Clever Ways to Save Money

Clever Ways to Save Money

Maryam Jinadu |Sep 22, 2023

Take Charge of Your Finances

One of the advisable ways to take charge of your finances is to have a healthy savings account. While the economy can be uncertain due to various factors, it is important to have a financial backup plan to help you when emergencies arise.

When you have emergency savings, you may not have to use a credit card or loan to settle unplanned expenses. However, according to statistics, not all Americans are financially ready to withstand emergencies.

Reports from a survey conducted by the Consumer Financial Protection Bureau in 2022 reveal that about 24% of Americans don’t have emergency savings. The report further mentions that around 37% have at least a month’s income as emergency savings. Keeping money aside for emergencies, retirement, and other situations can positively influence your financial well-being.

In this article, you will learn some smart strategies to save money and the benefits that come with it.

Financial Challenges that Many Americans Face

Many people in the United States face several financial situations, making it hard to have savings. These financial difficulties are a combination of personal situations, economic factors, and systemic problems. Here are some of these financial challenges

Renting/Owning a House

Renting and Owning a House is not a walk in the park for many Americans. Depending on their location, anyone renting a house may have to part with a sizable part of their monthly finances. This can make it difficult to save for other financial needs. Concerning owning a home, some challenges include mortgage debt, significant upfront costs, repairs and maintenance, taxes and insurance, etc.

Consumer Debt

Some people might be facing credit card debt and student loans, which might be an unpleasant financial burden for them. Credit card balances with high interest rates suggest that a huge chunk of their income is for debt repayment.

Medical Expenses

Not everyone may be able to foot their health bills, which makes healthcare a significant financial problem. Those with insurance may still face costs like prescription drug costs, deductibles, copayments and coinsurance, and high premiums.

Clever Strategies to Save Money

It is crucial to note that financial stability begins with strategies like saving money for a financial goal, irrespective of how small or big it is. Here are some powerful strategies you can use to save money

Record Your Expenses

Knowing how much you spend is important if you want to start saving money. Write down all your expenses without leaving anything out. Keeping this data will give insights into the expense that takes a huge chunk of your money. You can use an online spending tracker on your phone or personal computer to help you organize the numbers.

Create a Budget

When you have a near-accurate idea of how much you spend monthly, create a budget. Working with a tight budget helps you to track your expenses and income. You can allot some amounts to essential categories like savings, housing, feeding, utilities, etc. Be disciplined with your budget, and don’t overspend. Also, identify areas where you can achieve limited spending.

Set Savings Goals

Setting savings goals is an effective strategy because it provides you with a clear path to achieve your financial goals. When setting your financial goals, divide them into short-term and long-term, and create clear objectives to provide direction and motivation. Consider automating your savings by creating a separate savings account that automatically receives transfers from your checking account.

Cut Down Unnecessary Expenses

One of the ways to reduce unnecessary expenses is to review your expenses data. Identify the non-essential needs that can be reduced or eliminated. This may include limiting credit card usage, using energy-efficient amenities, using public transportation, cooking instead of fast food, eliminating unused memberships, etc.

Be a Smart Shopper

Being a smart shopper helps you to get the needed items while saving money. You can begin by comparing prices from various retailers instead of sticking to one. Watch out for coupons, discounts, and promo codes before getting any item. Get non-perishable items like grocery shopping in bulk because they are often cheaper than when you buy them in a handful. You can also use credit cards that offer rewards for purchases made.

Benefits of Saving Money

The idea of saving money sounds beneficial to most people, but they might not fully understand the perks of doing so. Here are some benefits of saving money

Safety Net During Emergencies

Saving money helps you afford urgent expenses caused by sudden life happenings like health costs, unemployment, home repairs, etc.

Achieve Life Goals

If you have goals you intend to achieve, the best time to start saving is yesterday. Saving helps you to attain your goals faster. Be sure to divide your goals into short-term and long-term.

Peace of Mind

When you have a good amount of money that will be helpful in dire times, you will think less about struggling to get money when things happen unexpectedly.

Helping People

Having savings is also pivotal in providing help beyond your personal goals. You can help out a loved one when you have sufficient savings.

Conclusion

Saving money is essential in establishing a foundation of financial stability, and it is pivotal to getting the life you desire beyond the regular necessities. With enough savings, emergencies won’t meet you unprepared, and the money allows you to build a quality life. By applying these money-saving tips, you can secure your financial future.

Our Most Valuable advice

How to Apply for a Business Credit Card

Myles Leva | September 22, 2023

Paying for Business Expenses Applying for a business credit card is something a small business should seriously consider for itself. Business credit cards can provide a range of benefits to a business. They allow a company to build up credit for better borrowing conditions down the road. They’re also quite easy to apply for. In this article, we’ll go over how to apply for a business credit card and other important points to note. What Is a Business Credit Card? A business credit card is a credit card that is intended for business expenses. These cards are not meant for any individual’s personal use, but they are available to businesses of all sizes. What Is a Business Credit Card Used For? Business credit cards are meant for business expenses, and as such, they come with several perks that you wouldn’t get with a normal credit card. Business credit cards typically have far higher credit limits than normal cards, but they are also harder to qualify for. [youmaylike] As a business phenomenon, business credit cards vary their offers greatly, and certain cards are meant for certain businesses. They are also highly customizable when it comes to individual payment terms. Businesses don't always have consistent incomes like individuals do, and business credit cards handle this problem. These cards are used to gain access to a long line of credit, to control employee spending on business expenses and more. One of their other common uses is to make accounting easier, as putting all business expenses on one separate account makes reporting to the Internal Revenue Service easier. In the end, there are many uses for a business credit card. Why Would I Need a Business Credit Card? You might not need one, but if you run a business, you’ll be leaving money on the table by not at least looking into them. Business credit cards can solve many of the problems business owners face. If you need employees to make purchases for the business, a business credit card is the safest option. These cards can be given to authorized users, a status you can easily give to any of your employees. From here, these cards make it easy to monitor employee spending and spot any discrepancies. You can attach customized user privileges to each card to limit spending and place limits on where the card can be used. As mentioned, if you feel like your credit is too limited, business credit cards are a sure way around low credit. According to the American Bankers Association, the average monthly payment on a business credit card is twice as high as the average payment on a normal one. If you’ve found yourself annoyed with the Internal Revenue Service over the complicated reporting processes for business owners, you’re not alone. This is where a business credit card can solve another problem. Simply handing over your business credit card statements to your accountant will make them love you. It will also provide them with the information they need to predict future spending. Another great use for a business credit card is lifting your liability for debts. Liability for credit card debt is determined by the liability offered by the card. If you’re using a personal credit card for business expenses, you are liable for all debts. On the other hand, if you use a business credit card with commercial liability, your business is liable for any debts, which changes the game. Keep in mind that some cards offer joint liability, which leaves both you and your business liable for any debts. Make sure you know what you’re getting into before signing any paperwork. Lastly, just as personal credit cards offer rewards programs, so do business cards. The main difference here is that business credit card rewards are tailored to your business needs. How to Apply for a Business Credit Card Before you apply for a business credit card, you should make sure you’re eligible. For the most part, you only require the following to be able to apply for one: A legal name for your business. A business structure to apply with, such as a Limited Liability Corporation. An explanation of the nature of your business. You’ll typically be given a list of industry types to choose from. A tax ID number issued by the Internal Revenue Service Your roll in the business you’re representing Various business/financial information including: Annual revenue. Number of employees. Length of time in business. Estimated monthly expenses. If you have this information ready, you can apply for a business credit card. At this point, it would be wise to shop around and find the best option for your business. Your decision on the business credit card you choose will have larger ramifications than your choice of a personal credit card. Applying for a business credit card is much the same as applying for a personal one. There are a few differences, but the main thing to remember is that business credit cards are taken more seriously than normal ones, so you’ll have to face a higher bar of entry. This doesn’t mean getting a business credit card is hard, but it does mean you need to arrive more well-prepared than you normally would. To make things easier, you can prepare for certain obstacles in advance. You may need to sign a personal guarantee that you will pay off any debts. Also keep in mind that if you’re the one applying for a business credit card, and your business doesn’t already have one, they will conduct a personal credit check. It may be best to try to optimize your personal credit if you plan on applying for a business credit card in the future. Some Options at a Glance Here are some of the most popular options for small business credit cards: Chase Inc Business Preferred This is a great option for a few reasons. With the Business Preferred card from Chase Inc, you get 80,000 ultimate reward points when you spend $5,000 with the card in the first three months. The card also provides generic, but highly useful benefits for business owners. Business Platinum Card from American Express The Business Platinum is ideal for businesses that spend a lot on flights and travel. This card offers numerous rewards on flight and hotel expenses and makes sure you get something serious back if you use it for these expenses. Chase Inc Business Unlimited The Chase Inc Business Unlimited offers unlimited 1.5% cash back. While we’ve said enough already, they also offer several other perks that are overshadowed by their first one.

Everything You Need to Know About Filing Your Own Taxes

Katie Macomb | September 22, 2023

It's Not Fun, but It Has to be Done Benjamin Franklin wrote a 1789 letter that states, “But in this world nothing can be said to be certain, except death and taxes.” Even at the United States’ early beginnings, federal taxes were a necessary evil to fund various public projects and administrative costs. Today, federal taxes serve much of the same purpose. While virtually no one likes to prepare and file their taxes, it is a necessity if you want to avoid fines and further hassle. It is no secret that preparing and filing your taxes is notoriously complicated. Many people lament that it should not be so difficult to pay the government. However, some of the complications allow people to save money if they discover specific tax benefits. Knowing how to file your own taxes may be a good option if your tax situation is relatively straightforward, or if you are willing to learn the process. Why Do You Need to File Your Taxes Every Year? The short answer is that federal law requires that most individuals file taxes annually. Income taxes are assessed every year based on your income earned during that period. You then pay a percentage of that income to the government, less any deductions, adjustments, or credits that you qualify to receive. If you do not file (and pay) your taxes, then you may be assessed penalties and interest. The Internal Revenue Service (IRS) can even go as far as garnishing your wages and repossessing your property if you do not file and pay as required. The Benefits of Filing Your Own Taxes If you are one of the 43% of Americans that are doing your own taxes, you are certainly not alone. Roughly 53 million people prepared and filed their own taxes in 2018. There are many benefits to filing your own taxes, including: Saving money: Hiring a tax professional is expensive, and many people can prepare and file their returns on their own, completely free of charge. Control: Some people like knowing the exact information that is included in their return and being able to control the data, and for some, knowing precisely how the numbers work out, is comforting. Gain helpful information: When you prepare your taxes, you can see what items saved you money this year or which issues you should address so you can save money next year. While filing your own taxes is complicated, it can be beneficial under the right circumstances. There are several programs online that walk you through the process to help ensure you are taking advantage of all of your available deductions and credits. The Drawbacks of Filing Your Own Taxes In addition to the benefits, there are also some disadvantages to filing your own taxes. These include: Time and effort: Preparing and filing your taxes takes time and work You have to sift through financial information and deal with concepts that you may not understand well. The process can be frustrating and take a considerable amount of time. Error risk: If you do not completely understand how your taxes work, you run the risk of making a mistake because of misconceptions. If that happens, it could lead to underpayment and audits down the road. Questions: Even if you use a tax preparation software, you may still have questions that will remain unanswered unless you do significant research or reach out to a tax professional. For some people, the risk of having a substantial error that triggers the IRS’s attention is enough to scare them away from preparing their own taxes. Preparing for Filing Your Taxes When you begin work on your taxes, you should have information gathered throughout the year. Some of the most common items that you will need include: Social Security numbers for you, your spouse, and any dependents Information about wages, such as W2s or 1099s Investment income information Documents that represent any other source of income Information regarding adjustments to income, such as student loan interest paid, IRA contributions, and health savings account contributions, just to name a few Information regarding potential credits, including, for example, child care expenses, education expenses, or retirement savings contributions Data about any tax payments that you may have made throughout the year Keeping good records will help make tax preparation easier at the beginning of the year. [youmaylike] The Basics About What You Can Claim When Filing You must pay income taxes on all your income earned throughout the year. However, that income is reduced by a few things. The further you can reduce your taxable income, the less you tax you will pay. There are three general categories of tax reduction methods: Standard or Itemized Deductions Everyone can claim either the standard or itemized deductions. Standard deductions are a set amount that is based on your filing status. Itemized deductions are based on actual expenses that you incurred throughout the year. You can choose to use the higher deduction. The higher the deduction, the less tax you will have to pay on your income because your income decreases on paper. Itemized deductions include things like medical expenses, state and local tax payments, and home mortgage interest deductions. Itemized deductions will only decrease your income by a certain percentage, or up to a specific point. Adjustments Some adjustments to your income may also be available. These include things like paying student loan interest or alimony. Adjustments are more valuable compared to deductions because they decrease your income dollar for dollar. Credits A credit decreases your taxable income as well. Some credits are refundable while others are not. For example, you get a child tax credit simply for having children that qualify for that credit, but that credit will not be paid out to you if you do not have any tax obligations. On the other hand, the Earned Income Credit, which is available for low-income filers, will be refunded to you even if you do not owe any taxes. There are a wide variety of deductions and credits available. Take a look at the federal forms and related schedules to determine whether you might qualify for any of these. How to File Your Own Taxes If You Live Overseas If you earned income in the United States as a U.S. citizen or resident alien, you likely need to pay taxes on that income. This is true even if you live overseas. You can still choose to e-file or mail your tax return to the IRS once you have it prepared, just as if you physically lived in the United States. In some cases, you will be taxed on the income that you earned throughout the world. However, you may be able to deduct a portion or all of the revenue that was not made in the United States in some circumstances. Filing Online The IRS offers an online filing option that is free for individuals that have an adjusted gross income below a specific threshold. Generally, your income must be below $66,000 to qualify for this service. You can also file online by using a commercial tax preparation software. Examples of this type of software include: H&R Block TurboTax TaxCut TaxSlayer There are many programs available that will file your taxes for you, often for a fee. Knowing how to file your own taxes can be a great way to save money, but it can be tricky as well. If you want to file your taxes yourself, be sure to read the form instructions thoroughly and get familiar with various tax saving opportunities before you begin preparing your return.