Everyday Money Tips for Small Business Owners

Starting your own business can be a daunting endeavour. There are larger, more time-consuming steps you can take to give your business a financial face-lift. However, there are also 5 smaller, less formidable steps that you can implement on a daily basis that will help you become more financially effective as the owner of your business.

Five Practical Tips for Small Business Owners

1. Separate Personal Spending from Your Business Purchases

Setting budgets on both a personal and a business level is one of the best ways to keep your finances simple. If you ever encounter a financial problem within your business, it might seem like a logical idea to rely on personal funds until you are back on your feet. However, this can cause issues down the road when the time comes to submit your taxes.

By setting a strict budget that you can stick to in both areas of your life, you are making the lives of you accountant or bookkeeper much easier by keeping such a distinct separation in your finances. They’ll be sure to thank you, as will both bank accounts!

2. Don’t Be Afraid to Haggle

When you think of haggling with vendors or contract workers, it doesn’t have to be a scene from a movie set in an open-air market in a foreign land. Working with someone outside of your own company is a great time to talk about pricing and to read the fine print. You can compare vendors by determining what services you need and at what price, and reading the specific terms of your contract can also bring to light helpful information, like extra time allowed to pay for services rendered or discounts for first-time customers.

3. Paying Bills on Time Is Worth It

Whether it’s your credit card, student loans, mortgage payment, or car title loan, paying your bills on time is always the best route to take. This includes your bills for your business. The late fees for bills from vendors you’ve hired and utilities can mount very quickly. You may also be struggling to pay your suppliers, in which case you should consider purchase order financing in order to smooth out your cash flow. Setting reminders on your calendar, in a spreadsheet, or on your phone are great for keeping track of what is due and when. If your business is particularly new, there can be a very thin line in the sand between ending the year with a profit, or a loss. Paying on time helps ensure your first year in business will be a success.

4. Be Thrifty

You don’t necessarily need to be Ebenezer Scrooge in order to spend less money. But simple things, like mail-in rebates for new office supplies, or buying larger items for your office, like chairs, tables, and printers, second-hand can make a huge impact on your business bank account.

5. Try Taking an Accounting Course

Mathematics might not be everyone’s strong suit, that’s why bookkeepers and accountants exist. But taking a beginner’s university course in accounting is a generous step forward in understanding the cash flow of your company. You don’t need to become a professional, but a simple and straight-forward online course on money-matters sets a solid foundation in preparation for larger financial decisions within your business.

Although owning your business may leave you with less time in the day, these small steps take little time and are worth the effort to make sure your company’s finances unfold as smoothly as possible. Before you know it, your company will expand and grow, as will your profit!

How to Manage Your Finances While Transitioning Careers

When you’re changing careers, many things are uncertain. It’s a leap of faith on many levels. So, in this delicate transition, you want to do everything in your power to maintain some stability.

And this means planning for some financial downtime.

Here are some tips to manage your finances while transitioning careers.

1.      Pad Your Emergency Fund

Your emergency fund is meant to help you pay for those emergency expenses that inevitably come up. Most experts recommend having enough to cover three to six months of living expenses under normal circumstances. But when you’re transitioning jobs, try to add enough to cover two to three more months (or more, if you can swing it).

More backup money is always better, and it’ll make your transition a lot less stressful. Start by setting aside as much as you can each week before you make your career transition.

2.      Create an Iron-Clad Budget

You aren’t going to make it through a tight financial time by sheer luck. You need a plan. Create a budget that includes only the necessities. First, get a good handle on your regular monthly expenses. Make sure you have money set aside to cover these for at least six months. And then, create a plan for the money you have leftover.

You’re going to create a budget for food, clothing, transportation, debt and anything else you need to spend money on during your downtime. And it’s okay to plan for some entertainment as long as your budget allows. Just be sure to keep it to a minimum.

3.      Negotiate

When you’re ready to take a job in a new industry, you might have to start from the bottom. And this inevitably means a pay reduction. But that doesn’t mean you have to accept the first offer that comes your way.

Even a $500 increase over the year is better than nothing, and it’s not much of a consideration for your potential employer. If someone were to hand you that money, you certainly wouldn’t turn it down. And if you’re in a position to ask for more, always ask for more. The worst they can say is no, and you should still have the option of accepting the original offer.

Here’s one tip for making yourself more marketable in a new career. Instead of focusing on your hard skills, use a functional resume template to focus on your soft skills. These are things like leadership, communication and teamwork.

Soft skills are important in any industry, and they are usually things that can’t easily be taught. Be sure to provide any awards or certifications you have to back up your claims. Everyone says they are a team player, so how can you show that you really are one?

4.      Consider Alternate Income Sources

While you build your reputation and income in a new career, you may want to supplement your income to avoid having to change your lifestyle too much. This will mean working a part-time job or taking on a side gig. It could also mean cutting back on some of the more frivolous activities that may have become a staple in your life, like your regular Asian massage or weekly round of golf.

Fortunately, it’s easier now than ever to make money online or outside of your day job. You can work for a ride-share company, one of many delivery services, or you can freelance. It does involve a time and energy commitment, but this may help alleviate some financial burdens of the change.

Changing careers can be exciting and nerve-wracking at the same time, but with the right financial plan in place, you can rock this transition and seamlessly flow into your new career. It’s all about being prepared.

And if you’re thinking about changing careers, don’t let the transition scare you out of staying in a job you hate. It’s important to love what you do.

Ways to Avoid A Scam

I recently was a victim of a scam where my credit card number was stolen. The thief used my card to buy almost $1,000 worth of groceries on a popular online grocery site! This incident made me really look into how this could have happened and ways to avoid it. There are many sources that are popular for thieves that should be red flags and be paid more attention to.

Online

With technology moving in the direction that it is, everything is online these days. This technology is great but at the same time it also adds a lot of security risks. All sites are subject to being hacked so basically your info isn’t as safe as it used to be. Many businesses out there are trying to take the proper security precautions to make transactions secure. When using sites, especially when you are buying something, make sure the site is secure and has additional security steps to make sure your information isn’t at risk.

It is every computer owner’s responsibility to make sure they have up to date antimalware installed.  Running a periodic scan is imperative to avoiding a scam.

Phone

There are many scams out there over the phone. There are reports that people are getting phone calls from people who are pretending to be someone else. They get information out of the people over the phone and use it to steal their money or identity. For example, they may pretend to be one of their family members in trouble and ask for money. Or they may pretend to be the IRS asking for your social security number. As previously explained, be sure you are aware and paying attention when giving away your information. When you are on the phone never give out your social security number and otherwise make sure you are speaking to who you think you are.

There is a ridiculous scam that has become popular recently where you literally give access to a hacker proclaiming to be a representative from Microsoft. DO NOT FALL FOR THIS ONE!

Skimmers

Another thing to worry about are skimmers. Skimmers are devices that can steal your number when swiped through the device. Gas stations and Atms are popular locations for these devices. The key is to be aware and make sure when you swipe your card that it doesn’t look suspicious or look like it has additional equipment attached that could compromise your card information.

It is no fun that we need to worry about these things these days but it is a reality. The best advice is to just be aware of what you are doing. Know where and who you are giving your information to avoid being scammed.

Can I buy that?

The beautiful thing about having money in the bank is you can afford to buy things. The ugly thing about having money in the bank is, well, you can afford to buy things.

Although I’m grateful to be in the financial position we are currently in, sometimes I miss the days of paying down debt.

That does not mean I miss debt. 

But I do miss the clear and simple objective one has when working their way out of debt.

Overtime income?

Pay off debt.

Tax return?

Pay off debt.

Side Hustle?

Pay off debt.

Birthday money?

Pay off debt.

No matter the situation, the solution was always the same. 

199950_264746610313596_1010358779_n

Within the last month or so, there have been a handful of relatively expensive items I’ve wanted to purchase, but haven’t managed to pull the trigger yet because I feel like it would be irresponsible. Here are a few of the items on my list.

Upgrade my iPhone 5 to a 6+: 

It’s kind of disgusting that we operate in a world where we believe our ridiculously expensive cell phones are essentially garbage after two years, simply because a newer model of the same phone exists. I’m a victim of the “ohhh, pretty-shiny-thing” cult as well. In a week I will be out of my ATT contract. I can upgrade my iPhone 5 to the new 6+ for $299. I’d get a better screen. A better battery. And a better camera.

That said, the primary purpose of my cell phone is to make/receive phone calls, make/receive text messages, make/receive emails. The iPhone 6 doesn’t do this any better than my current phone. Why would I pay to upgrade to a phone that has negligibly better features? Or a better question I suppose is, why do I WANT to do that?

Buy a Weber Grill: 

Five years ago, I got a relatively cheap ($199) Home Depot grill for my birthday. It has lived a long and glorious life, but after two moves, and years of use, the lack of quality is apparent. The burners no longer self-ignite. The thing is ginormous and eats up an excessive area of my patio. But most importantly, it doesn’t burn hot enough.

A burger should take 8 minutes to cook (about four minutes on each side). My grill has declined so much that it takes about 25 minutes for me to grill three burger patties. It’s a waste of propane and a terribly frustrating experience.

A Weber Grill would solve all of my problems. Just as Nordstrom is known for it’s superior customer service, Weber is known for manufacturing stellar grills. They aren’t cheap (base model is $399), but they are unmatched in value.

I love to grill and have been scouring craigslist like crazy trying to find a lightly used Weber. So far I’ve had no luck finding one that I feel is priced fair. The frugal part of me says I should wait until September to buy a new grill as that is typically when the big sales are to be had due to the end of the summer season, but the other part of me says that is stupid as I’d have to endure another grilling season with my barely functioning BBQ.

I’ve made a deal with myself that if I haven’t found one on craigslist by Memorial Weekend, I’m going to Home Depot and buying a brand spanking new one.

Pay for Electrical work:

This one isn’t so much a purchase, but more a “should we pay to have this work done.” We have an outlet in our pantry that we plugged our microwave in to a few months ago. Within one second of turning the microwave on, the outlet went out and our exterior security lights went off. It’s not the breaker. It’s not the outlet. It’s not the fuse. I’ve exhausted my electrical skills and can’t troubleshoot the problem on my own.

I had two electricians come by last week to get quotes. Since they aren’t yet sure what the problem is they could only give me estimates on how long they think it might take to identify the problem. Essentially, it’s going to cost about $300 for them to simply diagnose the problem, and potentially a lot more depending on what the issue is.

I hate having lights and outlets that don’t work. That said, these are probably the least important lights and outlets in my entire house so I don’t feel a rush to necessarily get them fixed. Why spend $300-$500 when we don’t need to? But when the time comes to sell our house, we are probably going to have to pay for this service anyways since a home inspector would surely note the issue.

I’ve never understood why people wait on upgrading their home. People will live 20 years with their builder grade laminate counter tops, only to replace them with granite when they decide they are ready to sell their house. Why not pay for the upgrade earlier and actually enjoy your counters? This is how I feel about my outlets. If I’m going to spend the money now, or down the road, why not have the electrical work done today?

I guess my issue is that I never want our financial privilege (money in the bank) to cloud my judgement and distort my perception of being a good steward of God’s resources (the money he has put in our bank).

Do I believe it’s okay to enjoy nice things? Absolutely.

Do I believe it can also be crippling? Absolutely.

 

I’ll still be so pissed if student loans are forgiven.

Back in the Occupy Wall Street hayday, Circa 2011, I wrote my 8th most popular post ever. It was simply titled “I’ll be so pissed if Student loans are forgiven“.

Yesterday I read an article by the New Yorker titled “A Student-Debt Revolt Begins“. Here’s a snippet from the article, but make sure to click through and read the whole piece.

On Monday, Heiney and fourteen other people who took out loans to attend Corinthian announced that they are going on a “debt strike,” and will stop repaying their loans. They believe that they have both ethical and legal grounds for what appears to be an unprecedented collective action against the debt charged to students who attended Corinthian schools, and they are also making a broader statement about the trillion dollars of student debt owed throughout the country.

If you took the time to read the whole piece, you’ll learn that it’s pretty clear Corinthian was likely not putting the students’ needs first. But then again, what would one expect from a for-profit entity? Of course the executives primary concerns are going to be how much money they will make, and how much money they can make for their investors.

It’s also abundantly clear Corinthian was taking advantage of the government’s generosity just as much, if not more, than they were taking advantage of their students.

Does this sound familiar? How about just a few years ago when all the financial institutions utilized predatory lending practices, knowing the fed was there to bail the bank out in the event the crap hit the fan.

Tons of upside. Virtually no downside. 

But to be honest, I actually feel for Heiney and think she should pursue legal recourse. If the college operated unethically, and the Dept of Education, requires that colleges do operate ethically, then I don’t know if the blame can necessarily be placed on her decision to enroll.

If she was deceived and lied to, how can I demand she pay back her loans. Lord knows if I was unknowingly ripped off, I’d like a chance to plead my case and get some type of relief.

BUT

Screen Shot 2015-02-25 at Feb 25, 2015, 11.20.55 PM

 

If she is successful in getting her student loans forgiven, then I would demand she forfeit any degree or credential she earned from her student-loan subsidized education.

I mean, her whole case is predicated on the fact that the school she attended sucked, wasn’t actually worth a single penny, and she feels her degree is useless.

Fine.

Give up the degree and I’m cool with you being able to explore student loan forgiveness.

Treat student loan forgiveness the same way that we treat foreclosures and bankruptcy.

I don’t get to revolt against my mortgage AND keep my house. No. The bank will kick my butt out, take back the house, and essentially forgive my loan (and damage my credit a good bit).

I don’t get to file bankruptcy, but keep my vacation properties, fishing boat, two dirtbikes, and $40,000 in personal savings. If I go to Bankruptcy court and convince the judge I can’t afford to pay back my creditors, the court takes whatever I do have, and distributes it amongst my creditors. My loan is forgiven, but I have to forfeit most of the things that debt allowed me to acquire.

So yes, even in Ms Heiney’s situation, as sad as it is. I will still be SOOOOOOOOOOOOOO pissed if her student loans are forgiven.

You can not have your cake and eat it too. 

Where do you see the student loan forgiveness issue going?

I think it’s inevitable and within 10 years student loan forgiveness will be a thing. And I’m sure it will be abused just like bankruptcy and foreclosure often are.

Heck, I’d take a damaged credit score for a couple years if it means I can swoop a free degree in the process.

*** keep in mind I graduated college with $28,000 of student loan debt, which was above the national average for my graduation year, so I’m intimately familiar with the “Frick, what did I do” feelings that come with a student loan obligation***

Retirement

Hope you enjoy a guest post today from none other than my better half, Girl Ninja. 

As of June 13th, 2014, I am officially retired…and it feels so good.  I spent all nine months of my pregnancy looking forward to the days I get to spend at home holding my baby.  I know challenges are definitely coming my way, but along with that I am excited to help take care of a household, without feeling worn down from working all day long.

As Ninja and I transition from a DINK family, to a single income household, I am surprised by the challenge.  It isn’t a tighter budget, more mindful spending or being bored and stir-crazy at home.  It isn’t the guilty feeling of spending money that I am not bringing in.  Instead, it is the surprising feeling that I miss kindergarten.

I love teaching kindergarten.  I’m not sure I really knew how much I loved it, until I left it.  In the frenzy of kindergarten graduation, packing a classroom, and a rapidly approaching due date to meet my little one, I was busy checking off to-do lists.  As I was literally walking out the back door of my classroom, I turned back one last time…cue cheesy slow motion scene with sappy music in the background.  Then the tears came.  I cried my whole drive home.  I cried as I thought back over the lessons I had taught, and the lessons my 5 year olds had taught me.  Inside those four walls, there was safety to try, to fail, to achieve, to be challenged for both my students and myself.  Names and faces poured through my mind, and I was overcome with thankfulness, joy, and sadness to be ending this chapter of life and moving on to something new.

Walking by the “Back to School” sale at Target last week, I had to stop myself from browsing the sales and stocking up for the next year. Rather than spending my days teaching, loving on, and learning with 22 five-year olds from 8:30-3:30 each day, I will be spending my day (and currently my nights) teaching, loving, and learning with Baby Ninja.  Some daily challenges will be similar, some will be different.  I won’t have those 15 minute recess breaks, 30 minute lunch breaks, or that 3:30 end time for each day. September will be hard, as I know my friends and coworkers will be gearing up to set up their classrooms and prepare for a new group of students.

Will giving this part of my life up be worth it?

Yes, I know it definitely will.  I know these are years and days with Baby Ninja I won’t get back, and I can’t wait for each of them.

So, what’s my plan? Am I just going to go through my day-to-day with this back and forth mindset of missing my teacher days, while learning to love being a stay at home mom?

Well, we have a plan.  I am excited to have the opportunity to substitute (saying yes or no to work based on what works for me? Yes please!), and I also hope to begin tutoring a few students next year.  Ninja’s schedule will allow us to make this work without having to pay for childcare for Baby Ninja.

I’m so thankful that my love for being home with my baby boy, and my love for teaching don’t have to be mutually exclusive.  I am thankful for the ways that my career have prepared me, and given me at least a glimpse of what motherhood holds. I am thankful for a husband that works hard to make it possible for me to be home with Baby Ninja during these little years.

We hope you’ll stick around to see how it goes! 

 

 

Short term investing is the worst.

About two months ago, I took $14,000 out of our savings account and put it in a taxable investment account. To date, it’s probably been my least favorite financial move I’ve ever made.

In fact, it’s the worst.

It’s also, apparently, the responsible thing to do, but that’s besides the point.

 

Responsibility is totally overrated.

drink and drive

To be clear it’s not the investment that I picked that sucks. The interest I’m earning in my Vanguard fund is blowing my savings account out of the water, granted that’s not saying much when my savings APY is a measly 0.7%.

As great as having my money make more money is, I just can’t shake the uneasy feeling I’ve had. I hate feeling less liquid.

I loved having fat stacks of cash in the bank. 

Around this time last year Girl Ninja and I had $100,000 in our savings account. After putting $70,000 of that towards a down payment, and $14,000 in to our taxable account, we are left with about $15,000 in our savings account now.

There is no logical reason why I would need to keep more than that in our savings account. I should be patting myself on the back for diversifying our money across retirement accounts, real estate, and now short-term investments, but instead I want to crawl in to bed and start sucking my thumb.

Investing in our taxable account is certainly the most uncomfortable thing I’ve done in regards to managing our money. I just need to keep reminding myself to stay the course. No pain, no gain right?

What is “that responsible personal finance thing” you know you should be (or currently are doing) that makes you uncomfortable?