Category Archives: Finances

Finances

Ways To Track Expenses

If you’re in business or if you have a lot of expenses that you could possibly write off, you know you’ve had to deal with tracking expenses in many different ways. Most of us try to keep our receipts, which can be problematic because you could have tons, and they’re easy to lose. Therefore, here are some ideas you might want to think about to help with the process.

First, if you have a smartphone you can think about taking pictures of your receipts. These can be transferred to your computer electronically and you can create folders to put them in. Even if you lost your phone, you probably have your backup program set up to move everything to the cloud every night, so you’d be able to recover them pretty easily.

Second, pick one credit card and use it for all of your business expenses. This way, even if you miss receipts you’ll have a record of your purchases all in one place. Some accountants would rather look at your credit card statements anyway, and if you decide to use your business debit card they can use your statement to help track your money for the year as well.

Third, you can still get receipts but either scan them all when you get home or purchase a receipt scanner, which will also turn all of your receipts into electronic files. This is nice and clean and, if you use one of those receipt scanners, you can categorize everything so that your accountant more easily knows where everything should go. Of course the problem with this one is you have to find the time to scan everything, because few people get home and immediately scan.

Those are some ideas you might not have thought of. If none of those work for you… at least put all of your receipts in one place so you’re not chasing them all over the house, especially your big purchases. 😉
 

Finances

3 Areas You Need Insurance Coverage For

Because it’s the newest topic, we’ve spent a lot of time talking about health insurance around here. However, not only is there other insurance, but some of it it pretty important for you to start thinking about, if not necessarily critical.

We won’t spend any time talking about car insurance because that’s mandatory, at least in almost every state in the nation. We won’t talk about compensation insurance because not every business needs it and not every state has it.

Instead, we will concentrate on insurance for individuals and families, those that we feel are the most crucial to have, even if you don’t think you need it. Part of this also takes into account what you’ll get the most benefit from. That discounts dental insurance where, though you’ll get some coverage, if you need anything serious most of the insurances only cover $2,000 a year, which would barely make a dent in any serious dental work you’d need.

1. Homeowners/rental insurance. If you’re a new homeowner insurance is a mandatory thing, but if you’ve owned a home previously, at least in some states, it’s an option. There’s absolutely no reason not to pay for insurance coverage for your home. All it takes is one bad winter of damage for you to realize how crucial having insurance is to take care of something you never saw coming. Not that you’ll have damage every year but when something happens to your home, minor or major, insurance can help you get those bills paid, if not take care of the entire thing.

The same goes for rental insurance. The fire could come from another apartment and you could lose just 25% of your assets, which usually means furniture or clothing, and the cost of replacing it would be totally on you. The costs are negligible when compared to what you’d have to pay out of pocket to replace things.

2. Life insurance. We hear from people all the time about not needing life insurance because they’re either too young or they’re single. We even know of families where parents don’t buy insurance to protect their kids or spouses.

One of the realities of life insurance is that if you get in early not only will your costs remain low, even if you have health issues later on in life, but if you buy the right type of insurance at a certain point it’ll start paying for itself while still continuing to grow, although you’d probably want to continue putting more into it for your own lifetime protection.

Life insurance could help you make sure your home is paid for if you’re not around anymore. Life insurance can help pay for your burial. Life insurance can give your family a boost to get used to losing your income and allow them time to get on their feet. Do this for those you love, and do it early.

3. Long Term Care insurance. You need to know this now; at some point in your life, you or your spouse might need to either go into a nursing home or need some home care help when you get old. Costs are not only astronomical, but for the majority of people what happens is their assets have to be sold off before Medicaid kicks in.

If you start long term care insurance early, when it doesn’t cost much and you get locked into a rate, there’s the possibility that you could put away enough money to pay for home care and never have to go into a nursing home, while protecting your assets for your family. You certainly help them out greatly.
 

Finances

5 Things To Know Before You Start Investing Your Money

It’s not a bad idea to think about finding ways to grow your finances through investing. With that said, one has to know that investing can be dicey, and rushing into it without knowing the good and the bad is basically gambling with your finances. I know many people who were cruising along with their investments until the recession of 2008-2009 hit, and many people lost money needlessly, although those who were able to weather the storm made it back and more over the last couple of years.

It’s not that investing isn’t easy; it really is. All you have to do is give the right person some money and off you go. But how do you determine who the right people are? Here are 5 tips to help you:

1. Ask people who they invest with specifically, but initially only stick with people you can talk to or research online. Everyone knows at least a couple of people who are investing their money in some fashion, whether directly with a broker or through some plan at work. If you can, get names of some of these brokers and the names of their company as well. If you can find out who’s backing them even better, as many brokers are associated with a specific trade organization.

2. Research everyone, always. Ever heard of Google? There’s no excuse for not going online to check out every person whose name you might get, as well as learning something about the companies they work with. Just because someone might not be online may not mean they’re not capable, but the way I see it if they’re not visible online and you can’t get information on them be wary.

3. If they claim high rates of returns, beware and research strongly. Remember the name Bernard Madoff. There were a lot of people vouching for this guy, many famous people who thought they were making money hand over fist, and when it all came crashing down it was ugly, not only for Madoff’s family and people who were cheated but people who had cashed in, thinking they’d earned their profits legitimately and suddenly found themselves being sued by the government to return those funds. When something sounds too good, it’s smart to look at the negative reviews and see why some people might not trust them; there was a lot out on Madoff that those investing with him decided to ignore.

4. Only invest what you can stand to lose. Starting off relatively small, maybe $100 a month if you can handle it, is a lot smarter than giving someone $5,000 without knowing if you might have something major coming up such as having to replace a furnace and not having the funds to take care of it. No matter how much you invest, the returns are relatively small percentage wise, even with the most aggressive investing position. Always take care of your present as much as your future.

5. Even if you don’t understand it, make sure you talk to your broker at least once every 3 months and open your mail regularly. A big mistake many people make is not opening up their mail and seeing if their money is moving in a positive direction or not. A secondary mistake is not keeping up with their brokers, who are sometimes known to leave and suddenly you have no idea who’s managing your money, if there is anyone managing it.
 

Finances

3 Housing Upgrades That Could Save And Make You Money

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Every year there are a lot of people selling their homes. Too many of them don’t end up getting what they feel their house is worth. Some have had significant upgrades done to their homes and yet those things don’t seem to matter when they go to sell their homes. Not only that but the money that was laid out doesn’t equate into much more than aesthetics for the homeowner; that’s nice but it’s not enough.

Homes that sell better offer things such as more space, a specialty item like a pool, or upgrades that have been performed that not only protects the house but helps to save money on either utilities or expensive repairs down the line. The suggestions made here will help with the latter; you’re on your own with the pool.

1. Roofing. Homes that have upgraded or repaired a roof within 5 years sell very well. Home buyers know that those are homes that won’t have to worry about leakage, which can damage so many things and can be hard to track. If a new homeowner has to worry about spending an extra $10,000 – $30,000 on a roof repair sometime soon, it encourages them to look elsewhere.

Not only will you get the same benefit while you’re living in the home but it’s possible that you can tie it in with upgrading your insulation while you’re at it. Some states like New York have arrangements with local organizations that will offer free inspections and give you a recommendation for upgraded insulation that will save you a lot of money and offer you a lot of comfort all year round. Imagine being able to tell a prospective buyer that their energy costs will be half of what their neighbors are paying.

2. Windows. A survey came out that had a surprising answer; windows are something many potential homeowners have at the top of their list. It’s not that they’re looking for pretty windows but energy efficient windows, windows that won’t leak air out and that offer protection from the sun’s heat during the day. Any home that heats up drastically in the evening sun also lets out a lot of heat if you have to keep your furnace running all the time.

With that said it has to be mentioned that it’s sometimes hard to find a windows installer you can trust. Estimates can sometimes range from a couple thousand to more than $40,000 for windows; ouch! When one of my clients moved into their new house they were offered a free evaluation that took 4 hours and received an estimate of $36,000. Two weeks later, after not jumping at the offer, the new price was $9,000. Even if that’s a great price would you trust someone who did that?

Still, it’s worth looking into, and the combination of better windows with the changes in roofing and insulation can offer dramatic savings in utility costs.

3. Basement. Many people believe that having a damp basement isn’t such a big deal, but it is. Basement flooding accounts for more damage than any other type of damage within a house outside of a disaster and some insurance won’t cover the costs of repairs or replacement of items down there. You can get mold in basements that will only cost a lot of money to get rid of, but you can be forced out of your house by the authorities and have to live in a hotel for awhile.

A well sealed basement can save both money and protect your health. It also gives you the option of furnishing your basement in some fashion or, when you sell it, offers the buyer the possibility of using the expanded space. That extra space can add thousands of dollars to the sale price of a home while offering you more options such as a media room or workout space.
 

Finances

3 Dangers Of Home Equity Loans

The idea of a home equity loan or line of credit seems like a great idea. After all, you get to tie the payments into your mortgage and since you’re already used to making monthly payments anyway, you feel that adding a little bit more to it wouldn’t be such a bad thing. Now you can take care of that roof or buy new windows and rugs for the house, getting more value out of your house than you presently have. Sounds great, right?

Unfortunately, for most people life isn’t quite that simple. Many find within a few years that the burden isn’t what they were expecting and it can be hard to get out of. Here are 3 things to worry about.

1. You could be approved for way too much money. Remember the first time you got a credit card that approved you for more than $5,000? Remember promising yourself that you would never max that out? How long did it take you to max it out?

The average home equity loan allows you to shoot for anywhere between 50% to 80% of the combined total of what your home is currently appraised for and how much you have left to pay on your home. So, if you owe $50,000 on your home but it’s appraised for $150,000, you could be approved for anywhere between $50,000 to $80,000.

That sounds good until you realize that you now have to pay whatever your normal mortgage is and a separate payment on the home equity as well. Even at a rate of 7% are you ready for large payments like that, especially if you didn’t refinance your home at the same time?

2. In many states, home equity loans are set up with variable interest rates. What this means is that you might start off with a low rate, but it’s always changing based on how the economy is. If you kept up with what caused the housing crisis and saw how many people lost their homes because they couldn’t afford to make payments on suddenly high interest rates then you know what this danger could be.

Suddenly making your regular mortgage payment seems like a great deal. If you’ve spent little on your home equity you’re probably fine, but what if you got one of those large loan amounts and spent a big chunk of it on home improvements, thinking you’d have more time to get the balance down?

3. You could get turned down. I know, you’re thinking so what, at least you don’t have big bills to worry about. Well, it seems credit agencies rank failure to be approved for a home equity loan very high, and it pretty much makes your credit rating and score take a hit. If you were hoping to get a store credit card it’s not happening for awhile, and you’ll have problems even getting a gas credit card.

Lenders have tightened up standards after the financial crises of the previous 4 years so you’d better ask a lot of questions before even considering it if you hope to be approved. However, you also need to know your spending patterns, your limits, and your tolerance for big liabilities.