscribe to a breakdown service? There are many options for paying monthly set amounts for services, rather than per repair.

IT issues

 

If your business is office-based, you may also find computer repairs rocking your budget. A few extreme fixes in one month could even gobble your profits.

 

By turning to outsourced repairs from companies like  https://www.sumasoft.com, you again agree to a set fee for endless repair jobs. If you want something a little more immediate, you could even hire a specific IT professional, and thus agree to a steady salary without unexpected fluctuations.

Just like that, you can eliminate the unexpected.

 

Where’s The Plan?

 

Each of these factors should be included in a formal business plan, which is your most effective tool to reduce uncertainty in your operation.

 

No business can succeed without a detailed business plan, and you need a plan to know how much cash is needed to operate.

 

If you don’t have a written business plan, create one.

 

Fortunately, you can find great software to help you with this process. Using software can help you address every important factor in your business, including market research, competitor analysis and pricing.

 

Business plan software can help you plan your estimated sales, the cost you’ll incur to generate sales, and the cash inflows you’ll need to operate. When you input all of these assumptions, the software will create a set of financial statements for you.

You got this!

This post is for educational purposes only.

 

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

 

 

 

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Cash Management For Startup Businesses

A majority of new businesses fail.

 

Why?

 

Lots of reasons. Maybe the product or service isn’t attractive enough to motivate people to buy. Businesses also fail because owners don’t manage growth well.

However, the biggest reason for a business failure may be financial- and you can take steps to avoid the problem. Here are some of the best tips  to make sure that your company always remains firmly in the green.

 

How Do You Start?

 

No business can succeed without a detailed business plan, and you need a plan to know how much cash is needed to operate.

 

If you don’t have a written business plan, create one.

A great personal finance book I highly recommend. Click below:

 

Fortunately, you can find great software to help you with this process. Using software can help you address every important factor in your business, including market research, competitor analysis and pricing.

 

Business plan software can help you plan your estimated sales, the costs you’ll incur to generate sales, and the cash inflows you’ll need to operate. When you input all of these assumptions, the software will create a set of financial statements for you.

 

Start by creating a business plan.

Finding Cash

 

Once you have an estimate of how much cash you need, you can think about where the cash will come from.

 

Product or service sales will generate a large portion of your cash inflows, but those cash receipts may not be enough to operate your business in the short term (over the next 30 to 60 days). If you’re waiting on customer payments and need more cash, you have a few options.

 

The first recommendation is to open a line of credit (LOC) for your company. You can do this by contacting your chosen bank, or financial lender. Even if you’re a startup firm, a bank may offer you an LOC if you’re willing to provide collateral.

Having an LOC means that you will never be in a position where you have no money to fall back on. The LOC should only be used as a last resort, and you should pay off the balance quickly, to avoid interest charges on the loan.

 

What About Credit Cards?

 

When you speak to your bank, ask about credit card options for small businesses.

 

The best business credit card can provide incentives, such as cash back on purchases, or hotel and air travel points that you can use to cover business travel costs.

 

 

Avoid Mistakes

 

Be careful: Your priority should be to manage your business with cash inflows, and then to use an LOC only when cash flows run short for a month or two. If you use a credit card for business, you must pay off the entire balance each month, in order to avoid interest charges and fees.

Don’t carry a credit card balance from one month to the next.

 

Take these steps to avoid getting submerged in debt as many new businesses often do.

 

Diversify Your Business Portfolio

 

Last but not least, if you are looking to make sure that your business is financially healthy in the long term, you do need to think about setting up different sources of income, reaching beyond the typical revenue line.

One example of this would be sponsored content on your website. Other businesses who are not competitors will be more than happy to pay for representation on your site with ads and high-quality content that can even improve your SEO.

This post is for educational purposes only.

 

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

 

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Safeguard Your Savings Account

Accumulating wealth takes a great deal of self-discipline and sacrifice.

 

So, how can you protect your savings over time?

 

Most people working a full-time job spend more time with their colleagues than they do with their loved ones. That fact should be evidence enough that we put in a lot of effort into making a living- and saving money.

Here are a couple of ways to keep your income safe  , so that you can benefit from saving and investing down the road.

 

Your Piggy Bank

 

Safeguarding your savings means that you need to have a backup in case something unexpected should happen. Expect the unexpected, because those large expenses will happen sooner or later.

 

Building an emergency fund is a great way to deal with the unexpected. It should be a part of your regular saving process, and you may have one account for your family savings and another one for your emergency fund.

 

A great personal finance book I highly recommend. Click below:

 

 

In order to build a savings balance, you’ll need some self-discipline. Consider these points:

 

Discipline and time

 

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.

Take a look at your monthly budget and make some spending cuts, then use the extra dollars to build a savings balance.

What About Insurance?

 

 

Make sure that you have the right kind of insurance to deal with unexpected expenses, so that you don’t have to empty your emergency fund in case of a flood or some other event. Have a look at 1stresponsepublidadjuster.com to learn about getting the most out of an insurance claim.

 

Who Gets Paid First?

 

While working out a sustainable budget is the key to living within your means, you should try to work out a savings plan that is just as bulletproof.

 

That work promotion may come, you may receive a lot back on your tax return, or maybe you have some inheritance money lined up – yet, you should still spend the same amount of money and just save a bit more. Have a look at bettermoneyhabits.com for some more money saving tips.

 

Remember to pay yourself the amount you promised before you spend money on anything else. Sure, you still need to have money to pay your bills but try to treat your savings account as another bill you simply have to pay before you can treat yourself.

 

This post is for educational purposes only.

 

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 Safeguard Your Savings Account appeared first on Accounting Accidentally.

Things That Should Be Taught In Schools, But Aren’t

What have you learned that sticks with you?

 

Do you remember the last time you used algebra? Yeah, me neither.

 

Fortunately, high schools are making a much bigger effort to teach personal finances. Whether you learned these skills in high school or not, here are some key concepts that every high school student should know:

Money Management

 

Although many schools are now covering basic finance subjects, there should be more emphasis on how to manage money, including budgeting, saving, paying bills, and even doing taxes.

 

With so much of the country in heavy debt, living paycheck to paycheck, and paying for everything with a credit card, so much of this could be avoided if proper money management was taught at a young age in school- so that these healthy habits could be formed early.

A great personal finance book I highly recommend. Click below:

Here are some specific points:

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.

 

Discipline and time

 

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.

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.

Entrepreneurship

 

In today’s world, thanks to the internet and social media making it easier for people to follow their passions, more and more awareness is coming to the fact that not everyone is cut out for the traditional path of leaving school, going to college, and working a 9-5. It’s also becoming far less desirable for many people.

 

Unfortunately, the people who realize this still feel somewhat alienated by society because, this isn’t viewed as normal within the school system, so they’re not pursuing their true passions and talents until much later in life- and often wasting years doing something they don’t really enjoy.

 

Managing Life

 

Lots of people are now leaving school well  educated in many areas, but when it comes to the practical aspects of daily life, they really struggle. Things like applying for a mortgage, booking appointments, job interviews, or even getting in touch with someone like Insurance Doctor to get themselves covered can seem completely foreign to so many high school graduates these days.

 

Education is Key

These are just a few of the things that really could help people, if every school taught these concepts.

This post is for educational purposes only.

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 Things That Should Be Taught In Schools, But Aren’t appeared first on Accounting Accidentally.

Will Online Freelancing Work For You?

Have you considered working online as a freelancer?

 

Whether full time, or starting online as a part-time gig, many people make the move.

 

Today’s digital environment allows you to take your skills, services, and products online and reach a worldwide audience. Working as a freelancer is a vehicle to pursue your true passion, and provides work flexibility. Freelancers can fit their job around other commitments like childcare, or work on a freelance basis due to their time limitations or lifestyle preferences.

Nowadays, if you have the skills people need and a laptop, you can enjoy doing your hard work from the comfort of your sofa or favorite coffee shop.

 

The Tools

 

To work effectively as a freelancer, you need to right tools.

 

Whether you’re an illustrator, designer, writer, or you’re great with numbers; now is the time to get to grips with the software you’ll need, and build your knowledge and portfolio. Here are some ideas, inspiration, and advice for those who want their job to be flexible, and are ready to embrace working as a freelancer.

 

Do You Know Enough?

 

Invest into training, learning, and honing your skills- on a continuous basos.

 

Potential employers want someone with a specific set of attributes, skills, and knowledge. Do you meet the criteria? If you don’t you can learn online.

 

In addition, you’ll need to handle a variety of administrative tasks that an employer would handle, such as business taxes and a retirement plan (to replace the plan you had as a full-time employee for someone else).

A great personal finance book I highly recommend. Click below:

Depending on your location and income level, you may need to address self managed super fund taxation, or federal and state tax payroll tax rules. Get an accountant to help you understand these requirements. There’s plenty of professional help out there, so make sure you find reputable companies to do the complicated stuff- so that you can concentrate on your client’s needs.

 

 

 

Comfort Zone

 

It might be tempting just to keep going with whatever role you’ve found within a company, especially if it means you can work remotely. However, freelance work tends to have a time limit, so it’s important to be mindful of this at all times.

 

Successful freelancers are always looking for new projects- even when their time is fully booked with business. This may mean taking on more work (and working more hours) than you really want to, but you’ll have options if you lose a customer.

 

Financially, it’s important to create a contingency fund. Saving regularly is a great place to start, so that you know you’ll have enough to live on while you secure a new role. It’s also worth keeping your eyes peeled for potential long-term opportunities every now and again. You never know what may crop up, and you’ll be glad you took a little extra time out of your day to scope out the digital job market.

 

Negotiation Theory

 

I think everyone can benefit from an overview of negotiation theory. For starters, you need to keep in mind that, in a negotiation, both sides are giving consideration. In your business law class, you have learned that consideration refers to giving something up. In a freelancer scenario, the employer gives up fees, in exchange for the worker’s time and effort.

 

Here are some negotiation terms you should know:

 

Reserve price (reservation price): The minimum dollar amount that a party is willing to accept. Think about the owner of a painting at an auction who won’t take less than $10,000 for the artwork. In a fee negotiation, you may have a minimum rate that you’re willing to accept.

 

Small pie bias: Many people in salary negotiations underestimate the size of the bargaining zone– the range of salary that both parties are willing to accept. The concept is referred to a small pie bias. Is it a $5,000 range , or $15,000? If you bring value to the firm, it’s probably $15,000.

 

Zone of possible agreement (ZOPA): What need to find is the zone of possible agreement, or the range within which a deal can be reached. Think about a company sale, for example. The seller says: “I can’t accept less than $15 million”, but buyer doesn’t want to pay more than $13 million. Maybe the parties can tweak the negotiation and come up with a price range between $14 and $14.5 million.

 

Keep the strategies in mind, as your negotiate fees for your work as a freelancer.

 

You Got This

 

Freelancing isn’t for everyone, so make sure that you’re ready to roll with any variables that may pop up. If you’re passionate about working on your own, however, freelancing can be rewarding.

 

If you think it might work for you, give it a try. You got this!

This post is for educational purposes only.

 

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 Will Online Freelancing Work For You? appeared first on Accounting Accidentally.

Avoid Driving Costs and Risks

Cars are an expense item to own and operate.

 

The everyday costs of driving and car ownership can have a serious impact on finances, and you should look at whatever you can do to reduce them.

 

However, cars also come with some inherent risk, and these risks can drive you right into debt if you’re not prepared to handle them. Here are some major sources of risk, and what you can do to protect your finances.

 

Are You Covered?

 

When you hear phrases like: “save money on your car insurance”, or “cheaper rates on auto coverage”, be careful.

 

There’s really no such thing as cheap car insurance. If insurance is cheaper, it doesn’t offer the same level of coverage.

 

Here’s why:

 

Insurance is math: Insurance is based largely on math, specifically the likelihood that you’ll have an accident, and the cost of that particular insurance claim. Every firm uses the same type of assumptions, which is calculated by actuaries- math majors.

 

Regulation: The insurance industry is one of the most heavily regulated industries in the world. No insurance company has a magic pill that allows them to offer a higher level of insurance coverage at far cheaper rates, because all insurance companies play by the same basic set of regulatory rules.

 

When you hear about “cheap” insurance, check out the coverage offered, because it’s probably less attractive.

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Policies that have much lower premiums may have a much larger deductible, which means you pay much more out of pocket, should you get into an accident. Learn more about the common auto insurance traps that you need to avoid. You might even want to consider using an insurance broker to make sure that you’re not getting a deal that works against you.

Legal Concerns

 

Some drivers get into situations that create legal liability.

 

Driving under the influence could cost you big. Besides doing what you can to prevent it, having legal help like AndrewAlpert.com can be crucial in protecting yourself from allegations of a DUI.

 

A great personal finance book I highly recommend. Click below:

 

 

Knowing to handle accidents is essential, too. Make sure that you have a lawyer to help as soon as possible, and collect any evidence or witnesses that can help you make your case. Don’t forget to contact the insurance company and the police in the event of an accident.

What About Repairs?

 

Repairs can end up costing you a lot more if you’re not careful. As WiseBread.com shows, neglecting to invest in routine maintenance, quality replacement parts, and repairs will increase your car’s cost over time.

 

To deal with the costs of repairs, it’s wise to set up a budget. Base this on how much you spent on repairs in the past year, and build a savings balance to cover the cost. That way, when it comes time to pay for a major repair, you don’t have rely on credit quite as much.

Besides investing in the right protections, the best way to stop your car costs from going through the roof is to drive safely. Learn defensive driving, take measures to prevent driving under the influence or drowsy driving, and consider investing in additional safety features for your car. Your life could depend on it, not just your budget.

 

This post is for educational purposes only.

 

Ken Boyd

Less search time, more answers, better content

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

 

Image:

Maciej Lewandowski, Vintage Cars, (CC By SA-2.0)

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Extreme Financial Mistakes We Can Learn From

We don’t wish bad things for anyone.

 

But sadly, some people make huge financial and legal mistakes.

 

This article explains some of these extreme financial mistakes, then explains some best practices for better personal finance results.

No Awareness

Some problems happen gradually.

 

The problem of adding debt to our already strained finances can happen gradually over time. Lenders are partially to blame for this problem, because some debt marketing can be misleading. Phrases like “no payments for 18 months”, or “zero percent interest for 90 days” don’t tell the borrower the whole story.

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Before you know it, a consumer may have far more debt than he or she can reasonably pay off.

Dishonesty

When people are in financial trouble, they may be tempted to cut corners on tax reporting.

These taxpayers assume that, with everyone filing returns, a small reduction in reported earnings will be easy to get away with. The tax man can afford it anyway, can’t he?

A great personal finance book I highly recommend. Click below:

In reality, though, sites like www.forbes.com prove that just isn’t the case. There are many ways to spot tax discrepancies, particularly with improved technology with banks, lenders, and investment firms. It’s much easier for the IRS to verify financial activity, and that’s how these consumers are caught.

 

Exaggeration

Many people exaggerate when filing insurance claims. Their thought is: “I paid into that policy, after all, so can it really be considered as theft?”

 

Exaggerations like these could leave you facing the cost of legal proceedings with the help of lawyers like those found at klgdefense.com. Even after that, losing your case is sure to mean again facing severe fines. All because you claimed for a television which was never stolen.

The Workplace

Some workers are tempted to file for expenses that aren’t worked, or fail to clock out until an hour after the working day ends. We convince ourselves that we’re owed these little extras. The trouble is, your employer is already paying you a wage.

 

Steps to Get on Track

 

Here are some useful steps that every consumer can use to get on track financially:

 

Changing

“To improve is to change; to be perfect is to change often” – Winston Churchill

In 2017, Trinidad and Tobago (a country of slightly less than 1.4 million people) beat the US Men’s Soccer Team (325 million people) to eliminate the US from the next World Cup soccer tournament. Every few years, we Americans get all jacked up about a new coach, new team members- and we don’t seem to make much progress in Men’s soccer.

 

Sounds like someone needs to make some serious changes.

Commit to making changes in your personal finances.

 

Take Action

 

Here are some easy improvements you can make:

 

 

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.


You Got This

 

Making the shift into good financial habits takes planning and self-discipline, but it’s worth it.

 

You got this!

This post is for educational purposes only.

Ken Boyd

Less search time, more answers, better content.

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 Extreme Financial Mistakes We Can Learn From appeared first on Accounting Accidentally.

What’s Your Financial Focus Right Now?

Your personal finance priorities may change dramatically over time.

 

In your 20s, for example, you may be paying off student loan debt and saving for a home. If you have children, your financial priorities will change. From there, people in their 40s and 50s typically save more aggressively for retirement.

 

There are some basic concepts that should serve as the foundation for your personal finances, regardless of where you are financially. Consider focusing on these factors at each stage of life:

 

What About Debt?

 

Always be aware of your total amount of debt, and how you’ll manage the payments.

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Where you can, you need to avoid getting into more debt like the plague. If you do carry debt, here’s a plan to reduce your debt over time:

 

Create a personal budget, and consider making spending cuts in areas of variable spending, such as meals and entertainment

 

Use the money you save to fund a savings account for emergencies- which will reduce the need to borrow for an unexpected event, like a car repair. Creating a savings plan can give you some peace of mind.

 

Once you build a $1,000 savings balance for emergencies, start paying down more than the minimum payment on your debt. Determine which debt has the highest interest rate, and pay that debt off first.

 

Once the highest-interest debt is paid off, use the available dollars to pay even more on a second debt. Move through this process until all of your debts are paid off.

Income Decisions

 

To help debt management- or even as its own separate goal (for those of you not in debt)- earning more money can make a huge difference.

A great personal finance book I highly recommend. Click below:

Sit down and work out how you can get a promotion, or earn money on your own. Do you have a skill you can charge for, or do you want to launch products? Think about what you can do to start earning more money as soon as possible.

 

Start small. The Internet makes it possible to try out a business idea, and invest a small amount of money to see if your product or service concept will work. If things don’t work out, you haven’t invested a great deal of money.

 

Many people try a business idea, and then tweak the idea based on feedback. It’s a smart way to start a new venture.

 

Brick and Mortar

 

Then, from here, you might want to think about property. If you haven’t bought your first home yet, this could be on the radar for you- or maybe you want to look to real estate as more of an investment. Either way, if you want to focus on property, then you need to work out how much money you need, and create a plan for getting it.

 

The Unknown

 

If you haven’t yet thought about your future, then this should be next. It’s so important to be thinking about how you’re going to pay for your life when you’ve retired. This doesn’t have to be a traditional retirement option, but you do need to think about how you’re going to do it.

 

Your company 401(k) plan may be the best investment available to you, if your employer matches investment contributions that you make. Start your investing journey by checking on your employer’s retirement plan, if they offer one. If you don’t have access to a plan, there are attractive retirement plan options for the self employed.

 

Stick to it

 

Staying on track financially may be as hard as starting the process. Check on your spending each week, and assess your finances on a monthly basis. With planning and self discipline, you can improve your personal finances.

This post is for educational purposes only.

 

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

 

Image: Bullseye, Jeff Turner CC by 2.0

 

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Get Back On Track With Your Finances

Everyone gets off track at some point.

 

If your personal finances have run off the rails, don’t worry- it happens to just about everybody.

It’s important to get back on track, because you can’t afford to be lax with your finances, and you may dig a financial hole very quickly. Getting back on track with your finances is not an easy task, and it takes time.

 

But- like many difficult tasks- it can give you peace of mind, once you fix your finances.

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No matter what kind of trouble or difficulty you might have gotten into, or who you owe money to- even someone as unusual as a bail bond company– it’s important to know where to begin.

 

Consider these tips to build momentum and get back on track.

 

Contact, Contact, Contact

 

It might be that you’re willing to take ownership of your finances and make improvements, but your creditors won’t know that until you tell them.

 

Call them.

 

You might use debt management company to negotiate on your behalf, but simply letting them know you are actively taking on the debt and trying to resolve it might help you arrange certain important benefits, such as negotiating payment plans.

 

Organize & Assess

 

It’s important you realize how to organize and assess your current needs when getting back on track.

 

This means stopping the habit of burying your head in the sand, and taking an objective, clear look at the current situation you are in. Calculate how much money you owe exactly, and if you’re not sure, it’s your legal right to request proof of debts owed from your creditors.

 

A great personal finance book I highly recommend. Click below:

 

 

 

Know what your credit score is. Draft a budget, and create a line item for each category of spending- both fixed and variable spending categories.

 

When it comes to budgeting, keep these factors in mind:

 

Discipline and Time

 

With discipline and time, I think most people can get their finances back on track. But getting on track 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 bigger- but start budgeting by getting a “small win” – make some small decisions.

 

Remain Current

When adjusting your lifestyle to your current debts, it’s important to remain current on all of your required payments. What does this mean? Well, neglect taking on any new financial burdens or responsibilities until your debts have been paid.

 

That can be a tough decision.

 

This might be postponing upgrading your living situation. It certain means holding off on starting a family. It means prioritizing your sources of income above all, such as improving your performance at your job. You might decide to sell your vehicle and use public transport to get to work.

 

You Can Do It

 

If you create a plan and have the self-discipline to stick with it, you can get back on track. You got this!

 

This post is for educational purposes only.

 

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

 

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