November 2014 - WiseDollar

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Setting Financial Goals for the New Year

November 24, 2014 Wise Dollar Lifestyle 16 comments

I know it?s only November and we haven?t yet had our Thanksgiving turkey in the U.S., but I?ve already started planning what my financial goals for 2015 will be. Lots of people won?t start talking about their goals for the New Year until January, but in my opinion you should start planning now for what you want to accomplish next year. That way when January 1st rolls around, you?ll already know what you need to do to be on the road to success. Here are just a few things I did to help me decide what my financial goals will be for 2015.

Take a Look Back

If you can?t remember what your 2014 goals were or how you stack up against them, take some time to review them now. Look at what you set out wanting to accomplish and how you progressed toward these things throughout the year.

2014 isn?t over yet and there?s still time to achieve your goals, but you should be at about 75-80% of your beginning goal by now. If not, why didn?t you make progress as you were hoping or expecting? What setbacks did you experience along the way? If you are on track to have your goals met by the end of year, or if you?ve already exceeded them, what helped you be successful? This information is key to helping you prepare for the coming new year.

Project Forward

Now that you?ve analyzed what you sought to do and what your results have been for 2014 so far, this information can help you figure out where to go from here.

If you had setbacks this year, how can you plan ahead now to avoid them next year? Maybe you?re on track to meet, or have already met your 2014 goals, because of a one-time income boost. If this is the case, what can you expect to accomplish next year without this event happening again? On the other hand, if you?ve met or exceeded your goals and believe you can replicate this progress again next year, you need to decide how much higher to set your goal for 2015.

Setting goals is a balancing act: your goals should always be something that you have to stretch a bit to reach. You don?t want them to be too easy so that you don?t have to work hard to achieve them, and you don?t want them to be unattainable either.

Break Them Down

Once you have big idea goals in mind, break them down in bite-sized steps. For example: if your goal is to pay off debt in 2015, how much should you pay off each month (or each quarter)?

Having smaller monthly or quarterly goals will make it easier to evaluate your progress during the next year, and will be helpful for evaluating your overall progress at the end of 2015.

Keep Track

Writing down both your big picture goal for 2015 and your smaller bite-sized goals, and keeping them posted in a highly visible place, will help you to stay motivated when times get tough. Spending temptations arise for all of us from time to time, and having your goals close at hand will help defeat the urge the splurge.

What do you do in order to set/establish goals? What are your financial goals for 2015? What is a goal you killed it on this year?

Photo Courtesy of: Amodiovalerio Verde

Top 5 Tax Tips If You?re Self Employed

November 19, 2014 Wise Dollar Side Gigs 15 comments

Sometimes being self-employed can feel like a drag because of those quarterly tax bills you have to mail in every few months. But what if you could find a way to bring down your overall income and save money on your tax bill?

Believe it or not, it is possible to do both by keeping track of various expenses along the way. If you have legitimate expenses they can really help you come tax time. With that in mind I?ve got some tax tips below I?ve learned over my years of running a business. I will put the disclaimer out there though that I?m not a tax professional so make sure to check with a trained tax advisor regarding you and your specific situation. 🙂

1) Your Home Office Can Be a Deductible Expense

Just like buying an item for your business, so too can your home office be written off ? as long as it fits within the guidelines of what the IRS considers an office. To make it easier, I?ll refer you to the IRS as to what does and doesn?t qualify. Assuming you do qualify to take this expense it can be a nice way to reduce your tax bill. The amount you can write off will depend on your specific circumstance, but speaking from experience it is a nice deduction to have.

2) Keep Track of Your Mileage

You probably already know that you can deduct your business mileage, but so few people I know actually keep track of it! If your business often has you driving around in your own vehicle, then you should most definitely be tracking your miles and deducting the expense from your overall earnings. Again, according to the IRS, the amount you can deduct for business travel is $.56 for 2014.

Even if your business doesn?t require you to travel from place to place, I bet you still find yourself driving once in a while. If you do drive on occasion for your business my tax tip would be to have a notebook in your car to record the miles. That will allow you to have a record of the travel in the event you ever need it.

3) Insurance Premiums

With a self-owned business often comes health insurance premiums. Keep track of how much you pay and present them to your accountant at tax time. While I absolutely hate the amount we have to pay for healthcare premiums, I guess a fringe benefit of being self-employed is that we can write off those premiums. As an added benefit you should also consider a HSA account to supplement your coverage as that?ll further reduce your taxable liability.

4) Meals, Entertainment, and Gifts

Every time you discuss your business legitimately, you can write off that current event. If you are eating out or entertaining, you can write off these expenses. If you send a gift to a potential client, this can be written off as well. The key to remember though is that most of these expenses can only can be written off by 50 percent. Point being, don?t go crazy when having business meals as you?ll only be able to write off half!

5) Furniture Costs Can Help Too

When you first start out in business, you might have a few larger purchases. The largest of these is often your desk, but don?t forget about the more minor expenses as well: a clock, [easyazon_link cloaking=”default” keywords=”laptop” localization=”default” locale=”US” nofollow=”default” new_window=”yes” tag=”wisedollar-20″]laptop[/easyazon_link], wall hangings, your office chair, your guest chairs, and even paint and carpeting (if they are added for the purpose of your office that is). All of these office purchases are can potentially be legitimate write-offs for your business.

Don?t Handle Your Taxes Lightly

Likely my biggest of tax tips for the self-employed is to take them seriously. No brainer, I know, but vitally important. If you?re like most small business owners then you?re incredibly busy. Don?t allow that to lull you into not taking your taxes seriously. My wife and I sit down once a month and go over all our expenses, income, etc. so we can easily hand things over to our account at the beginning of the following year. We?ve used both H&R Block and Turbo Tax in the past, but have gone with a tax preparer recently in order to save us time as well as to make sure they?re done right. Thankfully those charges can be written off as well. 🙂

What tax tips do you have if you?re self-employed? Do you prepare your own taxes or pay someone else to do them?

Photo courtesy of: Tax Credits

5 Tips for Resisting Impulse Credit Card Purchases

November 19, 2014 Wise Dollar Credit One comment

The problem with impulse shopping, well there are?more than just one problem, is that the unplanned spending adds up quickly.?You know it?s not the smartest thing to buy that seventeenth pair of earrings at the checkout, or those end of season boots don?t you? Yet you get home after your quick trip to the store?and find these ?no-no? items have somehow found their way into your house, and the charges have magically appeared on your credit card statements. Having gone through paying off debt myself, I know the challenge it can be to avoid impulse spending on a credit card and below are some tips to counteract that desire to give into impulse spending.?If you have gotten yourself in hot water with your credit card, you may need to contact an expert debt solutions provider such as Debt Rescue.

Waiting Period

Cooling off periods are common enough when it comes to almost any kind of contract these days and there?s no reason why you can?t enter into a contract with yourself. Give yourself a cooling off period. Be tough; try 30 days. If there?s anything you?re tempted to impulse buy on your credit card, make yourself a deal: hold off for 30 days. If you still want it by then, you can get it – assuming you have the funds to do so of course. 🙂 Chances are, in 30 days you won?t even remember which online shopping site you were on when you saw it.

Leave The Credit Cards At Home

This is one of the easier ways to avoid impulse spending on your credit card. Having the credit card in your wallet will only tempt you if you’re struggling with impulse spending. Leaving the card at home will automatically remove that temptation as you can’t use it. Don’t allow yourself to think that you’ll only use it for emergencies as that only brings about the possibility of talking yourself into spending. Simply put, if you don’t have your card on you then it can’t be used.

Make It Easy To Resist

If you find yourself whipping out your credit card every time you go shopping, avoid them. Make this easy for yourself by having your groceries delivered. Once you?ve set this up online, you?ll find you?re far less likely to stray from your shopping list when your grocery run is virtual. Having it delivered means you won?t spend time at the checkout, and be tempted to spend on small items you don’t need.?You don?t have to do it forever; just until you?ve got your impulse buying under control.

The Real Cost

Change the way you think about what you?re spending. Instead of telling yourself ?that?s only $9.99 ? and on sale, and I could use one…? try reminding yourself how hard you had to work to earn that money. How many minutes? Before tax? How many customers did you have to serve, or papers did you have to file, or presentations did you have to deliver? How many hours did you sit in traffic to get to work to earn that cash? Understanding exactly how much of your blood, sweat and tears went into your pay packet makes it easier to be more selective about where that money goes.

Plan Your Spending

Lists are a good way to keep your focus when you do have to go out and spend money. If you need to head anywhere to buy things, even clothes, make a list ? and stick to it. Discipline is the key.

Impulse purchases may not seem like a big deal at the time, but they can add up quickly If you are having trouble resisting impulse credit card purchases, it?s time to get tough with yourself. With a few strategies and some self discipline, you?ll soon be back on track.

How I Learned to Haggle Prices From Propane

November 17, 2014 Wise Dollar Frugality 12 comments

I know it’s expected that people will haggle prices at yard sales, auctions and car dealerships, but I didn’t know until last week that one can haggle prices at nearly any place of business. Here’s how I learned that price haggling doesn’t have to be limited to deals of a personal nature, but that you can haggle prices on just about anything in order to save money on many things.

Haggle Prices on Everything

So, last week we were chatting with friends who moved from the suburbs to the country about the same time we did. Our families have many things in common, so it’s fun to compare what we’ve learned and share with each other how to make the homesteading life in the country easier. Last week, we got to talking about propane usage. Our friends have a much, much bigger house than we do, and their propane costs run about $4200 a year, even though they keep the heat at a biting 58 degrees during winter and use their fireplace as well. Needless to say, Jay, the husband, has done his research on reducing heating costs.

“We locked in at an awesome rate this year”, I told him, excited that we will be paying $2 a gallon for propane this year instead of last year’s ridiculous prices that hovered near $5 a gallon. He looked at me, and didn’t say a word.?Uh-oh, I thought. What’s that about?? “What did you lock in at?” I asked. “$1.69 a gallon,” he answered. Curious, I leaned in to get his secret.

“Well,” he said,” it was pretty easy. The company sent out the sheet they always send out in summer, indicating what the current lock-in rate was. So I called them, and told them that I wasn’t happy with that price. I explained that I hadn’t started to shop around yet, but that I would if need be. I reminded them that we are high-volume customers and had been loyal over the last three winters. Then I told them I wanted a better rate.” “How about $1.69?” they countered.?Done, and done.?My friend had now locked in at $1.69 a gallon for the year, saving him a good 15% over our rate, and the equivalent of a few hundred dollars.

But it doesn’t end there. A few days beforehand, my mom was at a well-known retailer pricing out sweaters that were on sale. As she went to make her purchase, she randomly asked the cashier if there were any additional discounts available for the purchase. The cashier just happened to have had a 10% off coupon sitting at the register, and offered to let my mom use it for her purchase, to which, of course, mom happily obliged.

Challenge Every Expense

When I talked here about the importance of challenging every expense, I was focusing primarily on those consistent monthly expenses that we often pay too much for, such as car insurance and cable TV. But I learned this week that a person can haggle prices on just about anything if they’re willing to take the time and stand their ground. You can be sure that, next year, when it comes time to lock in our winter propane rate, I won’t be settling for the rate the company offers. Instead, I’ll be haggling for a better price.

When was your last price haggling success? How have you prepared for winter heating costs? If you don’t haggle, what holds you back from trying?

Photo courtesy of:?Lian Chang

Will The Credit Card Ever Be Replaced?

November 17, 2014 Wise Dollar Credit No comments

For a consumer in today?s world, there are a lot of different payment methods to choose from. Gone are the days where cash alone was king, though cash is still used a lot as well. Out of all the various new payment methods available, credit and debit cards are the most popular, as together, they are responsible for over 50 percent of all transaction value your business is likely to receive, according to the most recent triennial Federal Reserve Payment Study conducted by the Federal Reserve Bank of San Francisco in 2012.

However, while debit and credit card payments have been constantly increasing in popularity, the question of whether something new and better will come along to replace them is also an issue that some have considered. While only time will truly tell if the credit card will fall out of favor anytime soon, there are definitely changes in how card-based?mobile payments will work in the near future.

What to Expect of the Future

Like in so many other areas, the technology of credit and debit cards in the U.S. is behind that of most of the rest of the world. Which, having traveled internationally fairly extensively myself isn’t really that surprising. I have read in several places that there are plans to rectify that in the future with a?chip-and-PIN system, which will be nice to see for all concerned.

According to the Wall Street Journal, a chip-and-PIN card payment system functions similarly to the current swiping method of using cards. Instead of sliding your card through a magnetic strip reader, you will insert your card into a slot in a scanner machine that can read a microchip embedded in the card. This system will also require the use of a PIN if the issuing card company implements that system.

While the chip-and-PIN technology provides a couple of benefits, the most important is that of security. Magnetic strips are much easier to duplicate than a microchip with a PIN. And in fact, this additional security is one of the main reasons U.S. card companies are finally making the switch.

Card Payments and Your Business

Regardless of the fact that updates to how credit and debit cards function will be implemented within the near future, the current capability of your business to accept card payments won?t really change. You will need to upgrade your hardware to the new readers, however, once the switch occurs.

While it might be tempting to pass on the need to update your business?s card processing hardware, that really isn’t an option to consider. No matter how much you wish you didn?t have to deal with card payment transaction and processing fees, that aspect of business won?t ever go away as long as cards are still used.

Why Bother with Card Payments Anyways?

Even though the update to card technology will likely be somewhat of a hassle, it will be worth your time and effort for a variety of reasons. The first being the enhanced security features the chip-and-PIN system will provide. This will be beneficial to your business, as customers will be more trusting and likely willing to use their cards at your business when they know a giant data breach is much less likely to happen. The other reason behind the switch being worthwhile is simple; if you wish to continue maximizing the number of sales and customers your business receives, then you need to continue accepting whatever payment methods customers want to use.

If you haven?t already implemented a means to accept card payments in your business, don?t wait until the technology update. They aren?t expensive, the mobile reader offered by Shopify is only $20, and even though you?ll need to buy new hardware next year, your business will likely make more money during the next twelve months compared to not accepting cards at all and waiting.

Photo courtesy of: Sean MacEntee

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