A Week in Perspective
With the end of the filing season now behind us I have taken some time off. I have post ready for next week ,but I am out. all the same. The week now past held its own with great post. As Always I can’t get them all to you but please be sure to read what’s here. I have gathered great post from great bloggers with information we all need to know. See you all next week.
My favorite post this week:
How Your Financial Life Will Change After Marriage – 7 Important Money Matters to Consider – While the most common subject of marital conflict is money, premarital counseling rarely discusses the practicalities of managing household finances. Money matters are even more challenging when people move from individual to joint finances, often with very different financial viewpoints/habits and financial baggage (like student loans and credit card debt). But this article is here to help, with seven important money matters to consider before you tie the knot:
Understanding Your W2 Employer-Employee Reporting Form For 2010 Taxes Filed in 2011 – W2 Changes in 2011 – The W2 form for 2011 is pretty much the same as 2010 expect that employers now have to report the cost of tax-free medical coverage under an employer-sponsored group health plan (this is optional for employers in 2011, but you may still see it). The reporting of this cost, mandated under the Obama’s health care plan, is intended to provide employees with greater transparency into their overall health care costs.
Your taxes, now in plain language – It’s now law. Federal government documents must be in “plain writing.” And yes, that includes the Internal Revenue Service.
The IRS and the latest licensing outrage -
Who would you rather prepare your taxes? A professional tax return preparer with over a dozen years’ experience in preparing tax returns for taxpayers without incident. Or me, an attorney who has never so much as taken a law school class or continuing legal education course in tax law, and gave up on doing his own taxes last year once he started needing to itemize his deductions. You probably think you’d prefer the first option, but the IRS says you’re wrong.
10 More Essential Skills You Didn’t Learn in College -
IRS Prefers Snot-Nosed Harvard Law Grads Over Experienced Tax Return Pros – . . . are most attorneys really that much better qualified to prepare your taxes? Absolutely not. . . .most attorneys don’t have any special training or testing on tax law, let alone tax return preparation.
Tax Return Preparer Regulation: What About Attorneys and CPAs? – In all fairness, Congress has created a tax law that rivals quantum physics in terms of difficulty, which surely makes attaining competence just that much more elusive, but that does not diminish the need for tax competence by all preparers. Demonstrating that competence ought to be accomplished by actual testing and not by erroneous presumption.
33 Questions To Ask Customers – Are you providing a good customer experience? Here are some questions to ask your customers to find out:
How regressive is YOUR state’s tax system?
“Do you have a business…or a hobby?” – just because you spend a lot of time working on your creations doesn’t mean you have a business. While you may protest: “Hey, I’m working hard How is it not a business?!” it is worth taking a closer look at the true definition of a “business.”
A List of Useful Twitter Stats and Analytics Tools – Just for You! – Twitter happens to be a powerful tool to promote your brand, products or services on the internet. And these days, everyone seems to be busy tweeting! To measure whether you are making the most of this social media marketing tool, you should have a couple of useful analytics tools at hand.
Benefits of Independent Contractor Status (vs Employee) – . . . the fact remains that there are a lot of benefits to hiring independent contractors instead of employees.
IRS Independent Contractor Test – The IRS used to use something called the “20 Factor” test. But, under pressure from Congress and from representatives of labor and business, there have been some attempts to simplify the test. There are now 11 main tests that are organized into 3 main groups:
Small Business News: The Business of the Future! – The future is here as far as small business goes. A rapidly changing economic and technological landscape has almost completely changed the idea of what it means to be in business including the trappings of a storefront location or office, a large bank loan and hiring and buying merchandise. (As we’ll see even the small business Website isn’t what it was a few years ago.) But the core values of running a small business, or any business, have remained the same: create value, operate efficiently, be profitable. Here are the ways small business has changed. It’s the wave of the future:
Jobless After 50? You May Be Out Of Luck – The economy officially crept out of recession in June of 2009, but for many Americans, the economic markers that really count are the ones that come out each month from the Department of Labor: unemployment statistics.
In other news:
There will likely be no increase in Social Security benefits (sometimes referred to as a “COLA” or “cost of living adjustment”) for 2011. That makes two years in a row since there wasn’t an increase in 2010 (though there was an above average increase – nearly 6% – in 2009)
Kay always has the best pictures.
IRS announces that W-2 reporting of 2011 workplace health benefits is optional
Employee Relocation in a Suffering Market
Many companies are asking what to do about an employee’s home when he or she is moved to a new job location. With the real estate market in a downturn throughout much of the country, this is a tough and costly question.
Typically, the employer wants to protect the employee against financial loss on a “forced” sale of the home. Here are the most common ways to do that, and their consequences to the employee:
The employer reimburses the employee’s financial loss. Here the employer has the home appraised and agrees to pay the employee the difference between that appraised fair market value and any lesser amount the employee gets on the sale. Such reimbursement would cover the employee’s costs of the sale.
Note: The financial loss here is not the same as a tax loss. The financial loss is the home’s value less what the employee collects under “forced sale” conditions. In the current real estate market, the value is not always clearly determined. The relocating employee might think the home is worth more, based on earlier appraisals or comparative sales. A tax loss is the property’s tax basis (cost plus capital investments) less what’s collected on the sale.
If the employee has a gain on the sale (the amount collected on the sale exceeds the basis), gain can be tax-exempt up to $250,000 ($500,000 on certain husband-wife sales). Tax loss on the sale of one’s residence is not deductible.
The employer’s reimbursement of the employee’s financial loss is taxable pay to the employee. Employers who want to shelter the employee from any tax burden on what is usually an employer-instigated relocation may “gross-up” the reimbursement to cover the tax. But gross-up can be costly. For example, a grossed-up income tax reimbursement for a $10,000 loss would be $14,575 for an employee in the 35% bracket – more where Social Security taxes or state taxes are also grossed-up.
Employer buys the home. Few employers directly buy and sell employees’ homes. But many do this indirectly, effectively becoming the homes’ owners, through use of relocation firms acting as the employers’ agents. An IRS ruling shows how to do this with no tax on the employee:
Option 1. The relocation firm as employer’s agent buys the home for its appraised fair market value, and later resells it. The firm collects a fee from the employer, which will cover sales costs and any financial loss to the firm on resale. The IRS now says that this fee is not taxable to the employee. Also, the employee’s gain on the sale to the relocation firm qualifies for the tax exemption under the limits described above ($250,000 or $500,000).
Option 2. The relocation firm offers to buy the home for its appraised value, but the employee can choose to pursue a higher price through a broker he or she chooses from a list provided by the relocation firm. If a higher offer is made, the relocation firm pays that price to the employee (whether or not the home is then sold to that bidder). Here again, the employee is not taxed on the firm’s fee and the gain is tax exempt under the above limits.
Tip: Either option works for the employee, letting him or her realize full value on the sale of the home (with possibly greater value through Option 2), without an element of taxable pay.
Caution: If the deal is structured so that the relocation firm facilitates a sale from the employee to a third-party buyer (rather than to the relocation firm), the employer’s payment of the relocation firm’s fee is taxable to the employee.
The Employer’s Side
Reimbursing the employee’s loss. This is fully deductible as a business expense, as would be any additional amount paid as a gross-up.
Note: It’s fully deductible, but it may be more costly, before and after taxes, than buying the home for resale through the relocation firm.
Note: Paying the relocation fee only, without buying the home, as in the “Caution” above, is also fully deductible, as would be any gross-up amount on that fee.
Buying the home. The change in the IRS rule was good news for employees, but it gave nothing to employers, whose tax treatment wasn’t covered. The official IRS position is that employer costs (other than carrying costs such as mortgage interest, maintenance, and fees to a relocation management company) are deductible only as capital losses, which, for corporate employers, are deductible only against capital gains. Taxpayer advocates tend to argue that employer costs here are fully deductible ordinary costs of doing business.
Questions?
Are you an employee being relocated this fall? Are you wondering about the sale of your home and the tax implications for you? Are you an employer with a need to move an employee. I can answer your questions. Just give me a call.
Paying Off Debt the Smart Way
Being in debt isn’t necessarily a terrible thing. Between mortgages, car loans, credit cards, and student loans – most people are in debt. Being debt-free is a great goal, but you should focus on the management of debt, not just getting rid of it. It’s likely to be there for most of your life – and, handled wisely, it won’t be an albatross around your neck.
You don’t need to shell out your hard-earned money for exorbitant interest rates, or always feel like you’re on the verge of bankruptcy. You can pay off debt the smart way, while at the same time saving money to pay it off faster.
Know Where You Are
First, assess the depth of your debt. Write it down, using pencil and paper, a spreadsheet like Microsoft Excel, or a bookkeeping program like Quicken. Include every financial situation where a company has given you something in advance of payment, including your mortgage, car payment(s), credit cards, tax liens, student loans, and payments on electronics or other household items through a store.
Record the day the debt began and when it will end (if possible), the interest rate you’re paying, and what your payments typically are. Add it all up, painful as that might be. Try not to be discouraged! Remember, you’re going to break this down into manageable chunks while finding extra money to help pay it down.
Identify High-Cost Debt
Yes, some debts are more expensive than others. Unless you’re getting payday loans (which you shouldn’t be), the worst offenders are probably your credit cards. Here’s how to deal with them.
- Don’t use them. Don’t cut them up, but put them in a drawer and only access them in an emergency.
- Identify the card with the highest interest and pay off as much as you can every month. Pay minimums on the others. When that one’s paid off, work on the card with the next highest rate.
- Don’t close existing cards or open any new ones. It won’t help your credit rating.
- Pay on time, absolutely every time. One late payment these days can lower your FICO score.
- Go over your credit-card statements with a fine-tooth comb. Are you still being charged for that travel club you’ve never used? Look for line items you don’t need.
- Call your credit card companies and ask them nicely if they would lower your interest rates. It does work sometimes!
Save, Save, Save
Do whatever you can to retire debt. Consider taking a second job and using that income only for higher payments on your financial obligations. Substitute free family activities for high-cost ones. Sell high-value items that you can live without.
Do Away with Unnecessary Items to Reduce Debt Load
Do you really need the 800-channel cable option or that dish on your roof? You’ll be surprised at what you don’t miss. How about magazine subscriptions? They’re not terribly expensive, but every penny counts. It’s nice to have a library of books, but consider visiting the public library or half-price bookstores until your debt is under control.
Never, Ever Miss a Payment
Not only are you retiring debt, but you’re also building a stellar credit rating. If you ever move or buy another car, you’ll want to get the lowest rate possible. A blemish-free payment record will help with that. Besides, credit card companies can be quick to raise interest rates because of one late payment. A completely missed one is even more serious.
Do Not Increase Debt Load
If you don’t have the cash for it, you probably don’t need it. You’ll feel better about what you do have if you know it’s owned free and clear.
Shop Wisely, and Use the Savings to Pay Down Your Debt
If your family is large enough to warrant it, invest $30 or $40 and join a store like Sam’s or Costco. And use it. Shop there first, then at the grocery store. Change brands if you have to and swallow your pride. Use coupons religiously. Calculate the money you’re saving and slap it on your debt.
Each of these steps, taken alone, probably doesn’t seem like much. But if you adopt as many as you can, you’ll watch your debt decrease every month.
Related articles
- Are you sure you want to do a debt consolidation (cascadesatstluciewestblog.wordpress.com)
- Credit cards and your business – what you need to know (simplybusiness.co.uk)
- What’s More Important: Saving or Paying Down Debts? (dailyfinance.com)
Credit Reports: What You Should Know
How do lenders determine who is approved for a credit card, mortgage, or car loan? Why are some individuals flooded with credit card offers while others get turned down routinely? Because creditors keep their evaluation standards secret, it is difficult to know just how to improve your credit rating. It is important, however, to understand the factors and to review your credit report periodically for any irregularities, omissions, or errors. Reviewing your credit report annually can help you protect your credit rating from fraud and ensure its accuracy.
Credit Evaluation Factors
Many factors determine your credit. Here are some of the major factors considered:
- Age
- Residence
- “Authorized user” payment history
- Checking and savings accounts
- Bankruptcy
- Charge-offs (Forgiven debt)
- Child support
- Closed accounts and inactive accounts
- Jobs
- Payment history
- Recent loans
- Collection accounts and charge-offs
- Cosigning an account
- Credit limits
- Credit reports
- Debt/income ratios
- Department store accounts
- Payment history/late payments
- Finance company credit cards
- Income/income per dependent
- Mortgages
- Revolving credit
- Name/alias
- Number of credit accounts
- Fraud
- Inquiries
These factors may be used, and weighted, in determining credit decisions. Credit reports contain much of this information.
Obtaining Your Credit Reports
Credit reports are records of consumers’ bill-paying habits. They are collected, stored, and sold by credit bureaus.
Credit reports are also called credit records, credit files, and credit histories. Under federal law, you are allowed access to free credit reports. There are three major credit bureaus and thousands of smaller ones where you can obtain a credit report.
These credit bureaus offer free credit reports, as well as monthly credit reports and services for a fee.
- Experian Credit Bureau: 888-397-3742 (cost: free or $14.95 monthly)
- Equifax Credit Bureau: 800-685-1111
- Trans Union: 877-322-8228 (cost: $11.95 monthly)
If you have been denied credit, you can request that the credit bureau involved provide you with a free copy of your credit report – but you must request it promptly. Otherwise each of the bureaus will provide you a copy of the report for a fee. You can request a copy from their websites (see links above) or toll-free numbers (also listed above).
Disputing Errors in Your Credit File
The Fair Credit Reporting Act (FCRA) protects consumers in the case of inaccurate or incomplete information in credit files. The FCRA requires credit bureaus to investigate and correct any errors in your file.
Tip: If you find any incorrect or incomplete information in your file, write to the credit bureau and ask them to investigate the information. Under the FCRA, they have about thirty days to contact the creditor and find out whether the information is correct. If not, it will be deleted.
Be aware that credit bureaus are not obligated to include all of your credit accounts in your report. If, for example, the credit union that holds your credit card account is not a paying subscriber of the credit bureau, the bureau is not obligated to add that reference to your file. Some may do so, however, for a small fee.
Fair Credit Reporting Act (FCRA)
This federal law was passed in 1970 to give consumers easier access to, and more information about, their credit files. The FCRA gives you the right to find out the information in your credit file, to dispute information you believe inaccurate or incomplete, and to find out who has seen your credit report in the past six months.
Understanding Your Credit Report
Credit reports contain symbols and codes that are abstract to the average consumer. Every credit bureau report also includes a key that explains each code. Some of these keys decipher the information, but others just cause more confusion.
Read your report carefully, making a note of anything you do not understand. The credit bureau is required by law to provide trained personnel to explain it to you. If accounts are identified by code number, or if there is a creditor listed on the report that you do not recognize, ask the credit bureau to supply you with the name and location of the creditor so you can ascertain if you do indeed hold an account with that creditor.
If the report includes accounts that you do not believe are yours, it is extremely important to find out why they are listed on your report. It is possible they are the accounts of a relative or someone with a name similar to yours. Less likely, but more importantly, someone may have used your credit information to apply for credit in your name. This type of fraud can cause a great deal of damage to your credit report, so investigate the unknown account as thoroughly as possible.
We recommend an annual review of your credit report. It is vital that you understand every piece of information on your credit report so that you can identify possible errors or omissions.
If you have any questions about how to obtain your credit report or how to interpret what’s in your report, contact me.
Reads from Last Week
Five Critical Facts About Business Growth is a video blog post from Chad over at Bordeaux and Bordeaux in Charlotte North Carolina. I haven’t posted much from his blog but that’s because I am to lazy to watch so I can’t really say if they are worth watching or not. However I did watch this one and every business owner needs to watch this one. He discusses the following five facts about business growth:
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There is no such thing as a mature business or market.
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Not all growth is good growth. Some growth can be disastrous for your Company.
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Growth is a mentality – created by the leaders within a Company
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Balance growth is the key to long-term prosperity.
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Growing your business is much less risky than NOT growing your business.
If the rest of his video posts are like this I have been missing some things. Keep up the great work my friend.
Unfortunately, most young adults find themselves on their own when entering the “real world” without guidance about money and how to manage it. 7 Things About Money I Wish I Knew in My 20s is a great post.
IRS Presents: Five Facts about the Making Work Pay Tax Credit
Are you opening a new business this summer? The IRS has many resources available for individuals that are opening a new business. Here are six tax tips the IRS wants new business owners to know. IRS Presents: Six Tax Tips for New Business Owners.
Have you ever wondered how banks can offer higher than average interest rates on savings or checking accounts? Banks are in the business of making money, even if that means taking a loss sometimes. While that might sound counter-intuitive, it often works out well in the long run. So, How Do Banks Make Money by Offering High Interest Rates?
During the NATP annual conference my friend RDF ran some really great reruns. If you missed them please visit The Wondering Tax Pro
- TILL DIVORCE DO US PART – PART I
- TILL DIVORCE DO US PART – PART IV
- TILL DIVORCE DO US PART – PART III
- TILL DIVORCE DO US PART – PART II
- PAY THE SALES TAX AND AVOID THE DIVORCE LAWYER
Don’t fall for health care tax rumors
How To Prepare for Tax Increases Next Year In this Sluggish Economy
Back Taxes Aren’t Your Only Problem When Concealing Income from the IRS
This Month’s Runner Up for the Strangest Tax Form
Is extreme remodeling a charitable contribution?
“Tax Cuts Will Expire” – Geithner
Me, me, me. It’s all about me.
What the Heck is Basis, Anyway?
Don’t Get Too Anxious to Stuff Just Anything into Your IRA
How Would the Expiration of the 2001 and 2003 Tax Cuts Affect Individual Taxpayers? With just a week left before Congress leaves town for the August recess, the fate of the 2001 and 2003 tax cuts is up in the air.
Last week I wrote About The Three Most Common Payroll Tax Mistakes and I shared one of my reasons and thought process as to why I have started writing about non-tax stuff. Truth is as the non-tax stuff goes, the bookkeeping is very important for your taxes. The IRS even tells you in Publication 583 (1/2007), Starting a Business and Keeping Records “Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses.” As I read the second sentence or even interrupt it, the IRS is saying to you (business owners), it doesn’t matter if you use QuickBooks, Peachtree, or even Microsoft Office Accounting (before it was discontinued), but you need something “that clearly shows your income and expenses.” I promote QuickBooks because it is in my opinion, with over 12 years as a self-employed tax accountant, that QuickBooks is the best suited for those who keep their own books.
The Income Statement (Profit & Loss) Part 1
The Income Statement is one of the three main financial statements. (The other two being the Balance Sheet and Cash Flow Statement.) The important thing to remember about an income statement is that it represents a period of time. As opposed to the balance sheet, which represents a single moment in time.
The income statement is sometimes referred to as the profit and loss statement (P&L), statement of operations, or statement of income. In QuickBooks it is the P & L.
This financial statement indicates changes in the financial position of the business for a particular period of time, i.e. month, quarter or year. The portion of the income statement that deals with operating items is interesting to investors and analysts alike because this section discloses information about revenues and expenses that are a direct result of the regular business operations. The non-operating items section discloses revenue and expense information about activities that are not tied directly to a company’s regular operations. For example, if the sport equipment company sold a factory and some old plant equipment, then this information would be in the non-operating items section.
An Income Statement is related with the Balance Sheet in the terms of net result for the period, i.e. profit or loss for the period from this financial statement goes to the Balance Sheet as an increase or decrease in Retained Earnings (result not distributed to the shareholders as dividends).
The Items Included in
Considering the structure of Income Statement, it is important that this statement indicates not only net result for the period, but also fundamental parts, which make this result. So this statement will include the following:
Revenue:
amounts earned for the goods sold or services provided
Cost of Sales:
cost of goods sold or services provided. In case only goods are being sold, this items will be called Cost of Goods Sold. Here all the cost which are directly related to the revenues earned are included
Gross Profit:
difference between two mentioned items, which indicate how much business earns from the main operations
Operating Expenses:
this items consists of the expenses which cannot be directly related to the cost of goods sold or services provided. Examples can be salaries of accountants, administrative office space rent and other
Operating Profit:
difference between Gross Profit and Operating Expenses
Interest Expenses:
these expenses are shown separately to indicate financial costs the business incurs and whether it earns sufficient profit to be able to pay interest on time
Net Profit (Loss):
this is the net result for the period. If it is positive, we have a profit. If it is negative, we have a loss.
Important to notice, that the Income Statement is usually prepared on the accrual basis, i.e. income and related expenses are recognized despite the fact that cash was not yet paid or received, but based on the obligation from customers to pay for goods sold or services provided and based on the obligation of the business to pay its liabilities.
It is very important to format an income statement so that it is appropriate to the business being conducted.
Income statements, along with balance sheets, are the most basic elements required by potential lenders, such as banks, investors, and vendors. They will use the financial reporting contained therein to determine credit limits
It may look like this:
Personal Finance 101: Budgeting – it doesn’t have to hurt
With the economy as it is and all that’s happening in our country and around the world, most people are looking for ways to save money, cut out waste, spend less, tighten their purse strings -whatever you want to call it. We all are trying to survive on less, to make more money or figure out ways to make what we have go further. I thought this post especially timely as the holiday season is upon us and many of us are wondering how Santa is going to make it all work this year.
There are a couple of basic things involved with managing your personal finances successfully; know how much money is coming in and how much money is going out; then make sure more is coming in then going out. It sounds easy enough but actually requires some careful planning.
A budget plan is a chart that shows you the flow of money in your everyday life. A budget can help you determine where you are overspending as well as help you adjust bad spending habits. Usually by making slight adjustments to your budget, you can create the ability to save more or free up money to make larger payments on your debts or at this time of year, buy presents for your family and friends. YAY for presents & smiles & fun & good food & egg nog!! Oops, I got a little carried away, back to the budgeting plan.
The first thing needed to create a successful budget plan is to know exactly the amount of net cash you have coming in each month. So start by gathering your paystubs, deposit slips, if you have reoccurring monthly bank deposits (alimony or child support pmts, SSA, pensions, etc). It’s a good idea to have either a monthly budget book or even an online planner. Even something as simple as an excel spreadsheet works, but you need something where you can record your expenditures and income. Start by keeping track of all your monthly living expenses and other monthly bills. There’s really no need to spend money on fancy budgeting software – you can go online and Google “budget plans” and you’ll find some great household budgets you can download, copy or print for free that are pretty good and will get you started. You can “tweak” it to fit your own expenses – there’s usually a couple miscellaneous categories already listed anyway. You can even do this on a piece of paper.
I always suggest that you start with the “known” or fixed expenses each month, like car payment(s), rent/house payment, car insurance, medical insurance, etc. and enter those. Then go to your bills that you need to get a 12-month average for, like your utilities. By looking back on your heating bills, phone & electric bills from the last year, you can get an average monthly amount and in many cases the utility companies will let you go on a monthly budget plan if that’s easier for you. If you don’t know or didn’t keep records of those bills for the last 12 months, most utility companies can get you those figures easy enough if you ask, in most cases at no cost to you, or a very minimal fee. Groceries are a little harder to determine as well as eating out so the best way for you to truly set an accurate budget is to track every single expense for at least one full month, usually two months in a row if you’re doing this for the first time or it’s been more than a couple of years since you’ve done a budget. I know it can be a pain in the behind but it helps you to get the most accurate picture of your finances and a place to begin and usually people find out they’re spending a lot more on things they don’t really need or didn’t know they were spending that much money on and it helps tremendously in giving you back control.
The other thing in creating an accurate budget plan is to remember to include all the little things most of us don’t think about, like buying a specialty coffee or latte on the way to work or a few lottery tickets a week or month, garbage pick-up, paper products, a drink or two out with friends, kids or adults lunch money each week. Lunch money can add up real quick as I found out in my house when my 3 daughters were all in 3 different schools and I was shelling out lunch money every morning. When I added it up, I had to add another category to my budget plan since it was over $150 per mth just for them! And yes sometimes I did pack their lunches but that still cost me on average $2-3 per day (about the same as hot lunch) so I still had to plan for and budget that in – and it wasn’t something I thought of at all at first.
You also really need to control your emotions and try not to “impulse buy”. I know…I know sometimes you just have to have that chocolate bar (ladies you know what I’m talkin’ about) or a Friday night beer or two after work, and by no means am I suggesting you cut out all those types of indulgences – after all, you work hard for your money and if you can’t buy a few frivilous fun things to relax or reward yourself once in awhile, then what’s it all for? I agree…but the point here is in order to make sure you have enough money at the end of a given month to be able to do those things while still paying all your bills and saving some money, then you have to first have an idea of what you’re spending and where. Most of the time people find they can save a substantial amount ($100′s per mth sometimes) by cutting out things that they really won’t even miss; like the morning latte. Or….still get a coffee on the way to work if that’s what you really like, but make it a regular for $1.50 instead of a specialty drink at $4. Or if you usually go out to lunch at work and you really enjoy it, try going out only 3 times per wk then pack some of the time. Or eat out where you know you’re likely to have leftovers. That way if it’s an $8 lunch but you can eat the rest the next day, then it now became a $4 lunch or give yourself a weekly “lunch out” budget. It might sound a bit silly but I know for me, as a single mother of 3, at times when things were so very lean, I had to do that to survive or be able to get birthday presents, and I still do the “weekly lunch out” thing – it just makes good sense to me. And none of this is complicated or has negatively impacted my daily life…I’m still feeling “fulfilled” each day whether I pack a sandwich and some fruit from home or got out with friends from work that day.
Remember to keep all receipts for 2 months and then you can go back and create an accurate budget plan. Then you can pick and choose for yourself where you want to cut things, change things in order to meet your financials goals. Whether it’s saving money for the future (which that’s a topic for another day) or coming up with money for Christmas or birthdays, a vacation fund or maybe it’s just being able to pay all your bills ontime and not feel so stressed. Whatever it is that you want to accomplish, ask yourself ”Do I really need to buy this? Can I cover it in my budget? Is it going to help me with my long term goals? Can I live without it today? We all hope to have discretionary income each month to have fun with but sometimes we have to learn to cut back temporarily (hobbies, entertainment, specialty clothes) to have more in the long run. I hope this helps – maybe even inspires you to get started today and hopefully add a few more presents under your tree this year.
Kimmer
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