Category

Budgeting

Category

Pay Off Debts

Dealing with debts can be very stressful. Many people are not able to sleep well thinking about the debts they owe which they need to pay. As a mom, you usually handle and manage the finances at home including the budgeting.

There are times wherein there is no other option but to borrow money like for example credit card bills, fixed rate home loan, car loan and many others. Since you are in-charge of the finances, it is also your responsibility to pay these debts with the money you and your partner earn every month. It takes a good budgeting and management skills to be able to say good bye to your debts.

In this article, we will share some tips to help you pay off your debts as soon as possible:

Tip 1: List Down All Your Debts from the Largest up to the Smallest

Seeing the entire picture will allow you to plan and prepare thoroughly. Thus, you need to list down all your debts to know the exact amount you need to pay and how are you going to divide it per month to include the payment to your monthly budget. This way, you know how long it will take like 6 months or 1 year for you to pay off everything according to your budget. Some people does not want to know the exact amount of their debts thinking it’s “just big”. Well, it will not lead you anywhere if you will close your eyes to the reality.

Tip 2: Allot Budget for Each Debt

After seeing the entire damage that you need to repair, it is time to plan your actions. You should allot budget to pay each debt like how much will go to your credit card bills, to your loan, and other things. Make sure to be consistent every month.

Tip 3: Come up with Weekly or Monthly Budget Plan

Speaking of budget, it is also advisable that you come up with weekly or monthly budget plan for the household including all expenses every month. Once you do that, you will see how much is left every month. Then, you can probably add some amount to your original budget for debt repayment. That way, you will be able to pay off faster.

Tip 4: Pay Your Monthly Dues on Time

It is also important to ensure that you will pay your dues on time especially credit card bills and loans since they accumulate interest and late payment fees.

Tip 5: Avoid Abusing Your Credit Cards

You should also refrain from excessive use of your credit card. It will not help you, instead, it will even make you go deeper into debts. You should use cash in your purchases to also avoid interest fees. Also, spending cash will prevent you from overspending.

Tip 6: Stay Away from Vices

Vices like smoking, drinking or gambling will do you no good and it will not pay off your debts. In fact, you will probably accumulate more debts with these vices. So just stop and use the money for debt repayment instead.

It would be a lot more peaceful when you have no debts to worry. Follow the tips that we discussed in this post to help you say good bye to your debts and be able to manage your finances well.

Featured Image Source: pxhere

One of the fastest growing industries around the world is the food business and if you have the skills, creative ideas and resources to start up a restaurant, you might as well go for it. But the big question is – how do you start such an enterprise? There are a lot of things to consider such as the place, menu and most importantly, the food, and ambiance that will make your potential clients come back for more.

As the saying goes, there are only two constants in life: death and taxes. While most of us detest the idea of the government pilfering our hard earned wages, the fact is that modern society would cease to exist without them. Still, there are plenty of people out there who don’t pay their business tax, either out of neglect or a staunch refusal to pay into the system. But what happens if you don’t pay your business tax?

Pay Your Business Tax

To see what can happen, let’s do an overview of IRS penalties for non-payment.

Penalty Fees and Interest

Usually, the first thing that will happen if you don’t pay your taxes (or pay them late) is that you will start to incur additional fines or interest. The longer you go without paying them, the higher they will get, so it’s always best to pay these penalties as soon as possible.

Tax Lien

If penalties are not working, then the IRS may put a lien on your business property as a means of collecting the debt that you owe. This could mean that you lose ownership of the property until you have paid everything off, or they could threaten to seize it and sell it as a way of collecting.

Criminal Charges

Fortunately, the IRS is relatively lenient about pressing charges against those who don’t pay their taxes. Unless you are funding a criminal organization, you should be able to work with them to figure out a payment plan that covers your debt without crippling your business.

Nonetheless, if you show rampant disregard for paying your taxes and have shown intent to continue to evade payments, then you could be looking at jail time.

Tax ID Number

As a business owner, your personal taxes are separate from the company’s. However, if you are listed as the proprietor of the business, then you may be held liable for failure to pay. If you don’t have separate Tax ID, then you could be tied to the fate of the company and on the hook for all debt.

If you’re curious about how to get a federal Tax ID number, it’s a relatively simple process. You can fill out the paperwork online or submit it via mail, along with the requisite fees.

Divorce Planning

Many people focus on emotions and support when they are looking to divorce. How will they get through it? Who will their friends support? What happens to children and the assets? There are so many things that people think about and yet the one thing they forget to consider is the financial impact of an impending divorce. Here are six things for you to consider as you decide on this major life change:

Moving Expenses

Over 20 states require a separation period before you can begin divorce proceedings. Often this leads to moving into a new residence. This can mean purchasing a home or renting an apartment, which translates into a new mortgage or rent and deposit. But it doesn’t stop there, here are more expenses to consider:

  • Movers or moving van rental
  • Deposits for setting up electric and water
  • Paying for your own cable (or dish) and internet
  • New furniture and appliances
  • Renter’s Insurance

The Need of a Lawyer

If you are lucky enough to not have any assets to divide or custody to work out, you may not need a lawyer. Many, however, have assets and children and a lawyer becomes a necessity. Divorce lawyers are going to cost you a pretty penny. You can minimize the cost by working through your proceedings as quickly as possible. The longer you go, the more you fight over assets and custody, the more expensive the lawyer. It will be in your best interest to call around and ask about retainer fees and hourly rates.

A New Vehicle

If your marriage featured a one-car home, you are going to need a new vehicle. When adjusting your budget for these new expenses, you are going to have to figure in new car payments. If you prefer to buy a used vehicle outright, you will need to save and plan for this expense.

An Insurance Adjustment

Believe it or not, a divorce could hurt you in terms of insurances. Auto insurers often offer discounts for multiple drivers on a policy. Health insurance rates could go up for the same reason. Life insurance can even be adjusted. Do check into all your insurance interests to find out what the impact will be on your bank account.

Taxes

With a change in the household, your taxes will most likely change. Moving from married and filing jointly to single (or head of household) can put you into an entirely new tax bracket. Additionally, there must be planning on who can deduct for dependents, which will affect your tax bracket. And if you will be receiving alimony? That’s taxable as well! It will be a great benefit to you to ask a CPA on how to best handle and adjust to your new tax status.

Family Plans

If you have a gym membership or a cell phone account based on your marriage, you may be dismayed to learn that your bill is about to go up. Services for groups often offer a discount that will benefit a family unit. Once single, rates will go up. Shop around to find the best deal you can, now that you are on your own.

Divorce is one of the more difficult experiences one can get through. The end of the relationship is wrought with so many emotions and new experiences. Adding in financial stress is just one more headache to deal with. In the long run, you will be a stronger and a better person. It just takes some hurdles to get there!

Images via Pixabay

Managing the budget can be a big headache for business owners. If you don’t manage your business budget correctly, there’s a good chance your company will end up in serious trouble. You might find yourself in debt or simply not making as much profit as you’d hoped or dreamed of. Managing the business budget isn’t easy. It’s certainly not a job that you can go into without any experience. But it is possible to make sure that your company finances are handled effectively. You just need to be aware of the challenges and the issues involved. As well as this, you need to understand what steps will help you steer a ship when the market is dicey at best.

Use An Accountant

Accountant
Image Source

Our first step we strongly recommend is to think about hiring an accountant for your business. Don’t forget that this doesn’t have to be a new, permanent weight on your finances. Instead, you can use an outsourcing accountancy service. That way, you’ll get the same expert advice at a minimal cost. If you are struggling with your finances, an accountant is always going to be the first step. They’ll provide you with the knowledge of the industry that you need to survive. If you don’t want to hire an accountant you should at the very least, use accounting software. New cloud technology allows you to view your accounts from anywhere, making things easy. It will enable you to keep track of your finances and manage them yourself without the aid of an expert. You should look at this type of tech online and start utilizing it in your business as soon as possible.

Cut Costs In The Right Areas

Cutting costs is easy but cutting the right costs is a tad more difficult. You can look out of your office right now, point to a section of your company and decide everyone in that section is fired. Immediately, you will have cut the costs of your business down by reducing the cost of wages. But, there’s a good possibility that the people you fired were the ones who were making your business a hit. If that’s the case, cutting costs just crippled your company. Obviously, this is an extreme example, but it presents an important point. You must consider where to cut costs carefully. Ideally, you want to reduce costs in a way that has a minimal impact on your business model. Using energy saving bulbs in your office isn’t going to have any impact on your business model. It will, however, affect the annual energy cost of your company. We guarantee if you switch to LEDs this year, you will see an impact on how much you’re spending. This is a smart cost and it’s the type that you need to consider.

Another example might be stationary. As crazy as it might sound, a recent report revealed stationery costs add up to huge amounts for most office businesses. Typically, this is because business owners don’t price check different suppliers. If they did, they could save a lot of money, cutting overspending from their budget.

Readjust The Business Model

Of Course, it’s possible that a complete overhaul of the business model is exactly what your company needs to cut costs and manage the budget. Efficiency is a key issue to examine here. If you want to change your business model, you should consider how you can make it more efficient. Changing the production method can have this effect or, training up employees. Although training employees up will cost money, in the long run, it will make your business cheap to run. Your employees will be able to get more done through the day. This will hopefully maximize the potential profit margin of the business.

Use Consultants

If you are managing your businesses budget, it is important not just to rely on your expertise. If you don’t want to hire an accountant to manage the books, make sure you are taking advice from other people. These could be colleagues in your company or fresh eyes from outside your business. You can recruit a consultant who will be able to help you tackle the issues that are born from handling a business budget. In particular, they may be able to point out where you have been overspending and recommend measures to cut back.

Keep A Check On Industry Levels

You need to make sure that you are keeping a check on industry levels. Essentially, you should be looking at the average costs of the industry as a whole. By doing this, you can make sure that you can at least make sure you are matching the industry average. Don’t forget that smaller businesses often need to reduce spending more. A downturn in the market can have a greater impact on the finances of smaller companies.

Avoid Falling Into Debt

Similar to personal finance, it’s advisable that you use your business budget to avoid going into debt. If you can do this, then your business will not be in danger of failing, anytime soon. There are ways of dealing with increasing debt levels. One example would be borrowing a low-interest loan. Using a low-interest business loan or alternative financing loans will help keep your company in the green. This will help you achieve our final plan of action.

Secure An Emergency Fund

You must make sure that you have enough money in your business budget for an emergency fund. The market is unpredictable, and that is no exaggeration. One day, you will be making huge amounts of profit and the next you could be struggling to break even. In this, unstable situation, you must make sure that you have an emergency fund to rely on. You can use this to pay basic bills and costs in times of economic crisis. The smaller your company is, the more important that this fund will be. If you make sure this emergency fund is part of your budget, your company will survive when others fail.

Featured Image Source