Tag: Accountant (page 1 of 2)

The Best Holiday Shopping Budget Tips

Holidays are a time for giving, but giving too much can also put you in a huge financial hole. If you don’t want to end up having to dig yourself out of a shopping deficit at the end of December, follow these holiday shopping budget tips.

1. Set an overall budget.

Think about what you’re really able to spend overall and stick to that amount. What you’ll spend on each individual can fluctuate within that amount, but the overall budget should remain the same to avoid overspending.

2. Make a list of gift recipients, then trim it down.

Your second cousin whom you haven’t seen in 10 years probably doesn’t need a new set of dinner plates. Stick to the closest family members and friends for gift giving. If you still want to send something to long-lost relatives and acquaintances, a holiday photo card is a nice, inexpensive idea.

3. Use cash for purchases.

Credit cards can make it much easier to overspend. Instead, put cash aside at the beginning of the holiday shopping season and use that money to make purchases. If you prefer online shopping, create a separate account for your holiday shopping money, or be extremely disciplined in sticking to your budget.

4. Take advantage of free shipping.

Online shopping is convenient, but the shipping costs can really add up. Take advantage of free shipping days by making several gift purchases at once. Most retailers offer free shipping if you spend a certain amount.

5. Start shopping early.

Waiting until the last minute can cause you to overspend. Starting your holiday shopping as early as September or October is a good idea because you can shop a little bit at a time. Everyday deals are often better than Black Friday and Cyber Monday deals anyway, and you’ll be more likely to score the big-ticket items that might sell out on these busy shopping days.

6. Think quality, not quantity.

One thoughtful gift is more appreciated than several random items. Homemade gifts are also a good idea as they come from the heart. The best part is, they’re also less expensive.

Stay on budget with these holiday shopping tips and enjoy the season!

Estate Planning Simplified

Nobody likes thinking about dying, but, if you die without a plan in place, you’ll be leaving your assets and your family in a difficult position. In that case, you’ll be taking the chance that the state’s probate laws will work in your family’s favor. It’s much more advantageous to develop a simple estate plan.

Start With a Will

Above all, you need a will to ensure certain arrangements will meet with your approval. Even if you don’t have many assets, you should use your will to identify your heirs and determine how assets will be divided up among them. More importantly, a will is the only way you can choose guardians for your minor children and make arrangements for their care.

Add a Living Trust

Your estate plan should also include a living trust. If you have significant assets, or if you want to make sure a loved one receives a specific piece of property, a living trust will serve this purpose better than a will. Since a trust is a private document, it typically won’t be included in the probate process. This means any property transferred via the trust will also be kept out of the probate process.

Care for Yourself With Powers of Attorney

An estate plan can also help you take care of yourself in the future by helping you choose people to make medical care and financial decisions for you. A healthcare proxy allows you to choose someone you trust to make decisions regarding your healthcare if you’re ever in a situation in which you can’t communicate your wishes. Under those same circumstances, a financial power of attorney will appoint someone of your choosing to take care of your finances until you’re able to act on your own behalf.

While you could probably create a simple will that’s legally binding, it’s a smarter move to consult an estate planning attorney. An experienced lawyer can help you draft the other documents you’ll need for your estate plan, and they can explain how the laws in your state will affect your final wishes. Creating a simple plan for the future may seem bothersome, but you’ll be surprised by the peace of mind it provides once it’s done.

How to Start Building Your Emergency Fund

As the name implies, emergency funds offer some degree of comfort and peace of mind during times of crisis. Alarmingly, 45 percent of people in the U.S. claim that they do not have enough money to cover three months’ worth of expenses if they suddenly lost their source of income. To avoid being included in this statistic, here are four tips on how to start building an emergency fund:

Start Small

You don’t need to go from zero to sixty when building an emergency fund. Starting small by putting $5 a day in your fund can help your fund grow to a significant size over time. It’s also easier to build habits if you make it effortless to perform said habits every day. Start with a $500 emergency fund and then gradually increment it every time you hit your target amount.

Keep Your Emergency Fund Separate

An emergency fund should be easily accessible in tough times, but it should not be mixed in with your checking or savings accounts. These everyday money accounts put your funds at risk of impulse withdrawals. You can put your emergency funds in a separate high-interest savings account, money market account, or certificate of deposit or a mix of these three investment products.

Make Automatic Payments

Just as you would a 401k or any retirement account, it’s essential to deposit money into your emergency fund first before spending the money on other purchases. Allocate a monthly percentage of your income to your emergency fund. If the funds are stored in a savings account, you can set scheduled automatic deposits, so you don’t have to manually transfer the money to your fund every month.

Cut Monthly Expenses

An imbalance between monthly expenses and income is the most common cause of why people can’t build their emergency fund. By cutting down your monthly fees, you’ll have more money to invest in appreciating assets as well as savings. Trim the monthly content subscription services and the costly name brand clothing.

Final Thoughts

Building an emergency fund starts with awareness of one’s finances. Many people underestimate the likelihood of an emergency that costs them money; hence they don’t realize the importance of having a rainy day fund.

Four Questions Prospective Homebuyers Should Ask

It could be argued that owning a home is the American dream. But that dream can rapidly become a nightmare if you buy before you’re ready. Are you prepared to buy a home? These four questions will help you decide.

How’s Your Credit Score?

If it’s below the mid-750s, you have some work to do before you’re ready to buy a home. One of the first things lenders research is a prospective homebuyer’s credit score. They like numbers in the mid-750s or higher.

While you can get a loan if your score is lower, you won’t be allowed to borrow as much money, and your interest rate will be higher. That will make your monthly payments higher; over the life of your loan, you may spend thousands of dollars in extra interest.

Before you apply for a mortgage, bring your credit score up, even if that takes a couple of years.

Can you afford the down payment?

Take a look at your savings account. Do you have enough money for a down payment, closing costs, and insurance? Will there be enough money left for repairs and renovations you want to do right away? If there’s not, amp up your savings practices before you start looking for a house.

Can you afford the monthly obligations?

Predictions are difficult in these uncertain times. But you’ll be ready to buy a home when you’re confident you can make the monthly mortgage and interest payments and pay for homeowners’ insurance, property taxes, homeowner association fees, utilities, trash pickup, and water and sewer charges. Your car payments and insurance need to enter into these calculations, too.

Also, think about your lifestyle. If you love traveling, dining at pricey restaurants, or have an expensive hobby, make sure there’s room in your monthly budget for those, too.

Are you ready to stay put?

Experts suggest living in a home for at least four years before selling it. It can take that long to recoup the upfront costs of buying the house. Of course, you could rent it. But being a landlord isn’t easy. And if your tenant can’t pay the rent, you’re stuck with two mortgages.

If you’re thinking about changing jobs or leaving the area where you live now within a few years, you’re not ready to buy a home just yet.

Strategies For Building An Emergency Fund

One of the best things you can do to support your financial health is to create an emergency fund. This fund can be used in case of a medical emergency, a sudden visit to the veterinarian, a home repair, or other unexpected costs that could lead you to take out a small high-interest loan to cover the emergency.

Eventually, it can also be a way to cover your expenses if you lose your job.

These kinds of incidents, both large and small, put people into debt and their finances in a tangle for years.

By building an emergency fund, you develop a financial safety net for yourself.

Many people see the suggestion of saving for six months of expenses and feel that goal is far out of reach; they don’t even want to try. This is a big mistake. If you’re in that situation, first focus on building a small emergency fund of five hundred to fifteen hundred dollars. If this takes you a little time, it’s still worth having. Having a thousand dollars at your back can keep your finances well in hand on a tight budget.

How do people save a sizable emergency fund on any budget?

Open a High Yield Savings Account

Your emergency fund should be accessible, so you don’t want this invested in a 401k or stocks. Put this somewhere it can accrue the most interest and still be at the ready.

Use An App For Automatic Savings

There are many apps that can help you automate your savings in various ways, so it happens without you having to think about it. This makes building an emergency savings something you never have to consider again. 

Some people prefer to have a specific amount taken from every paycheck that comes in; others like to round up their purchases. Choose a path that works for your goals.

Prioritize Your Emergency Savings

Keep your emergency savings in that separate account. Never mix it with your vacation savings fund or anything else. You don’t want this money to go toward other things on a whim.

Save At Least Half of Your Tax Refund

Your emergency fund can get a big boost when you earn a bonus during the holiday season or receive your tax refund. Put away at least half of this money to help your savings grow.

How an Accountant Can Help You Combat Debt

A fiduciary gives you insights into your finances that effectively help you fight a history of toxic debt. Accountants understand financial concepts and can communicate those ideas in simple, understandable terms. With a fiduciary, you’ll get help in navigating the legal parameters for any class of debt you hold. However, you should be fully aware of how your accountant will work and what they’ll do. Below are steps an accountant will take to get rid of your debt.

Creating a Financial Portfolio
Your certified public accountant (CPA) needs a clear overview of your finances before evaluating them adequately.

A financial portfolio is created by forming a list of all of your assets, which even includes a dog if you have one. A professional fiduciary will then list your income sources along with any financial liabilities you have. Insurances, investments, and retirement funds are things to account for within a financial portfolio. As you help an accountant to organize your finances, be honest about any outstanding bills and the debt you have.

Starting with Student Loans
Most CPAs begin to target the debt of their clients by immediately looking at their student loans.

Student loans often account for the most significant portion of the debt that borrowers have, so accountants target it to get rid of the bulk of money owed. Or, if you owe $25,000 in debt, and 75% of it is from a car, then your accountant will work to reduce your vehicle debt first.

Strategizing a Payment Plan

The general picture created by your outstanding debt and financial portfolio gives an accountant sufficient data to form a payment strategy. Here are some of the strategic points that an accountant can use to devise a suitable plan that pays off your debts:

Budgets—An accountant can substantially improve how you spend money by verifying your needs versus your wants.

Taxes—Tax accountants are trained to allocate your tax returns to pay off any outstanding debts that you have.

Prioritizing—Above all, your accountant determines how to prioritize your payments so that the damaging debts you owe are paid off first.

When Should You Consult an Accountant for Tax Help?

When people are making plans to file their taxes, they may discover that there is a need for an accountant to help them complete the forms. Those who are uncomfortable with filing should seek an accountant that can help them make sense of the tax rules and what they need to do to file before the deadline. Unusual circumstances, such as changes in marital status and career, may call for additional assistance. In such instances, accountants are a taxpayer’s best friend.

Amended Taxes

Inevitably each year, taxpayers file erroneous forms. There may be mistakes and letters from the IRS that indicate that there is income that has not been accounted for, an incredibly stressful situation for everyone involved. If you’ve dealt with erroneous forms in the past, or if you’ve received notice from the IRS that this year’s submissions contain errors, seek out an accountant to help you readjust and refile. 

Owing Taxes

Anyone who owes taxes can benefit from involving an accountant in the process. After all, taxpayers may take the standard deduction when they could owe less or no money at all, all because they’re unsure how to itemize deductions. It’s an involved process, one that requires an expert eye. For this reason, professional accountants are there to help; by pointing out any overlooked itemized deductions, accountants can provide a better understanding of the deduction process.

Change of Status

Plenty of things can change in a year, not the least of which is household status. A single person that files as head of household may be unaware of changes in deductions when they get married. If you’re unsure about the best way to file taxes when your marital status changes, consider working alongside an accountant. 

First Time Tax Preparation

Filing taxes for the first time can be a confusing process. With all of the paperwork and math required for each form, it’s common for people to struggle to wrap their heads around everything. This situation is precisely what accountants handle regularly. Accountants want to help everyone ensure that all guidelines are followed and numbers are accurate. To pay taxes by the deadline, new taxpayers should schedule early consultations with local accountants. 

Four Easy Ways to Budget This Month

For some, creating and sticking to a budget is a simple task. For others, it’s a strenuous and seemingly impossible task. The temptation to eat out, splurge on clothes, and throw caution and cash to the wind can be huge, so it’s essential to find ways to stay on track. Here are four ways to create a budget that works and stick to it.

Meal Prep

In addition to various forms of outside entertainment, eating out is a considerable expense. Since most restaurants mark food up—sometimes as much as 300 percent—the only sure-fire way to save money on food is to cook meals at home. However, this is a lot more time-consuming and can be difficult for those without much cooking experience.

Take the time to plan meals, including the cost of ingredients, for at least a week’s worth of meals. Also, include the costs of snacks as well. One way to save on food is to buy in bulk. Look for items that can be purchased in larger quantities and divide up for later.

Set Up Autopay

Another way to stick to a budget is by setting up autopay. Instead of having to pay bills and charges every month manually, autopay lets budget-setters know what they pay and when. The same concept can also help track savings. Just have a set amount of money transferred each month into a savings account.

When it comes to paying utilities, look into budget billing. Customers pay a set amount for power and water. After a set time frame, they’re either refunded the difference or charged for any overages.

Entertain at Home

Simply put, going out is expensive. Everything from grabbing drinks to seeing a movie is expensive these days. Instead of breaking the budget, invite friends over and find ways to create a social atmosphere at home. Cocktails made at home cost half the price when ordered out. The same holds true for take-out. If your group wants pizza and a movie, rent a flick and make homemade pizza.

Track Success

Tracking success is a great motivator, so make sure you keep track of how much money you’ve saved over the month. After seeing positive results, you may feel even more motivated to stick to their budgets.

With a little planning, creating and sticking to a budget is easy. Since everyone has different needs, never compare budget planning. Finally, make sure that the budget isn’t so rigid that it’s impossible to follow. Just be sure to leave some wiggle room for the occasional splurge.

Where to Get a Loan Besides the Bank

When it comes to expenses, money can be a point of contention. With the cost of living and the need for appliances and machines on the rise, it’s not always easy for people to come out of expenditures with money in their pockets. For this reason, people often resort to loans to help keep themselves and their families afloat. While many people go straight to their local bank to take out a loan, there are other options that are not considered or even well-known. These are some of those lesser-known places to acquire loans.

A Credit Union

Acquiring a loan from a credit union is sometimes considered a better alternative to getting one from a bank. Credit unions can offer recipients lower fees and interest rates than a bank, which makes paying back the loan a lot easier on the wallet. However, there is a slight drawback to using a credit union. In order to qualify for a loan, people must be a member and meet their requirements. If you’re a member of a credit union such as Members 1st or PSECU, give customer service a call to learn more about how to qualify and what loans are offered.

A Payday Lender

A payday loan is a type of short-term loan amounting to, at most, $500. Often, these loans are taken out to cover unexpected expenses and late bills. Applying for one of these loans is simple; all you have to do is apply online or at a payday loan facility. 

While these loans are helpful in the short-term, there are a few drawbacks. To start, these loans must be paid back as soon as the recipient gets their next paycheck. Secondly, payday loans can be very expensive in terms of fees and interest. If the loan is not paid by the due date, the lender might extend it, but at the cost of tacking on additional fees. Think carefully about whether or not your situation calls for a payday loan.

A Pawnshop

There is one massive difference that pawnshop loans have over others; the shop won’t check credit scores or require an application. A pawnshop loan works like this; you take an item such as jewelry or an electronic to a pawn shop. Should the pawnbroker be interested in the item, they’ll offer a loan.

How much the recipient will receive varies on the overall value of what’s being pawned. Pawnshop loans are a great way to get money quickly, but this speed comes at the cost of substantially high interest rates. Extra fees may also be included, depending on the pawnshop.

Loans may be a surefire way of obtaining money, but they are a huge responsibility. It’s important that people consider all the factors of taking out and paying off a loan before making the investment. 

The Best Personal Finance Software

In the world of personal finance, there are some software programs that stand out from the rest. These programs make it much easier to manage budget and track spending within your household. If you’re looking for software to manage your personal finance, these are the programs you should check out.

Quick Books

If there is one program that has continued to stand out over the years when it comes to personal finance, it is QuickBooks. This software has become the cornerstone of personal financing for people who want to keep up with their household spending. The program allows people to set budgets and get running totals for their spending during the month. Users can see how much they deviate from the budget each month, and plan accordingly to save more in the next month. QuickBooks even offers the ability to compare previous years and see if a user’s spending has increased or decreased. With quick references and an easy budgeting interface, this is a great program for users who don’t want tons of fancy features.

Microsoft Money

Another program that stands out amongst personal finance software is Microsoft Money. This is a program that tends to work well for those that have already utilized Microsoft Excel spreadsheets over the years. Users have the ability to create formulas, track their spending, and create easy-to-manage documents.

The ability to add different categories of expenses becomes much easier with a program like Microsoft Money. It has a user-friendly interface that makes it easy for people that are not computer savvy to create documents of their personal finances. This program tends to be one of the favorites for people that like to create documents that can be saved in different formats. These documents can be exported to Excel spreadsheet or saved as PDF files, offering plenty of versatility depending on a user’s needs.

Mint

In the growing age of portable personal finance software, Mint is the finance tool that has gained a lot of attention with the younger crowd. Mint has offered the millennial generation a viable personal finance program that gives them access to an online platform that is not limited to their personal computers.

Mint users have the ability to add their credit and debit cards to track purchases without manually typing in everything that they buy. The Mint app for smartphones allows users to access their financial budgets whenever and wherever they want.