Accounting Tips Guides

Do you have a burning desire to achieve in a sport, hobby, talent or business venture but you never seem to have the time or money to achieve it?

Today I am going to talk about the importance of budgeting in relation to goal setting. For years and years I have set goals but I never used to fully fund the goals.

Before I had a home loan it was pretty easy actually, I would make a list with my family of all the things we wanted the following month. The purchases were prioritized and purchased as funds became available each week. Once I had a home loan, which obviously was one of the goals on our list, I found that our finances were a lot tighter than what they were before and it became a lot harder to set aside funds for the other things our family wanted to have and do.

So what tended to happen was the money was consumed immediately and for longer term goals there was no funding whatsoever. One of my goals was to go motor-racing, and there always seemed to be something more important to do than to put aside money for a go-kart, for example.

It took me years and years to get around to actually buy a go-kart; we would buy this or that or there was something else which needed doing. To actually have a lump sum available, $4000 or $5000 to buy a go-kart never seemed to happen. I think I ended up getting it from a tax refund.

However, what we do now is set aside some money on a regular basis for our longer term goals. Even if this does not fully fund your goal, let’s say you wanted to buy a go-kart for $5,000, maybe you put aside $100 a week and in a year, you’ve got your $5,000; maybe you can’t afford $100 a week, maybe you can only afford $50 a week, then at the end of the year you’ve got $2,500, and then you go and finance the balance of $2,500 some other way.

Without putting aside funds, things go from bad to worse and your goal will never happen. Let’s say your objective is to get to the national championship of your sport and that every week without balancing your budget you find that you run out of money. Most people will start doing overtime for example, to make more money. If you start doing more overtime, then you might have less time to put towards your sport or your hobby. So instead of training five nights a week on your sport or talent, all of a sudden or it could be practicing a musical instrument or that, you find that you start cutting your time down and spending less and less time on your goals and more and more time on trying to make ends meet.

Wouldn’t it be better to have a balanced budget in the first place, to make sure that you have got enough money coming in to cover your expenses, and sure you might have a national trip coming up and say I need $6,000 to go on an overseas trip to go to the international championships and maybe you debt finance a part of it. Still, we are talking about planning and spending as opposed to spending and planning.

Since we’ve started having a balanced budget, I have found is that it is a lot easier to hit those goals that we’ve been aiming for, and still have enough for all those things like Christmas and holidays and replacing cars and all that sort of thing.
In fact, my wife told me the other day that she’s made $500 of interest on the money she’s spent this year. It goes to show that once you get your budget balanced, that money can start working in your favor instead of against you. Now that’s not an overnight thing and I don’t promote the idea of just going to try and pay off your credit card all in one hit, or pay off all of your debts in one go.

It is more important to get the habit right than to get the actual debt paid off because it really takes some discipline and practice to establish the habit and you really need to set aside the funds that you need so that when your bills come in, you can afford to pay for them.

Once I set up my automatic payments for my big goal, I also set up high yield interest earning accounts and set aside funds for other known events such as holidays and gifts, car registration and repairs and I set up automatic payments for those things that my family uses weekly such as utilities. My wife and I have separate card accounts for day to day things and I know that I can spend all of the money in the card account without blowing the budget and my big goal.

Disclaimer: This document is educational and should not be considered advice. If you are in financial difficulty please get professional advice.

Glen Smith aka Glen The Goals Guy has been running goal setting courses for 13 years. Visit http://GlenTheGoalsGuy.com or http://BillBanisher.com

The thought of putting yourself and your family on a budget can often feels overwhelming for many. The truth of the matter is that not having a budget, operating with financial blinders on, is much more overwhelming than creating and sticking to a budget.

Before you even get started thinking about a budget, you’ll probably want to spend some time assessing your attitude to money. Money is not an evil or a bad thing. In fact money is wonderful! Money enables you to have a roof over your head, to feed your family and pets, to keep you and your family healthy, and to wear the clothes that help you tell the world who you are and what you’re about. Money buys education opportunities, cultural experiences, and money enables you to help others in need. Think positively about your money. You certainly wouldn’t think money was bad if you were giving it to Katrina victims or the parents of a child with a debilitating disease.

Once you’re ready to approach your budget with a smile on your face, here are a few steps to get started:

Step 1. Find a pre-formatted budget worksheet. You can find these online. They generally include the basic expense categories like:
1 Home
2 Utilities
3 Food
5 Family
6 Medical
7 Transportation
8 Debt
9 Entertainment
10 Pets
11 Clothing
12 Miscellaneous
13 Investments and Savings
14 Donations

Step 2. Spend a few minutes reviewing the categories listed in your budget worksheet. Do they make sense for your lifestyle? What categories can you eliminate? What categories will you need to add? You can find this information by reviewing your credit card statements, checkbook register and your bank accounts for the past three months. Take a look at each category that is right for your lifestyle and add sub-categories. For example, under “Entertainment” you might have the following sub-categories:
1 Movies
2 Dancing
3 Books
4 Bowling

Step 3. Determine your income! If you receive a regular pay check, go ahead and calculate your monthly take home pay before taxes. You’ll account for your taxes in your budget and this information will help you at year end when you’re doing your taxes.

Step 4. Before you jump in and begin a budget, take a month or two to track your spending using the various categories you’ve already determined. This means keeping track of all your spending, keeping receipts and not letting any dollar go untracked. This is the most important aspect of starting a budget; you need to know how much you spend on everything. You need to know where your money goes. The point to this step is to gather information, not to limit your spending or spend less than you normally do. If you normally go out to dinner three times a week, don’t all of a sudden go out to dinner just once a week simply because you’re tracking it. Doing so will set you up for budget failure and we want you to succeed.

Step 5. After tracking your expenses for one to three months you’re ready to set some goals. A budget won’t do you any good if you don’t have some financial goals. Do you want to save money for a vacation? Retirement? College fund? Financial goals are two part: how much time do you have to save the money and how much do you want to save?

Now you have absolutely all the information you need to create a budget. It is important to know that a budget isn’t set in stone. If you find after a month or two that you’re spending more on utilities than you expected but much less on food, then adjust your budget. The most successful budgets are budgets that reflect your life, are realistic and are easy to access. To keep an eye on your spending and make it easier to stick to your budget, keep your information in a location that is easy for you to access.

Eddie Lamb owns LiveMortgageFree.com a website devoted to helping homeowners, first time buyers or tenants. You’ll get your own exclusive access to the program and bonuses that will get you on the road to living Mortgage Free and will change the way you view money forever. For more information visit: LiveMortgageFree

In this day and age, it is easier than ever to spend money - just whip out your debit card and buy whatever you want. The problem with these nearly frictionless transactions is that it is difficult to keep track of your money. When most people wrote checks for every day purposes, at least they had transactions recorded in their checkbook. Every time a check was written, the person writing the check would be forced to write down the amount and see how much money was left in his account (assuming the person kept his checkbook balanced). Nowadays, it seems like very few people use checks for anything but monthly bills and very large purchases. Meanwhile, cash gets drained from their bank accounts while they use their debit cards without discretion. If this situation describes you, then you should pay close attention to the cash-based budgeting system discussed below. A cash-based budget can go a long way toward helping you get your financial situation under control.

In a nutshell, a cash-based budgeting system is one in which you take cash from your bank account for cash transactions and then divide that cash into categories. Each cash category receives its own envelope to hold the cash. That is all of the money that you are allowed to spend in that category until the next budget cycle begins.

To begin the process, you need to decide what your spending categories are going to be and how much cash you should allocate to each category. Common categories would include groceries, clothing, eating out, and entertainment. To decide how much to allocate for each, it will be helpful to look at your past spending patterns. You will probably be surprised at how much you spend on non-essentials, so it is very likely that your budgeted amount will be less than you have spent in the past. This will free up money for saving, giving away, or paying off debt. At the start of the month, withdraw the required amount of cash and divvy it up among the category envelopes.

Now comes the hard part. During the month, when you find that all of your cash for a particular category is gone, you cannot spend any more on it. If you find that it is impossible to get by on what you have budgeted for particular categories, then you need to adjust your budget for the next month. But until the next month begins, do everything you can to avoid spending more money on the category. If you have excess cash in other categories, then you can move money from one envelope to the next. The one thing you do not want to do is use your debit card to get more cash. That throws this whole system out of whack.

There are some items that will not fit into a cash system, mostly monthly bills that require a check for payment. But if you can get to the point where all of your bills are paid with check or on-line, and all other spending takes place in the context of your cash budgeting system, you will find that you have much more clarity and control of your finances.

The reason this system helps to control spending is that seeing your pile of cash disappear has much more emotional impact than using your debit card to make payments. You will be much less likely to over-spend. Even in the twenty-first century, when most transactions are done electronically, cash is still king. It is probably going to take some time to adjust to your new system. You will probably fall off the horse a few times. But if you force yourself to be disciplined and stick with it, eventually you will become a money managing machine.

ClearOne Debt Relief is a full-service debt management company providing debt settlement services such as credit card debt relief to hundreds of thousands of customers. We help people cut their debt in half, lower their monthly payment, and get out of debt in as little as 24 months.

Q. I run a recruitment company and struggle to pay temporary staff when I haven’t yet received the money in from the client. My overdraft facility is not easily increased when I need the cash. Is there anything I can do to assist with this?

A. This is a common problem for many businesses, not just those in the recruitment sector. Whilst there is no problem with the business, quite the contrary in fact, poor cashflow is halting growth. An increasingly popular solution for this type of scenario is Invoice Finance, which means that as the invoice to the client is raised, the funder will advance up to 90% of the value of the invoice immediately. This provides the funds for day to day business and winning new contacts. Once the customer settles the invoice, the remainder is then released minus a. This type of funding provides far greater flexibility than an overdraft as it grows with your business. Also, it can prove more cost effective as some providers are offering 1% over base rate on your facility. In addition, it is possible to have an outsourced credit control function attached to the facility if your customers are slow payers.

Q. I find it difficult to budget for VAT each quarter. I try and build a reserve in my bank based on my estimations, however the VAT return always drains my cashflow. How can I manage this situation better?

A. This is a situation many businesses find themselves in. Whilst everyone knows that VAT is due, the bill always hits thedesk at the wrong time. One option is to write to the HM Customs and Excise and switch to a monthly VAT return. This doesmean a little more paperwork but the cashflow impact is much less. The second option is to improve your saving scheme. If you finance you business through a debtor finance solution, then you can ask the finance provider to save an agreed amount in a reserve fund for you and, when the VAT is due, ask the finance provider to release this money to you.

Q. My company is an electrical contractor and we have lots of big customers and our work takes several months. We have to invoice in stages and every time I ask my bank to increase the borrowing to help me grow my business, they talk to me about Factoring. However, when the bank looks at my business they say that Factoring can’t help and, to add insult to injury, they won’t increase my overdraft. Who will fund my business better?

A. If the only assets you have are your growing sales, the quality of your work and your customers, then a suitable finance solution can be found. The key is to find a specialist finance partner that takes the time to understand the nature of your business and will focus their funding on the positive aspects of your business.

Q. Debtors take longer and longer to pay and, even though I have an Invoice Discounting facility, the funder does withdraw funding after a certain period of time. I then get blamed for being poor at credit control.

A. Many companies use their creditors to fund their business, this not only means that you have to wait longer to be paid, it also increases the risk of the debtor failure which will have a greater impact your business. There a number of options, the first is to talk to your finance provider and get them to look at a non-recourse finance solution, this will increase the funding period and provide insurance against non-payment and debtor failure.

John Mce writes for Hilton-Baird Financial Solutions who offer free independent business finance advice and has access to a number of finance partners helping over 2,000 UK businesses raise extra capital including the use of Invoice Finance.

Health Risk Assessments (HRA’s) have been around for many years. Physicians ask you questions and maintain data on your overall health so that they can provide appropriate care based upon one’s health history and current medical conditions.

Today the HRA is becoming a more common way that employers are providing a resource for employees to get a health evaluation and health report on their overall health status and wellness status.

Why HRA’s are important? HRA’s have increasingly become an important tool for employers to use as health care inflation has continued to rise at a prohibitive pace.

Employees voluntarily participate in an HRA to evaluate their health status. Participation in the HRA will give the employer a strategy to help their employees to manage their personal health situation. Though HRA information is private to comply with HIPAA, employers use HRA data to address problem areas in the overall health care claims.

As an example, a fictitious large employer with 500 employees offers an HRA to its’ employees. In exchange for participating in the HRA, employees will receive a discount on their contribution towards health insurance.

Due to the discount on contributions and Healthy Hearts campaign by the Human Resources department, the employer ends up with 71% of employees participating in the HRA.

The company that administers the HRA on behalf of the employer provides reporting to the employer that reflects three trends:

1. 14% of the employees or dependents have mild or elevated hypertension
2. 25% of the work force uses tobacco with 5 ongoing cancer cases
3. Type 2 diabetes impacts 11% of the HRA respondents or their family members

The employer is partially self-insured and works with their third-party administrator (TPA) to analyze their claims to assess the overall health care costs and identify each of above items relative to overall claims expenses.

Participants in the HRA will continue to get a discount on premiums for the health insurance. Through the aggregate report provided to the employer, the company implements an educational program that provides information regarding diseases to the HRA participants. Smoking cessation programs are offered to employees and dependents.

The company recognizes that the investments made in the HRA implementation and wellness program are long-term. The company will now sponsor preventive health programs and reward all participating employees who receive preventive health screenings with a reduction in their insurance premiums.

Employees who opt out of the HRA or preventive health screenings will pay a higher premium for health insurance.

What is the return on investment? The implementation of an HRA through a wellness program will require staffing and financial investment by the company. In addition, the employees will be going through the HRA screenings on company time thus impacting productivity for a short time.

However, the company will yield a positive return on these investments in reducing absenteeism, increasing productivity and lowering overall health care expenditures.

For every dollar invested, a company may expect to get a return of between the dollar invested and six dollars returned. Each company will vary in their results based upon the scope of the wellness program.

Health Risk Assessments or Personal Wellness Profiles help individuals evaluate their lifestyle, identify health risks and decide how to improve their lifestyle. Employers are increasingly using HRA’s to financially entice employees to improve their health status.

Through reduced insurance premium costs and other incentives, employers are seeking to lower health care costs by getting to the real root of the problem: good health is not an accident it is a choice based on a healthy lifestyle.

Healthier lifestyles result in lower health insurance costs. With health care inflation continue to far outpace the CPI, the investments made in implementing an HRA through a wellness program will help your company lower health care costs and absenteeism while increasing productivity.

Scott is a partner in ESP Benefit Design, an employee benefits insurance firm based in Westerville, Ohio. (614-882-8535) Scott has an MBA from Franklin University. Scott has worked with over 6,000 customers. Email Scott at scott@espbd.com

Visit http://americanhealthadvocate.com and check out articles such as

health and medical insurance quote

A home budget is often considered a frustrating venture into the world of managing money. Getting into the habit of following a budget might seem like a chore, at first. This is especially difficult for people who are impulse buyers and free spenders. But using a budget can end up saving plenty of money, if you take the time to learn how to live with one!

The first step in setting up your home budget is to write down all your income and expenses. Try to include upcoming expenses or those that occur only once a year. By including them now, the bills won’t be a surprise and the money to pay them will be readily available. If you’re not sure how to set up a home budget, plenty of free forms and guidelines available online will help you get started.

Always include “fun” money in your budget. A budget isn’t there to restrict your spending or cut out all the entertainment. Rather, it helps you see at a glance where your money is going. It allows you to manage income and expenses far more effectively. You may also discover that what seems like small purchases add up to big money. This helps you curb costs and redirect money towards better expenditures.

To help you stay on track with your home budget in the first few weeks, stop carrying cash. It’s easy to pull out a twenty when something catches your eye. The less cash you carry, the harder it becomes to make that unnecessary purchase. Even a dollar here and a dollar there add up quickly. Before you know it, the cash you had is all gone.

If you prefer paying with cash over debit or credit cards, decide before you leave home how much you need. Only take that much and no more when you go shopping. You can’t spend what you don’t have!

Using a list is one of the best ways to stay on track with spending, especially in places like the grocery store. Training yourself to follow a list for purchases helps you eliminate impulse buys. Also, a list helps direct your course through the store. Wandering about is just what store owners want you to do, it increases spending and makes them more profitable.

Using a budget doesn’t mean you have to become a coupon-cutter, but coupons do add up to big savings in the end. Clearance stores and discounted items also lead to savings. That money could go towards a reward for yourself, like a trip or a night on the town. It’s important to remember to please yourself, even if you are on a budget. You just have to be careful with your spending and keep your eye on the prize!

Really, a home budget isn’t about tracking spending and income. It’s about self-control and sticking to a plan to achieve a result. A home budget helps retrain your thinking to avoid wasting money in light of other, better goals.

If you find sticking to your home budget difficult, use the buddy system. When faced with the urge to buy something, call your budget buddy. Ask the person if he or she agrees with your desire to purchase the item. They’ll help distract you from the craving to spend and help keep you on track. Even better, take the person shopping with you!

A new habit takes about two weeks before starting to settle into permanent behavior. Getting into the habit of sticking to your budget is worth the effort. Before long, you’ll be seeing a definite change in your spending and more money at the end of the month. You’ll have a good feeling about yourself, proud of what you’ve accomplished. You might even be amazed at how much money you’ve saved!

Mike has been online since 2004. He can show you 3 simple steps to turn your Internet Marketing Business profitable. Affiliate Marketing Opportunity
Mike also publishes “Profit-Unlimited Home Business Weekly“. Take a look and receive some bonus ebooks.