Kenneth Boyd's Blog, page 66

Dreaming Of Going Freelance? What’s Holding You Back?

Many people dream of going freelance, but are reluctant to take the plunge.

Being employed is generally more predictable, because you get paid on a set pay schedule and you may be entitled vacation pay and benefits. On the other hand, working as a freelancer offers more risk and higher potential rewards. While you don’t earn a paycheck and don’t receive company benefits, you have the potential to make far more money.

You may reach a point in your career when your skills are in high demand by other companies. If you’ve developed a skill set that is valued in the marketplace, you may be able to create your own customer base as a freelancer.

If you are in a work position you don’t like and you have the skills to go freelance, what’s stopping you? Consider the reasons why people worry about going into freelance and how to address those concerns.

What If You’re Unsure?

The Internet allows you to find plenty of free resources to guide you through the freelancer process. Some professions (lawyers, architects, accountants) require you to register with a regulatory body before you start working on your own. You should also meet with an insurance agent to identify any professional insurance needs, such as errors and omission insurance. Finally, get help from other professionals who can provide tech support, marketing, and advertising services.

 

 

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

There are other aspects to running a business, including keeping accurate records. To save time and ensure that your tax reporting is correct, consider outsourcing your payroll processing. A company that can assist as a Pay stub generator can help you meet tax filing deadlines.

Is Failure a Concern?

Starting your own business as a freelancer is not without risk, but if you don’t try, you’ll never know. Research the market to determine the need for your particular skill set, the amounts you can charge as a freelancer, and how you can develop a customer base.

The most effective way to research the possibility of freelancing is to create a formal business plan. Use the data you collect on pricing and the size of your customer market to document how you’ll find business, and how much you can potentially charge for the first 6 to 12 months.

Ensure that you’re suitably qualified and take steps to complete training courses if you’re not. You don’t have to go freelance tomorrow, but you can enhance your skills so that you can consider a freelance career down the road.

Part-Time Freelancing: Critical Decisions

If you have financial and family commitments, taking the plunge to go freelance can seem like a huge risk. You still need to pay your bills and meet your financial commitments. If giving up your current job is too much of a risk, consider taking on freelance work in your spare time. As time progresses, you may be able to go part time and take on more clients, in the hope that eventually you have enough work to be completely freelance.

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

Financially Uncertain Times

It’s understandable in today’s uncertain financial climate that people want to hang onto the security of a full-time job. The predictability of being an employee may seem like a more attractive option. However, freelancing is a growing option that thousands of people choose each year. Many large companies are reluctant to take on more staff (and the costs associated) and would prefer to use freelancers.

With careful consideration, going freelance can be a lucrative option.

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

What To Do When Your Shady Insurer Won’t Pay Out

Insurance is the most important product you buy.

And you hope that you never have to use it.

If you do have an insurance claim for a car accident, health issue, or for damage to your home, you’re under a great deal of stress. Each of these situations can generate a huge expense, and you want to make sure that the insurance company pays the claim quickly, so that you can get on with life.

But what if they don’t?

When an insurer doesn’t pay your claim, it can create a huge financial hardship. Any type of insurable loss, such as a car accident, work injury, disability insurance claim, pet insurance, stolen iPhone, will cost you, if the claim isn’t paid.

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

Use these tips to protect yourself against an insurance claim dispute:

Why Your Records Are So Important

When it comes to getting your hands on a claim payout, one powerful tool is a pristine set of records. One of the most important documents is a list of the contents in your home that you provide to the insurance company when you apply for coverage. You should update this list once a year, and consider taking video of the contents of your home. This is particularly important if you have artwork, antiques, or other collectables.

If you’re in a car accident, on the other hand, a collection of statements from anyone that witnessed the accident will help support your claim. If you have a claim dispute, any statements you can provide (or statements collected by law enforcement at the scene) will help you get your claim resolved.

Security cameras and still photos also document events, so determine if there are recordings for a car break-in, or a home burglary.

Finally, keep detailed records of whom you talked to, when and what was discussed with insurance company representatives. If an insurance firm is making the claims process difficult, create a document trail of their discussions. If the company’s statements are elusive, your documentation can help your case immensely.

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

How an Attorney Can Help

As stated above, the tactics some insurance companies use to avoid paying a claim may be frustrating, which is why you should consider retaining a law firm that is familiar with the tactics and tendencies of large insurance companies. If you do retain an attorney, find an expert for your particular type of insurance (auto insurance, home insurance, etc.).

One recent insurance case that grabbed the headlines involved claims denied by Cigna Group. Thankfully, these people may be entitled to a re-evaluation of their claim as part of the $77 million recent settlement by CIGNA to cover claims that the nationwide disability insurer inappropriately handled. Retaining an attorney can be expensive, and heading into court isn’t always a great option, but it may be the only thing that works.

Details You Must Know

A thorough review of your insurance policy is critical, so that you understand exactly want is covered. Specifically, you need to understand the process for filing a claim, including the documentation needed, how long you have to file the claim, and the system for estimating your loss. If you have any doubts or questions about your coverage or the claims process, consult an attorney.

Use these tips to verify your insurance coverage, document your insurable items, and to respond to a denied claim. Having a plan in place will give you peace of mind.

This 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

 

Passive Income For Your Family – Trust Your Gut Feelings

“If you don’t know where you’re going, any road will take you there.”

This quote from author Lewis Carroll describes how many people approach the need to develop a passive income. Passive income refers to an income producing strategy that doesn’t require day-to-day management by the investor. Finding an effective passive income strategy is hugely valuable, because it only requires a small investment of time.

As your start to consider passive income methods, ask yourself a few questions to get on the right road:

How Much Do You Know?

What’s your background in business and investing- if any? Now, that doesn’t necessarily mean that you have to work in the industry. Many people who succeed in non-finance professions educate themselves on investing.

Evaluate how much you know, and if you’re willing to invest some time to learn the basics. If you decide that you don’t have a lot of business knowledge, consider doing some research online- investing websites are a great source of information.

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

If you decide that you’re simply too busy to educate yourself, get some help. Consider speaking with a financial advisor, an accountant, and other business professionals who can help you get up to speed.

Once you assess your knowledge level, you can think about some investment alternatives:

Stock Market Investing

Investing in stocks is an approach many people use to generate a reasonable amount of earnings over the long term, but you need to become comfortable with the stock market processes.

Companies issue common stock to raise money to operate the business, and investors can benefit if the company performs well, and they can sell their stock shares for a gain. Stock investors may also earn a dividend, which is a share of company earnings paid to shareholders. If you own stock, you can also vote on major corporate decisions, such as the firm’s board of directors.

To some extent, you need to trust your gut as a stock investor, because you need to make an honest assessment about how much risk you’re willing to take. Stocks can vary widely in value from one year to the next, and successful investors take a long-term approach to investing.

Investing in Property

If you prefer something a little more concrete, you’ll appreciate the physical aspect of the property market. One common investment option is to renovate a property and attempt to sell it at a higher price.

Alternatively, you can start a property management franchise, which allows you to manage rentals and tenants. Your gut feelings play a significant role here, as you need to find tenants you can trust.

Invest in a Startup Business

Last, but not least, you can put your trust in someone else’s business idea that you believe in. This is precisely what the crowdfunding of startup businesses allows you to do. As a startup investor, you can’t research the business you want to support, as it has no history. But you can get to know the company’s vision and ethics as an investor.

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

This type of investment is good for people who have a strategic mindset and can see the potential impact of innovative services and products.

Why Doing Your Homework Pays Off

Building a stream of passive income payments is valuable, because you don’t have to invest a large amount of time. To find the right strategy for you, do your homework. If you invest the time to educate yourself and get the help you need, you may be able to find an effective passive income strategy.

As always, consult with a financial advisor, an accountant, and other experts. 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

 

 

4 of the Strangest Ways to Make Money Online

You can make money online in strange ways- as long as you can solve a customer problem.

Here’s an example:

Wash. It. Later. sells a water-tight bag for soaking soiled baby clothes before they stain. It looks like a shopping bag from a high-end store, because the packaging is an attractive black and white stripped design.

And it’s sold online.

This product solves a huge problem for parents of young kids who need to store soiled clothes until they can get home.

Critical Steps to Create a Successful Business

Before you launch any type of venture, walk through these steps to decide whether of not your business idea is valid:

Step 1: An urgent need  

It’s obvious, but every successful product solves a problem or fills a need- if the problem must be solved quickly, even better. What’s an urgent need? How about a car repair, or heating and air conditioning repair?

We’re all willing to pay to solve an urgent problem or need.

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

Step 2: What are people willing to pay for a solution?

If you have an idea that solves a problem, offer your product or service to a group of people for free. Once they use your solution, ask them how much they’d be willing to pay for the product. Giving away the product allows you to capture free market research on your idea.

If you can’t charge enough to cover your costs and generate a profit, your business idea isn’t valid.

Step 3: What’s the size of the market?

How many people need to solve the problem? If there aren’t enough people, you may not have a viable business idea.

I know two smart people who each wrote software that solved a problem. One software application helped schools manage enrollments for sports teams, and the other idea helped contractors automate their business.

Good ideas that solved a problem- but there weren’t enough people who needed the solution.

Think carefully through each of these steps before launching a business.

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

Walk Your Way to Wealth

Okay, so you’re unlikely to actually get wealthy from it, but if you do a fair bit of walking anyway, why not capitalize on it by installing the Bitwalking app which will monitor your movement and allow you to earn money for your efforts.

Once you have enough walking completed, you can trade your earnings in for PayPal credit, or exchange it for a few other things. Check it out if you’re interested.

Become Someone’s Best Friend

The website RentAfriend.com allows you to sell your time and company to individuals who are looking for a friend to attend an event with them, or to show them around a city they aren’t familiar with. It might sound strange, but there are a lot of people who, for one reason or another (moving home, illness), have a limited network of friends. Helping them out can be a win-win for the both of you.

Comment on Blogs

We all know it’s possible to earn a good living by writing your own blog or becoming a freelance writer online, but did you know that you can earn money by commenting on blogs and forums? If you’re not into writing 500 words or more, it’s a great way to pick up an extra income for writing a small amount.

Profiting From Video Games

The market for video game viewership is exploding. Rolling Stone points out that over 360 million people watched a League of Legends competition in 2017. Some business people are profiting from this trend by becoming video game entrepreneurs.

A traditional business owner may take out a loan from personalloan.co and invest it in real estate or physical products they can sell to customers.

It sounds strange, but some people move through a similar process in the virtual world. They use fictional money to purchase fictional real estate or create fictional products and services, and they sell items to online game players.

Weird But True

As you can see, there are more ways to make money online than you might imagine. Many of them are unusual, but an online business strategy may work for you. Fortunately, most online ventures don’t require a large out-of-pocket investment, so your risk of loss is lower. Do your homework and find an idea that’s right for you.

As always, this information 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

 

 

What Is Your Single Best Piece of Financial Advice?

“Your Ivy League Future”

I glanced at the sign on the conference room door and thought: wow- that sounds pretty good. I’d like to be attending that meeting…

We all aspirations.

To get out of debt. To be able to pay for an emergency, like a car repair (smaller stuff).

Then there’s bigger stuff, like buying a home, taking a dream vacation, or retiring early.

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

Your aspiration may be to start a business- maybe take that hobby and make it a full-time gig.

So, my single most effective piece of financial advice is:

Self-discipline.

We all know- generally- what we should do

Like many aspects of life, we know- at least in a general sense- what we should be doing financially. We’ve heard for years that we should create a plan, and work with an expert, if we don’t have a background in finances. We should save and invest money each month, and consider the amount of risk we’re comfortable taking.

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

You know, the personal finance greatest hits.

But, just like diet and exercise, many people just can’t pull the trigger and do it on a consistent basis. Gyms fill up in January and empty out by March.

We just don’t have the self-discipline. But we can change that.

A purpose

The classic book Psycho-Cybernetics explains that it takes 21 days to changes a habit. That takes effort, and you need to be motivated to make that effort. What can give you the self-discipline to change your personal finances (or go to the gym three times a week) is a purpose.

The purpose has to be a bigger influence over you than the idea of not changing. In other words not changing becomes more painful than changing.

And I use the word “pain” for good reason.

I can say from personal experience that financial problems suck. They can damage your health and your relationships.

At some point, the pain of having financial problems is worse than the pain and uncertainty of not changing.

So, what’s you reason for improving your finances?

Get specific- and write it down somewhere. Once you find your reason, you’ll be able to implement the plan listed below.

Create a budget, and move funds into a savings account

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.

Monitor your spending and your budget  

Consider using a budgeting app to monitor your spending.
Set up a separate bank account to discipline yourself to save.
Save 5% of your monthly gross income.

Use a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options

One last thing: Read The Richest Man In Babylon. It’s a simple- yet powerful- book on savings and investing.

As always, check with a financial advisor and a CPA for more specific advice.

Good luck!

Ken Boyd

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

This post was originally posted on my Quora page. This post is for educational purposes only.

 

Image: Bullseye, Jeff Turner CC by 2.0

How Can I Develop a Second Source of Income?

Do the hustle.

So, you’re interested in a second source of income- a “side hustle” to use the parlance of our times. Be careful, because you’re time is limited, and you don’t want to waste time and effort on a venture that won’t work.

Here’s my answer for developing a second source of income.

Start with a need- an urgent need

It’s obvious, but every successful product solves a problem or fills a need- if the problem must be solved quickly, even better. What’s an urgent need? How about a car repair when you’re stuck on the side of the road (‘had the transmission on my car give out on a highway exit ramp. I don’t recommend it). Another good example is heat or air conditioning repair at home.

You’re willing to pay to solve an urgent problem or need.

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

Where the rubber meets the road

So, I’m sure you can jot down some realistic business ideas. Once you do, you need to take a hard look at three factors:

How urgent is the problem or need?
What’s the size of the market?
Can I scale to meet the market’s size?

If you don’t have specific answers to these questions, you’ll struggle to get your business venture off the ground.

Spend enough money to validate your idea. If you don’t you’ll really be flying blind as you start your business.

Be an observer

I heard the founder of Wash. It. Later. on the How I Built This podcast. She created a water-tight bag for soaking soiled baby clothes before they stain. Her packaging is an attractive black and white stripped design- it looks like a shopping bag from a high-end store.

If you’re a parent of your kids, this product solve an urgent problem- almost as important as landing on the moon (seriously, it’s that important).

So, how did the inventor, Hannah England, come up with an idea? She observed what was going on around her, and noticed a problem that needed to be solved. That’s a great way to come up with ideas for a startup. Here are some other examples of founders using observation:

Bliss Spa and Skincare Products: Maria Kilgore started her business career by learning the proper way to give people facials. She was inspired to start her business after a terrible experience getting a facial at an expensive spa in New York.

 

LinkedIn: Reid Hoffman noticed that people segmented their online preferences between personal and professional. He started LinkedIn to fill the consumer’s desire for a professional online platform.

 

Patagonia: Yvan Clouinard started Patagonia, because he couldn’t find camping gear that was durable enough to stand up to the intense hiking and climbing trips he was taking.

 

What is it in your own life that’s a problem you might solve?

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

Perform intensive research

Arthur Blank started Home Depot with a partner, but the pair did not open their first business until they performed research on the concept for several years. Blank and his partner had extensive experience managing a successful chain of big box hardware stores, but they did more research to increase their chances of success.

There’s an endless ocean of information on the web, and finding useful research may be difficult. However, it’s worth the time investment to find the right information source for your startup idea.

Find the thought leaders in your particular industry, and find how what they’re saying about the industry. Many thought leaders put out white papers, free webinars and other useful information to attract an audience- and potential future clients. The information must be useful, in order to keep the reader engaged, and it can be a great reference for you.

Here’s an example: I pay attention to content marketing, and I recently came across an infographic from LookBookHQ. I thought the infographic was useful, so I went to the website. I downloaded this 15-page content marketing research document, and now I feel far more educated on the subject.

Find thought leaders- and read, watch, listen to everything they put out. It’s a form of free education.

Spin off your current career/ industry

If you work in a certain field, you probably have your own ideas about how you can improve things. Here are some other business founders as examples:

Chipotle: Steve Ells worked in a high-end restaurant in San Francisco, was a classically trained chef. He started Chipotle originally as a cash generator to fund a gourmet restaurant, and he wanted to use some unique cooking ideas. Chipotle took off, and he expanded into dozens of store locations.

 

Kate Spade: Kate Spade worked in the fashion and design industry in New York for years, and decided that the handbag market was missing something. She started making simple, modern handbags to fill a customer need.

 

Clif Bar: Gary Eriskson was a competitive bike rider who was tired of eating energy bars that tasted terrible. His mother helped him create a better tasting energy bar that was healthy- and now Clif Bar has a big share of the energy bar market.

 

If you come up with an idea in your own industry, you’ll have some natural advantages. You’ll already know about the industry, so the learning curve won’t be as steep. Second, you can leverage your existing contacts to get feedback on your business idea. You know what questions to ask.

Summary

Observe, perform research, and consider challenges in your own industry. Create the smallest test version of your product or service, and see how it’s received by customers. Price your product so you can earn a reasonable profit, and do your homework to find out if the market is large enough to justify starting a business.

Good luck!

Ken Boyd

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

This post was originally posted on my Quora page. This post is for educational purposes only.

 

Image: Bullseye, Jeff Turner CC by 2.0

 

 

How should a person in their early 20s invest their money?

 

Embrace the suck.

The phrase is one of several lessons learned by a West Point grad, and this saying relates directly to investing in your early 20s. Acknowledge that investing successfully is hard, because it takes self-discipline and delayed gratification.

Those two concepts don’t sound any fun.

But, as the writer says, we should embrace times that are difficult, because we always learn something- and we’ll be better prepared for the next time things suck.

I’ll answer this question by pointed out two advantages that you have as an investor in your early 20s, then provide some concrete steps for investing.

The power of compounding earnings

It was 1999, and I was talking to a co-worker, Ron, who was about 50 years old. A large insurance company we both worked for was merging with another firm, and we were both leaving the company. (I left to start my current business).

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

I had suspected that Ron well below his means, because I had a good idea of how much money he made. Both Ron and his wife worked, yet they lived in a blue collar-type neighborhood with small homes.

Ron wasn’t retiring early, but he had enough money to take some time off. He told me that he and his wife had planned financially, so neither of them would need to start working immediately after leaving a job.

They planned, they saved aggressively, and invested wisely.

How did he do it?

He compounded earnings on his investments.

Here’s how: Consider a $1,000 investment at a 5% interest rate, with total annual interest of $50.

Compounding interest is defined as earning “interest on interest”, and when you compound interest, your total earnings can be much higher.

In year one, you earn $50 in interest. Here’s the key point: in year two, the investor keeps the original $1,000 invested, plus the year one earnings of $50. The total amount invested in year two is $1,050.

$1,050 invested at 5% = $52.50 in interest, or $2.50 more than in year one.

The returns get bigger over time.

Think about a bucket. You can envision more money going into the bucket each year, since you leave your earnings in the bucket. If you took each year’s interest out, you’d only invest the original $1,000 each year- and you’d end up with far less money over time.

You have a longer time to compound earnings on investments in your 20s vs. your 50s.

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

You can make up for investment losses over time

Another advantage of investing in your 20s is that you can make up for investment losses, because you’re investing for a longer period of time.

So, what’s a “normal return” on stock investments, 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 11.4122%

So, what’s normal? Seeking Alpha says 11%, and other stats suggest 8-10% over a 70-80 year period.

If you stay invested for the long term, those losses will balance out with the gains over time- and you’ll probably earn that average 8-10% rate.

Here are some practical steps:

Create a budget, and move funds into a savings account

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.

Monitor your spending and your budget

Consider using a budgeting app to monitor your spending
Set up a separate bank account to discipline yourself to save
Save 5% of your monthly gross income

Use a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options.

One last thing: Read The Richest Man In Babylon. It’s a simple- yet powerful- book on savings and investing.

As always, check with a financial advisor and a CPA for more specific advice.

Good luck!

Ken Boyd

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

This post was originally posted on my Quora page. This post is for educational purposes only.

Image: Bullseye, Jeff Turner CC by 2.0

What’s Your Secret To Saving Money?

“The longer I live, the more I realize the impact of attitude on life. It is more important than the past, than education, than money, than circumstances, than failures, than successes, than what other people think or say or do.” – Chuck Swindoll

Saving requires a change in attitude about money.

One change that’s required is delayed gratification. Here are some examples:

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).

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

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).

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

So, what do I get?

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

You build savings- which can lead to building 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.

Here are some practical steps:

Create a budget, and move funds into a savings account

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.

Monitor your spending and your budget  

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 a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options

One last thing: Read The Richest Man In Babylon. It’s a simple- yet powerful- book on savings and investing.

As always, check with a financial advisor and a CPA for more specific advice.

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

This post was originally posted on my Quora page.

Image: Bullseye, Jeff Turner CC by 2.0

Best Way To Use Credit Cards

Credit card companies profit from the uninformed.

So don’t be uninformed.

Here is some broader personal finance advice first- then the best ways to use a credit card.

First things first: Delay gratification to avoid credit card use

Be willing to delay gratification, and you won’t need a credit card. 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).

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

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).

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.

Create a budget, and move funds into a savings account

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.

Monitor your spending and your budget

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 a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options

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

Critically Important Strategies: Credit Cards

Read the entire, boring agreement: Yes, it’s dull, and you’re probably tempted to throw the agreement in the trash- but read it. Recent changes in federal law have forced credit card issuers to make agreements easier to read, but it’s still a struggle. Read the whole thing, and take some notes- particularly about payment due dates.

 

Pay a day early- even online: Don’t take the risk of paying late, so pay a day early, and ONLY pay online. Mail is too reliable, and makes difficult to prove that a payment was made on time.

 

Pay in full, every time- or don’t get a card: Using credit wisely can build your credit rating, but that’s the only reason to use a credit card. If you can’t pay the card in full every month, don’t use it. The interest rates are simply too high to justify carrying a balance.

 

Only use a card that earns points: There are so many credit card choices, that you should be able to find a card that gives you airline, hotel, or purchase points.

 

Balance transfers: OK- you can certainly find a card that’s willing take you as a client in exchange for a lower, “teaser” interest rate. But, like I said- don’t carry a balance.

 

As always, check with a financial advisor and a CPA for more specific advice.

Good luck!

Ken Boyd

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

This post was originally posted on my Quora page. This post is for educational purposes only.

Image: Bullseye, Jeff Turner CC by 2.0

How Can I Become Financially Free?

Is everyone spending a ton of money and having fun on Spring Break?

If you check social media, it sure seems that way. All of your friends are on the beach, skiing in the mountains, or people watching at a café in Europe.

But that’s not reality.

The fact is that not everyone is living it up- although some are. Those friends and relatives that are on trips may have carefully saved money to make that happen.

They may be financially free.

So, how can you make that happen for yourself?

If you’re struggling after a financial setback, this article may help.

It’s a journey, and it takes self-discipline and- hold your breath- delayed gratification. Fortunately, I’ve noticed that the millennial generation (those who are currently between 22 and 37 years old) is a lot less focused on material items, which makes delayed gratification easier.

Here’s how you can become more financially free:

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

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.

Delay gratification

Be willing to delay 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).

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.

Create a budget, and move funds into a savings account

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.

Monitor your spending and your budget  

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 a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options

Follow these steps, and you’ll be on the road to financial freedom.

Oh- and ignore all those beach photos on Instagram…

 

Good luck!

Ken Boyd

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

Co-Founder: accountinged.com

(email) ken@stltest.net

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

(you tube channel) kenboydstl

This post was originally posted on my Quora page. This post is for educational purposes only.

Image: Bullseye, Jeff Turner CC by 2.0