All posts by TL Wall

I'm the owner of TL Wall Accounting, located in North Syracuse, NY
Finances

5 Reasons To Check Your Credit Report

Even though credit scores can seem somewhat arbitrary, based on which credit agency is putting the information together, it becomes obvious pretty quick that they’re pretty important to all consumers. Yet it’s amazing at how few people actually get credit reports before they try to obtain loans or get credit cards, even though every American consumer is allowed to get a free credit score once a year, courtesy of the federal government. Let’s look at 5 reasons you should be availing yourself of this important piece of paper.

1. The higher the credit score, the better credit risk you are.

Most people think their credit is better than it probably is. A study done in 2015 stated that 56% of consumers have subprime credit scores, which is usually a score of 640 or below. having a low credit score doesn’t always mean you won’t get a loan, but your lender might consider you a credit risk and charge you a higher interest rate. It’s better that you know your status before you let someone else run your report because if it’s not up to par, just the act of allowing someone to run your credit report can actually lower your score even more.

Just so you know, not all credit reporting agencies will tell you what your credit score is unless you pay for it. The reports change all the time, so you might not get the score even from the free reports that come. However, usually at least one agency will give you your current score.

2. Sometimes they have errors.

In 2013, a FTC report found that 5% of consumers had at least one error on one of the 3 major credit reporting agencies (Experian, Transunion or Equifax). That’s only considering financial errors, because it seems there are a lot more people who say that addresses are some of the biggest errors seen, although that doesn’t count against you unless it’s within the last 5 years.

3. They may show an outstanding bill that’s been paid

The biggest errors that show up on credit reports are old bills you’ve paid off that don’t show as being paid. These can wreck your credit report because you haven’t received anymore bills and you probably thought it was all taken care of because of that, but it could either mean that the billing system messed up your address or your original creditor didn’t log your payment correctly.

4. Sometimes you can get a negative report reversed.

If you check your credit report and see a bill outstanding and it’s one you agree with, if you have the ability to pay it off you can contact the creditor holding your outstanding debt, make a deal to pay your claim off (at least the amount you actually owe) if they agree to send something to each agency once you’ve made that payment telling them that everything’s been satisfied. Even though it can stay on your report for up to 7 years from the time it made the list, it’s a positive notification that some creditors will take into account in your favor.

5. It’s always better to know.

Like a lot of things, people who fear their credit status are scared to check on it to see where they stand. It’s always better to know because if you know what’s going on and you don’t like it you can always fix it. You never know when you might need to count on it being in the best shape possible.
 

Managing Money

Buy New Or Go The Repair Route

It doesn’t take a business person to know that some purchases are pretty costly. When things start to go wrong and you don’t have a lot of money, you’re forced to make the best financial decision possible.

Even if you have a lot of money, you don’t want to go spending your money indiscriminately. Therefore, you need to have a set of guidelines to determine whether it’s time to purchase something new, something formerly owned or go for the repair option.

1. Accumulative cost of repairs

Sometimes a simple fix can take care of all your problems, so this is an easy decision. However, if you find yourself constantly putting money into repairing something, whether it’s new or not, and especially if it’s not under warranty, it might be time to consider buying new.

For instance, if you have a car that’s paid off but every time you take it to the shop you’re walking out upwards of $500 or less, and you’re going to the repair shop every 2 or 3 months, it might be time to buy a new vehicle. Sure, you’re going to have monthly payments but these days your warranty for most things lasts upwards of 10 years or 100,000 miles and you’ll have your vehicle paid off way before then.

2. Determination of what the issue might be

Computers are a dicey thing for the overwhelming majority of people. Even the simplest thing can cause a lot of grief and consternation because you’re unsure where the problems lie.

This is one of those times where getting a diagnostic might save you a lot of money, no matter the age of your computer. Depending on who you go to the costs range from $60 to $150 an hour. They’ll run your computer through a series of tests to figure out where the problems lie.

Truth be told, most of the time the cost of replacing something significant isn’t really that expensive on a computer and it’s possible that you’ll walk out with a computer that’s humming for less than the cost of a new computer.

The flip side is that it depends on the cost of your original computer. If you only paid $250 for one and it starts going faulty it’s cost prohibitive to try to repair it unless you can do the work yourself. If you paid anywhere around $700 or more, then a diagnostic could end up saving you a lot of money.

3. Age of your item

Strangely enough, these days it feels like a lot of things you buy have a short term life before they become obsolete. Think about many of the appliances in your house; if they’re older, don’t they seem to last longer than something you purchased a few years ago?

In the short run, calling someone to see if your item is repairable is the smart way to go, warranty or not. The downside is that the older your item is, the less likely there’s anyone who can repair it because finding old parts isn’t easy for a lot of things, and what you might get is a recommendation for someone to do a “fix” that they’ll say is as good as new. That never seems to work, so in this case the smarter thing to do is to buy new.

These are only a few ways of looking at cost effective ways to address your issues. Each situation is different, but there are always patterns that should help you make the proper decision.
 

Tax Preparation

States Will Garnish Your Federal Tax Refunds

One of my clients was ecstatic when he was informed that he’d be getting a nice tax refund. I was betting that he had already spent some of the money. Later on I ran into him at a networking function and found out that almost all of the refund had been absorbed by the state.

What happened is the client owed a sizable amount of tax from the previous year. He’d done the right thing and set up a payment arrangement with both the state and federal government, since he owed something to both of them. He’d been making regular monthly payments to both to offset the balance.

The bulk of the refund was coming from the federal government. The client knew that was going to happen but assumed that the rest would be coming his way.

Thus, he was surprised when he found out that one source of the state refund, which was coming from another state for work his wife had performed, had been garnisheed by New York state. Not only that but at the end of the same week, he received another letter saying that the state had put out a claim on the rest of his refund, to the extent that all he was going to receive back was around $40.

That’s a major blow when one is expecting more money, yet it’s a cautionary tale when it comes to paying on back taxes owed. Whereas the federal government doesn’t put out a garnish on state taxes, every state in the union files with the IRS to recover any outstanding funds owed to them before they make it to your bank.

What you need to know is that it doesn’t only go to taxes if requested. If there’s any other outstanding federal debt, your refund can be intercepted by them. States can also garnish refunds if there’s child support payments that are outstanding, and if you’ve been ordered to pay back any workers compensation you might have received from your state, and in some cases even student loan payments if you haven’t been paying them on a regular basis.

There is a caveat to intercepting refunds though. If you filed a joint return but filed separately, the spouse who doesn’t have an obligation can request their part of the refund without the states being allowed to take any of it.

As always, the government will make sure they get their money from you. If you’re independently employed, you can only help your case by making quarterly payments when you can. It also helps if you can make bigger payments instead of the bare minimum when setting up payment arrangements.

In any case, it’s good to know what could happen so you don’t get caught off guard when you don’t receive the refund you were expecting.
 

Managing Money

Extend What You Can Do If You’re Self Employed

Back in January we wrote a post about self employment for those people who are thinking about working for themselves or are new to it. This time around we’re offering suggestions that could possibly apply to people who’ve been in business for a while but are either struggling or not taking advantage of everything they know to increase their business.

espresso
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For instance, we’re an accounting firm. We’re pretty busy all year round, although we always welcome more business. 🙂 Still, if we weren’t as busy, there are a lot of other things we could offer that could help us not only bring extra income in but would help to advertise our business in the community.

For instance, myself or anyone else here could put on a program at a local hotel or elsewhere talking about accounting, Quickbooks, taxes or a number of other things. We could charge for it, advertise it in the newspaper and on this blog, and even if we only got 10 people to come that could make a nice little chunk of change.

We could do webinars and do the same type of thing, and our reach could be even bigger because of social media. Not only that but we could record it and sell it later as a product off our website. We could also take the material we produced, turn it into a book or ebook, and not only have another product but possibly something we could sell on a site like Amazon.

We find that most people see themselves as only one thing or only doing one thing. A friend of mine who works for herself saw her skills as a worker and that’s it. I had a conversation with her, saying that she was calling herself a consultant and that consultants don’t always just do work. She has the skill and knowledge to be an evaluator of processes for departments that are in her industry. She also knows how to offer advice, train, and handle interim management during periods where an organization might be in transition and need someone temporarily. She hadn’t thought of things like that and said she would think about it further and possibly alter her list of services.

When you work for yourself, it pays to take some time to sit down and think about all the things you can do within that business. While you’re at it, think about other things you might be able to do that relates to your business. For instance, there are a lot of people who have niche businesses that have turned it into a profitable speaking career. All it takes is some forethought, some confidence and the ability to speak to people and you could find yourself being seen as an authority in your industry.

Don’t rule out anything you might be able to do unless it’s something you don’t like doing. Being flexible is one of the wisest things those who are self employed can do to help them get by when things slow down.
 

Managing Money

Set Up Automated Payments Through Your Bank

In the movie The Secret, one of the philosophers, Bob Proctor, stated that instead of worrying about debt we should all start thinking about how we can improve and grow our income. His suggestion was to set up payments to automatically go out from our banks, make sure the money is in our accounts, then never think about it again.

The City
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While part of that is a bit scary, the part about not thinking about it, there might be something to setting up some payments to automatically go out from our banks to certain creditors. Let’s think about why we might do this.

These days, more companies are charging us for paper statements, trying to get all of us to set our billing up electronically. Sure, it saves them money, and we might get our bills sooner, but if you’re like me as it pertains to email you probably see it when it first comes in and then forget about it. Even those of us who have an idea of when our payments are due can easily miss a date because of this.

This is where setting up your account to pay some of your bills electronically might be a major benefit. Unlike the old days where it could take up to a week or more for payments to transfer, these days most payments actually show up in your creditor’s account on the same day your bank sends it. The longest you might have to deal with it is a couple of days, for which I don’t know a single creditor that’s true for, but I’ve heard that there are some that take a day to process your payments.

The negative is if your money situation is unstable, which means you’re not always sure that your money will be in your account. That and the worries about banking in places where your online access isn’t as secure as it might be at home could put you in a precarious position. Overall though, this is an efficient way to make sure your bills are paid if you don’t have any worries about money and don’t need to access your account too often when you’re not at home.

Because you’re doing it through your bank, the only thing they usually need from you is the name and account number of the institution you wish to be paid. After that, you select how much is paid and on what date and that’s pretty much it; you’re good to go. You can change either the amount or date whenever you want to; it’s pretty simple to do.

You could also set up payment arrangements directly with your creditor, but doing it through your own bank gives you more control over the process. Either way, it’s something to consider.