In today’s financial landscape, a no-credit-check loan has emerged as a seemingly ideal remedy for individuals grappling with poor credit scores or a complete lack of credit history. The allure of accessing funds without the burden of credit scrutiny is undeniable, prompting many to wonder about the actual borrowing potential in such scenarios. 

 

If you find yourself intrigued by the notion of no credit check loans and are eager to discover the extent of financial assistance they can offer, this all-encompassing guide is tailored precisely to your needs. Here, we shall delve into the diverse array of loan options available that bypass credit checks and shed light on the maximum amounts that can be secured through these channels.

 

Payday Loans

Online payday loan lenders are a popular option for those who need quick cash. These loans typically require no credit check, making them accessible to those with bad credit or no credit history at all. The amount you can borrow with a payday loan varies from state to state. In most states, the maximum amount you can borrow with a payday loan is between $300 and $500. However, in some states, the maximum amount can go up to $1,500.

 

Loans like CreditNinja $500 loans are a popular payday loan option. These loans require no credit check and provide borrowers with up to $500 in cash. With a streamlined and effortless application process, borrowers can swiftly access the funds they need, often receiving the money as early as the following business day.

 

Installment Loans

Installment loans are a versatile loan option that offers borrowers a convenient way to secure funds without necessarily requiring a credit check. With this type of loan, you can borrow a specific sum and repay it over time through monthly installments until the entire amount, along with interest, is paid off. The actual loan amount accessible through an installment loan will depend on several factors, including the lender’s policies, and your income level and credit history. 

 

One noteworthy aspect of installment loans is that many lenders don’t impose a strict maximum borrowing limit. Instead, they assess your financial situation and ability to repay when determining how much you can borrow. Installment loans like these can be a great way to make large purchases that normally wouldn’t be feasible with a credit card or paid off with savings. Furthermore providers like LendForAll make the application process simple and cater for those with lower credit scores so that loans are accessible to a wider group of people who require some kind of capital for whatever life throws their way.

Personal Loans

For those seeking a loan option without the need for a credit check, personal loans present a flexible solution. These loans can be utilized for various purposes, including debt consolidation, home improvements, or covering medical expenses. Similar to installment loans, the amount you can borrow through a personal loan hinges on factors like the lending institution’s policies and your income and credit history.

 

Unlike installment loans, personal loans typically have specific maximum borrowing amounts set by the lenders. The cap on the loan sum can vary but is commonly seen to go up to $35,000 or more. It’s crucial to understand that, similar to installment loans, personal loans often carry higher interest rates than traditional loans. Consequently, while you may have access to a larger loan amount with a personal loan, the higher interest rates could lead to a larger total repayment in the long run.

 

Title Loans

Title loans offer a unique loan option that requires borrowers to provide collateral in the form of their vehicle. The advantage of title loans is that they generally don’t necessitate a credit check, making them accessible even to individuals with poor credit or no credit history. The loan amount accessible through a title loan is determined by the value of your vehicle.

 

Typically, title loan lenders offer loans amounting to about 50% of your vehicle’s appraised value. For instance, if your vehicle is valued at $10,000, you might be eligible to borrow up to $5,000 with a title loan. However, it’s crucial to be aware that title loans come with relatively high interest rates and fees. Failing to repay the loan as agreed could result in the loss of your vehicle, as it serves as collateral to secure the loan.

 

Conclusion

There are various loan options available that require no credit check. The amount you can borrow with these loans varies depending on the lender’s policies, your income, and your credit history. It’s important to carefully consider the risks and costs associated with each loan option before applying. However, if you need quick cash and have poor credit or no credit history, these loans may be a viable option. 

Home insurance is a crucial aspect of protecting your most valuable asset. While many homeowners understand the importance of insuring their homes, some overlook certain coverage options that provide maximum protection and peace of mind. In this article, you’ll learn about the coverage options that should always be part of any home insurance and how you can tailor them to your needs and circumstances.

1. Dwelling Coverage

When considering home insurance, it’s essential to prioritize dwelling coverage, as it forms the foundation of your policy. This coverage protects the structure of your home, including walls, roof, and foundation, against various perils such as fire, windstorms, and vandalism.

 

To ensure comprehensive dwelling coverage, assess the cost of rebuilding your home in the event of a total loss. Or, if you’re not sure how to go about it, find a recommended website that allows you to build your own insurance policy with the coverage you want while being guided by experts throughout the whole process.

 

2. Personal Property Coverage

Another essential component of home insurance is personal property coverage, which safeguards your belongings inside your home. When your possessions are stolen, damaged, or lost, you can use this coverage to replace your belongings without spending out of pocket. Here are some important aspects of personal property coverage to consider:

• Coverage Limit: Personal property coverage has a predetermined limit, typically a percentage of the dwelling coverage limit. Reviewing it and ensuring it adequately reflects the value of your belongings is crucial. If you have high-value items such as jewelry, fine art, or collectibles, you may need to consider additional coverage or scheduled endorsements to cover their total value.
• Covered Perils: Personal property coverage protects against theft, fire, vandalism, windstorms, and water damage (excluding floods). However, reviewing your policy and understanding the specific perils covered and any exclusions that may apply is essential. Some policies offer broader “all-risk” coverage, while others provide “named perils” only, which covers specific events listed in the policy.
• Off-Premises Coverage: Personal property coverage may extend beyond your home’s physical boundaries, to include belongings in storage units or luggage you take with you.

By understanding your personal property coverage, you can have peace of mind, knowing that your treasured possessions are safeguarded, no matter where they are located.

3. Liability Coverage

The liability coverage safeguards your financial well-being when held responsible for bodily injury or property damage to others. For instance, a lawsuit was filed after your guest slipped and fell on your icy driveway and sustained physical injury. If their injuries were particularly severe, the guest may even look to someone like https://www.warforindy.com/indianapolis-premises-liability-lawyer to help them put together a strong case. You can use this coverage to pay for legal costs or the medical expenses you have been deemed liable for.

Additionally, liability coverage can protect you in situations outside of your property. For example, if you accidentally damage your neighbor’s fence or car, it can pay for the repairs or replacement costs.

The limits of liability coverage are typically stated in your policy and represent the maximum amount your insurance company will pay in case of a covered liability claim. It’s crucial to review these limits and ensure they provide adequate protection. Higher liability limits are generally recommended, as they offer greater financial security and help protect your assets in the event of a significant liability claim.

4. Additional Living Expenses

If you can’t live in your property due to a covered loss, additional living expenses (ALE) coverage provides financial support. It covers the cost of temporary housing, meals, and other necessary expenses while your home is being repaired or rebuilt. 

Like the other coverage options, reviewing the ALE limits in your policy is important. That way, you can ensure they’re sufficient to support your living expenses during the restoration period. 

5. Ordinance Or Law Coverage

This coverage option is an often overlooked but essential component of home insurance. It protects you from the unexpected costs of rebuilding or repairing your homes to comply with current building codes or regulations.  

Building codes and regulations are continuously updated to improve safety standards and ensure structures meet modern requirements. If your home is significantly damaged or destroyed, local authorities may require you to rebuild or repair your home in compliance with current codes. It can include electrical systems upgrades, fire suppression systems installations, or the addition of energy-efficient features. With ordinance or law coverage, you’ll receive financial aid for these upgrades.

Conclusion

Home insurance is a crucial safeguard for your house and other valuable assets from various unforeseen events. However, it’s important to understand the different coverage options available to choose the right ones for your needs. Some essential coverage options include dwelling coverage, personal property coverage, liability coverage, additional living expenses, and ordinance or law coverage. 

Understanding your policy and reviewing it regularly with your insurance provider is also essential. It will help ensure that your coverage is adequate and that you’re aware of any changes to your policy.

Navigating the unpredictable seas of the real estate market can often feel like an endless game of chance. 

 

With income primarily based on commissions, real estate agents must tackle unique financial challenges. Ensuring future financial security requires meticulous planning and strategizing. 

 

One robust approach is to pair a comprehensive life insurance policy with a solid retirement plan. This combination is not merely beneficial but becomes an essential instrument for agents to secure their financial future and find peace of mind in their chosen career path.

Understanding Life Insurance for Real Estate Agents

Life insurance is one of the most important aspects of financial planning among real estate agents. It provides a safety net, ensuring that your loved ones are not burdened by any debts or loss of income in the event of your untimely demise. For real estate agents, where income can fluctuate dramatically, this is especially vital.

 

There’s a plethora of life insurance types available, from term life and whole life to universal and variable life. The key is to choose a policy that aligns with your financial circumstances and long-term goals. Many agents find term life insurance appealing due to its affordability and straightforwardness. However, others may opt for whole life insurance for its cash value component, which can serve as an additional savings or investment vehicle.

 

If you’re searching for the right life insurance policy, Assurance IQ quotes can help make things easy. This platform allows you to compare life insurance quotes from various providers, helping you choose a plan that best suits your needs and financial capabilities.

Retirement Planning for Real Estate Agents

While life insurance covers the financial risk of untimely death, retirement planning is essential to cover the risk of outliving your savings. The unpredictable and often volatile nature of the real estate market makes having a well-thought-out retirement plan even more crucial for agents. 

 

Depending on your specific circumstances and goals, you can consider various retirement plans. These include Individual Retirement Accounts (IRAs), Simplified Employee Pension IRAs (SEP IRAs), 401(k), and Roth IRAs. Planning for retirement early allows you to take advantage of compounding, potentially leading to substantial savings over time.

 

As a real estate agent, your income may fluctuate year by year, making it even more important to set up and contribute to a retirement fund consistently. Regardless of the state of the market, having money set aside in a dedicated retirement account can offer a sense of financial stability and assurance.

 

Additionally, consider diversification within your retirement portfolio. This can contribute to financial success. Don’t rely solely on the real estate market. Spread your investments across various asset classes to reduce risk and improve potential returns. This approach, coupled with diligent and consistent saving, will ensure that your golden years are just as prosperous and rewarding as your active working years.

The Interplay of Life Insurance and Retirement Planning

Life insurance and retirement planning, while serving different purposes, can intertwine to form a comprehensive financial safety net for real estate agents. They complement each other, bolstering your financial stability from different angles and ensuring that you are well-prepared for various future scenarios.

 

Let’s look at some ways these two aspects interact. Some life insurance policies, like whole and universal life, have a cash value component. This component works like a savings account or investment vehicle within your policy. The cash value accrues interest over time and can be borrowed against or even withdrawn in times of need. This cash value growth can contribute towards your retirement savings, providing an additional layer of financial security.

 

Conversely, if you’ve done a good job with your retirement planning, you might find that you don’t need as much life insurance as initially thought. A substantial retirement fund can decrease your dependents’ need for replacement income if something happens to you, thereby allowing you to reduce your life insurance coverage and, in turn, your premiums.

 

Life insurance can hold considerable importance in estate planning for real estate professionals. Generally, the death benefit received by beneficiaries from a life insurance policy is exempt from taxation. This makes it an advantageous and tax-efficient means of transferring wealth to your heirs, or it can be used to address potential estate taxes that may be applicable to your retirement savings or other assets.

 

Moreover, life insurance can provide funds to cover end-of-life expenses or any lingering debts, preventing these costs from eating into your retirement savings. By strategically using life insurance and retirement planning, you can safeguard your financial future and create a lasting legacy for your loved ones.

Implementing Life Insurance and Retirement Planning

Initiating a sound life insurance policy and retirement plan demands an accurate assessment of your financial health. For real estate agents, whose earnings can fluctuate, understanding income stability, current expenses, existing debts, and desired retirement lifestyle is key. These insights lay the foundation for selecting a life insurance plan that offers adequate coverage, aligns with long-term goals, and fits your budget.

 

Choosing the right retirement plan is equally essential. Factors such as income patterns, future goals, and risk tolerance come into play. Different options have unique tax implications, contribution limits, and withdrawal rules that need careful evaluation. A consultation with a financial advisor can provide valuable guidance in this process.

 

Remember, financial planning is a dynamic journey. As your career evolves and personal circumstances shift, so too should your life insurance and retirement plans. Regularly revisiting and adjusting these plans helps maintain a robust financial strategy, ensuring you are prepared for whatever the future holds.

Conclusion

Being a real estate agent can be financially rewarding but also brings unique challenges that demand careful planning. A well-crafted life insurance policy coupled with a comprehensive retirement plan can offer the financial stability and peace of mind that real estate agents deserve. 

 

With today’s wealth of resources, exploring life insurance options and retirement planning strategies has never been easier. So, start today. Assess your current plans, compare options, and consider your long-term goals. Secure your future now because the best time to plan for tomorrow is today.

Are you ready to embark on an exciting journey into the world of gold investment? Whether you’re a seasoned investor looking to diversify your portfolio or a first-timer seeking a golden opportunity, this blog post is your ultimate guide.

Equipping you with the essential tips and golden rules, we will unveil the secrets that can turn your gold investment dreams into glittering reality. So fasten your seatbelts and get ready to uncover the path towards financial prosperity as we dive deeper into the realm of gold investing!

Types of Gold Investments

Gold bars and coins are the most popular types of gold investments.

 

Gold bars come in a variety of sizes from 1 gram to 1 kilogram. The most popular size is the 400 oz good delivery bar. Gold coins come in many different weights, but the most popular are the 1 oz American Gold Eagle and the 1 oz Canadian Gold Maple Leaf.

Factors to Consider When Buying Gold

1. Your budget – how much money do you have to invest? Gold can be a costly investment, so you’ll need to make sure you have enough money set aside.

 

2. The current market value of gold – what is the going rate for gold currently? 

 

3. Your reasons for investing in gold – are you looking to hedge against inflation or simply wanting to add a valuable asset to your portfolio? Understanding your motivations will help you better assess whether gold is the right investment for you.

 

4. The form of gold you’re interested in buying – there are many different ways to purchase gold, from coins and bars to ETFs and mining stocks. It’s important to research each option and figure out which one best suits your needs.

 

5. Where to buy gold from – there are many reputable dealers out there, but it’s still important to do your homework before making any purchase. Be sure to compare prices and services before making a decision. You can read reviews like these Texas Precious Metals reviews to get a well-rounded perspective.

Benefits of Investing in Gold

When it comes to investing in gold, there are many benefits that make this metal a wise choice for first-time investors. For starters, gold is a very stable investment. Unlike stocks and other investments that can fluctuate wildly in value, gold tends to maintain its value over time. This makes it a great choice for investors who want to protect their money from inflation.

 

Another benefit of investing in gold is that it is a very liquid asset. This means that it can be easily bought and sold, which is ideal for investors who may need to cash out their investment quickly. Gold is also a popular choice for investors because it is a tangible asset. This means that it has a real-world value that paper assets like stocks do not have.

 

Gold is a great diversification tool. Because it behaves differently than other investments, adding gold to your portfolio can help reduce your overall risk. For these reasons and more, investing in gold is an excellent choice for first-time investors. If you’re already an experienced investor it’s a great asset to add to the mix too, it’s easier than ever to move some of your investment into it too, the use of an ira gold transfer for example is one such method. A gold transfer takes your existing invested funds from your IRA and allows you to allocate a portion of the funds to gold, this can provide additional security against inflation and also helps to keep your eggs in multiple baskets without giving up more cash upfront.

Tips for Storing and Protecting Your Investment

Make sure that your gold is stored in a safe and secure location. This could be a safety deposit box at your bank or a home safe. Whichever option you choose, just be sure that your gold is well-protected from theft or damage.

 

In addition to choosing a safe storage option, you’ll also want to insure your gold investment against loss or damage. This can give you peace of mind in knowing that your investment is protected even if something happens to it. You can talk to your insurance agent about adding gold to your existing policy or purchasing a standalone policy for it.

 

Remember to keep an up-to-date inventory of your gold holdings. It’s also a good idea to take photos or videos of your gold so that you have a record of it in case anything happens to it. By following these tips, you can rest assured knowing that your gold investment is well-protected.

Alternatives to Buying Gold

You can invest in a gold-mining company or buy shares of a gold Exchange-Traded Fund (ETF). Gold mutual funds invest in companies that mine and produce gold, giving you exposure to the metal without having to own it directly. ETFs track the price of gold and can be purchased through most online brokerages. Another option is to invest in gold streaming and royalty companies, which provide financing to gold miners in exchange for the right to stream gold production from their mines. These companies typically have low operating costs and high margins, providing investors with exposure to gold without the risks associated with mining companies.

Conclusion

The golden rules outlined here are essential tips for first-time gold investors, providing guidance on how to get started safely and securely. Time to start investing smartly in gold.

House hacking is an incredible way to improve your financial situation in your 20s and 30s. House hacking allowed me to pay down my debt, increase my savings, and grow as a personal.

In this post, you’ll see the true financial results from my house hacking experience.

From 2015 to 2019, I hacked my housing expenses by renting out multiple rooms to friends in my house.

House hacking is a great way to reduce your housing expenses, and also a great way to gain experience as a landlord.

Over the past 4 years, I’ve learned a ton and improved my financial situation greatly. For anyone in the early stages of building wealth, house hacking is definitely something to consider.

In this post, I want to share with you the financial results of my house hacking, talk about how expensive houses are, and give you some inspiration to consider house hacking.

Why I Decided to Sell vs. Rent My House

Before I get into the financial results of my house hacking, I want to talk about why I sold my house vs. wanting to potentially rent out my house.

I bought this property in 2015 for $287,900. Previously, it was a rental property and was renting for ~$1,900.

In 2018, I started having thoughts that I didn’t need as much space and wanted to downsize.

While the property was amazing, and definitely had potential to become a rental property again, I started to run the numbers and I wasn’t so sure it made since for my financial goals.

When I started looking at comparable houses in my neighborhood in 2018, I looked at my house and thought I could list it for sale somewhere in the $350,000 to $400,000 range.

At the time, my mortgage balance was sitting around $250,000, and with this sale price, I could get out a significant amount of equity from the property.

In terms of it being a rental, I think I could have rented it out for ~$2,200-$2,400 a month, and with a mortgage of $1,835 a month, I would be cash flow positive.

$400 a month is $4,800 a year in cash flow, and while this seems decent, when looking at the potential of what kind of cash I could get out, this didn’t seem like an no-brainer use of the capital.

Also, even though the location and house is amazing, there were upcoming repairs and challenges with the house. It was built in 1900 and needed some updates.

My decision came down to if I could get $50,000 to $100,000 out of the property via a sale, then I could potentially buy multiple rental properties, start a business, invest in stocks, etc. With these proceeds, I could potentially make more than $4,800 a year in cash flow – and not have to worry about property management of this property.

This lead me to wanting to sell vs. renting it out.

Financial Results from 4 Years of House Hacking (from Purchase to Sale)

Below I’ve created a table with all of the housing related income and expenses I had over the last 4 years.

As mentioned above, In 2015, I bought the house for $287,900, and using FHA, I put down 3.5% (and it ended up being more like 2% due to some fees).

With mortgage closing costs included, I started off on my house hacking journey with ~$10,400 into the property.

After moving in, I had 3 roommates join me. My initial mortgage payment was $1,820, and my monthly rental income was $1,650.

Increasing my income is a goal of mine, and with house hacking, I was able to accomplish this.

Over the next few years, friends and roommates moved in and out of the property, and also had a few housing improvements and repairs.

With all of this income and expense, I’ve looked to categorize it appropriately above.

Fast forward to July 2019, I decided to sell my house, and was able to sell for $375,000.

My mortgage balance when I sold was ~$245,000, and after agent commission and other fees, I walked away with roughly $110,000.

Tallying all of this up, over the 4 years of house hacking, I “made” just over $11,000 to live.

But I’ve left out where the cool part of house hacking comes in.

House Hacking vs. Renting – An Opportunity Cost Analysis

In the calculation above, I included the principal payoff as an expense. When you pay down the principal, yes, technically it is going back to you, but it’s not unlocked until you sell.

Since I’ve included the principal payoff as an expense, I need to make an adjustment to the final profit number.

I haven’t considered the opportunity cost of renting a place. 

If I was to rent out the room I lived in for 4 years to myself, I would have charged $800 a month. Adding in $800 a month for 4 years, I actually “made” nearly $50,000 to live.

$50,000 over 4 years, or $12,500 a year to live.

As mentioned above, when I got my house, I paid $10,400 upfront (down payment and closing costs).

Looking at the final profit number, I made $12,500 a year for 4 years – a return on investment of 120.19% a year for 4 years.

Those are some ABSURD returns.

These kind of asymmetric pay-offs are what you need if you want to build wealth fast without having a lot of money.

Real estate has this type of potential, but there are also some other thoughts I want to reflect on and share with regards to real estate and house hacking.

Houses are Expensive and The Potential for Real Estate Gone Wrong

While I made out really well on with my house hacking experience, there are a number of things which could have gone wrong, or also lead to much lower returns.

For one, I didn’t have any major repairs or accidents with my house.

For example, I could have easily had to repair the roof, replace a water heater or furnace, or dealt with water damage in the basement.

These things would have potentially cost thousands of dollars and also lead to headache and stress.

In addition to these potential repairs and damages, house prices are NOT guaranteed to always go up.

We live in a world with finite resources and finite space. Real estate is very cyclical and dependent on location and demand.

I happened to buy at a great time and rode some nice appreciation (33% in 4 years).

However, this might not be the case for other people who buy in other areas or at other times.

Finally, property taxes is another factor I want to discuss.

Property taxes keep going up all over the United States. As you may have noticed above, from 2016 (the first full year of living in my house) to 2018 (the last full year), my property taxes increased $1,500!

In 2019, they were set to be $5,200 – an increase of $2,200 in 3 years!

In 3 more years, would they be $7,400 a year? I have no idea, but depending on the area you live, this could definitely play into lower returns.

Again, I was pretty lucky with my house hacking, and am thankful for my experience. What do you think?

What are My Thoughts on House Hacking?

I’m done with house hacking for now, but still believe it’s an amazing way to reduce your housing expenses and improve your financial situation.

House hacking allows you to cover some of your mortgage and increase your monthly cash flow.

One thing I should say, though, is house hacking is not for everyone.

As a 20-something person without a spouse or kids, I was able to take this risk.

However, you may not have as flexible of a situation as I did, and I want you to think critically before jumping into real estate.

There’s no guarantee that house hacking will work for you, but there is certainly great potential!

Thank you for reading 🙂

Saving more money can sometimes seem impossible, but with the right saving strategy, you can save a lot of money. I like to focus on the 3 big expenses – housing, transportation and food – to save more money fast.

In this post, you’ll learn how to save more money fast and increase your savings by focusing on these 3 areas of spending to improve your financial situation.

There are a number of ways for a person to improve their financial situation: increasing your income, increasing your savings rate, decreasing your expenses, or getting a windfall, to name a few.

My goal is to increase my income, though I’m always cognizant of the big three expenses: housing, transportation, and food.

These are called the big three because, typically, they will be your three biggest yearly expenses (shocking right?). Reducing expenses in these areas will have the biggest impact on your financial situation.

Yes, it’s easy to look at that $4 latte each day and think dropping that will help reduce your expenses, but honestly, $4 a day is $120 a month – not a crazy amount of money.

Switching houses or apartments could result in a $500 per month saving with little to no effort – and you’re still caffeinated. 🙂

I believe we all should be cognizant of these three expenses.

Here are some tips and tricks for saving more money on your three biggest expenses.

How to Reduce Housing Costs

In real estate, the main determinant of housing cost is location.

“Location, location, location!” you will hear, and it’s true.

The areas where there is higher demand, due to better schools, better jobs, and better attractions, will be more expensive than areas where there is lower demand.

An obvious way to reduce your housing cost is to downsize to a smaller house or apartment.

In the metropolitan area I live, a 3000 square foot house might cost in the range of $350,000 to $450,000.  A 1500 square foot house, on the other hand, might cost in the range of $200,000 to $250,000.

This immediate cost savings of $100,000 to $200,000 adds up quickly when you consider savings on interest, property taxes and insurance.

For a 30-year home mortgage at 5% interest for $400,000, you can expect to pay nearly $375,000 in interest over 30 years.

Compare that to a $200,000 home, also at 5% interest and over a 30 year period, and you will only end up paying $186,000 in interest.

That’s a savings of nearly $200,000 over 30 years – just in interest!

Another way to reduce housing costs is to share your housing space with roommates. When you are single, this is easy – just grab a friend or two and divvy up the rent and utilities such as water and electricity to share with your friends. Learn how to calculate electricity bill to monitor your monthly power consumption.

If you are married, and/or have kids, then it might be a little bit more difficult to get roommates. Luckily, there are other ways to share space, while also reducing your housing costs.

House Hacking

I’m a huge fan of house hacking. I bought a single family house in 2015, and rented it out to three friends while I also lived there.

Because of this, I earned over $39,000 in 2 and a half years – just by house hacking!

While this sounds impressive, there have been dozens of other more successful house hackers.

One of my fellow personal finance and real estate bloggers, Guy on FIRE, has amassed a nearly $500,000 net worth by age 30 through house hacking and real estate.

By buying a multi-unit property (such as a duplex or triplex), you can have the privacy of a single family home, and rent out the remaining units to cover your mortgage and reduce your housing costs.

Using AirBnB

Another way to save more money on housing costs is to rent out your unused space through AirBnB.

I’ve never stayed in an AirBnB and I’ve never personally rented out space using the platform, but I know of many people who are successfully doing this. One of them is my friend Financial Panther, who rents out one of his rooms on AirBnB.

He makes a pretty good amount each month, which is helping to cover part of his mortgage.

There are many ways to reduce housing costs, and depending on your level of comfort with renting out your house to others, there are various solutions you can try.

How to Reduce Transportation Costs

Unless you work from home, or are a hermit, there’s a good chance you use some form of transportation. Going to work, going to the gym, traveling to see friends and family – there’s always somewhere to be and people to hang out with.

Saving money on transportation is similar to housing in that if you want to own a car, buy something that is used and affordable. You’ve probably heard that when a new car rolls off the lot for the first time, the car loses 10%+ in value, just like that.

Therefore, if wealth is a goal of yours, buying a new car for $40,000 might not be the best choice, since in the first day of driving, you lose $4,000. Buying a used car for $20,000 or less might be a better choice for reducing expenses in the long term.

I bought a used 2014 VW Jetta for $13,000. It runs like new, and gets 37 mpg on the highway. I love it and since I own it in full, and drive it a few thousand miles a year, I’m going to get my money’s worth over 15-20 years. I could have bought a nicer car, but then I might still be paying for it many years later.

Riding Bikes and Taking Public Transportation

As the push for green travel takes place in many cities around the world, biking and public transportation continue to be a great option for people who want to reduce transportation expenses. I take the bus to work every day and pay $50 a month for the bus pass.

If I was going to drive, this would result in wear and tear on my car, $10+ a day in parking costs, and additional gas costs from filling up once or twice a week. All of this totaled up could add a few hundred more dollars to my monthly expenses.

Instead, I’ll pay my $50 and get a little bit of reading done on the bus!

Other people bike every day to work, get their exercise, and save the $50 I’ve been spending monthly to further save money on transportation costs!  I applaud the people in Minnesota who bike to work in the freezing temperature. It’s bad enough standing at the bus stop in 0 degree weather!

By driving something a little more affordable, using public transportation or riding your bike, you can reduce your transportation expense, which can be another way to increase your savings fast!

How to Reduce Food Costs

Reducing food costs can be as simple as eating out less.

When you go out to eat, there are a lot of added costs hidden within the price you end up paying: the service, the overhead of the restaurant, the tip and any additional tax.  I know this, and we all know this: eating out consistently is expensive.

I eat out for lunch at work. Typically, I go for a fast food type place (think Chipotle or something similar) and look to keep my daily lunch expense under $9.

This quickly adds up over the month (20 working days times $9 each lunch is $180).  Throw in any snacks I have at work, and during a working day I will spend $10 or more.

I generally do not go out to eat for dinner, and don’t drink much anymore. I’m saving some money there, but those work lunches are my main deterrent to having a bare bones food and drink expense (and maybe I’d have bare bones then!)

Like I said, cutting the number of times we eat out a month will reduce your food costs. By eating in, cooking meals in bulk or meal planning, you can save a few hundred dollars a month.

There are many resources out there for how to meal plan, bulk cook, or couponing to save at the grocery store, and I won’t go into these – I just want to make you aware that these are possibilities to reduce your food costs.

How Personal Finance Blogs Community Members are Managing their Big 3 Expenses

One of the great things about having readers is being able to ask them about their strategies for financial success.  A number of people contributed to the question of how they are managing their three big expenses.

Cynthia, one of my readers, said the following about housing expenses:

Our wealth began to snowball when we paid off our mortgage early. There is nothing like being truly debt free.

Congrats, Cynthia, you are one of the lucky ones! Not paying interest to the bank can add up in your brokerage or savings account!

Gwen, a blogger at Fiery Millennials, uses a three-prong strategy to attack these three major expenses:

I’m house hacking, I meal prep during the week, and I drive a 2005 car as to not be indebted to the bank and put my cash to good use in the present.

Another house hacker! I’m so impressed!

Dom, a blogger at Gen Y Finance Guy, uses a term he calls “Relative Frugality” to look at his three main expenses:

We simply practice what I have coined ‘Relative Frugality’. We don’t spend so much time managing the expense side of the equation as we focus on increasing the income side of the equation. The overall goal is to save 50% of our after-tax income and live on the other 50% guilt free. It’s a free ticket to enjoy lifestyle inflation. One thing we did intentionally do on the housing front was bought a house that at the time was 50% less than the bank said we could afford, but was still 3X the size we probably needed. The mortgage with insurance and property taxes makes up less than 10% of our gross income.

It’s cool seeing what different goals and scenarios people have, and how they are applying the strategic plan to their situation!

Conclusion

Being aware of how much you are spending on your three main expenses is step 1, and looking for ways to reduce these costs will help you get a handle on your expenses and increase your savings fast.

Moving to a cheaper apartment, house hacking, cooking in bulk and riding your bike or the bus to work are all great ways to reduce your expenses quickly.

As a current bus rider and previous house hacker, I’ve experienced the great benefits of these cost-cutting tactics.

I hope you can take what you’ve learned here and make some changes to see bigger savings in your future.

Creating a budget can be a great way for you to improve your financial situation. There are many different budgeting methods you can use, and in this post, you’ll learn about 5 simple budgeting methods.

Budgeting is one of most common ways for a person to get on their way to personal finance success.

With budgeting, you can determine ahead of time what you will spend your money on, and what you will have left over each month.

Budgeting is to personal finance what dieting is to nutrition. Both require a self-discipline and accountability, and they can be challenging and seem discouraging at times.

However, with consistency and effort, budgeting works.

Budgeting and dieting also share another common trait: they run on deficits and surpluses.

If you want to gain weight, you need to consume more than you burn.

If you want to gain wealth, you need to have income higher than your expenses.

This deficit and surplus theory is the no-nonsense foundation of diets and budgeting methods alike.

In this post, you’ll learn about 5 simple budgeting methods, and how you can budget to make the most of your money.

First, let’s talk about your spending habits and think about what you need vs. what you want.

Applying Simplicity to Your Budget and Life

For those new to the site, you should know I’m a big fan of simple living. This mindset of simplicity applies to budgeting and spending as well.

First, before looking to start budgeting, it’s important to think about your financial goals and current lifestyle.

• Are you looking to save up money for a new purchase?
• Are you looking to get a house or new car?
• What about take a vacation?
• Do you want to start prioritizing health and wellness, and are fine with spending more on healthy food?

With these thoughts, then you can start to determine how much more you want to spend on other categories, and align your goals with your actions.

But first, what is a budget?

What is a Budget?

First, what is a budget?

A budget is just a plan for how you spend your money every month.

That’s it. Nothing fancy. It’s just you telling your money what to do.

But it can be a lot more than that if you’re constantly stressed over your finances. When you make a budget, it suddenly becomes a lot easier to:

• See where your money is going
• Figure out what you’re wasting money on
• Create a plan for paying down debt
• Build an emergency fund for rainy days
• Save and invest for retirement or your kids’ college
• Plan out your financial goals
• Understanding your spending patterns and triggers
• Stop freaking out over money

That last one is really important.

Money is not everything in life, but it is a tool you can use to create the life you want and deserve – without stress.

With these pre-budgeting thoughts and questions out of the way, let’s get on to the 5 simple budgeting methods for personal finance success.

5 Simple Budgeting Methods for Personal Finance Success

Budgeting doesn’t have to be hard or complex, and there are a number of different ways to make sure you are spending your money on what brings you joy.

Below are 5 simple budgeting methods for you to choose from:

1. The 50 / 30 / 20 Budgeting Method
2. The 80 / 20 Budgeting Method
3. The 60% Solution Budgeting Method
4. The Cash Envelope Budgeting Method
5. No Budget

In the following sections, we’ll go into detail to learn more about these budgeting methods.

It may take some experimenting to find what works for you. After all, personal finance is personal!

1. The 50 / 30 / 20 Budgeting Method

Elizabeth Warren, a law professor and U.S. Senator, first referenced the 50 / 30 / 20 budgeting method in the book “All Your Worth: The Ultimate Lifetime Money Plan.”

Simply put, the 50 / 30 /20 budgeting method involves spending 50% of your take-home pay on needs, 30% on wants, and 20% on investing and/or debt repayment.

With the 50 / 30 / 20 budgeting method, you only have 3 line items to track every month – it cannot get much simpler than that!

What this method requires is for you to clearly define what is a need vs. what is a want in your life.

After defining your needs and wants, you just need to sort all your monthly expenses into a need or a want, and add up each category.

Then, you can review monthly to see if your spending percentages were roughly on par with the 50 / 30 / 20 guideline.

It should be mentioned that 50 / 30 /20 is just a starting point. These percentages are not practical for everyone.The nature of needs is that they are must-haves, irrespective of your income.

Say your household’s needs are $40,000 a year. If your take-home household income is $60,000, then your needs make up 66% of your income.

If that take-home income were $100,000, then needs would only make up 40% of your income!

So the percentages are variable depending on your situation.

Also, one other limitation is this method may be great for those with salaried jobs, but it’s not ideal for those with highly variable incomes.

Variable income is typical for self-employed people, commission-based jobs, and hourly jobs where the hours worked fluctuate week to week.

Luckily, there are a few other budgeting methods you can read about below.

2. The 80 / 20 Budgeting Method

The 80/20 budgeting method is an even easier version of the 50/30/20 method.

If you don’t want to make the effort to discern between wants and needs, you can just lump them into one.

In this budgeting method, 80% goes to your wants and needs, and 20% goes to investing and/or debt repayment. That’s really all there is to it!

This budgeting method runs on a “pay yourself first” mentality. First, you should invest the 20% (or use it to pay off debt faster), and then you are free to spend the rest on your wants and needs.

This simple budgeting method is great for people who want to improve their sense of financial accountability.

Following this method will give you an impressive 20% savings rate on your income!

However, it should be noted that those who feel they are stuck living paycheck-to-paycheck would not benefit from this budget.

You’ll need to use a method that discerns between wants and needs, allowing you to see where costs can be trimmed.

3. The 60% Solution Budgeting Method

The next budgeting method is the 60% Solution.

The 60% Solution was first referenced in an article written by MSN Money editor-in-chief Richard Jenkins. This budget has five categories for your GROSS income (ie. pre-tax) outlined below:

• 60% to “commited” expenses
• 10% to retirement savings
• 10% to long-term savings
• 10% to short term savings
• 10% for “fun money”

This budgeting method effectively suggests you can live off 60% of your gross income. According to the original article,

“I determined that we needed to keep our committed expenses at or below 60% of our gross income to come out ahead at the end of the month.

Committed expenses:

* Basic food and clothing needs.
* Essential household expenses.
* Insurance premiums.
* Charitable contributions.
* All of our bills — even such non-essentials as our satellite TV service.
* ALL of our taxes”

This budgeting method really simplifies expense tracking since all your “committed” costs are lumped into one category.

However, it carries the same challenges as the 50 / 30 /20 method since 60% may not work for your household.

I suggest starting with 60%, and changing it by +/- 5% depending on how easy or difficult it is.

For the other buckets, here are some examples of what they could involve:

• The 10% retirement savings would be akin to an IRA or 401(k).
• The long-term savings could be a goal such as saving up for a new vehicle or home down payment.
• Short-term savings could be contributions to your emergency fund, or some purchase you are making in the next 12 months.
• Fun money is self-explanatory!

This 5 category budgeting method is great for those who want to itemize their spending a little more, without evolving into a full-grown line item budget.

4. The Cash Envelope Budgeting Method

The cash envelope budgeting method is the oldest form of budgeting out there.

In fact, the word budget originated from the Old French word for purse.

While the cash envelope method requires the most effort out of any method on this list, it is still relatively simple.

The cash envelope budgeting method requires you to go old school by using nothing but cash for all your purchases.

You need to create a few spending categories and make an envelope for each one. At the beginning of each month, you then put a predetermined amount of cash in it, which makes it impossible to overspend.

Here are some common categories:

• Vehicle expenses
• Groceries
• Entertainment
• Clothing
• Childcare

This method is just great for people who struggle with impulse spending, or people who prefer visual organization.

As mentioned before, it is impossible to overspend if you follow the method correctly. This budgeting method helps build discipline for those who need it when it comes to discretionary spending.

There are some negatives with the cash envelope method however.

First off, not using any plastic means you may be forgoing credit card rewards (assuming you’d pay your balance in full and on time).

Secondly, carrying wads of cash in today’s day and age is slightly impractical and potentially unsafe.

Finally, the amount of effort required is far greater than other budgeting methods in terms of tracking expenses. There are no monthly statements prepared for you when using cash!

5. No Budget Method

The last budgeting method may shock you, but the best budget may be no budget at all! This may sound silly, but hear me out.

Of course, from a solely financial perspective, there is no valid reason not to have a budget.

However, personal finance is more than just numbers.

Psychology plays a huge role.

Many people dislike budgeting due to the scarcity mindset it may force on you. Granted, this mindset may be necessary if you’re paycheck-to-paycheck and trying to get out of that cycle.

But, is it really sustainable?

With the No Budget budgeting method, all you really need to keep an eye on is your savings rate. You can improve your savings rate greatly by reducing big expenses.

Of course, the higher savings rate, the better.

The concept of savings rate is actually incorporated in the other simple budgeting methods mentioned.

For example, if you have no budget and have a 20% savings rate, you’re actually inadvertently following the 80 / 20 budget.

This idea is great for those who aren’t in any deep financial trouble but still want to improve their financial situation.

Simply monitor your savings rate; as long as you are happy with the number, there is no reason to track more in-depth!

Which Budgeting Method is Right for You?

At this point, you are probably wondering, “which budgeting method is best and right for me?”

The best one is likely the one that resonated the most with you when reading the above.

Objectively speaking, some methods are more effective than others, but you should remember that this is not solely an objective matter.

The budgeting method has to be one that YOU think will work for yourself.

A budget is useless if you don’t think it’s a method you can reasonably follow.

If you can’t pick a budgeting method today, then to start improving your financial situation, I’d recommend to start tracking your expenses today. Don’t wait until the first of next month to act.

Look at your daily spending for a couple weeks, you can see where you’re at. With these measurements, you can figure out roughly how your budget is going to work starting next month.

Readers: have you tried any of these methods? Which have you found most effective for your household?

If you are aspiring to join the ranks of highly esteemed professionals in the banking sector, cracking competitive exams is the first step towards achieving your dream. Among the most popular and sought-after exams in this domain is the IBPS (Institute of Banking Personnel Selection) exam. The IBPS calendar, also known as the schedule or timetable, plays a crucial role in your exam preparation journey. This blog will guide you through the process of navigating the exam calendar for competitive exams, helping you stay on track and maximize your chances of success.

Understanding the Significance of the Exam Calendar

The exam calendar serves as a roadmap for your exam preparation. It provides important information about the dates, timings, and deadlines for various stages of the examination. By carefully analyzing the exam calendar, you can plan your study schedule, allocate time for each section, and set realistic targets. This proactive approach will help you stay organised, focused, and confident throughout your preparation.

Decoding the Exam Calendar

There are a number of tips you need to understand to decode the exam calendar.

Stay Updated with the Latest Information

To crack competitive exams, it is crucial to stay updated with the latest exam-related information. Keep an eye on official notifications, websites, and reliable sources for any updates or changes in the exam calendar. By staying informed, you can avoid missing out on important dates and ensure that you are well-prepared for each examination stage.

Identify Exam Phases and Their Deadlines

Competitive exams like the IBPS are conducted in multiple phases, including preliminary exams, main exams, interviews, and document verification. Each phase has its own set of deadlines and requirements. Take the time to carefully review the exam calendar and identify the dates and deadlines for each phase. This will enable you to plan your preparation strategy accordingly, allocating more time to the sections that require additional focus.

Create a Study Schedule

Once you have a clear understanding of the exam phases and their deadlines, create a study schedule that suits your learning style and preferences. Divide your study time based on the weightage of each section and the time available before each phase. Be realistic while setting daily or weekly study targets, ensuring enough time for revision and practice tests. Remember to include breaks in your schedule to avoid burnout and maintain a healthy balance.

Prioritize Revision and Practice

Revision and practice are key to mastering any competitive exam. Allocate sufficient time in your study schedule for revising the topics you have learned. Regularly solve practice questions and mock tests to assess your progress and identify improvement areas. Incorporating revision and practice into your routine will reinforce your understanding, boost your confidence, and develop a solid exam strategy.

Seek Guidance and Support

Preparing for competitive exams can be challenging, but you don’t have to do it alone. Seek guidance from experienced mentors, join coaching institutes, or participate in online study groups. Engaging in discussions, clarifying doubts, and sharing study resources can provide valuable insights and enhance your preparation. Remember, the journey becomes easier when you have a support system.

Conclusion

Navigating the exam calendar for competitive exams, such as the IBPS, is essential to your preparation journey. By understanding the significance of the IBPS calendar or any other exam calendar, decoding its contents, and creating a well-structured study plan, you can stay on track and increase your chances of success. Remember to stay updated, create a study schedule, prioritise revision and practice, and seek guidance when needed. 

Are you looking to buy a house for the first time? Saving money to buy a house can be a challenge, but with the right strategy, you can successfully save up for that down payment on your dream house.

Saving up to buy a house is an amazing accomplishment – but it’s not without its challenges.

First, you need to find the right property.  Then, you need to save for a down payment.  After that, you get to deal with banks, lenders, mortgage brokers, etc.

It’s a lot to handle if you’re buying a house for the first time.

But being a first-time home buyer doesn’t have to be scary – as long as you approach it with a thoughtful and critical eye.

Three Steps to Take When Saving Up to Buy a House

For the purpose of this article, there are 3 steps I want to focus on as you look to save up for a down payment on a house:

1. Do Your Research
2. Be Aware of All Costs
3. Take Advantage of Programs

Then, after discussing these three steps, I’ll share with you some quick hitting saving money tips to help you increase your savings.

Let’s dive into each of these three pieces of information.

1. Do Your Research

The first step to take before you even decide to save for a new home is figuring out how much home you can afford.

There are a number of ways to do this:

• Getting an estimate from a bank or credit union
• Doing the math yourself
• Using an online calculator

While mortgage lenders are all too willing to help you figure this out, keep in mind that what you want and what you can afford are two very different things.

Mortgage lenders generally have no qualms with getting people to sign up for more house than they need.

Likewise, what you need compared to what you can afford also needs to be taken into consideration. If you’re planning on starting a family soon, you won’t want to buy a tiny 1-bedroom house.

To help figure out just how much home you can afford, you’ll want to know:

• have a clear idea of your income
• the cash you have on hand,
• your recurring expenses and
• your credit profile

You should be familiar with these as a lender is going to ask for this information, and it’s directly relevant to getting a home.

You can also use the 36% rule to determine how much home you can afford.

The 36% rule states that, on average, you should aim to spend no more than 36% of your gross income on your mortgage expense and debt payments.

For example, if you gross $3,600 a month and have recurring student loan debts of $500 a month, you’ll want to spend no more than $796 per month on your mortgage.

$3,600 X 0.36 = $1,296.00 – $500 recurring debt = $796

You can use this handy calculator from Nerd Wallet to estimate it for you.

The thing to keep in mind most is that you know your financial situation best – don’t let anyone pressure you into something that doesn’t feel right.

An Example of Research for a Home

When saving up for your first-time home purchase, conducting thorough research is an essential step in ensuring you make an informed decision.

To illustrate, imagine you’re captivated by the idea of owning a beachside property. New homes at the Delaware beaches can serve as a prime example of what you might consider. Start your research by exploring the various neighborhoods and communities along the coast.

Dive into the specifics of these newly constructed properties, examining factors such as amenities, proximity to schools and essential services, and the overall lifestyle they offer.

Additionally, dive into market trends and property values in this region to gain a broader perspective. This comprehensive research not only provides insights into the captivating potential of owning a beachfront property but also equips you with the knowledge needed to make sound financial choices.

2. Be Aware of All Costs

Next, it’s important to be aware of all costs associated with buying a home.

While saving up for a down-payment is great, did you know there are many other property and loan related fees associated with buying a home that are not recoverable?

These property and loan related fees are called closing costs.

Closing costs are fees paid (usually by the purchaser) to finalize the sale of the home. Some of these fees are rolled into the mortgage, while others are paid before the house is purchased.

Typically, you can expect to pay between 2% to 5% of the mortgage loan amount on closing fees.

If you’ve never bought a home or haven’t heard of closing costs, these additional expenses can throw you for a loop.

Some common examples of closing costs include:

• Appraisal fees
• Home inspection fees
• Application fees
• Loan origination fees
• Escrow fees
• Document preparation fees
• Title search fees
• and more!

These fees add up, and many of them are one-time fees that don’t build equity – meaning they don’t go into the value of the home.

For someone purchasing a $100,000 home and putting 20% down and paying a 4% interest rate and using a mortgage broker, it’s estimated you would pay over $5,000 in closing costs!  That’s a hefty chunk of money.

When you’re saving up to purchase a house, it’s essential you take all of these closing costs and fees into consideration in your budget and savings goal.

You don’t want to get caught with your pants down if you fail to factor in one (or multiple) costs.

Here’s a calculator from NerdWallet that can estimate closing costs for you.

3. Take Advantage of Programs for First Time Home Buyers

There are a number of programs that FTHBs can use to their advantage when purchasing a home.

This is one of the best ways you can save money if you’re buying a home for the first time.

Many of these programs offer exclusive advantages, such as greatly reduced interest rates; grants given to help with closing costs and down payments. Others help vulnerable populations like veterans and native Americans in securing funding for purchase.

No matter your situation, if you’re a FTHB, there’s likely a program that can help.

Some examples of programs offered to first time home buyers include:

• HUD first time buyers program
• FHA loans
• USDA loans
• VA loans
• and more!

Depending on where you live, you may have different offers in your area.

Here is a list of some of the federal programs that help first time home buyers by state.

Check out the list – you may qualify!

How to Practically Save a Down Payment for a House

Once you know what you can afford to spend on a home, you’ll want to start saving for a down payment.

The easiest way to save for a down payment is to decide how much you’d like to put down, then divide that number by the amount of months you have until you plan on buying.

For example, if you can afford a $100,000 house, want to put 20% down, and you plan on buying in one year, you’ll need to save $1,666.66 a month.

$100,000 X .20 = $20,000 down payment / 12 (months in one year) = $1,666.66

Depending on how much house you can afford, how long you have to save and your income and expenses, this number may be easily doable or very difficult.

Something else to keep in mind is that the more you put down on a house, the lower your mortgage payments will be.

This is where using a home loan calculator can be incredibly helpful. It allows you to experiment with different down payment amounts to see how they impact your future mortgage payments, helping you to better plan your savings and understand the true cost of your mortgage.

You can also avoid having to pay private mortgage insurance (PMI) if you put at least 20% down on your home. PMI is added to your mortgage payment whenever you put less than 20% down. It’s used to protect the lender against a loss in case the borrower defaults.

9 Tips on Saving Money for a Down Payment

Here are some tips on how to save some additional money you can put down towards a house.

• Set a target amount and stick to it.  Just because you can afford something bigger and nicer doesn’t mean you have to do so.
• Cut any unnecessary costs. Go through your credit card statement, bank statements, etc. looking for services you don’t use, or don’t care about and cancel them.
• Pick up extra shifts or overtime at work, or get a second job one day a week.
• Take on simple side gigs, like dog-walking, cat-sitting or babysitting.
• Store your savings in a separate account to keep you from spending it on something frivolous or expensive.
• Automate the savings process.  Now that you’ve calculated the amount you need to save per month, you could have that automatically transferred to your savings account the day you get paid. You won’t miss money you never had.
• Save any unexpected money. Whether it’s your tax return or Christmas money from your grandma, put any additional money you get into savings to reach that goal faster.
• Cut back on spending. You can go generic, as that’s a great way to save money without changing your shopping habits.
• Have an extra room in your home?  Throw it up on AirBnB.  If you live near a music or sports venue, you could even rent out your driveway as a parking space on events days.
• Declutter and sell your goods on eBay, or have a yard sale.

With all of these tips, I’m sure there’s something in there for you to utilize to help save more money!

Making Saving up for a Home Stress-Free with these Tips

Buying a home can be a big expense and stress, but depending on your own circumstances, it can be a good investment.  If you’re a first time home buyer, you can make the experience much more pleasurable by doing a little work beforehand.

By researching how much home you can afford, saving money for a down payment, and taking advantage of offers for first time home buyers, you’re far more likely to make it a pleasant experience.

Purchasing a home is one of the major financial decisions you will make in your life – don’t take it too lightly! Best of luck!

Accounting has always been a crucial function for businesses of all sizes. Over time though, since digital technologies have become more prevalent, various business operations have transformed significantly, especially traditional accounting. 

As a business owner or accounting executive, you need to focus on a number of things, especially if your company is small and you want it to expand and become sustainable. One of the most important items on the list is overhauling the accounting division by maintaining accounts and implementing relevant control as well as compliance mechanisms.

Currently, 69% of owners of small businesses prefer to manage their accounting or bookkeeping. Although there are numerous tools and software to help with the procedure, the job can still be difficult. In reality, 21% of small and medium-sized business owners admit they lack sufficient understanding in this area. 

Nevertheless, there is optimism in sight. Here are some pointers for business owners on how to improve, and maintain operations, particularly through the use of modern technologies:

Strengthen your basics

If you are a part of the cohort of business owners that prefer to handle their own accounting but don’t know much about it, the best place to start is your professional development. Thanks to digital education, business owners can easily enroll in online MBA accounting courses or a host of others that offer comprehensive, relevant knowledge as well as skills in this domain. 

Of course, you have the choice to outsource the work to professionals, but even then, you need to be in a position to not just offer some oversight but also review the books once they return from the external auditors. Even when your business has a full-fledged accounting department, you’ll need to keep a check on them, and an accounting degree helps a lot in this matter. 

Plan on integrating relevant digital tools

Digital technologies make it simpler to manage many conventional practices. Software has improved in-depth analysis techniques and accuracy over the last few years thanks to the wide availability of raw data, analytical tools, and cutting-edge AI. These technologies are also relevant to accounting departments in modern companies and their day-to-day practices. 

Software streamlines numerous aspects of bookkeeping for your company, from balancing your books to giving you insights into optimization and effective resource allocation. You can reduce your workload in half with the aid of reliable software while easing your company’s use of future-proof business methods.

Ensure strictness about cutoff policies and reconciliations

Most businesses and their relevant accounting departments put off the task of reconciling accounts receivable and payables against other financial statements until the end of the fiscal year. This habit is nothing but a recipe for chaos since going back to each transaction, especially those that happened at the beginning of the year, can be a real hassle. 

This is why it is important to have the accounting department and the team perform reconciliations throughout the year, ideally at the end of the month or even every week. Also, there need to be certain stringent rules in place that drive accounting processes effectively. These include guidelines and cutoffs for transactions like reimbursements and invoices etc. You must ensure that these rules are followed religiously. 

Have a routine in place

A detailed schedule for when to complete bookkeeping duties could create consistency and a fluid, streamlined flow. Business owners and accounting professionals are usually so overburdened with management responsibilities and other obligations that they may forget that their books need to be updated frequently. 

Numerous inconsistencies could result from this, impeding future development and efficient operating flow. You can remain on top of your finances and strive to make the most appropriate choices for the long-term viability of your company’s affairs by developing a schedule and then adhering to it stringently because, at the end of the day, the efficiency of your accounting department matters a lot for the company.

Routinely review all accounts

It’s essential as well as necessary to examine and scrutinize your financial information in addition to following a routine. Your company is your baby, and you have been growing it from scratch, irrespective of whether it is a new venture or even an established business. You can examine your current assets, liabilities, payables, and receivables with the use of bookkeeping. 

This gives you a financial picture of your current situation and your chances for the future. Regular bookkeeping doesn’t just help you streamline your operations, but it also helps you understand accounting principles and, over time, become more adept at them. Setting such a routine also allows the accounting department to streamline its operations. 

Delegate efficiently

Whether they are handled by the accounting team or an external firm, a few crucial jobs can be separated to make the process more effective and speedy. For instance, you may require the manager to handle their own streamlined accounting for transactions and gathering receipts to improve inventory management. 

You can also request the management of any financial concerns that other department heads oversee for the sake of their divisions. Not only will you reduce your workload via delegation, but you’ll also give the company a far stronger base for expansion. At the same time, the accounting department becomes more productive and efficient too. 

Develop a plan for transaction processing

There usually is a lot going on, regardless of whether or not a business is already established or is just getting started. Things are made easier by developing a coordinated plan for the transactional and accounting procedure. There are many considerations to make, even when discussing bookkeeping alone. 

It can be difficult to compile receipts and coordinate with suppliers, vendors, and other players to obtain the most recent financial information. Keeping track of inventory is another enormous chore if your company sells products. Without a comprehensive strategy, you can run into problems that irritate and exhaust you much more quickly than usual.

Conclusion

Given that majority of small businesses fail because of bad financial planning, letting ineffective accounting practices slide is a no-ho if you want your business to thrive. Therefore, whether you conduct the bookkeeping yourself or take steps to instill greater efficiency in your existing team, you must exercise extreme caution.