I have 15 years of experience doing taxes. My practice is starting out so I charge $60 – $100 for most returns. Self-employment income, rental income, and other complicated returns rates will increase.
I also offer budget consultations. Let’s find a way to get you on track with a new budget for this year.
You’re trying to make changes so you can live a better life. According to Balance.com, a budget is “hard work, and often brings to mind feelings of restrictions, limitations, and plain old not getting what you want when you want it. A budget is a cornerstone of good financial health. It sounds like a diet. So, let’s think about it in terms of dieting again.
When trying to live a healthier lifestyle if you don’t eat on plan every day, you don’t give up, rewrite a new diet and further restrict yourself. You should look at worked and what didn’t work and then make adjustments. Let’s talk about our new healthy financial lifestyle.
Improve your budget. Continually evaluate your plan. If you overspend consistently in one area, look at that area. What can you change? Make sure your budget adds up. If it’s too restrictive, you may not stick to it just like a fad diet.
Know where you’re spending every dollar. This is like meal prepping and planning. If you know where you’re going to spend every dollar you make for the month, you will be less likely to overspend. Yes, you can still have flexibility and fun or discretionary money. But, you know exactly how much money that is. Or, you go get it out of the bank and use cash so you don’t overspend.
Set short-term goals. If your goal is to pay off $50,000 in debt, that can be daunting. I think of the joke, “How do you eat an elephant?” “One bite at a time.” So, break it up into smaller chunks like six month goals or even monthly goals. Or, give yourself a small reward when you stick to one of the areas you are struggling with. This could even be a highlighter on your budget, to mark the areas you stayed within. Notice the small victories and that you did better than last month.
Understand opportunity cost. When you are tempted to overspend, think of what you are giving up. When you have clear goals, it is easier to see that buying a cute pair of boots isn’t as great as being out of debt. You can also think of purchases in terms of time. If you make $20 per hour, that $100 pair of boots will cost five hours of your time. If you’re trying to get out of debt, so you can quit that job and do something you enjoy more, then the boots might not be worth it.
Allow yourself a break. You didn’t completely blow your budget. Don’t give up. Look back at your accomplishments with your budget. If you’re starting to get burned out, you might need to take a step back and make your budget work for you. A budget is useless unless you can implement it in your life.
Contact me for help setting up a budget you can work with. Make this the year, you get out of debt.
If you pay bills every time you think you have extra money, you get ahead and stop living paycheck to paycheck. Even an extra $20, could add up if you pay it as an extra debt payment. Change your mindset from “What can I buy?” to “Where could I put this aside to help me?”
“Money issues are so troublesome that people who say they’re experiencing stress in their relationship cite finances as the number one reason — easily beating out the second place contender: annoying habits, according to a study by SunTrust. Money issues are also responsible for 22% of all divorces, making it the third leading cause, according to the Institute for Divorce Financial Analysis.” (Woods, July 2015)
My husband and I don’t agree on money priorities. Confession: My husband and I don’t agree on how to spend money. I’ll spend money on the kids and house all day long. He wants to save for trips, retirement and a good nest egg. Every person will have some different priorities. We meet together to discuss where we are at with each of these priorities.
-Plan. First step in any budget is to sit down and make a plan. In order to get both people to stick to a budget, they both need to help with the plan. Understand and listen to the other person’s want and needs. They might say they don’t want to live on a budget or they want you to take care of it. It is so important to figure out what is important to each of you. Help your spouse understand the why of your financial goals. Listen to the why of their financial goals, also. Forget the past. Don’t bring up how much money they spent yesterday, last week or last year. You are both starting now.
-Prioritize. Decide which priorities are most important to you as a couple. One wants to save and one wants to buy a new car this year. Focusing on one priority at a time will help you see results more quickly. Make sure you are listening and agree that the priorities you set, you both want to achieve. After focusing on one area you will see results and then you can decide to stick with that priority or move on to another one.
-Evaluate. Make a way to track your priorities. I have a simple Excel chart that shows how much in debt we paid off last year. My husband likes to see a visual since numbers on a page don’t mean that much to him. Discuss at least once a month where you are both struggling to meet the budget categories that you set up.
-Flexibility. Always allow for flexibility in your budget. Evaluate together what you could do differently to adjust those categories or discuss ways to save in that area. Make sure you have a sufficient amount in your discretionary budget that is yours to spend on whatever you want. My husband often saves his up until he has enough to buy something bigger. I usually find something to buy with mine by the end of the week.
The first step in establishing a budget with your partner is to listen. Then, you can plan, prioritize, evaluate and improve flexibility together. Set aside time to have regular, uninterrupted conversations about your budget. Even after you have established a budget, leave blame and shame out of the conversation. If you start with the first step, listening, your joint efforts will combine, your priorities will shift towards each other, and your relationship will be strengthened.
Woods, Jennifer Ryan. 10 Ways to Prevent Money from Ruining Your Marriage. July 6, 2015. Forbes Magazine.
78% of workers in America claim to live paycheck to paycheck. No, the answer isn’t to make more money. 1 in 10 workers making $100,000+ every year, still live paycheck to paycheck. The answer is to be smarter with your money.
1. Track spending and create a budget. Yes, I always start here. I believe that a budget means freedom. If you create a budget that works well for you, you don’t restricted in your budget. But, you do learn to live within your means.
2. Save money the day your paycheck comes. If you use online banking, you can use automatic transfers to move money the day you get paid. Start moving a little money into a savings account right now. It can be $5-10 every time you get paid, but it still adds up. If you don’t have online transfers available, set some money aside from each paycheck.
3. Break monthly expenses into chunks. If your house payment is $1,000 and you receive two paychecks every month, set aside $500 from each. Don’t wait and take all the money for a big expense out of one paycheck. This is one of my favorite tricks which I will talk about the many ways it can help you pay down your debt.
4. Change your attitude. You can pretend to earn less than you do. Cut back on a few expenses every month. If you really like to go out, you still can. But, look at your expenses and adjust them to just save a little.
5. Change paycheck withholdings to get a smaller refund. If you had less withheld from each check, you could be saving or paying down debt quicker. The IRS doesn’t mind holding your money but they don’t give you any interest. If you receive a $4,000 refund, you are paying the IRS an extra $333 every month that you don’t need to pay. If you lowered your withholdings and paid an extra $333 every month on your debt, you would save about $200 in interest for the year on a 10% interest loan. Plus, you don’t have the worry of living paycheck to paycheck. I know you like the big refund but wouldn’t you also like to have an extra $300 a month to pay yourself.
Big Refund? See my ideas of how to spend it.
Living paycheck to paycheck is stressful. Don’t continue to get caught in that cycle. Start with small things to move into financial freedom. Contact me for a free budgeting consultation.
Note: If you always pay the IRS, start 2019 with a small savings account to pay that bill when it comes due. The IRS interest and penalties when you don’t pay your bill by April 15th is very high. You can set up an appointment with me to discuss how much interest and penalties you are paying by not paying your tax bill by April 15th every year.
My system of “No Crash Budgets” teaches you about interest, debt, savings and planning for emergencies while still living the lifestyle you want to live. My system is adaptable and flexible to you and your wants and needs. It allows you to still get your wants.
Saving money is a lot like losing weight or getting healthy. I advocate for a system of saving money and getting your finances in order that is sustainable unlike a “crash budget”.
Be Real. You must set manageable, realistic goals. Just like when losing weight, you won’t go from $500 in savings and thousands in personal debt to $10,000 in savings in one year. Think about the times when you have gone on a diet and you cut out all sugar, soda and flour. It made you grouchy for a few days and then sometimes you come out feeling great. With a budget, a system allows you flexibility will help you keep on track.
Focus. Find an area to focus on. Once you have a minimal amount in savings ($500-$1,000), it is more beneficial to focus on paying down your debt. But, if you’re paying down your debt and you don’t have a cushion for emergencies, then you go right back to the start. Dieting without a clear focus will not be as successful.
Plan ahead. What actually constitutes an emergency? Things come up all the time. My kids need money for school things and it can feel like an emergency but it’s not. Christmas, birthdays and entertainment are not emergencies. So, I don’t touch my emergency fund. I put away money every month for Christmas. I also look at whose birthday is during the month and set aside money for that. When you diet, if your house is full of brownies, you’re not going to lose weight. If you plan ahead and fill your kitchen with healthy items, you are prepared.
Track. Track where you are spending your money. Tracking money is an important part of setting up a sustainable budget. Each time you get paid, you should be evaluating how much you’ve spent and where. If you’re out of money in a budget category, can you quit spending or do you need to evaluate another area to take the money from? Track where you are at every month. I even like to make a chart in Excel that shows my savings growing and debt decreasing. If you’re not stepping on the scale or noticing a change in how your clothes fit, the diet will not be as effective.
Deal with setbacks. If you have an emergency fund established, you can handle emergencies. Does it seem like you have more emergencies than most people? Is your house old, your car old, or do you have medical expenses? Even when emergencies do arise, I can look at my budget and see where I could take money so that I don’t need to touch my emergency fund. When you use your emergency fund, start building it back up right away. Every few months, you can evaluate if your savings fund is enough for you. We had to replace a broken furnace during the first week of January. We had half of the money saved up because I knew it was coming. Along with that, we will be replacing our a/c unit in the spring. I am planning ahead and saving the money for that so it is not an emergency. Sometimes when you’re getting healthy you have an injury or just gain a few pounds back. You can quit or you can deal with the setback.
Understanding debt, savings and interest. I recently saw a statistic that the average American owes $15,000 in credit card debt. I want you to understand debt. You can have a car loan and a mortgage as long as you understand exactly what it is costing you. Paying interest means you are sacrificing other things. You should understand interest, tax benefits and decide which is the most important debt to pay off first in your case. Muscle weighs more than fat so the number on the scale doesn’t mean everything. Sometimes, a few pounds is a good thing.
As always, I offer tax and budgeting advice for free. Contact me through my website. You can also follow me on Instagram at nocrashbudgets
The government shutdown carries on. But, the I.R.S. will still open tax filing season on January 28th. I heard news stories that refunds wouldn’t be issued until the shutdown ends. But, the government has decided that amidst the shutdown we need the I.R.S. at work.