Kenneth Boyd's Blog, page 63

Money Mistakes You Could Be Making With Your Business Right Now

If you own a business, you’re moving at full speed and working on dozens of issues every week. Given the hours you work and the fast pace of change, it’s hard to stay on top of business finances. Consider these common financial mistakes business owners make, and how you can avoid them.

When you first started your business, you knew there would be many pitfalls and hurdles to get through before you reached success. You make the effort to learn new skills and gain knowledge, but that doesn’t stop the unexpected from happening. When mistakes happen, it usually results in a loss of time and most importantly money.

Once you accumulate some profits, you need some low risk options for investing, so that you can earn a reasonable return on your profits, without taking a large amount of risk.

Some of the biggest money making mistakes that could happen to you include incorrect contracts, lack of business planning and inefficient marketing techniques. Read how you can avoid these mistakes and generate better business results.

Do Your Need a Written Contract?

Business owners sometimes forget about the need for a written contract as they struggle to build a company. The challenge here is that the contract prevents problems down the road- and a contract may not seem necessary when you set up an agreement with a partner, vendor, or a customer.

Get free sample chapters from my book: Not Another Personal Finance Book.

When you started your business, you might have trusted a close friend or family member to work with you, and a written contract seemed too formal. This is where many entrepreneurs will lose money, because they haven’t put the correct legal paperwork in place. You should visit WeisblattLaw.com to get an official contract drawn up between you and your partners, so you don’t have to worry about getting into disputes down the road.

Is Your Marketing Effective?

Marketing is the process of getting attention and generating interest, and if you make smart choices with your marketing dollars, you can generate a big return in the form of increased sales and earnings.

Some businesses just start running a marketing campaign, cross their fingers and hope for the best. If you don’t have a close eye on how each of your marketing efforts is performing, you may be throwing money away.

Fortunately, online marketing (websites, landing pages, email campaigns) make it easy to tweak your approach and improve your results. Don’t neglect your marketing- take a look at your performance at least once a week.

Why Overhead Is Ignored

Overhead is defined is costs that you cannot directly trace to your product or service. Direct costs, like raw materials or labor hours, are easier to track and apply to the total cost of a product or service. Overhead costs are less apparent, and they’re sometimes ignored.

There are many ways in which you can reduce your overhead costs and stop wasting money on unnecessary bills. You might be paying a large amount of money to rent out a workspace or overpaying for your energy usages. Monitor every overhead cost and look consider making cuts in order to increase efficiency and reduce costs.

What’s Your Plan?

Just rolling with an idea might seem fun for the first year of running a business, but many people will start to get off track. Keep your focus and plan for the future, because you don’t want to put all of this hard work and money into a company for nothing.

If you take the time to plan, you’ll find ways to lower your costs and make your business run more effectively. Make adjustments to your plan as circumstances changes, and if you’re ever unsure about anything, seek out advice from an expert.

The future of your business will be looking much brighter as long as you consider these potential money pitfalls.

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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No Good With Money? Here’s What To Do

No one is good at everything.

For many people, managing money is a struggle- but you can improve that skill, just like any other learned skill.

If you’re having trouble getting your finances in order, the advice in this guide can help you. Being ‘no good with money’ can feel like a curse, but the truth is, anybody can make a change to their finances and their lives if they really want to.

Start working your way through the pointers here, and in no time at all you should find that your financial situation has improved significantly.

What Do You Tell Yourself?

Most people don’t realize that we live up to the stories we tell ourselves. You may believe these stories to be true, but you can actually change them and begin living out a new story whenever you like. If you’re constantly telling yourself stories like:

 

I’m broke
I’m terrible with money
I never have enough money

Get free sample chapters from my book: Not Another Personal Finance Book.

You will live up to these stories. ‘I am’ and other ‘I’ statements are very powerful. Change them into something else that you’d rather be true and repeat them whenever you feel your old story start to creep back in. A lot of what goes on in our lives all starts from a mental perspective first.

Your circle of friends also plays a big part, so ask your friends for personal finance advice. Those same friends can help you stay on track financially.

Can a Pro Help You?

Just because you change your story, doesn’t mean you’re automatically going to get out of debt or become a master of finances. That is just the beginning. You could call Ronald D. Weiss or a similar seasoned professional for advice on what to do when you know your finances just aren’t in the state that they should be in. If you’re on a budget, many financial advisors will offer their services for free.

Key Issues With Budgets

Create a budget, and with it, know your numbers exactly. Know how much money you have coming in and going out. In addition, figure out how much you want to spend on things like food and entertainment. Give yourself a limit on your spending, and stick to it.

Instead of using your credit card, take cash out of the bank so you have an actual incentive to stick to your limits, ensuring you don’t go over. Seeing money leave your wallet can make a big impact.

Goals- and Tracking Things

Having financial goals is a great way to stop buying junk you don’t need and take positive steps towards having a better life every day. Do you want to have a set amount for retirement? Perhaps you just want to buy a new car, or put a downpayment on a house? Write out your goals and keep them somewhere you can see them. This will keep you on track.

If you’re recovering from a financial setback, this article may help.

Track absolutely everything you spend, so you can make changes if you need to. Even small purchases can add up.

Apps

Apps can help you to keep track of your accounts in real time, so you don’t have to wonder whether you should be buying something (if you’re wondering, the answer is probably ‘no’ anyway).

Pay Yourself First

Pay yourself a small amount of money to play with first, and then put money away to be saved, towards your goals, and even kept in your bank ready for your bills. Getting used to tracking will make the world of difference!

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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Is Getting Rid Of Your Car Really The Best Way To Cut Back On Your Finances?

Cutting back on your expenses is a way to improve your personal finances, but you should consider other factors, such as spending alternatives and the impact on your lifestyle.

When is a cutback on spending too much?

That’s what we’ll discuss here.

As a way out of debt, it seems that giving up your car might be an option. You’ll no longer need to make a car payment (whether you purchase or lease), and you won’t be paying for gas, car insurance, or vehicle maintenance.

Driving an old car- we’ve all been here.

If your car guzzles gas like Henry VIII at an all-you-can-eat buffet, it probably makes sense to find other transportation. That’s also the case if the cost of maintenance has become too expense.

Get free sample chapters from my book: Not Another Personal Finance Book.

While it certainly benefits your carbon footprint, are you better off without your car?

How Will You Get Around?

The availability of public transportation can vary greatly, depending on where you live.

Cities like New York and Chicago are set up for people without cars, given the subway, railway, and bus systems. Other cities, however, may only have a bus system- and government cutbacks have reduced the number of bus lines. St. Louis, where I live, has seen a sharp decline in bus routes over the past 20 years.

Not to mention the luxury of having to commute in your own car, rather than being so close to others on a bus or train, that you can smell what they’ve had for breakfast.

It depends on the amount of miles you have to cover. But make no mistake, if you spend the money to maintain an older- but reliable- car, it may be cheaper than public transport.

Do your homework before you make a decision.

Are Your Other Options Safe?

A growing number of commuters are cycling to work, but there are risks to riding a bike. Next time you pull up to a four-way stop in a car, take a look at the number of people in other cards who are on their cell phone. People using their cell phones while driving create huge risks for cyclist.

Law firms like Rizk Law can help cyclists who are injured while riding. Cities are adding bike lanes and bike-only trails for riders, but some risks remain.

There’s no arguing that it’s a lot cheaper than public transport or driving your car, but what you have to consider is the time lost on a bike. If love being outside and thrive on the exercise, biking may be for you.

Time and Lifestyle

Proximity to your regular destinations is one of the defining factors in whether you should get rid of your car or not, but your lifestyle will determine the necessity of a car.

When you’re at retirement age, you will naturally have a lot more time on your hands. As a result, there is no need to rush. Ultimately, getting rid of your car could be the best thing to happen to you financially, or it could make life a lot more difficult.

Give It a Try

Finding that balance is very difficult, but if you’re spending through the nose on a car, it’s time to think about more cost-effective methods. Whether this means getting a new car, or a cheaper one, or alternating car journeys with public transport, these are all options to cut back on your expenses.

Experiment. Give different transportation option a try, and see how it goes. Making the effort to change you spending habits can really pay off.

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

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There Is Always A Way Out of Debt

There’s a reason why they say they living with debt is one of the most stressful living conditions there is.

It’s all consuming.

You wake up, and you’re thinking about debt. You go to sleep, and you’re thinking about debt. It feels like a black hole from which you cannot- and will not- escape.

But here’s the thing: there is always an escape route available.

It may take time, it may be hard work, but it is possible. Take a look at a few ways you can manage to get your financial life back on track.

Get Real

Like any challenge, the first step is to take an honest look at where you are.

You have to combine realism with optimism.

A great example of this is the Stockdale Paradox, which says, in so many words, that you have to be completely honest about your current situation- and have complete belief that things will work out.

Get free sample chapters from my book: Not Another Personal Finance Book.

It’s much easier to simply avoid the debt, to keep it at arm’s length. But is this really the right approach? While it’s easier to handle the debt this way, you’re not taking action to solve the problem.

And actually, the debt is just growing – via interest – that entire time anyway. So be brave, and take a look at your debt total realistically.

It’s unlikely to be worse than you imagined, but even if it is, at least you know what you’re dealing with. In many ways, this is the most difficult part of the whole journey.

Have the courage to assess where you are now.

Get a Small Win

You need a small win- any size win- to build confidence.

One way to get that small win is to pay off a small debt first- because it represents progress.

If you’ve got multiple debts, then you might be tempted to take a look at the biggest one and think, “let’s start here.” If you don’t know where to start, consider tackling the smallest debt first.

While this might seem a bit pointless, it’s not! There’s a big psychological boost attached from getting rid of a debt, even the small ones. Once it’s a thing of the past, you’ll see just how easy it is to move on from debt.

Do You Need More Help?

Of course, there will be times when it’s just not feasible to tackle your debts all on your own. If this is the case, then don’t worry – you still have options. You can, for example, look into consolidating your multiple debts into just one debt – it’ll make managing it much easier.

If you’re in greater financial difficulties, then you may want to consider filing for bankruptcy with Dove Law Firm. No matter how great your mountain of debt might be, there are always options for putting it behind you – and especially so with the help of other people and organizations.

Ask for help if you need it.

How Can You Increase Your Income?

Are you tapping all of your potential sources of revenue? You might want to consider getting a part-time job, selling your old belongings, or starting a passive revenue stream.

It’s easy enough to do, and all that money can go towards paying down your debt.

Stay On Track

Once you’ve plotted your route out of debt, you’ll want to take steps to ensure you don’t fall back into it. Curb your spending, set up a budget, and cut out any bad habits that drain your bank balance.

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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Low Risk Options For First Time Investors

How much investing risk can you live with?

Every investor needs to answer this question for themselves, because the answer will have a big impact the investments you select, and on your personal finances.

The world of investing can be very daunting for beginners. Even though you know it’s the best way to make your savings grow, the fear of losing it all puts a lot of people off. They think that you have to be a financial expert to get anywhere, but that isn’t always the case.

Get free sample chapters from my book: Not Another Personal Finance Book.

There are some good resources online that can teach you the basics and help you avoid many common mistakes. The other big misconception is that you have to put up loads of money on very risky investments, but you can build wealth over time by consistently investing in lower-risk investments.

How Much Risk?

So ask yourself.

If your investment portfolio declined 10% in given year, is that something you could live with? How about 15% or 20%? Keep in mind that the more risk you’re willing to take, the higher the potential rewards you can earn.

Go through this exercise, and then ask a financial advisor about the types of investments you should choose, given your risk tolerance.

Do Savings Accounts Pay Off?

Using a savings account allows you to earn a small return over time.

A savings account isn’t technically an investment but for some people, it’s a better option. If you’re really not sure about risking your money because you haven’t got that much saved, it’s often better to take a low-risk option and just put it in a savings account with a good interest rate. There’s little chance of losing it, and you’ll make a small return on the money.

What Is a CFD?

A contract for difference (CFD) is an investment tool for trading in derivatives, which are investments that gain or lose value based on the price change in a security, currency, or a commodity.

When you’re trading on the CMC Markets you don’t buy the stock itself. Instead, you make a bet on whether the value will increase. Crucially, you don’t have to put in the full value of the stock, you can enter the trade with a lot less. If the value increases, you can sell and make a profit; if the value decreases, you’ll lose money.

The relatively small buy-in makes it a lower-risk investment.

 

When To Consider Bonds

Bonds are essentially loans. You lend the money to an organization of some kind (usually a corporation or the government), and the issuer pays back the your principal with interest over a fixed period. There are a lot of variations on that time period, some will start paying in one year, others 10 and some up to 30 years.

They’re ideal for first time investors because they’re pretty safe. You’ll make small gains over a longer period without too much risk of losing any money. However, if the issuer selling the bond isn’t in a stable financial position, there is always the risk they won’t be able to pay back the money.

Investing With Others

A money market fund is a collection of investments like certificates of deposit, and short-term debt instruments that are grouped together. By putting your money into a diverse range of investments, you spread out that risk and reduce the chances of incurring a big loss.

These money market funds are usually offered by brokerage firms and handled by financial advisors, so you’ve got the benefit of having an expert make your investment choices for you. That gives you an extra level of protection and further reduces the likelihood of losses.

Do Your Homework

If you’re entering the investing world for the first time, these are the least risky places to start. It’s critically important, however, to start by assessing you personal risk tolerance, then find investments that are a fit for your needs.

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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Debt Dilemmas and Credit Catastrophes: Pushing Through the Hard Hits

Two critical factors for improving your personal finances are debt management and your use of credit.

Unfortunately, many consumers don’t get proper training in personal finance issues in school. When you were younger, you didn’t realize how important money would be in your life. You were taught tricky algebra problems, the geography of rocks and the history of the monarchy, but you were never taught how to organize your finances in the real world.

Don’t despair, however.

Although there are many important things college doesn’t teach you remember that you can learn the tools to improve your personal finances. There are so many people in the same position as you, so you should never feel alone.

Get free sample chapters from my book: Not Another Personal Finance Book.

Think about other skills you’ve had to learn as an adult.

When you become a parent, for example, people expected you to know everything about raising kids, but no parent can know everything on day one. You can apply those same skills to get your finances in order. Let’s discuss a few ways that you could get back on track and gain some peace of mind.

How Do You Use Credit?

One of the biggest personal finance mistakes is building up a large credit card balance.

It happens to many consumers- but it’s a problem that you can solve.

If you’re recovering from a financial setback, this article may help.

One possible solution is a consolidation loan, which pays off all of your credit card balances and combines the debt into one payment. Look at consolidation.creditcard and get advice on how to simplify your bills into one monthly payment. You won’t have any hidden fees to pay and the experts will be on hand to answer all of your questions along the way.

Once you consolidate your debt, be diligent about making your loan payments on time, and consider setting up a direct debit payment from your bank account. If you can pay off debt sooner, you can reduce the total amount of interest expense. Your next step is to find more dollars to make debt payments.

Steps For Personal Budgeting

Create a personal budget by writing down all of your monthly spending, and grouping that spending into categories. Some expenses, such as your car payment or apartment lease, are fixed. Other costs, such as meals, food, and entertainment, are variable expenses- and you can reduce your spending in these areas.

Use the available dollars that you cut from your spending to fund a savings account. Create a written monthly budget, and check your spending each week using a mobile app, such as Mint.

You pay your bills as soon as they arrive and take a hard look at reducing all of your monthly expenses. You might be able to get a much better deal on your bills by simply contacting your supplier and asking for a better rate. The big energy companies are all vying for your business, so they will be inclined to give you a discount if they think they are going to lose you. Be smart and save money on your bills right now.

A Plan For Savings

The sooner you start saving for your future, the more comfortable you will feel with your financial situation. Everybody goes through a rocky patch in terms of money at some point, and you can lean on your savings when this type of things happens.

You don’t want to be scrimping and saving all of your life, so get a small amount of money in savings, and you will soon feel more at ease with your bank balance.

You Can Do It

Overtime, many people realize that there is no quick fix to anything. Don’t be afraid to face your money struggles, and realize that getting your finances back on track will take some time. In the long run, you’ll be much better off.

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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4 Things You Shouldn’t Try To Save Money On

Saving money where you can is a smart decision for your personal finances, but some purchases require you to spend more money- and for good reason.

When you’re living paycheck to paycheck, cutting down costs and saving money where you can is a sensible decision. In fact, it’s an idea often recommended to people who live on a limited income. However, some purchases are simply worth paying more for, because some products and services are more important than others.

To make your life easier and protect your personal finances, consider four products and services that are worth the higher cost.

Why Sleep Is Critical

 

If you’re getting the right amount of sleep each night, you should be spending around eight hours a day on your mattress, which is a third of your entire life. Because of this, it’s important that you spend a little extra and ensure that you buy a mattress that’s comfy and supportive.

Of course, lumpy, worn-out, second-hand mattresses are cheaper, but they will also affect your sleep and could lead to back problems, both of which could end up costing you in the long run.

Get free sample chapters from my book: Not Another Personal Finance Book.

Broadly speaking, there are purchases for the home that are worth the extra cost. In addition to your mattress, basic kitchen appliances have to hold up over time. Consider paying more for these items.

What Do You Eat?

These days, healthy options for food are a lot more affordable than they were a decade ago, but they’ve still got a long way to go before they can be considered cheap. That being said, you shouldn’t opt for fatty and non-nutritious foods simply because they’re cheaper than most nutritious options.

Healthy food is an investment in your body and your life, so make sure you buy these foods, so that you can avoid expensive doctor’s visits and medications.

Exercise is another important tool to maintain health, so a gym membership or a quality pair of running shoes are worth the cost in the long run.

Planning Your Financial Affairs

A will writing services may be cheaper than hiring a attorney, but that doesn’t make them the better option. If your will is more complex than most, and you have a complicated family or a small business to deal with, then it’s always better to go with a professional.

In this way, everything goes according to your plan and your wishes, and no one has any reason to find out how to contest a will. You can also be confident that the will is written accurately, and that you’re protected if anything goes wrong.

Do You Have Insurance?

In your lifetime, you’ll probably pay premiums for a number of insurance policies, including car insurance, home insurance, and life insurance. When things are running smoothly, you might be okay with reducing the coverage of these policies to save some money, but this is a huge mistake.

Of course, everything might continue to work out fine, but disaster could strike at any moment, and if it does so when you’re vulnerable, you could end up in huge financial difficulty.

Make Smart Choices

When you’re struggling for money, it makes sense to cut costs and save money where you can, but that doesn’t mean that it’s always the best idea. By all means, you can shop around and try to save, but you should never put your finances, comfort, health, or wishes at risk in the process.

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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Taking The First Step Toward Financial Stability

Financial freedom is often described as having both the time and the money to live life on your terms, and freedom over your personal finances can have several definitions:

The ability to pay for an emergency using a savings account balance.
If you’re considering a job change, financial freedom allows you to take time off before starting your next job.
For many people, financial freedom is simply the peace of mind that you have when you can pay all of your bills on time.

Money is like oxygen, because it’s an essential fuel we all need to live.

More, More, More

Unfortunately, some people get caught up in a culture of striving for more, more, more – which isn’t a particularly healthy or fulfilling approach to life. Many consumers in this situation move from “want to want”, and they’re never happy with what they already have.

This mindset can have a huge impact on your personal finances, because you don’t have financial discipline. These people don’t create a personal budget and stick to it, and they can’t save money for future needs.

 

Get free sample chapters from my book: Not Another Personal Finance Book.

A better approach is to set financial freedom as the destination- the place that will make us content and satisfied- and then work out the most efficient way to get there.

Financial freedom is following a recipe; it’s just like baking a cake.  In this article, we’re going to focus on the very first step to financial stability – which is to get out of debt and get back on top of your personal finances.

Key Steps

If you’re seeking financial stability, start by creating a plan to save more money and to get out of debt. The fuel that’s going to make that happen is cash, not monopoly money or fake check stubs, cold hard cash that requires work in order to earn it.

One way to generate more income is to add some part-time work, or to start a side business. Rather than focus on the dollar amount of your debts- that may seem overwhelming- set a goal for the additional amount of income you hope to earn.

Why Paying Down Debt Is Important

 

Being in debt can seem like a slippery slope, due to the interest and late fees that accrue on overdue payments, and this type of situation can quickly snowball out of control. Once you start taking responsibility for the situation and start making progress, however, you’ll quickly find the light at the end of the tunnel.

Pay down one debt at a time by increasing the monthly amount you pay- an amount above the minimum payment. Choose the debt with the highest interest rate, since you’ll save interest costs by paying off the debt sooner.

After you pay off that high-interest credit card balance, for example, move on to the next debt balance. As you see yourself making progress, you’ll gain confidence and feel more in control of your personal finances.

Avoiding Stress

For most people, having debt isn’t the thing that is stressful – it’s the debt collection activities that happen as a result of falling behind.

Being pursued for debt can be an extremely stressful and humiliating experience. When people are pursued by multiple creditors with multiple streams of debt collection activity, the situation compounds to such an extent that many people feel they can’t cope. They choose to bury their heads in the sand by not opening letters, avoiding phone calls, and detaching from the situation.

However, when it comes to debt, avoidance isn’t the best strategy… it can provide temporary relief, but it isn’t a long-term solution. If you want to take the first step toward financial stability, start by finding out where you are today, and then tend to the financial fires that are in your life before they get out of control.

Take The First Step

In summary, the first step to financial freedom might not be a glamorous one, but getting out of debt will allow you to lay a foundation on which to build a stable future – and have the financial freedom that you crave.

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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How To Be Smart Every Time You Spend

Before you take out your debit or credit card…

Stop.

Think carefully about your spending choices, and you can make huge improvements in your personal finances.

We’ve all heard the sayings:

Money makes the world go round. Money doesn’t grow on trees. Money is the root of all evil.

While all three may be true- to some extent-  we still need money to survive, and to facilitate our lives. In order to live a comfortable life- no matter how simple or luxurious that may be- you have to plan your spending carefully and be smart when you spend.

 

Get free sample chapters from my book: Not Another Personal Finance Book.

To make every purchase count, you need to understand your spending patterns- and change those habits, if you’re not making financial progress.

Do You Need A Budget?

You need a budget to control your spending, and to set aside money in a savings account- both critically important factors in personal finance.

Now, it’s easy to think of a budget as something you do when you’re struggling, and the phrase ‘being on a budget’ can lead you to believe that. However, that’s not the case.

Smart people budget, and they do so to gain more control over their money. You budget by deciding what spending is important, and how much you’ll spend on each budgeted item. So, start to get more transparent about what you’re allocating your dollars toward.

Impulse Purchases

We’ve all done it.

The bag of chips at the gas station, or buying desert at a restaurant (when you really didn’t need it).

The impulse buy.

These unplanned spending choices can have a hugely negative impact on your personal finances.

If you’re someone that struggles with impulse buying, then work on that issue first. Spending money without really thinking about it is a really dumb way to lose a lot of money. So work on that using tips from https://www.thesimpledollar.com/.

When you’re able to change the way that you purchase, you’ll notice that your money lasts longer. So start by thinking over purchases, and not just buying on a whim.

How Do You Shop

Whenever you buy something, make sure that you shop around. This is one of the reasons why impulse purchases can be costly. Not only are you buying things that you may not need- your overpaying for those items!

Shop around by using services like https://auto.loan/ or by doing your own research. When you can find the best price, you’re always being smart with your spending.

A Word About Discounts

You should also look to get a discount whenever you spend, too. When there always seems to be a sale on, or a coupon code available, why pay full price?

Think about these tips from https://lifehacker.com/ and make sure that you change your approach to purchasing. This is the best way to ensure that you’re always getting a good deal when you spend.

Will That Be Cash Or Credit?

If you’re someone that always tends to swipe their card without really realizing it, then you’ll want to stick to cash when you’re out and about. If you only take so much out with you, then you only have that to spend. This can also help you with controlling your impulses too.

Use these tips to make smarter spending choices and 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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5 Tips For Taking Out Your First Mortgage

 

Nearly all first-time homebuyers must take out a mortgage to buy that first home, and the process can be frustrating.

Applying for a mortgage is no easy task and lenders may reject you, if they decide that you can’t make your mortgage payments on time. There are many variables that a lender will consider, including your income, total outstanding debts, and your repayment history.

Here are a few tips to increase the chances of being accepted for a loan, and tools to improve your overall personal finances.

Why a Budget Is So Important

Every homebuyer needs to have a budget, which allows the purchaser to accumulate a down payment amount, and to have funds available to make the mortgage payment each month.

Get free sample chapters from my book: Not Another Personal Finance Book.

There are two big costs to consider when taking out a mortgage. The first is the down payment, which the amount you initially pay to secure a mortgage. The second is the monthly repayments.

Some lenders offer mortgages with a down payment of less than 5%, especially for those that are relatively young, but you could be paying a much bigger mortgage payment with lots of added interest as a result. Can you afford a huge monthly mortgage payment?

To avoid this problem, set up a personal budget that allows you to save money for a larger down payment. Making a bigger down payment can save you a lot of money in the long run – waiting until you have a savings balance is tough, but it can pay off in lower mortgage payments.

Your Credit Score’s Impact

Your credit score dictates how much you can borrow, and the interest rate that you’re charged on the loan.

A low credit score will affect your chances of being accepted for a mortgage loan. Your credit score is your license to spend, and is affected largely by your ability to make payments on time. Your history of missing payments on bills could result in a lower credit score.

At the same time, it’s possible to not have a credit history if you’ve never had to pay bills. Sites like fixmy.credit can help you to explore credit-building options that could improve your score. There are also many sites online that can reveal your score.

Keys To Managing Debt

If you can successfully manage payments on a reasonable amount of debt, you can develop a good credit score. However, carrying too much debt- or not making payments on time- will make it harder for your to borrow money.

Some mortgage lenders may not look upon you fondly if you already have multiple debts to pay off. Carrying multiple personal loans could be an indicator that you live beyond your means and are less likely to make mortgage payments on time. Try to get rid of many debts as you can before applying for a mortgage, which will increase your chances of being approved.

What About Your Job?

It can also help to have a stable job when applying for a mortgage. If you’ve been in the same job for over a year, it indicates a sense of stability. If, on the other hand, you keep job-hopping and your income keeps changing, mortgage lenders may doubt your ability to provide a steady income in order to make payments on time.

Try to get your career settled so that you have better chances of getting accepted by a good lender.

Do You Need An Expert?

As a first time buyer, the world of mortgages can seem complicated – it’s often beneficial to talk to an advisor who can guide you through the process. Sites like mortgageadvicebureau.com can help you to find an advisor. Some advisors may charge a fee, but you may get access to mortgage deals you can’t find on your own.

Use these tips to get approved for your first mortgage.

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

The post 5 Tips For Taking Out Your First Mortgage appeared first on Accounting Accidentally.