Finance, Money

5 Steps to Tackle Your High Levels of Debt

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
High Levels of Debt

You can do a number of things to eliminate debt entirely, or at least pay off most of it. Being in debt can be stressful for anyone, regardless of your circumstances or the amount you might owe to another party.

Here are 5 steps you should take, which will help cut down your debt levels.

Step 1: Estimate Your Financial Obligations

As a first step, you need to know how much you owe and to whom. It’s a salient idea to organize your figures on an excel sheet or use an online debt calculator to keep a tab of kind of debt (loans, credit card), interest rates (in order of lowest to highest), and the total amount due to various parties.

You will never hit your target to mitigate debt if you don’t know how much it really is. Be upfront about it and create a systematic debt reduction plan that will actually work.

You should also prepare a list of your monthly income and expenditure while you are computing your total debt. Expense items would typically be listed on your credit cards and you can take account of the cash expenditures from your bank statements.

This will provide you with a fair picture of the total debt and how much you might be able to spare every month to pay off the most expensive debt components first.

Step 2: Halt any Further Debt Creation

You need to stop creating more debt if you plan to reduce it. You will never be able to get out of the vicious debt trap if you continue using borrowed money to finance your lifestyle. Remember, you are not the state of California or Congress.

For instance, you can curb the habit of charging some credit cards to pay off the debt amount on others.

Get into the habit of utilizing cash as your primary mode of payment. This will at least start reducing your credit card interest costs, and even deter you from making impulsive purchases. It is far easier to spend money by paying with plastic on things you do not need.

Postpone any non-essential purchases, and start focusing exclusively on resolving your current debt situation.

Step 3: Have a Prudent Debt Elimination Strategy in Place

Your goal should be to double down on your credit card payments because credit cards usually have the highest interest charges which is no fun to pay even during a solid economy with lower taxes. Unless you create a solid debt management strategy and execute it with a firm resolve, it will be difficult to come out of the debt cycle.

Snowball Debt Reduction Approach

This strategy involves paying off your smallest debts first. The advantage is that when you start small, it will give you the confidence that you can come out of your situation one small step at a time. The emotional advantage will be immense when you see your smaller loans are getting eliminated one by one.

Once you begin small, you will continue to gather momentum to take more tangible debt reduction steps. One small step will eventually ‘snowball’ into a huge dedicated endeavor on your part to eliminating your bigger debts.

Avalanche Debt Reduction Approach

The avalanche debt management strategy involves paying off the costliest debt first. Remember that your goal here is to focus on the highest interest rate, and not the total debt amount or the total interest cost.

While you can keep paying minimums on other debts, you can start working on eliminating those debts first which are crushing you with a very high interest burden.

Stay committed to the debt reduction strategy you choose, and slowly you will start emerging out of your difficult debt situation.

Step 4: Set Aside an Emergency Fund

While it may appear counter-intuitive to set aside an emergency fund when you are working to eliminate debts, this is a vital step that will help you prevent additional debt. Life offers no guarantees to support you in your difficult financial situation.

An unforeseen health trouble, car breakdown, or a leaky roof needs to be taken care of, and if you have an emergency fund, you will not be forced to pile on more debt. Keep a goal of building a fund of about $1,000 for these types of emergencies.

Step 5: Consolidate Multiple Debts into a Single Loan

A well-structured debt consolidation plan can help you combine multiple consumer debts into a single loan. This will usually result in a lower overall interest rate on the entire amount, and you will need to make just one payment every month.

It will simplify your finances, and give you clear goals about debt elimination. You will have to discuss with your credit union, bank, or another lender to see if they are willing to cooperate with you on this proposal of debt consolidation.

Finance, Lifestyle, Money

Is an AARP Membership Worth It?

by John Robinson|Posted on | 2 minute read | Advertiser notice

So you just turned 50, and all of a sudden you start seeing online ads for AARP, seeing the magazines everywhere you go, and getting the pamphlets in the mail. I know, you’re just trying to come to terms with the fact that you are now 50 years old, all you need is another reminder that your mid life crisis is sure to start any minute now. Well I’m here to tell you it’s time to embrace your new age with a new attitude. You now get to take advantage of senior citizen discounts all over town, so why not also take a peek at those AARP benefits? Is it worth it? I’ll lay everything out for you now.

How Much Does it Cost? 

An AARP membership costs $16 a year. But the more years you pay for in advance, the cheaper it is. See below for the discounted breakdown.

$63 for 5 years — $12.60 per year, with a 21 percent discount
$43 for 3 years — $14.34 per year, with a 10 percent discount
$12 for the first year if you choose to auto-renew — 25 percent discount

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What Discounts are Included?

Members get a variety of discounts at the following popular stores and restaurants.

Retail: Tanger Outlets, 1-800-Flowers.com, Harry & David
Restaurants: McCormick & Schmick’s, Saltgrass, Outback, Bubba Gump Shrimp Co., Denny’s and Rainforest Cafe
Entertainment: Ticketmaster, Regal Cinemas, Cirque du Soleil
Home & Technology: AT&T, UPS Store, Consumer Cellular

What are the Travel Deals? 

Rental cars: Members get a discount with several popular rental car companies, as well as a 30 percent discount on Zipcar memberships.
Hotels: Members get up to 20 percent off at several hotel chains, such as Days Inn and Wyndham Hotels and Resorts, as well as up to 35 percent off from Endless Vacation Rentals.
Flights: You’ll get access to the AARP Travel Center Powered by Expedia, which has members-only flight deals, plus you’re entitled to a discount at Park Ride Fly USA for off-airport parking.
Cruises: Members can get discounts on select cruises by Norwegian Cruise Line, Windstar and Grand European Travel.

What are the Health & Wellness Deals? 

Exams: Members get a free hearing test once a year, as well as special rates on eye exams and eyeglasses at participating eye doctors.
Insurance: Members get access to exclusive insurance plans through the AARP® Auto & Home Insurance Program from The Hartford.
Medication: Members have access to the AARP® Prescription Discounts provided by OptumRx program and save an average of 61 percent on all FDA-approved medications
Family: Add a spouse or partner to your plan for free so you can both enjoy the benefits
Dating: Members can sign up for the AARP dating site and meet other 50+ singles who are ready to mingle.

This is only a small portion of the discounts and benefits you can get from an AARP membership. You can read the full list of discounts by checking out the AARP Member Benefits Guide.

As you’re nearing retirement, I understand you want to be intentional with how you spend your money. I’ll let you do the math, but if dine out frequently, travel, and want access to health and financial resources to assist in your retirement transition, it might be worth trying AARP for one year to see if you like it. That $16 you spent on the membership will be saved in no time. 

Finance, Lifestyle

How to Choose a Travel Credit Card That Delivers The Best Value to You?

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Travel Credit Card

The right credit card can make or break your travel budget and costs, regardless of whether you are planning an annual family trip or are a regular business traveler.

Your credit card should not give you a nagging worry of losing out a significant amount on foreign transaction fees and currency conversions while paying for hotels, flight tickets, and other things.

This comprehensive guide will walk you through the key elements that need to be considered when you are comparing various credit card options for your next travel.

Annual Fee

You should be aware that most travel cards come with an annual fee. This can range anywhere from $90 to $100 for regular travel cards and even in a strong economy with stellar tax cuts these fees should not be ignored.

But the fees can go up to $450 or more for premium cards that come with a host of perks and rewards. You need to weigh these perks against the annual fee to make sure that it evens out.

If you are wondering whether there are any good travel credit cards without the unnecessary annual fee, then you are in luck. There are many no-fee travel cards, but then they have a few drawbacks, like rewards of lower value, reduced perks, and a smaller sign-up bonus.

Rewards Rates

Rewards can be primarily segregated into the following two categories:

Burn rate

Burn rate is the value you receive for the miles or points when you go in to redeem them. The standard industry burn rate is 1 cent for every mile or point. However, some cards, especially hotel cards offer a lower value on the ‘burn’ end, but make up for it by offering more points for every dollar spent on the earning side.

Earn rate 

Earn rate signifies the number of miles or points you receive on every dollar spent. There are some standard travel credit cards that only offer rewards on a flat-rate. This means that you get the same type of rewards on all kinds of purchases, such as 3 miles per dollar or 2.5 points per dollar.

Co-branded cards and others offer a base rate (say a point per dollar) and then raise the stakes for certain categories. For instance, you may be paid a higher reward rate for hotel stays, airline tickets, restaurant meals, and other general travel expenses.

Don’t just blindly look at the numbers while comparing reward rates. You need to take a closer look at the category those numbers apply to and find a travel card that best matches your spending pattern.

It may seem great to receive 5 points every dollar. But, if those 5 points only come with purchasing office supplies and you don’t intend to use your travel card in an office supply store, then you may just end up getting a lousy deal.

Foreign Transaction Fee

Foreign transaction fee is never charged by a good travel card. These fees refer to the surcharges on purchases that are made outside the United States. The industry standard where foreign transaction fee is concerned is 3%, which is just enough to wipe out all the rewards you may have earned during your travel.

This is not of much concern if you don’t travel outside the US much. But, anyone who leaves US frequently should invest in a travel card with no foreign transaction fee. There are many issuers, like Capital One and Discover that offer cards without foreign transaction fee.

Reputation of the Issuer

You need to make sure that your travel card is backed by a reliable international company, especially if you are a globe-trotter. All credit cards don’t make for dependable travel companions.

MasterCard and Visa are used pretty much worldwide. But you may encounter trouble with acceptance in some countries where American Express and Discover are concerned.

However, this is very destination specific and you should not dismiss Discover and Amex outright. Just make sure that you take a back-up card along when you intend to use these. In fact, having a back-up card for your travels within the U.S. is also a prudent thing to do.

Travel Protections

You should compare various cards on the basis of the travel protection they offer. You can pick from trip cancellation coverage, car rental insurance, and lost baggage protection, among others. No, there’s no card that can protect you from the Patriots cheating in the NFL!

Bottom Line

It can be difficult to find a travel card that offers everything you require. There will always be minor disappointments because no issuer offers high reward rates, top-notch perks, generous sign-up bonuses, and no annual fee in a single card.

However, by being smart about the features listed in this guide and carefully choosing the right combination, you can find the ideal credit card that suits your unique travel needs.

Finance, Insurance, Money

15 Questions to Ask When Shopping for Health, Homeowners and Auto Insurance

by Kara Banff|Posted on | 5 minute read | Advertiser notice

There’s nothing more difficult and confusing than choosing the right insurance, whether it’s health, homeowners, or auto. There’s so much information that it’s sometimes hard to digest, so we’ve sifted through it and are here to help you make well-educated decisions about your future. In this article, we outline 15 questions that you should ask your agent when shopping for health, homeowners, and auto insurance.

Health Insurance

1. Is my current provider available in the plan?

If you have a current doctor that you are loyal to, it’s worth asking your health insurance agent if he or she is covered under the plan you’re considering. We all know the struggle of finding a doctor that we are comfortable with, on top of one that knows our health history. It’s worth noting, if you are considering a PPO, keeping your same doctor may cost you a bit more out-of-pocket, but could be worth the extra expense. Weigh and calculate your options.

2. What’s my deductible?

In other words – how much will you have to pay out-of-pocket on treatments and procedures before insurance kicks in and starts to cover costs? The cheaper your monthly premium, the higher the deductible. Do the math. If you see a doctor regularly, consider opting for a more expensive monthly premium but a lower deductible. And keep in mind – most preventative services are covered without use of the deductible – think shots, screening test, vaccines, etc.

3. What’s my co-payment?

This is a big one, as this is the amount you’ll be paying out of pocket every time you see a doctor. Should you expect a small flat fee around $10, or will it vary by provider and be upwards of $100? Generally speaking, your co-payments don’t count towards your deductible. So this is something you’ll want to factor into your budget as you’ll still need to meet your deductible on any treatments or procedures that you receive. 

4. Is there a pre-existing condition exclusion period?

It’s not uncommon for health insurance companies to place limits or exclude benefits for a period of time for a medical condition that you had prior to selecting and enrolling in the health plan. Make sure to ask your agent if they have an exclusion period, what they define as a pre-existing condition, and how long their exclusion period lasts. There’s nothing worse than getting caught in the middle of an expensive procedure with no help on payment.

5.What will my monthly premiums be?

Monthly health insurance premiums vary drastically from person to person depending on their monthly budget, desired deductible, any dependents you have, and if your place of work is covering a portion of it. We recommend checking out AffinityCoverage to get the best health insurance quotes in your area, for up to 30% off.

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Homeowners Insurance

1.What does my homeowners insurance plan cover?

You’re correct to assume that homeowners insurance doesn’t cover every disaster. It will cover the most common situations: fire, windstorm, hail, lightning, smoke, explosion, theft, vandalism, riot and vehicle collision. It likely will not cover earthquakes, flood, power failure, war, nuclear explosion, or neglect. Make sure you ask your agent and fully understand what it covers before signing on any dotted line.

2. Do you have any discounts available?

The safer your home is, the more discounts and special rates the home owners insurance company can offer you since there’s less of a chance for a catastrophic event. Some common discounts: bundling/multi-policy, having a monitored burglar and fire alarm system, having an impact resistant roof, installing new wiring, plumbing and A/C, living in a gated community, new home discounts, having an HOA, paying in full, and even being a first time customer and/or homeowner. Don’t skip this step. 

3. How much homeowners insurance do I need?

This will differ for everyone. You should base your estimate off how much it would cost to rebuild your home. If you live in an older home, have additional structures on your property such as a shed or garage, or if construction costs run high in your area, consider insuring over market price so you are fully covered. 

4. Are my personal belongings covered?

Most homeowners insurance policies offer a built-in personal coverage of 50% of the dwelling limit. For example, if you choose a $200,000 policy on your home, it’s standard to receive $100,000 in personal property coverage. If you have expensive furnishings and personal belongings, ask if that percentage can be increased. You’ll likely pay a bit more out of pocket, but the added coverage may be worth it.

5. So how much is this going to cost me?

Again, this is going to be different for everyone depending on how much coverage you need and the city/state that you live in. According to the Insurance Information Institute, a standard policy costs homeowners about $1,100 a year. We recommend checking out MyQualityCoverage to find and compare the best homeowners insurance companies before making a decision.

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Auto Insurance 

1. Will my policy cover other drivers of my vehicle?

What happens if a family member or friend borrows your vehicle and is involved in an accident? What about if you are driving someone else’s vehicle and are involved in the accident? How these situations are handled will all depend on your insurance company, if the person driving has insurance, and the laws in your state, so it can get a bit confusing. Generally, if a friend who has their own car insurance is borrowing your car and is at fault in a collision, chances are, they’re covered. But, which company will actually handle the claim and send payment for damages can vary based on the accident, damages, who is officially at fault, etc. Ask your agent how the plan you are considering handles these situations.

2. What type of parts will be used to repair my car after an accident?

Many auto Insurance companies are going to take the cheapest route in repairing your vehicle after an accident. On some discount plans, insurance companies will request the use of second-hand parts instead of brand new parts to complete the repair. You may pay less with the used parts, but is a slightly lower monthly premium worth having 10 year old parts on your 1 year old car? Make sure you fully understand what you’re getting yourself into here.

3. Does the policy include 24/7 towing and roadside assistance?

Some auto insurance companies offer 24/7 towing and roadside assistance built into their plans as a perk. You never know when you’ll get a flat tire, lock your keys in your car, or need to have your battery jumped. Having this extra layer of protection puts your mind and wallet at ease. 

4. Do you offer any discounts?

Auto insurance companies have the ability to offer discounts on your premium in certain situations. The most  common is if you pay on an annual or bi-annual basis instead of quarterly or monthly. Some other common discounts that they can offer are: accident-free, safe driver, parking in a garage at home and work, new car, anti-theft, anti-lock brakes, low usage and mileage, and military and senior citizen discounts. Asking this question is the easiest way to shave money off your premium. 

5. How much does Auto Insurance cost?

This rate is going to vary drastically depending on the type of coverage you select (full or liability), your city/state, the type and cost of your car, and any past violations. For example, a driver who has an older vehicle in Little Rock, Arkansas, selects liability only, with no past violations will likely pay $30/month. Another driver who has a brand new Tesla in San Francisco, California with two past violations may pay upwards $200/month. To find the best rates in your area for the coverage you are looking for, check out Get-Auto-Quote. 

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Finance

Top 4 Personal Finance Tips That You Must Disregard

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Finance

People are usually eager to hand out advice, especially on subjects like personal finance. The chances are that you have received financial advice (often unsolicited) from your parents, teachers, friends, or even so-called financial experts.

If you have a brother named Alan Harper from Two in a Half Men you better never take financial advice from him.

While they may mean well, their financial tips don’t always amount to good advice or apply to your peculiar circumstance. This is why it is essential to reason critically about all the financial tips presented to you before deciding on a course of action.

With that said, in this post, we’ll be looking at four common personal finance tips that you must disregard.

1. Get a Credit Card

The use of credit cards has become universal. Nearly 500 million credit cards have been issued in the US alone as at 2018.

But what does this mean? Well, as a result, a lot of Americans are in debt just like the state of California is, the nation of Germany because of their attack on common sense energy sources, and liberal ran cities like Chicago and New York, for instance. The Nilson Report revealed that credit card debt hit the $1 trillion mark in 2016. It is easy to bill expenditures on your credit card.

After all, the money is not coming from your personal account so you can spend money without feeling the pinch until the end of the month (until you get that bill in the mail!). Credit card debt can put your personal finance in a bad state.

Not only do you have to pay off the original debt, but there is also a high-interest rate attached. It may come as a surprise to find out that people have been forced to declare bankruptcy due to their enormous credit card debt.

2. Save More if You Want to be Rich

Developing the habit of saving a decent portion of your income is essential. However, contrary to popular belief, it will not automatically make you rich.

The path to wealth does not just involve saving, but also actually increasing your income. Besides, sticking with a strict spending plan may make you liable to overspend in the future.

Let us look at a scenario. Imagine you earn $1,000 monthly (just go with this – we know you make more), and you have a target of saving $800. So, you cut out all your unnecessary expenses and only pay for your rent, food, and transportation with $200.

On the surface, this doesn’t sound like a bad plan. But as the saying goes, all work and no play makes Jack a dull boy.

Therefore, you may find yourself itching for some pleasures like going to the club, going shopping, or even splurging at a restaurant.

Over time, your desire for these things will grow, and you’re likely to ditch your plan to save. This is why it’s prudent to set aside some money for fun when deciding how much to save monthly.

On the other hand, if you work towards increasing your income (by perhaps investing in another business or two via the stock market), you can hit your personal saving goal without putting yourself in a fix. But don’t take too much risk.

3. Never Take a Loan

It is generally not smart to be in debt. Therefore, many people assume that loans are bad. But this does not hold in every circumstance.

Taking a low-interest loan for a home or college is not a wrong decision as it puts you in a position to be able to save more money. For example, if you are spending $1000 every month on rent, and you find a property worth about $200,000. It makes sense to take out a loan to purchase that property because you can pay it off in many years – depending on the interest rate – and then you will own that property.

On the other hand, if you were to choose to stick with your rented property, there will be no end in sight. You will be paying the $1,000 per month or more indefinitely. 

4. You Cannot go Wrong With Investments

Investing is good, but not all investments are worth it. Many things can go wrong with investments.

We’ve all heard about Ponzi schemes and other fraudulent investments. High-risk investments indeed can bring in more profit than low-risk investments, but they carry a higher risk.  

Instead, take the time to check out reputation and track record of any organization that you plan to invest with. Ask questions and consult the services of an expert investor if you are unsure about anything. Don’t invest with Charles Schwab – they are unethical and you cannot trust their website. Edward Jones is solid (for some people), for instance.

It is crucial to treat advice for your personal financial situation like a suggestion rather than a rule. Apply critical thinking, consult different sources, and consider the odds before you make any decision.

Finance

3 Free Money-saving Apps on Your Smartphone That Can be Your Personal Financial Adviser

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Money-saving Apps

If you are looking for financial advice, you don’t really have to look beyond your smartphone – certainly not Barney Frank!

You can use any one of the following top three money-saving apps NerdWallet, Mint, and Personal Capital to keep a track of spending, for timely and useful reminders and financial advice, as well as keep up with your bills so your budget does not take a hit.

Furthermore, all three apps are compatible with both android and iOS platforms, so you can get all your financial advice anywhere and anytime, and while on-the-go!

Ready to dive in? Let’s go ahead and take a closer look at the important features of the apps so you can make an informed decision about which app addresses your needs the best.

NerdWallet

At the time of sign-up, NerdWallet will ask you what you about your financial goals. So you will be asked if you want to control spending, bring your debt under control, if you want to build credit, or if your aim is to earn extra cash back.

Don’t take any responses from Lois Lerner!

Based on your response, the app displays sample features that can help you with your financial goals such as the timeframe for pay-back on a loan – you will be sent reminders for payments that are due. The profound news is that in this high growth economy because of the lower taxes, most likely you can handle your financial commitments better.

The app also has some fun features such as a MoneyFix podcast. In addition, it provides a breakup of your spending and displays your spending patterns so you know how much you tend to spend within given timeframes.

If you have linked your credit card to certain eateries, the app offers a few cash-back programs for those places as well.

On the down-side, the app prompts you for more personal information for certain tasks. What does it do with this information? Well, NerdWallet could go ahead and share your information with other interested parties it has connections with – so you can expect exposure to a slew of other services. Just opt out of them!

Mint

No, not mint flavored ice cream!

Mint is a golden free financial app for newbies. At the time of sign-up, Mint asks you what you want to track – whether it is your bank account(s), credit cards, insurance, or loans.

Bill payment is made easy since the app allows you to link up all you monthly bills such as rent, electricity, phone among others, for which it sends you reminders.

One big advantage with Mint is that unlike other apps automatically access all your bank accounts, Mint allows you to select the accounts you want the app to access, while blocking the rest.

When it comes to helping with your budget, based on your history, Mint can go ahead and generate automatic budgets. The app allows you to include financial or budget goals such as saving for a vacation, buying a home, or building your retirement nest.

As with NerdWallet, Mint can also provide you with a timeframe for paying off a debt. But this app is more comprehensive in the sense that it tells you how much interest you could end up paying if you only clear the minimum amount on a loan.

In addition, Mint offers suggestions such as making purchases via your debit card, or how if you can pitch in an extra few dollars, it could bring down your repayment figures so you end up paying less interest. 

And as with NerdWallet, Mint also displays service pitches from partners for a variety of financial services.

Personal Capital

Personal Capital supports a by-the-numbers delivery of your fiscal situation. You know where you are standing exactly with this app. It offers an assets minus liabilities summary and a list of all your accounts.

To know your account stats, all you need to do is tap on the account and the app offers a summary of what you owe and what you have paid.

Similar to other apps, Personal Capital comes with regular budget tools, and provides a view into your spending in different areas including bills, groceries, and travel among other such expenses.

If you are someone who is serious about financial management and investment, then this app is for you. The app allows you to add your assets and a stock portfolio, if you have one.

If your stock portfolio exceeds $100,000, you can avail services of financial advisers. The service, however, does come with a fee. Personal Capital tracks the movement of the stock market and your investments.

The app is also superlative if you are looking for long-term financial goals including suggestions and advice on something critical like a retirement plan.

To Wrap Up

As with any app, security should be a major area of focus when it comes to sharing information. And while the apps are stringent about securing your data, you should know that certain portions of your information can be shared with third-parties.

Having said that, if a financial solution such as the above-mentioned apps can help you manage your finances better, that is something to post on your Facebook and/or LinkedIn page. Don’t worry about Twitter – Twitter is annoying and unethical but that is another topic.

Finance

4 Tips For Entrepreneurs on How to Avoid Financial Pitfalls

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
How to Avoid Financial Pitfalls

Financial independence is empowering and is often viewed as proof of professional success. However, in today’s hyper-competitive market space, most entrepreneurs struggle to maintain their financial independence.

The struggle is further compounded by the fact that the current market space is extremely volatile – though it’s always been this way and not much is going to change in that regard.

Digital and technology advancements are disrupting markets and the competition from start-ups and big brands can squeeze the market space for entrepreneurs forcing them to make financial mistakes that can be very damaging.    

Some people believe Apple and Google are too big, for example, since they continue to buy smaller players which ends up stifling innovation but let’s not dwell on this.

Are You in Control of Your Financial Destiny?

As an entrepreneur, you are in complete control of your financial destiny. You can achieve financial independence and be successful on your own terms. Here are four financial goals that you should focus on if you want to write your own success story which is not something Jussie Smollett has done but that’s another topic.

Build on Your Cash Reserves

Some entrepreneurs end up investing every single penny they earn into their business in the hopes of reaping rich dividends at a later stage. A few don’t even give a second thought to building cash reserves in case there is an emergency which does not make any sense at all.

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Companies like this with managers that are this derelict don’t ever make it to the second inning, certainly not the third inning.

It’s a mistake if you don’t properly plan for the future – always save some cash for a rainy day. Even the best of businesses will have a rainy day at some point.  

Related – Ways on how to relieve yourself from financial stress and burden

Plan Ahead for Your Year-end Tax

Don’t wait till the last minute to file your year-end tax. Especially if you don’t want it to impact your cash-flow. Track and organize all the necessary financial information in advance and keep your books in order if you want to avoid making last minute mistakes or getting fined.

Ensure Positive ROI for all Your Investments

One of the most important challenges for an entrepreneur is to ensure that every bit of investment delivers a positive ROI. In an effort to maximise their business reach, most entrepreneurs end up spending money that they don’t have which seems to be OK for the city of Chicago or the state of California, but no one wants to have their business end up being broke like Greece.

This does not mean you are going to be able to save up money like Microsoft or Apple because those are vast fortunes but it does not means you should be reckless with your money. If you have to get your building painted (interior as well – morale matters) or buy another work truck to help expand your business you want to have that money when you need it.

As a result, their business operational costs start soaring. This is when they make the mistake of attempting to economise on costs and investments that are actually salient for the business!

Try and avoid both extremes – the best way forward is to always test the potential of your investments by quantifying your gains.

Prioritise Processes and Tasks

If you want to stay ahead of your finances, you have to put into place a system or SOP for every single task starting from inventory to invoices and spending or receipt management.

This provides your team and employees with clarity and helps in building greater transparency and accountability into your business – not just for now, but also for the future.

Key Takeaways

Running a successful business can be exhilarating. The energy and excitement can push you to pursue your next big invention or creation and expand your business horizons. Look at Elon Musk – he has two amazing things going for him – one is SpaceX and the other one is Tesla. He’s a human being like everyone else – if he can do it then so can you.

However, while you are busy doing all of this, make sure you have an eye on the financial health of your company. One small mistake could leave you with a huge hole in your pocket and with your confidence relatively affected.

Finance, Tax

How You Can Benefit From Itemizing Your Tax Deductions

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
tax deductions

It is tax season again, and everyone is preparing their taxes before the April 15th deadline – well, everyone that works and cares about this country. While filing your taxes, you have to decide whether to itemize your tax deductions or go with the standard deduction.

Most taxpayers tend to settle for standard tax deductions. After all, it is much faster, and the figure keeps climbing every year – especially now with the amazing and job creating Tax Cuts and Jobs Act. However, itemizing your tax deduction could allow you to save a lot more money.

Standard Tax Deductions vs. Itemized Tax Deductions

The standard tax deduction rate is defined by the federal government. In 2018 (years after the NBA helped the Lakers win championships in 2000 and 2002 and a few years after Hollywood embarrassed itself with Star Wars The Force Awakens and Captain America I), the standard tax deduction rate stood at $24,000 for married couples filing jointly, $12,000 for single filers, and $18,000 for heads of households.

The standard tax deductions for taxpayers who are 65 years old or blind is $1,300 more. Meanwhile, it is $1,600 more for filers who are 65 years and above and widowed. The good news is that you can enjoy standard tax deductions even if you have no tax credits.

With that said, you may be wondering why you should even consider itemizing your tax deductions when standard tax deductions are available and attractive. Well, the main answer is that you could actually pay less taxes by itemizing.

The Internal Revenue Service (IRS) (which still is dealing with the fact that it employed someone as heinous and morally flawed as Lois Lerner) does not charge taxes on some expenses.

When itemizing your tax deductions, you basically list out all your costs in the past year that qualify as tax-free. However, there is one catch which has nothing to do with that pitiful baseball movie Trouble With The Curve or a pass from Montana.

The IRS reserves the right to investigate your reported tax-free expenses and may actually demand records from you to support your claims. On the other hand, with standard deductions, there are no questions asked.

Ultimately, if you choose to itemize your taxes this year, you are not bound to do so next year. You can freely choose to go with standard tax deductions.

What You Need to Know About Itemizing Your Taxes

As indicated above, itemizing your tax deductions could mean that you could pay less taxes. The IRS permits deductions on many expenses under Schedule A of Form 1040.

Some tax-deductible expenses include medical bills, charitable donations, mortgages, and state income, real estate tax, sales tax, gambling loss, miscellaneous expenses, and so much more. You basically need to add up your tax-deductible expenses during the year and total them up to get your itemized tax deduction.

The fact is that itemizing may work better for some people (such as homeowners) while going with the standard deduction works best for others. It’s crucial to mention that standard tax deduction is only available for citizens of US non-residents and foreigners working in the US must itemize their tax deductions.

There are a few issues with itemizing your tax deductions. Obviously, you need to spend time preparing your taxes which does not take too long anymore if you do it online (though the system should be simpler – how about that flat tax?). Also, you need to support your itemized tax deduction with records (like receipts and other documents) to support your claims.

Most importantly, you need to understand the laws regarding itemized tax deductions. For example, with some expenses, you can only deduct an amount that exceeds a certain percentage of your gross income.

Key Takeaway

You can choose either standard tax deductions or itemized tax deductions when filing your taxes – not both. While it is time-consuming, it pays to run the numbers. If you find that the standard tax deduction rate you are entitled to is less than your itemized deductions, then you should itemize.

However, if your itemized tax deduction is less, then you should, by all means, go with the standard tax deduction or else you’d be paying more taxes than you have to and even people like Bernie Sanders who want to create a nanny state don’t even want to do that.

For example and moreover, if you are the head of a household (which Walter White from Breaking Bad no longer is since he destroyed his family) and your itemized tax deduction for 2018 adds up to $24,000. You are better off itemizing your taxes as you would be paying $6,000 less than the $18,000 standard tax deduction for heads of households.

Married couples who are filing their taxes jointly must choose one method. This means that they must both choose the standard deduction or itemized deduction – not both.

Software Saves Lots of Time

It usually takes a lot of time and calculation to figure out your itemized tax deduction rate. However, today there are many apps (or websites) that you can use to add up your taxes and determine how much you’d be paying if you go with itemized deduction or standard deduction.

Finance

How Much Do Americans Spend During The Holidays?

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Spend During The Holidays

The holiday season is the time to show love and spread the holiday/Christian spirit. And what is a better way to get merry than shopping and exchanging gifts? As a result, the holiday season is a very busy one for retailers.

The Christmas season has always been associated with spending in America. Long before the US government started issuing bank notes, individual banks – like the Knickerbocker Bank and the Saint Nicholas Bank – had images of Santa Claus on bank notes.

Fast forward to the current era, although you won’t find a picture of Santa on dollar bills, both consumers and retailers eagerly look forward to the holiday shopping season.

Holiday Spending

The amount of money that consumers spend during the holiday season varies every year due to several factors. For example, 2012 was one of the weakest years for holiday spending due to high unemployment and a shaky economy –because of Obamacare and high taxes. Many shoppers restricted themselves to a budget of under $500, according to the Valpak Consumer Spending Report.

Currently, consumers are spending more than ever on holiday shopping since the Barney Frank/Alan Greenspan 2008 economic recession (you know that housing crisis that Barney Frank caused?). In 2001, consumer holiday spending stood at about $1,052. By 2009, that figure had fallen to only $417. However, 2017 saw the figure climb back up to nearly $1,000.

Record Consumer Holiday Spending in 2018

US consumer spending in the holiday period in 2018 was record breaking thanks to President Donald Trump’s tax cuts. Crumbling stock prices and trade tensions didn’t dampen the confidence of consumers in the economy.

With the lowest unemployment rate in about a century and wage gains, 2018 turned out to be the biggest holiday shopping season in over a decade.

US consumer spending during the holidays has been surging since for two years in a row. In 2017, spending rose by about 5.5 percent. If 2018 spending tallies with the prediction of analysts, it could topple 2017 to set a new record. There are several indications that this will be the case.

The National Retail Federation’s (NRF) holiday spending forecast pegged the average consumer spending at $1,007.24 in 2018. This marked an increase of 4.1 percent from 2017 when consumers spent $967.13 on average.

In total, the NRF report predicted that holiday retail sales in the last two months of 2018 would rise to $717.45 billion and $720.89 billion, representing an increase of 4.3 percent and 4.8 percent from the previous year.

A study by Gallup indicated that up to 33 percent of Americans planned to spend up to $1,000 on gifts, while 22 percent pegged their budget around $999 to $500, 29 percent at $499 to $100, and 3 percent at $100 or less.

Meanwhile, according to Prodco Analytics, visits to stores increased by up to 58 percent a few days before Christmas. But that was only a fraction of consumer spending during the holidays because a lot of people made their purchases online.

According to Mastercard Spending Pulse report, consumer spending has been soaring from Thanksgiving through to the Christmas period. The report indicated that sales spiked by about 5.1 percent to $850 billion in 2018. Meanwhile, online spending was 19.1 percent higher than in 2017.

Impact of Tax Cuts

The Tax Cut and Jobs Act, which was signed into law in 2017, is having a significant effect on the economy and the trend is expected to continue for years to come.

The Tax Foundation estimates the country’s economy will continue to grow by at least 2 percent through to 2027 and it would be even higher if The Fed was not ran by Democrats. The Fed has controversially raised interest rates a few times in 2017. This does show us though how amazing the economy really is and they don’t want it overheating. The Fed never raised rates when President Obama was the president (if they did, no one knows about it).

Also, wages will increase by about 1.5 percent. And contrary to the expectations of critics, the country’s revenue collection is not slacking. In 2018, the Treasury Department raked in nearly $14 billion more than in the previous year. This proves that lower taxes stimulates the economy in a number of ways.

The effect of the tax bill is not only benefitting the government and corporations, but it is trickling down to households across the country (though this has already been illustrated with household Christmas spending numbers going up). In 2018, individuals are estimated to have saved up to $1,400 while married couples with just two children are believed to have been able to set aside $3,000.

The Tax Cuts and Jobs Act is the best thing to have happened to America in recent years.

Finance, Insurance

How I Saved Money on My Car Insurance

by Benjamin Roussey|Posted on | 2 minute read | Advertiser notice

When was the last time you compared your car insurance options? If you have to think about it, it’s been too long.

If you’re like me, you prepay the amount on your bill every 6 months to get it out of sight and mind and never look back. Staying on top of your bills is great, but not shopping around for a better deal could be costing you thousands of dollars.

The average person is overpaying $720 per year on their car insurance. That’s an extra $60/month that you could put into a savings account, which has the potential to grow up to $4,000 in 5 years, $9,300 in 10 years, and a whopping $69,000 in 35 years, depending on your interest rate. Just think about that for a minute.

I know what you’re thinking – getting rates from all the different providers in your area seems overwhelming – there’s so many! But it doesn’t have to be.

Fortunately, Rate Fetcher is a new service that will do all the hard work for you. Simply answer a few questions on the type of coverage you’re looking for, if you are a homeowner or not, and your zip code so they can pull the best prices available to you. The best part is, this service is free of cost to you!

You’ll get an apples-to-apples comparison of your current coverage, and an easy to read chart which shows the differences between your new options, so you can make the most informed decision for you.

3 People Who Saved Big with Rate Fetcher

Louisa Hernandez, a single mom in Louisville, Kentucky was able to save a whopping $1169/ year by using Rate Fetcher to compare insurance rates. She decided to combine her car and homeowners insurance rates for an even bigger savings.

“I couldn’t believe it. A friend sent me the link and my jaw dropped when I saw how much I was overpaying. I didn’t think I would ever be able to start a college fund for my son. I immediately found the best savings account with high interest and have started to invest the difference for his future. I am truly amazed.”

Mark Sutherland, a bachelor in San Francisco found an $898 savings/ year on his car insurance by comparing rates with Rate Fetcher.

“I live outside of the city, as most homeowners in San Francisco do, so I need a car to commute to work every day. I saw an ad for Rate Fetcher on Facebook saying I could save $720/year and living in such an expensive city, I thought – why not, let’s just see. I still can’t believe I was overpaying so much. It’s definitely eased my financial concerns a bit.”

Tara Evans, a recent college grad, moved from Louisana to Arizona for her first job and was forced to re-register her car and find new car insurance. She ended up saving $987 by using Rate Fetcher to compare insurance rates. While she moved from a state that tends to have higher insurance rates, to a state that averages a bit lower, the savings are still drastic.

“I had just moved to Scottsdale and was scrolling on Facebook when I came across a Rate Fetcher ad that said I could save almost $720. Getting new car insurance was on my to-do list so I gave it a shot and answered the 3 questions and was shocked at the rates they gave me. I have almost $26,000 of student loans that I need to pay off so this was the best thing I could have done! So happy!”

To see how much you can save, visit  Rate Fetcher today!

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