Tag: Accounting (page 1 of 2)

Money Moves for Retirement

Retirement planning is one of the biggest financial concerns for many Americans. There are many considerations to make when it comes to savings—retirees should be aware of what income sources they will be relying on in their golden years. It’s also important to be aware of how long investors have before they will need to access those savings. Finally, it’s important to think about how long people expect to live in retirement, and what they estimate their expenses will be. These are the considerations that must be made to accommodate the aforementioned concerns.

Retirement Income Sources

There are many sources of income that retirees can utilize. Social security is a program that most people will qualify for, but it typically is not enough to get by. Some workers may also have a pension to count on, although that’s becoming increasingly rare. Thankfully, savings accounts are one area over which individuals have personal control. Annuities are also an option for savers. Many retirees also look to their property holdings, including real estate and collectibles, as key sources for income in their old age.

Compound Interest

One of the most basic but most important lessons about retirement that everyone should know has to do with the power of compound interest. Compound interest is the accrual of money on interest over time. Saving a little bit while young can help workers build up a healthy amount of savings to fall back on during retirement. Additionally, tax-advantaged retirement accounts like 401(k)s and IRAs allow future retirees to put money aside and reap important tax benefits. However, even a standard savings account can be a good way to start saving. The older an investor gets, the more important it becomes to have money set aside in an account that won’t be touched. It’s also a good idea to look into catch-up deposits in tax-advantaged accounts. Sometimes, investors over 50 are able to exceed the maximum contributions allowed to the rest of the public.

Tax Considerations

Tax considerations should be a key guideline when choosing investments. In some cases, the gains made from selling a home are untaxed. Some investments are subject to capital gains taxes, even in retirement. Even tax-advantaged accounts like IRAs and 401(k)s can be subject to management fees. It’s a good idea to seek professional advice when it comes to specific investment decisions.  Reach out to a local financial advisor with any financial concerns!

How To Plan For Student Loan Payments

Many students get out of college and realize that they need to pay off their loans. With colleges sticker prices on the rise each year, it’s easy to feel overwhelmed by student debt. However, if by applying these tips, students can plan for debt and pay off their loans as quickly as possible. 

Consider Refinancing Your Student Loans

Some people may not know where to start, especially if their student debt is going to be quite high. If you fall into that camp, you could look into refinancing your loans. Refinancing your loans means that you use another loan to pay off your student loans.

If you have a stable job and you can find loans with lower interest, then you may want to refinance. This way, you pay off the student loans and then don’t have to pay as much money over time when you work on the other loan.

Set Money Aside Each Paycheck For Your Loans

You should focus on budgeting your money so that you can set aside some of that income from each paycheck. This way, you can always pay off that set amount with each paycheck. Such a consistent system will go a long way in helping you pay off those loans.

Some people may worry that it would take too long to use this approach, but consistent payments do offer a tremendous benefit. Yes, it may take some time, but this method helps you calculate when you’ll have that debt paid off by. As your financial situation changes, you can accurately pivot and recalculate to get a clear picture of your debt payment schedule.

Prioritize Your Student Loan Payments

People tend to push their loans to the side, but you need to prioritize your loan payments. Sure, you can buy a new phone or gourmet coffee, but you should consider putting that extra money towards your loans. If you prioritize your payments, then you can put all your extra money towards your loans. This will help you to pay them off sooner and reduce interest.

Conclusion

While student loans are scary to think about, keep in mind that you can pay them off with careful planning. Look at how much money you make, set aside specific amounts and continue to prioritize your loans until you pay them off. This way, you can overcome your loans and start saving money for life’s next big adventure.

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. 

The Differences Between CFAs and CPAs

CFAs and CPAs may sound like the same thing, but their responsibilities differ. For people who are not familiar with the financial and investment industries, the differences between the two may not be that clear. While CFAs and CPAs are both financial professionals, these individuals travel along different educational and professional paths. 

What is a CFA?

A CFA, or chartered financial analyst, analyzes financial reports. Such reports include financial statements revolving around wealth planning and mutual and hedge funds. 

The job of a CFA, or a chartered financial analyst, is to analyze financial reports. These financial reports include financial statements that revolve around wealth planning and mutual and hedge funds. Typically, CFAs find employment with investment management companies, equity firms, and organizations that navigate mutual and hedge funds. In addition, CFAs can work with individuals to plan personal finances and offer advice on investing. 

The path to becoming a CFA involves a slew of experience, including four years of some mix of professional and educational experience. Typically, a bachelor’s degree or four years of professional experience are valid for becoming a CFA, and precede a triumvirate of exams to earn the CFA designation. Such a designation is awarded by the non-profit organization known as the CFA institute. This global organization lays out standards of professionalism and ethics in the investment industry. 

What is a CPA?

A CPA, or certified public accountant, is an individual who has passed the Uniform Certified Public Accountant Examination. The exam is given by the American Institute of Certified Public Accountants. Professionals must also meet their state’s requirements in order to be allowed into the ranks of the Institute.

The job of a CPA is to audit and put together the financial reports that CFAs analyze. They are involved with audits, accounting and taxes; specifically, CPAs keep track of the business dealings of the individuals and companies for whom they work. In addition to putting together this documentation, CPAs also file and officially report them. Outside of formal reports, CPAs are able to give advice about how to pay as little taxes and possible and how to profit as much as possible.

In conclusion, these are the differences between CPAs and CFAs. CFAs are involved in the analysis of financial reports, while CPAs create those reports. They are two very different types of professionals involved in finance that commonly get confused. However, knowing the differences can help you make better decisions when you need financial planning help!

Great Ways to Boost Your Credit

Great Ways to Boost Your Credit

 

One of the many ways we are “defined” by society, is by our credit score and history.  Your credit information has a very significant impact on not only your personal finances but also a majority of your life and different events you may experiences, such as buying your first home.  The first step in credit management is establishing your credit score. Once this is done, it’s important to remember that you’ll want to continue to build your credit up in various ways; you can do this by gradually making small credit charges or larger transactions such as financing or leasing your first vehicle.  Always remember that any credit charges you make need to be paid back within a specific period of time, and late payments can negatively impact your score, as well as result in late charges and higher interest payments. Here are some great tips for boosting your credit:

Make Payments On-Time

Whenever you make a credit charge, you should keep the payment due date noted somewhere where it will help you remember.  Credit cards are a great tool for boosting your credit when they are used properly; however, they can do more harm than good when they aren’t managed correctly.  Any credit card charges you make should always be paid on early or on time. This will give you a good rapport with the credit company, as well as boost your score.  You’ll also avoid any late charges, and you’ll have a better chance of getting future credit cards and other purchases with low-interest rates.

Avoid Making Minimum Payments

While minimum payments are an option that you’ll usually see when you’re making a payment, it’s best to pay your bills in full if you can.  Minimum payments tend to extend your payback period, as you’ll incur interest that can sometimes make a minimum payment useless. Do your best to make any payments in full.  If you’re unable to make them in full, try to pay back well over the minimum, to tackle the balance the best you can.

Address Any Late Bills or Payments

Late bills or payments can happen sometimes.  As humans, we forget, and it isn’t uncommon. You may have changed bank accounts or hit a financial hardship that caused you to get set back on some payments.  If that’s the case, once you’re in a better financial position, work on getting any late payments or bills settled as quickly as possible. This will help bring your credit score back up if it’s taken a hit recently.

6 Tips for Saving Money

When it comes to saving money, Americans are notoriously bad. Last month CNN reported that “nearly six in 10 Americans don’t have enough savings to cover a $500 or $1,000 unplanned expense” (Vasel). If you are one of the six Americans that CNN is referring to, then you’ll find the below tips useful.

Track the Money You Spend

You can’t save money if you’re not sure how much you spend each month. Every time you buy something make sure you get a receipt. Then at the end of the month tally up all of your expenses. If you’re comfortable with online tools, Mint is one of the easiest ways to track everything in one location. Tracking your expenses will show you where you spend the most money. If you find that you spend too much money on entertainment each month, then you might need to rethink your spending habits.

Plan a Budget

After tracking your expenses for a couple of months, you can create a monthly budget. This budget will help prevent you from overspending. Once you have a budget you’ll be better able to make spending decisions each month.

Start Saving

You should include a savings category as part of your budget. Saving 10-15% of your income each month is a good starting point. If you find that percentage to be too high, you might need to take a second look at your expenses. Think about cutting back on non-essential expenses like buying coffee each day or dining out each week.

Create a Savings Goal

It’s easier to save money when you have a goal you’re saving for. It’s easier to give up your daily latte when you’re saving for a vacation or a house. An emergency fund is another good savings goal. The above CNN article mentioned how unplanned expenses can catch a lot of people off guard. An emergency fund will help you avoid this unpleasant situation.

Pick Your Priorities

Saving money is easier when you prioritize what you’re saving for. For example, if you are saving for a new car you shouldn’t neglect your retirement savings in the process. Once you prioritize your goals you’ll find it easier to start saving money.

Decide How to Save

When most people think about saving money they think about savings accounts. While savings accounts are a great way to save your money, they aren’t the only way to do so. Take a look at this article to learn about the different ways you can save money.

Tools Every Accountant Needs

You may not have thought about it, but accountants all need certain tools to do their jobs right. Many of the tools used by accountants are to make the job easier and provide ways of offering better services. Below is a list of a few of the most important things every accountant should have.

Reliable Computer

Invest in a quality computer because it is the one that takes on most of your work for you! Having a fast, reliable computer will allow you to run multiple programs at once. It also gives you the peace of mind that you will be able to do your job effectively.

Tax Software

Tax software eliminates the need to file taxes by hand and saves you a ton of time and headache. Investing in a great tax software will help you serve more clients at a more efficient rate. Plus, tax software will catch any mistakes you may make and gives you the option to correct them. Doing so can save your client a lot of money.

File Encryption

Adding a layer of security to the confidential and sensitive information found on most of the files you have will ensure clients that their information is safe. By having file encryption in place you will be able to email sensitive materials without the risk of the wrong person getting a hold of that information.

Scanner

In order to convert paper files into easily accessible electronic files, you will need a scanner. You can get a traditional scanner/printer combo or even a file scanner specifically for scanning documents and sorting them. These special document scanners often can scan both sides of a double sided documents at the same. They also turn your bulky paper documents into easily accessible PDFs.

Gear Up

You can have the best computer all the software in the world, but nothing beats old school gear. Have a great calculator handy for crunching numbers. Also have plenty of writing utensils and notepads around for note taking. Being able to do the thing the “old fashioned” way never hurts. You may not always be able to rely on technology and having the tools to complete the job are important.