How Will the Government Shutdown Affect My Personal Finances?

“The question of whether or not your personal finances will be hit by the shutdown depends on your unique circumstances and how long the shutdown lasts.”

via Will the Government Shutdown Affect My Personal Finances? | MyBankTracker.

Forget the Last Minute Tax Return

Although there are some people who seem to always have their tax return data up to date and ready to be filed when the time comes round, many of us have a mad dash to find all the relevant pieces of paper and find ourselves surrounded by piles of receipts, bills, invoices and bank statements very near to the deadline date.

There seems to be something about filing a tax return that makes even the most level-headed people put it off until the last moment, which is why there are always stories of the online systems buckling under the weight of deadline day submissions and also so many people who needlessly subject themselves to late filing fines.

There have also been ongoing news stories over the past year concerning high profile public figures who have been outed as using various schemes to avoid paying tax. As long as you are acting within the law, most people want to make sure they are not paying more tax than they are legally obliged to, but the flipside is that many of us feel that going to great lengths to use complicated schemes specifically to avoid paying higher rate tax can be morally questionable.

Of course there is also a major distinction between the terms ‘avoiding’ and ‘evading’ tax, with the former being illegal and the latter, at most, morally objectionable. Whatever your stance on the matter, everybody would agree that it is plainly ridiculous to actually fall into the trap of having to pay a fine for the simple act of having filed your return past the deadline when there are easy and straightforward ways you can ensure you are always ready on time.

When it comes to tax liability it is often the case that any benefits gained in claiming our rightful allowance can often be swallowed up by accountancy fees, but without the help of specialists it is often difficult to navigate the various tax breaks available and to know how to best submit details.

The way that money can be saved is by cutting down on accountancy ‘man hours’ that are billed and this is easily done by providing your accountant with all the relevant details in a form in which they can work on straight away without having to trawl through everything to make it presentable.

Today there are some great online accounting services available from the likes of Sage One, which can save you money whilst also giving you greater control over your day-to-day bookkeeping. This process need not be daunting when you make use of simple-to-use software with easy-to-navigate unctionality.

The benefits of using online accounts packages are manifold and essentially mean that your accounting work is no longer tied to your office desktop computer. Indeed a laptop, tablet or smartphone can be used to access all your information 24/7 from wherever you happen to be, giving full flexibility and total control.

Best States for Incorporation

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Avoid walking into the doom of bankruptcy

This is a guest post.

Choosing the right career is just as important as getting the basic education. Just as the basic education works in your favor, to help you go on with higher studies, the higher studies work as the pillars of success for your career. Now, in order to complete the higher studies and go on with a job, as per your career choice, you may have to shell out lots of dollars. This again can lead you to a level which can result in bankruptcy. For, the financial situation of most of the people as of now is in no way enough to manage all of the expenses along with the student loan payments. In fact, the job market has not yet turned around on a complete basis. On top of that, if you are required to file bankruptcy, just at the beginning, your career may get stalled. Yes, it is true that bankruptcy might not be the end of the road, but still it is better to avoid bankruptcy.

Choosing the right career

Choosing the right career can be a hard job, in itself. Moreover, the perspective of choosing a career is changing with the change in the economy. So, if you have not yet changed your notion, it would be wise of you to do so. For, the job market moves in sequence with the world, and the national economy. This means, even if you were interested in any particular career, and even if that career was good enough to bring in quite a lot of dollar, it would be better for you to think twice. This is because, the career which was once considered to be good, may not be able to bring enough money for you, under the present economic conditions.

Another thing which you may be required to consider is, the cost of choosing the career you like. This is a very important part, which is going to help you determine, if you will at all be able to achieve your dreams. For, you may not be able to afford to pay for the cost of the course which you may have to join, in order to be able to enter a particular career, which you are interested in.

Yes, it is true that there are various advertisements claiming that nothing should stop you from achieving your dream, and that, if you are thinking about the costs of getting higher education, there are various financing options. However, in this case too, you will have to consider various other factors. These are:

  1. Your expenses;
  2. Your credit rating; and
  3. Financing options



If you do not have good credit, you may not be able to find yourself eligible for most of the loans. In case of the federal loans too, there are certain eligibility criteria. Then, you will also be required to consider if you can at all afford to make the student loan payments – private or federal.

Money and the job market

Now, let us consider the situation of the job market. Though the economy has just started to look up, no one can deny that the job market is still looking bleak. In fact, there is also the looming shadow of another recession, the debt ceiling problem, and also the inflation. So, how will you even be able to get a job after the completion of your studies – and in your chosen career?

Even if you can manage to get a job of your liking, your salary may not be high enough for you to manage all of your expenses. Handling the debt payments, the everyday expenses, the mortgage payments, providing for your family, and even managing student loan payments… that’s definitely not going to be an easy cakewalk for you.

In order to be able to earn more money, you may have to try out newer possibilities, other than your whole time job. There are some options which you may try, depending on your abilities. You can earn money either online or offline. In addition, you may also have to try and change careers, if required. Furthermore, you will also be required to try out new skills, so that new avenues open up before you.

All of these together may help you achieve your dream, pay down your debts, and avoid bankruptcy at the same time. However, other than trying out different careers and following a simple debt pay off process, you will also have to be a responsible human being. This in the long run, can also help you to save money for the future; and you may never have to walk the way towards bankruptcy, ever in your life.

True Secret to Success: Gratitude

…if you want to be successful, you need to feel more gratitude. Fortunately, gratitude, like most emotions, is like a muscle: The more you use it, the stronger and more resilient it becomes.

True Secret to Success: Gratitude |

What Makes the Market Move?

Click through on the link, and be patient….


There’s almost no chance you can beat the artificial intelligence machines that make thousands of trades a day now.  If your career is investing-related, make sure you understand how these AIs work, because they are going to trade faster, more often and (eventually) at a level of intelligence about what-makes-the-market-move than we ever will.  They will understand the Butterfly Effect in a way we never will – think “if Coke goes up .01%, we can safely predict potato commodities in Iowa will rise .03% and trade on that model.”  Spooky.

…what we see here is relatively low levels of high-frequency trading through all of 2007. Then, in 2008, a pattern starts to emerge: a big spike right at the close, at 4pm, which is soon mirrored by another spike at the open. This is the era of traders going off to play golf in the middle of the day, because nothing interesting happens except at the beginning and the end of the trading day. But it doesn’t last long.

You have to consider the fact that, when investing, you are competing against super-intelligent artificial intelligence.  That AI is taking millions of news articles, trends, data points and even seemingly unrelated data (weather, time of day, movement of other stocks) and trading on that information.  You’ll never compete with that.  Your best bet?  Join the party…. invest in broad-based mutual funds.


Via “Chart of the Day, High Frequency Trading Edition”,

smart phone

If You Own a Smart Phone, You Worked an Extra Two Months This Year

smart phone

Smart phones are great – Angry Birds, Netflix and 24 hour Facebook access have revolutionized how we waste our time.  But smart phones are used for work, too.  That’s not a great development.  Once mobile phones become common in the workplace, you could always be reached.  That was bad enough, but smart phones meant you could always be reached by email.  Once that idea took hold, people started proactively checking to make sure they DIDN’T have email, just to make sure they weren’t needed.

Some 68% of us check work email before 8 a.m., with half of us doing so before our heads leave the pillow. (The average check-in time of the 1,000 randomly-selected respondents: 7:09 a.m.) At the other end of the day, 69% of us can’t slip into slumber unless we’ve checked that old work email one last time.

But perhaps the most eye-popping part of the survey is how much all that extra time adds up to. Simply by answering work-related calls and emails when we’ve left the office, the average respondent is working an extra seven hours a week. That adds up to 365 hours a year.

Assuming eight-hour days and five-day weeks, that’s around two months per year of unpaid overtime — and you’re putting it in voluntarily.

All of this in the midst of a recession.  Calculate your average salary based on a 14-month year, working (at least) an 8 hour day plus another hour or so commuting.  Didn’t know you worked at Home Depot, did you?

via Why You’re Probably Working an Extra Two Months This Year.

Photo Attribution Some rights reserved by IntelFreePress

Make Your Money Last Between Jobs

man losing money


The following is a guest post.

If you are not working, or currently between jobs, it is imperative to ensure that your money lasts until you are employed once more. Graduates, who do not have much money saved, may need to make a number of sacrifices while waiting for their next job.

Under these circumstances, it is very important to make sure that your money lasts during the period of unemployment and that you can maximize your chances of becoming employed.

Take stock of your current financial situation

Draw up a budget as a first priority. A well-designed budget will guide you when handling both your expenses and bills, such as rent or any payments you need to make on a motorbike or vehicle purchase.

Always include any and all of your sources of income, so as to ensure the budget is as complete as possible. Money earned from a casual job or income from family members must be included.

Open a savings account

Even if you are between jobs, it is important to put as much into a savings account or high yield savings account as possible. Having money saved will help if it takes longer than you thought to secure work.

It is important to compare current accounts to make sure your money is working for you. As there are many different types of savings accounts, compare current accounts and earn the best rate of interest available.

Unemployment benefits and eliminating expenses

If you have previously held down a job, you may be eligible to receive unemployment benefits. The amount will vary, dependent on the wage you were receiving, so it is best to check these important details with your unemployment office.

Eliminate all expenses that are not absolutely necessary. This is an important step to stretch your money as far as possible. The ideal situation is to cut down expenses until the amount of money you need to pay out is less than the money you currently have.

Purchase inexpensive foods and prepare meals at home, rather than ordering out or going to a restaurant. Always try to use coupons and cook with inexpensive ingredients, such as potatoes, pasta, beans and rice. Try to shop only once a week and take the shortest route to the mall.

FeedingAmerica distributes food for free to people who qualify. Make contact with your local food bank to see if you are eligible and to check on their distribution schedule.

Be conscious of lowering your utility bill, which you can do simply by only turning lights on when you need them and by taking short showers or by not filling the bath.

Arrange to have your student loan payments deferred for a period of time, or until you are employed once again.

Also pay your most essential bill first, in case you run out of money. Such bills as food, medical costs and mortgage or rent should always receive priority. Remember to also always compare current accounts before opting for one, as the banking costs can really make a big difference when your financial position is dire.

Set up and follow a “work day” routine, even when you are not employed. By doing so, you will stop yourself becoming depressed and you will keep disciplined for your next job.

Work for free

People who volunteer their services at a company are often first in line to be interviewed when permanent positions become available. Employers are quick to notice potential among those working in their organizations and if you are dedicated and conscientious, there is every reason to believe that you will eventually be offered full time work.

Photo Attribution Some rights reserved by thethreesisters


The Five O’Clock Test

clockYou’ve probably heard the saying that “we’re all in business for ourselves.” This statement resonates with me.  Everyone is, in effect, an entrepreneur.  You may be an entrepreneur with a narrow set of expertise and only one client:  an employee, in other words.  Yet you are not a permanent part of your employer’s company.  As you move on through life, you will be an entrepreneur of your own brand, seeking to move from one client at a time to another.  You may become increasingly specialized in your services, but the brand – you – is still something you’ll attempt to promote and improve upon as you move from client/employer to client/employer.

Even if you buy into this mindset, though, it can be tough to think like an entrepreneur in a 9-to-5 job. An employee has a fundamentally different way of viewing the world than an entrepreneur does.  One of the main ways you can tell if you’re an employee with an entrepreneurial mindset versus an employee with an employee mindset is this:  do you worry about being at your desk at 5:00 PM (and also, 9:00 AM)?

If you have the employee mindset, you’ll want to make sure you’re a team player. You’ll have a contract specifying a minimum of 40 hours per week, and you’ll watch that clock to make sure you are in your seat 40 hours (at a minimum).  The employee mindset says that the “where” (sitting at your desk) is more important than the “what” (getting results).   The employee is banking on ‘face time’ being the critical measurement of success.  If you have ten hours of work to do or two hours, the hours will be the same.

The entrepreneurial employee’s mindset is different. If you’re in at 10 and leave at 3, it doesn’t matter as long as you get the job done.  If you need to be there at 5 (or 6, or 7), fine.  If you can leave early, also fine.  The employee with the entrepreneur’s approach knows that his or her “brand” is based on whether or not goals were met.  Whether you sat in your desk an extra two hours after your work was done for the day, just so you were there at 5, doesn’t matter.

Has anyone in a professional career has ever bragged in an interview about how they could always be counted on to stay in the office until 5:00?   Employers don’t care.  Clients don’t care, either.  Skills and results are the only thing that matters, right?

Unfortunately that’s not true. A lot of lip service is given in the corporate environment to work/life balance and the idea that only results matter, but anyone who spends more than a day or two in a cubicle knows this isn’t true.  Whether or not you have butt firmly planted in chair at 5:00 matters nothing to your next job, true.  But in office politics – the business of surviving in and flourishing in your current job – ‘face time’ is critical.  Look around the office and see how many people are coasting, working at less than full potential, simply so they have their tired face visible when 5:00 rolls around.  These people may understand, deep down, that there is no real reason to be adhering to a 9-to-5 schedule, but that’s the corporate culture and it seems unlikely to change.

If you feel the desire to be in your seat at 5:00, fine. Many people are more comfortable not rocking the boat.  But if you feel that you NEED to be in your seat at 5:00 or you’re going to be disciplined, you’re not in an organization that values results.  You’re being paid to fill a budgeted position so a manager can move up the corporate ladder by pointing to his management of a team of 20.   And before you think you can just coast along showing up at 5:00, remember this:  managers with that mindset weren’t born.  They were sitting in your seat 20 years ago, waiting for the clock to move past 4:59…

Photo Attribution Some rights reserved by Muffet


The 10 Most Common Accounting Mistakes Small Businesses Make


“Excellence is in the details. Give attention to the details and excellence will come.” – Perry Paxton

Everyone makes mistakes, and if they aren’t bad mistakes, everyone can recover from them.  Yet accounting mistakes can have long-lasting effects; customers and vendors can leave, and the IRS and financial institutions will certainly take notice, too.  Managing the money that comes in and out of your business is one of the most critical tasks facing you and your company on a daily basis.  If you pay attention to the details and you are aware of the problems that can arise from simple accounting errors, you have a head start on avoiding the worst mistakes.  The following accounting mistakes are among the most common errors facing small businesses.  Some simple actions can save your small business big money.  Some of the most common accounting mistakes are listed below:

1. Failing to follow accounting procedures.

Even the smallest business needs accounting procedures.  Too many small business owners think that they can “just wing it” when it comes to procedures, but one of the first steps towards success for a small business is the establishment of accounting policies and procedures.  Controls need to be established and documented.  Even the most detail-oriented owner can forget to instruct employees or accountants on the rules for their business.  Setting the rules early on ensures that the business is protected in the event that the owner is too busy to oversee every last accounting transaction.  Controls need to include even the simplest activities, such as the proper way to accept, document and deposit payments, pay bills and deal with routine issues like payroll and taxes.  Put the procedures in writing; create a policy binder and make sure you – and your accountant or whoever provides accounting services – is aware of every step that needs to be followed.  If you’ve written the policies correctly, you’ll make it possible for any employee or accountant to quickly and easily record transactions the right way… the first time.

2.  Forgetting about systems.

The days of accountants toting big leather-bound ledgers while wearing green eyeshades are long behind us.  Most small business owners would like to think that the choice of accounting systems might not make a big difference, but that choice may be one of the most critical ones they face.  Finding a system that meets the need of the business and easily and quickly provide information that the owner needs may be the difference between spending time trying to worry out data versus getting out and generating revenue.  Owners need to make sure that the system they choose works not only for their business and their accountants or bookkeepers (if any), but for THEM.  A good accounting system should be easily customizable to provide the reporting and analysis that an owner needs on a regular basis to analyze the financial health of his or her business.

3.  Thinking your business doesn’t need a budget.

Most small business owners like to think that they are careful with spending.  They keep an eye on every dollar that’s going out the door, and consider whether the expenditure is worthwhile or not.  Many owners think they don’t need a budget:  a careful consideration of expenses on a case-by-case basis is enough.  Wrong!  You can’t control overspending in one category or invest a surplus in another if you don’t know they exist.  Budgets are key for understanding the progress of your business.  They offer a baseline that can be used to measure where the business is versus where it could be.  Budgets don’t have to be complicated.  They can be general and high-level, but they do need to be drawn up.  Some expenses can fall into “miscellaneous” categories – but not too many.  Any business can look at the average of the last few months’ expenses, for example, to determine a reasonable budget; but any business owner who dismisses this step because he or she “watches expenses” is making a serious mistake.

4.  Outsourcing too many functions.

Small business owners may look to outsource some basic functions that require particular expertise:  accounting, taxes, IT or marketing.  All of these functions are good candidates for outsourcing if the owner doesn’t have experience in that area.  But reliance on outside contractors and firms can be a weakness if the owner chooses simply to dump the responsibility for that function.  Owners need to have an understanding of every aspect of their business.  If areas are outsourced to contractors, those contractors should be overseen.  If functions like IT, accounting or taxes are sent to outside firms, the owner of the business has a responsibility to meet with the firms on a regular basis to review the status of work and make sure he or she is aware of upcoming issues or challenges for the business.  Even if functions like accounting are outsourced, any small business needs to have at least one person working for the company who understands accounting.  Recording the transactions that might affect the business is simply too important to toss out the back door.

5.  Failing to record details.

Many transactions can be roughly categorized into a few general categories.  Sales.  Travel expenses.  If transactions aren’t recorded with a sufficient level of detail, some of the key business intelligence an owner needs to keep the business running profitably is lost.  The key step here is setting up the initial chart of accounts.  Making sure that the business transactions are properly categorized in the correct accounting when they are initially recorded, including every balance transfer, can save a lot of time and trouble down the road, when researching and recreating the original transactions might be difficult.

6.  Relying on “experts” who don’t understand your business.

When choosing an accountant, tax adviser, bookkeeper or other financial professional, small business owners have to make their first order of business a verification that the person or firm who are being hired have experience with their type of business.  Accounting principles are generally universal; but some specific types of business may have particular rules and compliance issues that are specific to that type of business.  If an owner isn’t aware of ALL of the issues facing their business, they need to find advisers who are.

7.  Disorganization.

It’s sad to say, but sometimes half of the battle is simply making sure that documents and records are properly filed.  Disorganization with receipts, bank statements and other critical documentation can create problems with accounting and taxes, of course.  But a hidden cost – one that probably costs small businesses more than many other errors – is simply the amount of time and effort it sometimes takes to research a transaction, contract or other record.  Hours are lost constantly due to intensive searches for that one little piece of paper.  Small businesses need to establish filing systems, and focus intently on ensuring that the filing is followed without fail.  Paperwork is the bane of small business, but clearing that inbox out on a daily basis – and filing it, instead of dumping it into a “to be filed” stack – can make a big difference in efficiency.

8.  Ignoring petty cash.

Petty cash seems almost quaint in the 21st century, but many employees will be reluctant to incur expenses, even on a company credit card, if it isn’t paid by the company.  Many small businesses still maintain a petty cash fund for stamps, deliveries, office supplies and so on.  The amount of money seems small compared to many other expenditures, but the simple fact is that petty cash is one of the most easily abused assets of a company.  If controls aren’t established and regular reconciliations aren’t performed, petty cash can quickly slip away.  Petty cash usually flies under the radar of auditors, owners and even many employees, but it’s an easy way for unscrupulous employees to swipe a dollar here or there.

9. Making data entry errors.

We’ve all made the mistake where we’ve entered a $432 in place of a $342 in a spreadsheet at some point in our lives.  It’s an easy error to make, and a costly one if you’re a small business owner.  Certain levels of data entry errors are just par for the course for any small business.  These accidents happen, and the controls that you would need to prevent them up front (entering all numbers twice, for example) are too costly to consider.  However, there are ways to prevent data entry errors from hurting the business long-term.  The number one method?  Reconciliations.  Make sure that accounts are reconciled against bank accounts frequently and that any accounts requiring frequent data entry are routinely reviewed and reconciled – before month end, if possible.  Small errors don’t just disappear – they eventually become bigger problems.

10.  Backing up information.

With the increasing reliance on servers and cloud computing – as well as long-lived desktops and notebooks – everyone is assuming that data is safe.  Not so.  The customer contact information you keep in your Blackberry might not be getting backed up on your server, and that invoice you sent might disappear if you created it after your daily backup has already run.  Even the best backup system has holes, and a small business owner has to be aware of the amount of data and time that will be lost if any system goes down, any time.  Think of backups as insurance.  It’s likely they’ll never be needed, but the one time you do they’ll be invaluable.


Just the first step…

Paying attention to these common mistakes won’t necessarily do a thing to attract customers, get the lowest prices from vendors or generate revenue.  But failure to pay attention to these common mistakes can be the difference between a small business that stays afloat and one that fails.  Paying attention to these common problems, especially early on in small business’s life, can make a huge difference.  As the old saying goes, “an ounce of prevention is worth a pound of cure.”