Fear

We all have fears at some point in time in our lives.  Such as fear of putting money into the stock market and the fear of losing it all.  But you can not allow financial fears hold you back and prevent you from achieving your financial goals.  The only way you will achieve or reach your financial goals and objectives you set out to achieve is to get over your financial fears.

Here are 5 ways to help you get over your financial fears and help you achieve the lifestyle you want to live.

Is the worse likely to happen? I know I sometimes have a tendency to look at the worse case scenario.  But in reality will the worse really happen.  Will having a budget really cause you to go crazy and not allow you to spend or will using a bill pay service cause your bills to be late.   By having a budget you will be able to allocate your spending and know where you are spending your money.  Using online bill pay will help you save time.  In these two scenarios or any other what is the worse that could happen.  If you don’t try you will never know if it will work.

Just Do it!!  It’s the old Nike saying “JUST DO IT”.  The best way to eliminate a fear is to just do it and see what happens.  It is easier said then done but bet once you do it you may find out it was not as bad as you had thought it would be.

Know the outcome – Many times we fear the unknown.  Many of us do not like change but many times change is for better.

Ask for help – If you are afraid to make a change or unsure about something.  Ask a friend or someone you know has done what you want to do.   You can then ask them all of the questions and concerns you have about establishing it.  You can also find out how helpful it was.

Start small – Start by taking one step at a time instead of paying all of your bills with bill pay instead just start with one.  See how it works then once you feel comfortable set a goal to add more until you are completely automated.  Start saving a small amount each month.

SIMPLE HOMEWORK

By using one of these tips, I am sure you can conquer your financial fears.  You just never know what you can accomplish once you get over those fears that are holding you back.  So take it slow but take some action to get rid of those fears.  Let me know what’s your financial fear and how you plan to get over that fear by using one of these suggests.

Til next time take it one step at a time to simplify your personal finances.

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April 15th is here and hopefully your tax return is completed.  So now it’s time to celebrate right.   Maybe if you are receiving a refund or if you didn’t have to pay much.  The best news is that you don’t have to worry and stress over your return for at least eight to nine months.

Not exactly.  You just completed this year’s return and now is the best time to start planning for next year’s return while it is still fresh in your memory.  You still remember the pains that caused you to pull out your hair while preparing this year’s tax.  Instead of just putting it off for several months why not better prepare yourself by implementing a few changes for next year.

Here are a few questions to ask yourself that will help you prepare for next year’s return:

Do you need to have a better tax filing system?

Does your current filing system work for you or were you scrambling for miss placed docs? How are you keeping track of all tax related documents you will need next year.  Instead of pile it up with rest of your mail keep it separate.  Maybe even scan it and store it electronically. Having good filing system makes it easier since everything is in one file and will save you time.

Do you need to keep track of charitable donations?

Make sure you keep track of all donation letters and receipts through the year.  When you receive them place them in your tax file.

Do you need to increase your retirement contributions?

How much are you contributing to your retirement plans? Consider increasing your retirement contributions which can help lower your taxable income. Now is a good time to increase the amount you are contributing to help you with next years taxes.

Review your non-retirement holdings to make sure you have your cost basis information.

Having to determine the cost basis of something you sold can be time consuming.  I know I had this issue this year. Not having the information delayed completing my taxes for a few days.  I had to search some old files to find the information.  Reviewing your statements to make sure every asset you own has a cost basis.  If not, now is a good time to obtain the cost basis information instead of waiting until you have sold the asset and preparing your return.

Do you need to adjust your withholdings?

 Are you not having sufficient taxes withheld from your paycheck resulting in you owing taxes or you withholding to much resulting in a large refund?  Now is the time to adjust your current withholdings if necessary.

Do you have any major purchases planned for this year?

If so consider how this purchase could impact your tax situation.  May provide you some additional deductions.

Any life events happening next year that you are aware of?

Are you planning to get married, having a child or maybe moving to new state?  Tax situation maybe better or worse if you are moving to another state.  Do a little research to see how these life events will impact your tax situation. Its better to understand now when you have sometime to research than when you are preparing your taxes.

Do you need better tax preparation software?

Was the tax software you used sufficient for you tax situation.  Do you need to upgrade or purchase different software next year?  Consider it now to give you time to review other software before you make your next purchase.

Discuss with tax prepare ways you can maybe reduce your taxes next year?  

If you hired a tax preparer, schedule a time to discuss a few ways you may be able to reduce your tax liability next year.   Asking now will enable you to implement those changes sooner than later.

Should you hire someone for next year? 

Were you so stressed about the preparation of your return that now you are considering hiring someone.  If that’s the case, start asking for a few recommendations for tax preparers.  You want to find one who fits your needs in advance of tax season next year.  If you wait until, last minute, you may end up hiring the first person that has capacity or end up doing them yourself again.

These are a few questions to ask yourself to help you prepare for next tax season.  Hopefully by answering some of these questions now if may help you better prepare for tax time next year and maybe reduce your taxes next year.  It always better to be proactive than reactive.

So take action by answering these questions now rather than later.  You never know answering these simple questions now may save you money as well as reduces your stress.

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It’s April and tax season is upon us.  As you gather your W-2s, 1099s, 1098s and other tax documents to complete your tax return or provide them to your tax preparer, you are probably hoping  to receive a tax refund instead of owing additional taxes.  As you visualize that tax refund check, you are probably also wondering how to spend it.  Instead of spending it on something you don’t need or just splurging it.  Why not use it to help you begin your journey to simplify your finances.

Here are a few ways you can use your refund check to help you simplify your finances:

Start an emergency fund  or add to your existing emergency fund - having funds available for the unexpected is key to simplifying your finances. So establishing an emergency fund with your tax refund or just replenishing your emergency fund will help you to simplify.

 Open an IRA – outside of your 401k this is one of most convenient ways for you to save for retirement.  You can use your tax refund to fund your account.  Maybe take this year’s refund check to make your 2014 contribution if you have not already contributed this year.

Open an investment account - if you have already established an IRA and have fully contributed for this year, use this year’s refund to open an individual investment account.

Payoff or pay down credit card debt – Whenever you have an opportunity to eliminate or reduce your credit card debt you should.  So applying your tax refund to any outstanding debt will benefit you and help you simplify things.  The less debt you have the better your financial picture will become.

Pay down your car loan or student loan – if you have no credit card debt, why not knock out your outstanding car or student loan debt with your tax refund.  It’s better to try to reduce this as soon as possible.

Make additional mortgage payment – why not apply your tax return fund to your home mortgage.  I know it may not make a big dent in your mortgage balance but every little bit counts.

Have your Will written – Doing this Will not simplify your current financial situation but will help your family simplify things upon your death  and enable you to control how your assets are distributed.  So using your tax refund to draft your Will or updating it will help simplify things and reduce the stress on your family.

Purchase budgeting software -Having a good budget will help you simplify your finances  but you may need a little help to stay on track.  Why not buy budgeting software to help you with your tax refund?

Start kid’s savings account – What better way to teach your kids about saving by using your tax refund to start them an account.  

Start kid’s college savings account – Now you have some extra cash why not use it to start your child’s college fund or if you already have one add the refund to their existing account.  The more you have saved now the less you will have to budget for in the future.

Save it for vacation – I will assume you plan to take a vacation this summer.  Why not take that tax refund and use it toward for your vacation.

Save it for holiday shopping – We are still months away from the holiday season but with some extra cash from your tax refund why not save it for the holidays.  Maybe even begin your holiday shopping now.   It will be less stress on you and your budget if you plan ahead or buy several months in advance.

 I am sure you can find a few other ways to use your refund to help you.

ACTION STEP:

What do you plan to do with your refund check to help you simplify your finances?  I would love to hear from you.

Til next time take one step at a time to simplify your finances.   Simplifying is not a sprint it is more like a marathon so pace yourself.

 

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Splurging – Spend (money) freely or extravagantly .  All of us do it every once in a while.  We go to the store with a list of things to buy or a set amount you plan to spend but you saw something you just could not leave the store without.  You ask how can I stop the splurging and stick to my budget.  Well it takes some self control to stop the splurging but sometimes that does not always work.

So here are some ways to help you eliminate your splurging and help you stick to your budget:

Plan ahead before you leave home.  Create a list of the items you need to purchase.  Only purchase those items on the list.   I know this is easier said than done.  But it helps you focus only on the items you need instead of just wandering around the store purchasing things you really did not need.  I have a hard time with this one sometimes.

Do not bring the credit cards with you.  If you know you are going to the mall or store where you have a tendency to splurge remove your credit cards from your wallet or purse.  This way it helps prevent you from overspending.  If you have to only keep one card in with in case of emergency.  An emergency is not the extra pair of shoes or jeans you must have

Do some research before you buy. Before you go make a large purchase do a little research to see what you should pay for that item.  You may find it cheaper somewhere else instead of buying it at the first place you visit or first time you see it. I hope you do a little research before you purchase a new car or new house.

Budget for it.  If you have a tendency to purchase extra things when you shop then add it to your budget.  If you know you will always spend more than you planned on spending make sure you are capturing it in your budget.  Make it a month line item if your budget allows it.  But it should be your last item on your budget.

Hide your money. If one of the above tips does not work or if you have a tendency to splurge because you see extra money in your account, try hiding your money from yourself.  By hiding it you are not tempted to spend it because it is not visible.  Here are some ways to hide your money from yourself.

To help simplify your personal finances, you must begin to eliminate the splurging.   Eliminating the splurging will help you save more as well as help you  stick to your budget.  So which one of these tips will you begin to implement to help you combat your urge to splurge?

Remember take one step at a time in order to simplify.

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed.

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I am sure you have heard the term cash is king.  It is true but not only is cash king it can also help you simplify your personal finances.  You have probably read articles that cash will become obsolete.  Well as long as we are still using cash let it help you simplify your finances.  Here is how using cash can help you simplify and improve your finances.

Eliminate monthly bills – Yes it true cash can eliminate bills.  Instead of paying with a credit card use cash when possible.  By using cash you will not receive a bill for your purchase at the end of the month.  One Christmas I decided to use cash for all of my Christmas purchases.  It forced me to stick to a budget as well as plan ahead before I would go shopping.  I needed to determine how much cash I needed to take with me.  It was a great feeling when January came around and there was no credit card bills staring at me to pay.  It was already paid for.

Forced budget – Using cash for purchases forces you to stick to your budget.  Once your cash is used you will have to wait until your next pay check to make your next purchase.  It is not like your credit card which allows you to make purchases until you have reached your credit limit or sometimes even allows you to spend more than your credit limit.  Credit card does not inform you that you do not have the cash to pay for your purchase.

Less to remember – If you use cash for your purchases you do not have credit card due dates to remember, no stamps to purchase, or trips to the post office.  There will be no bills to pay so you have less to remember.  What a great feeling knowing you do not have to have remember the due date or remember to go to the post office for stamps or mail the bill.  You probably have enough to remember so knowing you have a few less things to remember will make you happy.

Saves time – Not only does using cash enable you to have less to remember but it also saves you time.  You do not have to to go to post office to purchase stamps and mail the bill.  You save time because you do have to review your bills and write a check to pay the amount due.  You do not have to spend time setting up bill pay either.  These seem like simple things but the time you spend on them can add up.  You can use this time doing something you enjoy instead of paying your bills.

See using cash has its been benefits.  If you find it a challenge to remember those monthly due dates, staying within your budget, or just want to save time and eliminate some bills using cash maybe a solution you may want to consider.

Remember take one step at a time to simplify your personal finances.

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You are probably wondering how can my 401(k) possibly help me simplify my finances?    Investopedia defines a 401(k) as a qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.  Most companies offer 401Ks or some form of retirement account which you can take advantage of to help you simplify your finances.

So enough with the details of a 401(k),  how will it help me simplify my finances.  Here are five ways a 401(k) can help you simplify:

Forced savings - When you sign up for your company’s plan, your contributions are taken directly from your pay check.  You do not have to set up automated transfers to your savings account to save.  Its already done for you.  All you have to do is sign up and determine what percentage of your income you would like to save.   Can’t get any easier than that.  Having a 401(k) forces you to save and its a little bit more difficult to to stop the contribution.  You can but not as easy as when you don’t control the transfers.   You can’t tell yourself I forgot to make the transfer this month.

Free money – Who does not like free money?  Many companies will match your contributions to your 401(k) which means more money for you.  Having more money in the future will absolutely help simplify your finances.  Here is the best part assuming you invest the money in a mutual fund the money the company contributes will be worth more than when they made the contribution when its time for you to retire.

Can reduce current taxes - Because your contributions to your 401(k) are pre-tax it will reduce your current annual income. Therefore it reduces your current tax liability.  Who would not want to pay less in taxes?  Check with your tax preparer to help determine how much you should contribute and how much of a tax benefit it will be.

Has limited investment choices - Yes limited investment choices can help you simplify your finances.  I know when I have too many choices I tend to make slower decisions which delays the process.  Also if this is your first introduction to investing you may be overwhelmed with too many choices.  This can sometimes result in no action at all.  Having limited choices makes it easier on you to make a decisions and not delay the process of investing your money.

Some offer target  date funds – many 401(k) plans offer targeted funds.  Targeted funds is a mutual fund that automatically adjust the asset allocation mix in the fund according to your expected retirement date.  For example if you anticipate retiring in 30 years your initial allocation will be more aggressive with mainly stock funds as you get closer to your retirement date the allocation will automatically shift from a growth to a more conservative allocation which will have more bond funds to reduce risk and generate more income.  Having these funds as a choice makes it easier on you because you do not need to make adjustment to your allocation it is done for you.  That is one less thing you have to worry about. This post can help you with your 401k choices.

You didn’t think it was possible but it can happen. Your 401(k) can help you simplify your finances. So now take action by either contributing to your 401(k) or reviewing your existing 401(k) to make sure you are taking full advantage of the benefits. Til next time take one step at a time to simplify your finances.

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What do you plan to do with year end bonus or salary increase?

by B Simple Simple Tips

The year end is only a few months away.  Many companies usually payout year-end bonuses and make salary adjustments at the end of the year.  Have you considered what you will do or would do if you receive year end bonus or salary increase?  Will you spend it or will you allocate it to help […]

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8 reasons WHY you must take action to simplify your finances

by B Simple Mindset

“Action is the foundational key to all success. ” Pablo Picasso Do you set goals but never reach them?  Do you want to organize your finances but never seems to get it done?  It’s probably  because you never took action.   Taking action is the first step you need to take in order to simplify […]

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What are you doing right with your personal finances?

by B Simple Question

  Do you  have a tendency to focus on the negative when discussing your personal finances and forget about the things you are doing right with your finances? I have too much debt. I don’t have an emergency fund. I have not saved for retirement. It is good to focus on the things you need […]

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9 Simple ways to avoid overspending on your credit card

by Guest Post Guest Post

This is a guest post from Andrew Wang who also publishes a blog on making money. Purchasing a large number of different items on your credit card, as well as paying certain bills with a credit card can very quickly send your card up to the limit. Before long, many people quickly find themselves overspending on […]

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