Category Archives: Managing Money

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.
 

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.

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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.

Health Care, Managing Money

Shopping Around For Health Products

No matter who you are, you probably know that the cost of health related supplies or pharmaceuticals can be pretty costly. Even though you can write off some of these costs, you can’t be happy paying high prices for it up front; no one is.

What we find is that people tend to go to the store or pharmacy that’s closest to home. It turns out those stores don’t often offer the best deals. In some cases, there are stores and pharmacies that will offer special deals for people with specific diseases like diabetes and cholesterol issues. This is helpful to know when your insurance company either doesn’t cover the bulk of the cost of your medication or other supplies.

For instance, one local store considers itself the friend of diabetics. If you’re on insulin and have a valid prescription, they’ll give you syringes for no cost. As a comparison, most of the other stores in the area charge between $30 and $45 for the same 100 syringe supply; you can’t save any more money than that.

Another local store offers some cholesterol reducing medication at a drastically reduced rate than most other stores. For instance, at most stores a prescription of Pravastatin at 20MG costs around $40 for a 30-day supply. This one particular store offers it at $37 for a 3-month supply.

Most people are willing to do a lot of shopping for the lower price of things like groceries and appliances, but when it comes to health care related items, even health care services, for some reason people are reluctant to try to find the best prices available. While it’s true that the cost of health care can be high sometimes, there are still deals of all sorts to be found by taking a little bit of time, picking up the phone and calling around.

For that matter, sometimes you can look online and find lower prices for some medical supplies you might need. It turns out eBay is a pretty good place to find a lot of medical supplies at a reduced rate. Sometimes the seller requires you have a prescription for those items, but most of the time it’s just a straight up transaction. For some items you might have to check out expiration dates, but in doing some research we’ve found that most supplies are actually good past those dates for up to a year.

You can save a lot of money if you’ll take the time to shop around for the best deal possible. As always, don’t drive 30 miles to save a dollar, but if you can save a lot for the same thing then it’s worth exploring.
 

Managing Money

The Correct Way To Go For Your Money Goals

Back in November we wrote a post giving our advice about some financial goals to shoot for in 2016. Those are good goals at any time, and in that article we shared other goals we’ve recommended over the years.

The best thing about goals is they help us to keep on track for what we hope to accomplish. The worst thing about them is that, if we don’t reach them, sometimes we get depressed or frustrated, which leads us to giving them up.

Recently there was an article that talked about financial goals in a way that makes a lot of sense. In essence, the person who wrote the article said that most people look at the big picture when it comes to goals. For instance, if they want to make $10,000 more a year than the previous year, they start at the end, which is the $10,000, instead of at the beginning, which is figuring out how to generate more income in the first place. That’s the difference between having an actual goal and having a dream to shoot for; it’s an important distinction.

Let’s take that $10,000 as an example. If you work at a corporation making $40,000 a year and your goal is $50,000, yet the company usually only gives 3% raises every year, you don’t have a chance to hit your goal if that’s all you have to count on. This means you have to either get another job, a part time job or find another way of making money on the side.

Let’s say you did either of these things.

A part time job might do it for you, and it’s probably your best immediate option. If you found a job paying $10 an hour and committed to 100 hours a month you’d earn $12,000 in a year, which would put you at your financial goal. Or maybe you could try to find a way to create your own income. Either option is viable, as long as you recognize one important thing – it’s going to take some time.

That’s not a bad thing, but it’s something that’s hard for a lot of people to consider. That’s why goals need plans, because the plan will help you realize how long it may take you to achieve your financial goal, whether it’s making money, reducing debt, or saving money. If you invest $10 a month into stock options, it’s going to take a very long time to get that money to grow; if you could afford to pay $1,000 a month it’ll grow faster, but even there if you have big dreams for great wealth it’s going to take time to realize it.

The article recommended people get used to the idea of financial growth by thinking in small increments. If you’re looking to reduce debt, concentrate on one bill at a time as the one to pay off while still making payments on the rest. If you’re trying to increase your income, start by trying to find a way to make $100 of extra money, then see if you can expound on it.

We want to see everyone living in comfort and financial responsibility. We’re not dream providers but, as accountants, we can help you learn where you are and figure out where you might want to be financially. After that, the skies the limit if you have the patience to ride out the time.