Boy has my financial juggling gone astray today! We live on limited income from a variety of sources and sometimes we have a timing problem (bills due out this week, money coming coming in next week type of thing). As an accountant I am pretty good at this juggling.
I had it all planned out. We have dividends coming in on Monday which would cover almost all of our bills due out in the next week – except our RV payment and that is due out this week. I knew that later in February we would need to take money out of husband's IRA to cover our car insurance, but had time until same.
Well, the money to cover the RV payment was to come from the monthly client I have and she pays me quarterly when I go and do her books, etc. and I was due for a check in January. I tried to go to her last week, but when I called on Monday she was going to the doctor on Tuesday and did not expect to come into her place of business on Wednesday or Thursday either – maybe Friday she suggested? Friday it actually was suppose to be nice weather here and in Pennsylvania and husband was ready to go to Pennsylvania for the day and I could not disappoint him – who knows when the weather would be right in both places again as it has been so long since they were.
So I said that I would be in this week. I telephoned her on Monday to go yesterday, Tuesday, but she still was not feeling well so today, Wednesday it had to be. In addition to needing to do her bank rec, payroll taxes have to be filed by the end of January so I had to go there now! I was glad that weather stayed nice and no snow or rain.
I planned last night to deal with my problem – I wrote out a deposit slip for her check. I checked where branches of our bank are near her. I checked where a post office was near her. My plan was that when I finished doing her books I would take the check from her, deposit and mail out the RV payment.
When I got there she had a bad month and not only could not pay me, she could not pay her rent either. I did her books. I had her sign her payroll tax forms. I dealt with a couple of problems she had which are not related to what I am suppose to do, but I do things for her – she is in her 80s.
Well, I have my check – but cannot deposit it until she calls and says okay. I need to get that RV check out tomorrow, so we will have to go and take the money out of husband's IRA now and hope that she says I can cash check when the bills that were to be paid later in February with the IRA money come due. Just when I think I have it all taken care of….
I am sure that all of you have had similar problems. The important thing to do is keep track of it all – accurately so that nothing bounces – and if there is that rare occasion that something goes wrong and it does bounce – both the bank and who you paid will look at your records and say “hey, this never happens with you – of course we understand and will waive the fees for the bounced check/late payment”. (Yes, I did mess up badly once a few years ago and the fees were waived by both by the bank for the bounced check and by the company I had paid with the check as our record was so good that they could excuse the one error.)
To help keep my records accurate I use a software program to help me – Quickbooks (Quicken it's non- business alternative is good also). I keep my checkbook by hand and also in the program – and the two of them better agree or I have a problem to look for. The software lets me memorize the payments and when they are do and will remind me when I open it what bills need to be paid and what money should be coming in. It also lets me keep my personal expenses separate from our various businesses and each of them separate from the others. Lets me set up accounts for our tax related expenses and income to keep track of them for the taxes when they filed the following year.
THOUGHT OF THE WEEK – Now is the time to get started so that next tax season will easier for you to deal with your income taxes (presuming that you are in the US and need to do so). It is also a good time to start keeping better financial records in general as we all need to do same and it is easier to start with the start of a year than in the middle of it.
Showing posts with label Quickbooks. Show all posts
Showing posts with label Quickbooks. Show all posts
Thursday, January 30, 2020
Thursday, August 22, 2019
WATCH THE PENNIES AND THE DOLLARS GROW
Yes, saving money involves being organized. One thing that husband and I agreed on - very early in our dating - was that neither of us liked being in debt. The day before we were married I paid for every one of my bills sitting waiting to be paid - including adding up the credit card slips and sending a check for same to the credit card company. I never wanted husband to be able to say that I married him in debt. (Well, technically I was in debt - my student loans were still being paid off by my parents and were not fully paid off until some time after we married - but he has been polite enough to never mention same.)
When I was a child - before age 5 - my parents started teaching me about money. I got an allowance of something like a penny (US) a week. Now, remember, both my parents were accountants. My mom set up a “bank account” for me. She drew up a little bank book (do they still exist now?). When I received my allowance I could keep it and spend it (amazingly, one could actually buy things then with a penny) or I could deposit it in my bank account and save up for something. If I “deposited” it in the “bank account” she would note in my bank book. If I decided to buy something and needed money, I could withdraw it from my bank account and she would note it in my bank book. Sounds crazy right? Well it taught me to save and what saving could do. (I don’t remember if she ever added interest to my account - I don’t think so.) If I got a gift of money from a relative I could, again, keep it and spend it or “deposit” it.
Over the decades the amount of my weekly allowance increased. By the time I was in junior high school (around age 12) I was getting $3 per week. My allowance was calculated so that I could buy lunch in school every day (50c per day), if I wanted to, from my allowance and I would still have money left over to spend. Over time I saved up money and took my parents and my younger sister (second sister was still a baby) to see a Broadway play (tickets were a lot cheaper than - under $10 even for orchestra seats and I bought for the mezzanine).
We have lived within our means since we married. We found an apartment that we could afford. At first we were spending most of our income. As we went along I came up with an idea. Husband received promotions at work - first director of his department and then director of the agency at which he worked. With the first promotion I took half of the increase in his net salary and saved it - only using half of the net salary increase for spending. Why? Well, we had been living on the amount he (and I ) received before - the raise was extra money that we would not miss if we put it in savings. I used the net amount (after taxes were deducted) as that amount was the extra money available to us. I did for some time.
Watch where you bank. Different banks, savings & loan associations or credit unions can charge hugely different amounts for the same services. A credit union functions just like a bank, only the depositors own it so fees are less. The same financial institution that works for a friend or family member - might not be best for you and what is good for you now (or last year) might not be the best for you right now or in the future. The credit unions I have been involved with locally require one to deposit $5 in a savings account and leave it there. One then gets a free checking account plus can make other deposits and withdrawals to the savings account. Generally the interest rate on credit union accounts is higher than those on accounts at banks.
We eventually bought a house. We bought one below what we could afford. We put down a good sized down payment on the house - much of it from my savings as a child. We did not like the idea of having a mortgage and wanted it paid off as quickly as we could. Instead of dividing the net salary increases in half after that, I would divide into thirds - one third to spend, one third to save and one third for extra mortgage payments. We paid the mortgage off in half the time it was for - again since the money was new money, it was not missed by us as we had not had it to spend before.
When we have bought cars - and we buy them, we do not lease them - we have mostly paid for them in full from savings. When we have had to take a loan - 3 times - for a car it was always for less than 25% of the price of the car. We drive them, with two exceptions, until it no longer makes sense to repair them. We have 23 year old van and a 10 year old car at the present time.
We did buy our little RV. It does have a loan on it. I send an extra $100 at least 4 times a year to speed up the payments on it and cut the amount of interest we will have paid on it when it is paid off.
We have paid our credit card bills in full - with one exception - since either of us had a credit card. No interest paid means money not needed for same and available to use. I recently read an article and the person who wrote it said that one should always pay in cash for everything. I wrote to them and pointed out that if items are put on credit cards one has a record of where their money went (and records for tax deductible items). If they are paid in full, it costs nothing in interest or fees. If one gets a credit card one can get one that pays a very small percentage back in cash - additional money to spend or save. In our case we use several credit cards - each for a different purpose and depending on the card and what we buy we can get up to 5% back in the purchases. Does not sound like much? We bought a fence for our house - we got 5% back on the price of the fence. We put a car down payment on a credit card - paid the credit card in full and got 5% back on the down payment towards the car. The one exception was decades ago. Husband used to get his unused sick days paid off at the end of the year, which was August, so we used the money received in September for the sick days to pay for vacation (and the balance of what was received into savings). One year there was a problem and the sick day pay was coming in October. We discussed should we take money from savings to pay the vacation bills and then deposit the sick pay to replace what we took or should we pay the half of the credit card bill we could and then pay the balance in full the following month. It was an odd time and the two interest rates were just about the same, so we went with paying half and then paying the bill in full the following month.
If one can get their bills in order, one can actually pay less and have money available for savings or needed items. I was reminded this past weekend when the movie “I Remember Mama” was on TV that I actually started my thinking of dealing with money with when I read the book (actually named “Mama’s Bank Account) as a girl. If you have never seen the movie or read the book - it is about a lower class Norwegian immigrant family in San Francisco in the early 1900s. Every week the father brings home his wages (in cash which was how people were paid back then at all but professional/executive level) and gives it to his wife. She sits there with paper and sorts the money “ for the grocer” she makes a pile and wraps it in paper, “for the landlord” ditto and so on. When there is a problem and money is needed for something special/different (such as the son going to high school - they will his potential wages and there will be costs) the mother says that they must figure out what to do so that they do not have to take money from her bank account. I have gone with this idea of “piles. I have moved money - in my computer accounts - to save for various things. By subtracting the money before we have it on our regular savings account, it is not there to spend. I had subaccounts in my Quickbooks - savings for next car, for vacation, etc. subtracted from the total amount of each paycheck and each time I did I heard in my head “for the grocer, for the landlord..”. (Spoiler alert - at the end of the book/movie the daughter/author has received her first payment for writing and tells the mother to deposit it in the bank account and the mother admits that she has never been in a bank in her life - but that “it is not a good for children to worry”.) Set aside money in advance for things that you want or need and you will not have to worry. Start next time there is a raise if you want and set aside part of the net raise in a savings account (or even a jar) and it will become a habit.
THOUGHT OF THE WEEK -
It is back to school time again. If you need or know that you will need office supplies - now is the time to buy them. Pens disappear all the time? Buy them for around US$ for a dozen. Will you need a memo book, notebook, ruler, file folders etc. NOW is the time to buy them!
When I was a child - before age 5 - my parents started teaching me about money. I got an allowance of something like a penny (US) a week. Now, remember, both my parents were accountants. My mom set up a “bank account” for me. She drew up a little bank book (do they still exist now?). When I received my allowance I could keep it and spend it (amazingly, one could actually buy things then with a penny) or I could deposit it in my bank account and save up for something. If I “deposited” it in the “bank account” she would note in my bank book. If I decided to buy something and needed money, I could withdraw it from my bank account and she would note it in my bank book. Sounds crazy right? Well it taught me to save and what saving could do. (I don’t remember if she ever added interest to my account - I don’t think so.) If I got a gift of money from a relative I could, again, keep it and spend it or “deposit” it.
Over the decades the amount of my weekly allowance increased. By the time I was in junior high school (around age 12) I was getting $3 per week. My allowance was calculated so that I could buy lunch in school every day (50c per day), if I wanted to, from my allowance and I would still have money left over to spend. Over time I saved up money and took my parents and my younger sister (second sister was still a baby) to see a Broadway play (tickets were a lot cheaper than - under $10 even for orchestra seats and I bought for the mezzanine).
We have lived within our means since we married. We found an apartment that we could afford. At first we were spending most of our income. As we went along I came up with an idea. Husband received promotions at work - first director of his department and then director of the agency at which he worked. With the first promotion I took half of the increase in his net salary and saved it - only using half of the net salary increase for spending. Why? Well, we had been living on the amount he (and I ) received before - the raise was extra money that we would not miss if we put it in savings. I used the net amount (after taxes were deducted) as that amount was the extra money available to us. I did for some time.
Watch where you bank. Different banks, savings & loan associations or credit unions can charge hugely different amounts for the same services. A credit union functions just like a bank, only the depositors own it so fees are less. The same financial institution that works for a friend or family member - might not be best for you and what is good for you now (or last year) might not be the best for you right now or in the future. The credit unions I have been involved with locally require one to deposit $5 in a savings account and leave it there. One then gets a free checking account plus can make other deposits and withdrawals to the savings account. Generally the interest rate on credit union accounts is higher than those on accounts at banks.
We eventually bought a house. We bought one below what we could afford. We put down a good sized down payment on the house - much of it from my savings as a child. We did not like the idea of having a mortgage and wanted it paid off as quickly as we could. Instead of dividing the net salary increases in half after that, I would divide into thirds - one third to spend, one third to save and one third for extra mortgage payments. We paid the mortgage off in half the time it was for - again since the money was new money, it was not missed by us as we had not had it to spend before.
When we have bought cars - and we buy them, we do not lease them - we have mostly paid for them in full from savings. When we have had to take a loan - 3 times - for a car it was always for less than 25% of the price of the car. We drive them, with two exceptions, until it no longer makes sense to repair them. We have 23 year old van and a 10 year old car at the present time.
We did buy our little RV. It does have a loan on it. I send an extra $100 at least 4 times a year to speed up the payments on it and cut the amount of interest we will have paid on it when it is paid off.
We have paid our credit card bills in full - with one exception - since either of us had a credit card. No interest paid means money not needed for same and available to use. I recently read an article and the person who wrote it said that one should always pay in cash for everything. I wrote to them and pointed out that if items are put on credit cards one has a record of where their money went (and records for tax deductible items). If they are paid in full, it costs nothing in interest or fees. If one gets a credit card one can get one that pays a very small percentage back in cash - additional money to spend or save. In our case we use several credit cards - each for a different purpose and depending on the card and what we buy we can get up to 5% back in the purchases. Does not sound like much? We bought a fence for our house - we got 5% back on the price of the fence. We put a car down payment on a credit card - paid the credit card in full and got 5% back on the down payment towards the car. The one exception was decades ago. Husband used to get his unused sick days paid off at the end of the year, which was August, so we used the money received in September for the sick days to pay for vacation (and the balance of what was received into savings). One year there was a problem and the sick day pay was coming in October. We discussed should we take money from savings to pay the vacation bills and then deposit the sick pay to replace what we took or should we pay the half of the credit card bill we could and then pay the balance in full the following month. It was an odd time and the two interest rates were just about the same, so we went with paying half and then paying the bill in full the following month.
If one can get their bills in order, one can actually pay less and have money available for savings or needed items. I was reminded this past weekend when the movie “I Remember Mama” was on TV that I actually started my thinking of dealing with money with when I read the book (actually named “Mama’s Bank Account) as a girl. If you have never seen the movie or read the book - it is about a lower class Norwegian immigrant family in San Francisco in the early 1900s. Every week the father brings home his wages (in cash which was how people were paid back then at all but professional/executive level) and gives it to his wife. She sits there with paper and sorts the money “ for the grocer” she makes a pile and wraps it in paper, “for the landlord” ditto and so on. When there is a problem and money is needed for something special/different (such as the son going to high school - they will his potential wages and there will be costs) the mother says that they must figure out what to do so that they do not have to take money from her bank account. I have gone with this idea of “piles. I have moved money - in my computer accounts - to save for various things. By subtracting the money before we have it on our regular savings account, it is not there to spend. I had subaccounts in my Quickbooks - savings for next car, for vacation, etc. subtracted from the total amount of each paycheck and each time I did I heard in my head “for the grocer, for the landlord..”. (Spoiler alert - at the end of the book/movie the daughter/author has received her first payment for writing and tells the mother to deposit it in the bank account and the mother admits that she has never been in a bank in her life - but that “it is not a good for children to worry”.) Set aside money in advance for things that you want or need and you will not have to worry. Start next time there is a raise if you want and set aside part of the net raise in a savings account (or even a jar) and it will become a habit.
THOUGHT OF THE WEEK -
It is back to school time again. If you need or know that you will need office supplies - now is the time to buy them. Pens disappear all the time? Buy them for around US$ for a dozen. Will you need a memo book, notebook, ruler, file folders etc. NOW is the time to buy them!
Subscribe to:
Posts (Atom)