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Money Saving Hacks

Money Saving Hacks

Make a list. Every time you go out, make a list.

This is easy to do and has an effect, simply because when something is not on the list you have to think about buying it, and that moment is death to the impulse buy. Keep the list in hand and refer to it, so that when something is not on it, it’s a lot easier to ignore.

Don’t go shopping hungry.

This matters – studies show that hungry shoppers buy more, sometimes as much as 40% more, compared to people who are shopping on a full stomach. When you’re hungry you are swayed much faster by not just the smell of the caramel popcorn at the other end of the store, but also by those cute wineglasses you are just certain you urgently need.

If you are married, make a plan at the start of every month.

Planning your monthly spends is pretty useful for single people too, but it’s an especially powerful exercise if you are married. No matter what, no two people are entirely alike in their financial behavior. Sit together at the start of every month and plan out the monthly spending – essentials, the fun stuff, the kids’ expenses, and so on. Once that is done, take the leftover cash and move it immediately to your ‘long term savings’ account. This takes away the temptation to touch it at all.

Doing this regularly at the start of every month brings down the tension couples often have around money. And done right, brings you closer together.

What are the savings for?

Debt can often come up un-announced, from a medical emergency, or a job loss, and so on. Be clear to yourself, and if you have a partner, reach an agreement on what part of the savings constitute an ’emergency fund’ and cannot be used for expenses, etc. Remember, bad things happen to everyone. It’s how we manage these, that make financial tragedies and horrible events short term ones, not life-changing ones.

Bankruptcy Attorney Is a Necessary

Bankruptcy Attorney Is a Necessary

The stock market continues to make new all-time highs, but there is no good financial news to substantiate it. As companies continue to file bankruptcy, move overseas or plain old just close, no one’s job is safe. Being proactive when it comes to financial matters will help anyone survive this economic downturn. Pride is one of the biggest problems that stop people from admitting they are in need of filing for bankruptcy. Instead, they continue to borrow more and kick the can down the road, hoping that things will get better after the election. Now that the election is long behind us this type of logic is foolish, because things are not going the way that most expected them to go.

This study came out that reported the average American is only three weeks away from filing for bankruptcy. This doesn’t mean that everyone is filing bankruptcy in three weeks, but Americans as a whole no longer have any kind of savings or reserves. When you ask someone if they have anything for backup, most people will say they have a Visa card with no balance on it for emergencies. In the past, it was the norm for people to have six months of living expenses in savings. Now, this number is down to three weeks and that’s why most Americans are one small disaster away from a bankruptcy filing. Before things get any worse, people need to heed to the warnings and immediately consult a bankruptcy attorney to get advice. The bankruptcy attorney will be able to tell a person whether or not filing is in their near future or if they don’t make changes, in the distant future.

As more and more Americans sign up for food stamps, it is becoming very apparent that this is the new normal. The companies that closed plants or move them overseas are not coming back to our shores, at least any time soon. Quantitative easing has pushed cash into our ailing economy giving the appearance of some kind of recovery. In reality, this is just putting broken Americans further into debt and bondage. The only thing that will break this cycle is filing bankruptcy. The way our laws have changed in the recent years it would not be surprising to see bankruptcy further regulated making it next to impossible to file. Before it’s too late, people need to wake up and talk to a bankruptcy attorney to see if they qualify or if it is in their best interest.

Financial Systems

Financial Systems

This pillar also includes the software you will use in your business as well. You need a reliable accounting system to help you track your numbers and know what is truly going on in your business. Excel is great but even with the best macros in place, it is still a manual process and is therefore susceptible to more errors than a full blown accounting system.

Now that we are in the 21st century, technology is everywhere. And you need to embrace it. Don’t be scared of it. If your accountant or CPA does not have a stack of technology applications that they recommend, figure it out for yourself. Make a list of your need and wants – in two separate columns. Then start your research. Figure out which applications can give you most of your needs and a few of your wants. No software is perfect, so I doubt you will be able to find every want and need in one application. But hey – anything is possible. Be sure to check the advantage and disadvantages of each one, so you can make a well-informed decision.

Now once you leverage technology by matching it to your operational processes, magic will really begin to happen. You will then be able to shift the some of the duties and task to an automated system which will in turn free up your time. You will begin to run a more productive business. And a more productive business with efficient process equals higher profitability.

System workflow in a business is the key to structure and organization in your business. It is also the one thing that will allow you to scale your business.

Critical Financial Ratios

Critical Financial Ratios

Return on Assets

One common measure of a company is Return on Assets (ROA). Return on Assets helps the would-be investor glean insight into how profitably a business is using its assets.

If Company A shows a ROA of 9% while Company B demonstrates a 23% ROA, we see that Company B is getting much more return on its assets. The higher ROA could indicate a competitive advantage that makes Company B an attractive investment. Conversely, if you are the owner of Company A, you may do well to examine how your competition is producing more profit per dollar of assets.

The ROA formula is:

ROA = Net Income / Average Total Assets

Net income can be found readily in a company’s income statement. Average total assets are calculated by adding the value of total assets at the start of the year to the value of total assets at the end of the year. Divide that sum by two.

Debt Ratio

The more debt a business assumes, the more likely the business will be unable to pay that debt. The debt ratio shows the percentage of assets that are financed with liabilities. The debt ratio formula is:

Debt Ratio = Total Liabilities / Total Assets

In spring 2017, Exxon Mobile had a debt ratio of 49% (162,989.00/330,314.00). The other 51% is financed by the stockholders of the company. By comparison, BP has a debt ratio of 64%. If an economic downturn occurs and fewer sales occur, which of these companies is more likely to default on their debts?

Current Ratio

More immediate are the current liabilities a company has: obligations that must be paid within the next year. The current ratio gives investors insight into the company’s ability to pay its near-term liabilities. To do this, we employ the following formula:

Current Ratio = Total Current Assets / Total Current Liabilities

The higher the ratio, the stronger the financial state. Using the outlet hardwood flooring company Lumber Liquidators, we get a current ratio for 8.86. This ratio reveals that for every $1.00 of current debt Lumber Liquidators must pay off in the next year, it has $8.86 on-hand!

On the other hand, at the time of this writing American Airlines has a current ratio of 0.76, which means the business has only seventy-six cents for every dollar of debt it must pay off in the next year. One business clearly struggles more than the other to pay its bills.

The Acid-Test Ratio (i.e. Quick Ratio)

The acid-test ratio is a more refined version of the current ratio. The total current assets used in the current ratio are not always readily convertible into cash (should the company need to pay off debt rapidly). Significantly, inventory is excluded when using the acid-test. The formula is:

Acid-Test = Cash & Equivalents + Market. Securities + Accts. Receivable / Total Current Liabilities

When we reexamine Lumber Liquidators with the acid-test ratio, we get a value of 0.22 – a much weaker showing than its current ratio. There are several interesting implications here. Lumber Liquidators is a company whose current value comes primarily from its inventory. It has relatively little cash on hand. The shrewd investor can take this information and try to envision situations in which an inventory-heavy company might suffer and then estimate how likely those episodes might occur.

Some Habits of Financial Health

Some Habits of Financial Health

  • Stay Insured
    A study done at Harvard University indicates that Medical Expenses are the biggest cause of bankruptcy, representing 62% of all personal bankruptcies in the States. A good health insurance can protect you. However, one of the interesting caveats of the study I just mentioned, shows that 78% of filers had some form of health insurance. My own take is that you need to select an insurance that is personalized to your needs. If you have dependents you would need a different insurance compared to your single friend.
  • Be prepared for the unexpected
    One year ago I lost my job, my monthly salary went from five figures to zero within two weeks. With today’s mind, I can say that being laid off was probably one of the best events for my career. When that happened I was emotionally devastated. Before I started a new adventure in the special place I am right now, I spent few months without any income. I was able to sustain my previous lifestyle with few adjustments, thanks to the money I had saved. Most will call this “rainy fund”. I much rather call it “Opportunity fund”. Rainy fund brings the memory of scarcity, whether opportunity fund is something full of optimism. I had to use some of my funds during my unemployed days, and having a positive mindset helped me go through that difficult time.
  • Develop a long-term financial plan
    If you do not know where you are going, you will probably end up somewhere else. Your financial future is much more important than your next holiday. My work colleagues are always busy planning their holidays, if you do the same, channel some of that energy and focus on what your long term plans are. Write them down.
  • Earn more
    Your income matters. Saving 20% of 1,000 is different than saving 20% of 10,000. Everyone has the opportunity to tap into their free time and find something that could produce extra income. Baby-sitting, tuition, music lessons,… The only limit is your imagination. It may be awkward and difficult at first, but with time and persistence you can succeed in developing one or more sources of extra income
Protect Your Retirement Accounts

Protect Your Retirement Accounts

Fortunately, the threat of the regulation had already started to change the way financial institutions do business. Some firms have moved away from their higher-cost products and toward making their fees easier to explain to clients.

Investors should always keep a close eye on how much they’re paying, since a fee of 1 or 2 percent can have a surprisingly large cumulative impact on their financial future if it’s charged yearly.

For example, did you know that mutual fund returns in 401(k) plans are normally reported as net returns, meaning that fees for managing your investments are subtracted from your gains or added to your losses before calculating the annual return. Other costs, such as administrative and record-keeping fees, are often divided among plan participants but are not explicitly listed on individual investment statements. This lack of transparency is frustrating for investors.

Investors should also ask detailed questions about how their advisers are being paid. What incentives do they have to steer you into products they recommend? An adviser may operate differently if they’re paid by the hour or by a percentage of the assets they manage, versus if they’re paid extra commissions for certain in-house products. Even if the rule passes, I just can’t believe that institutions are going to stop pushing products down your throat.

People who don’t know the first thing about annuity expenses, load fees, or the importance of a mutual fund’s expense ratio have been held hostage by unscrupulous salesmen.

The truth is that the financial services industry has many caring people of the highest integrity who truly want to do what’s in the best interest of their clients. Unfortunately, many are operating in a “closed circuit” environment in which the tools at their disposal are “pre-engineered” to be in the best interests of the “house.” The system is design to reward them for selling, not providing “conflict-free” advice. And the product or fund they sell you doesn’t necessarily have to be the best available, or even in your best interest.

Manage Personal Finances

Manage Personal Finances

Planning Goals- To be successful with almost every sphere of life, knowing what you want (Goal) and how you will achieve it (Plan). Make a list of your short-term, medium and long-term goals. After you come out with a list, figure out the time, expense of each of your goals and then plan what you need to be saving on weekly, monthly and on yearly basis to reach your goals. Goals may include making plans for things such as retirement, housing, child welfare and others.

Budget- For everything that you decide to spend money on or you are planning to go doing shopping make sure you have a budget and follow it religiously. This will go a long way in keeping you from doing unnecessary impulse buying.

Do not spend more than you make- Make sure you check your cash flow properly, will obviously show you areas where your money is leaking and make sure to reduce your expenses.

Prefer using a debit card- When using a debit card, one is only allowed to spend to a certain level and this helps in taming the urge to spend more thus keeping you on track of your set goals.

Create an emergency account- Creating an emergency account doesn’t mean that you precedent bad things will happen, but this is planning ahead so that when an emergency occurs you will not have to stop other important projects in order to settle the emergency but you will be well prepared, ready and able to settle it.

Pay Off Your Home Loan Sooner

Pay Off Your Home Loan Sooner

  • Consider how mortgage features can help
    Think about how using an offset account or a credit card linked to your home loan might help you keep your loan balance low. If you’re looking for ways to keep your interest down, it’s worth investigating what other features your mortgage comes with.
  • Take advantage if there are variable rate cuts
    A lower interest rate will reduce your repayments, but if your lender reduces the interest rate, consider repaying more than the minimum loan repayment amount. This can help you save on future interest payments. Don’t pay the interest-only An interest-only loan might mean you’re able to make lower repayments for the first few years, but this means your repayments will be larger when it comes time to pay off the principal.
  • Consider re-financing
    If you’ve had your mortgage for 12 months or more, re-financing might be able to get you a better deal on your home loan. There may be costs associated with re-financing and it’s important to take this into account.
  • Consider a split home loan
    A split loan allows borrowers to divide their mortgage into both variable and fixed components. You can lock in a low fixed rate on part of your loan, if you only want to limit exposure to the variable rate.
  • Explore your options
    Before you sign on the dotted line, make sure you’ve explored all of your options. It’s worth looking into whether you can get a discounted loan rate with a financial package that includes special rates on other products and services. With just a few easy steps, borrowers can significantly reduce the length of their loan and save thousands of dollars in the process.
Collecting Rent Online

Collecting Rent Online

Reasons for Collecting Rent Online

Controls management costs

Collecting rent online reduces property management expenses. This allows you to cut down on operation costs, and lets property management fees remain low, which is definitely an advantage for property owners.

Improves customer service

Instead of collecting and processing paper checks, your team can spend more time focusing on their marketing efforts and improving the relations with the residents.

Lessens past due accounts

Since there are different online payment options – such as PaypPal, eCheck and credit card – there will be a considerable reduction in late payments. In addition, mobile alerts that remind the residents that the rent is due, or when the due date is drawing near, usually prompts an immediate payment when your system is mobile device optimized.

Adds more security

Paying rent online gets rid of the risks involved with cash payments. Moreover, your insurance company is more likely to reduce your coverage when you do not maintain cash on-site.

Makes dispute resolutions easier and makes an audit track

Online rent payments generate a digital paper trail. If ever a resident claims that he/she paid online, you can check the system at once to confirm or refute the claim. With a fully incorporated property management software package, you can update owner statements, evaluate late fees and automatically trail split payments. The processing of rent payments and owner disbursements are more secure since sensitive personal info is never compromised. Your accounting group can just click to get a snapshot of those who have or have not paid to allow well-informed financial resolutions.

Expectations of Residents when it comes to Online Rent Payment Portals

According to past surveys, residents often expect a lot from online payment options. Besides being accessible 24/7, they expect them to:

  • be user-friendly and simple to navigate;
  • come with itemized monthly statements that separate additional fees from services;
  • provide different payment options, such as credit and debit cards;
  • allow automated recurring payments;
  • not have any processing fees, particularly if residents are required to make online payments.

Manage Your Money

Manage Your Money

First, define your goal. It is pretty difficult to achieve what you want if you do not know what you want to buy. In fact, you do not know the best way to have a successful budget because your financial goals are not even defined. Financial success is almost impossible and very stressful without a clear objective. If you do not know how much revenue you want to generate, you will not know how much work you should do to achieve it. Having a clear idea of what you can afford to avoid living beyond what you have is essential. Clear goals help you avoid unfavorable situations such as financing a lifestyle with credit or simply buying stuff you do not need. This tip works for everyone in any situation, not only for companies but also for individuals. With this first step, you created a foundation, which will help you build your financial success.

Second, control your expenses excessively. The problem is not how much you spend but what you buy. It is important for you to know what goods and services you need to purchase in order to live. Sometimes people feel suffocated by not having enough money. However, they do not realize that if they only purchase the things they need, they would have more money to spend on other things. When you know where your money is going, you are able to make more efficient decisions in business or personal finances. Controlling your expenses also allows you to keep track of misleading, incorrect or inaccurate information in important areas, such as your credit report. Another benefit of controlling your expenses is that you can determine how long you will have to save money to purchase a non-essential good or service. Some easy methods to control your expenses include an Excel sheet to track transactions, a handwritten list at the end of the day, or even applications on your mobile device that notify you every time you spend something with your cards.

Third, plan ahead. Planning is very important because it helps you to be prepared for any situation in the future. When you make a plan efficiently, you are able to reduce the necessary time and effort to achieve certain goal. Planning will help you control your expenses by identifying the best options for your investments. When you plan ahead, you gather the necessary information to make informed decisions and avoid adverse transactions. For example, paying down the debt with the highest interest or creating an emergency fund to avoid getting back into debt if an emergency happens, are easy decisions when you have a well-developed financial plan. Having defined goals, controlling your expenses, and planning are connected. You can develop a plan to achieve your goals and control your expenses.