Budgeting Tips

Receiving a tax refund can be a nice financial boost. Technically though, if you’re doing things well, you shouldn’t be getting a tax refund. You can make sure you don’t pay the government too much during the year with the help of a CPA. But for now, if you do find yourself anticipating a gas return, there are some ways that you can maximize the potential of this so-called windfall. A large tax refund can make a big difference in your life if you use it strategically. It could even help support financial well-being in the future. Here are some smart ways to use your tax refund.

Pay Off Debt

If you find yourself with a revolving door of debt, you could use your tax refund to help get you off the hamster wheel. Making the minimum amount due each month won’t get you anywhere for a long time. In the meantime, you’ll be accruing more interest that is sure to keep your creditors happy, and keep you in debt for the foreseeable future. If this describes your situation, then using your tax refund to pay off debt is a smart idea. You’ll save a significant amount of money in interest charges and improve your credit rating. Start by paying off the debts with the highest interest rates first, as this will have the greatest long-term impact on your finances.

Build an Emergency Fund

An emergency fund is a crucial financial safety net, as you probably already know. Many people know they should have some money tucked away, but they find that there isn’t enough money left over at the end of the month to start such a fund. It’s hard to see a positive outcome when you can’t even get started. But if you’re getting a tax refund, this can be a great time to use a portion of it to start building your emergency fund. Seeing that money in your savings account every time you log into your online banking account will help motivate you to add to your savings. It will grow faster than you realize, even without the terrific interest rates that your grandparents enjoyed. And, by having an emergency fund, you'll be better prepared to handle future unexpected expenses or financial setbacks without relying on credit cards or loans.

Invest in Your Retirement

If your employer has a retirement account benefits, consider using all or a portion of your tax refund to contribute to an Individual Retirement Account (IRA) or a 401(k). These accounts offer tax advantages that can help you secure your financial future. If you're eligible for an employer match on your 401(k) contributions, even better. Take full advantage of it by depositing as much of your tax refund as makes sense for your household. 

Splurge a Little

There’s no reason that every penny of your tax refund has to go to productive use. If you’ve spent a long time watching your pennies and there’s something nice that you and your family have been wanting, it’s fine to splurge a little. Maybe it’s a bedroom renovation for your daughter who has recently become a teenager, or a fence around the yard that will enable you to adopt a puppy. Life is here to enjoy, and it’s okay to splurge a little once the essentials have been taken care of.

Home Repairs

Speaking of home upgrades, one of the smartest ways you can use your tax refunds is for home repairs that you might have been putting off. Homeowners can spend up to $20,000 a year on home repairs and maintenance, but if you haven’t got that kind of money, many needed home repairs go undone. Your home is probably the biggest investment that you make in a lifetime, and it stands to reason that you should do what’s necessary to protect that investment. If you’ve been putting off a new roof, new windows or other essential repairs, now’s the time.

Start a Business

The adage, it takes money to make money isn’t far off. Anyone with dreams of starting a business knows that it takes some seed money. If you’re thinking of using your tax refund to start a business, you’re on the right track. This is a great way to put that money to good use, because it could make you more money in the future. Just be sure to make a budget so you spend the money wisely, and consult with your CPA so you set the business up in the best way leverage tax advantages.

Work on Self Improvement

Another option to use your tax refund that can pay off in the future is to invest in self improvement. If you have an interest in a certain field where certifications can help you advance, then it makes sense to spend some money on coursework. Consider taking a course or workshop that can enhance your professional abilities or exploring a business idea you've been passionate about. Investing in yourself can open up new opportunities and increase your earning potential.

Invest in Your Health

Health and well-being is always a priority in life. If you’ve been putting off something important that your health insurance won’t pay for, this is a good time to invest in your own health. Unfortunately, the health system often forces people to sacrifice things they really need regarding vision, dental and overall health. Use your tax refund money to pay for anything you need that your health insurance or Medicare isn’t willing to cover.  The value in this is incalculable.

By paying off debt, saving for emergencies, investing in a new business, investing in your own education, paying for needed health care or simply adding something to your family’s quality of life, you’ll be using your tax refund well. Just remember, a qualified CPA can help to ensure that you don’t overpay tax throughout the year so that more money goes into your pocket with each paycheck.

In an era where traditional compensation packages are evolving, accepting stock options instead of a bonus or a raise is becoming a common practice, especially in the startup and tech industries. Companies often use this approach to conserve cash, motivate employees towards the company's success, and save on payroll taxes. However, this shift from immediate financial gain to a more complex, potentially lucrative reward system presents both opportunities and challenges for employees.

What Are Stock Options?

Stock options grant employees the right to buy a specific number of shares of the company's stock at a predetermined price, called the strike price, within a set time frame. The idea is that if the company performs well and its stock price rises, employees can buy the stock at a discount and then sell it at a higher market price, reaping a profit.

The Upside of Stock Options

Stock options are popular and attractive, for reasons such as these:

Potential for Greater Earnings

The key allure of stock options is the potential for significant financial gain. If the company does well, its stock price could rise substantially above the strike price, leading to a significant payoff when you exercise your options. In some cases, employees of startups that have gone public or been bought out have made substantial amounts of money from their stock options, sometimes far more than they could have earned from salary increases or bonuses.

Alignment of Interests

Stock options can also help align your interests with those of the company. As a shareholder, you may feel more connected to the company's success, which can enhance job satisfaction and loyalty.

Possible Tax Advantages

Depending on the type of stock options you receive, there can be tax advantages. Incentive stock options (ISOs), for instance, can offer favorable tax treatment if certain conditions are met.

The Downside of Stock Options

Stock options aren't always ideal. Consider the drawbacks, such as:

Risk and Uncertainty

The potential for profit is coupled with risk. If the company doesn't do well, the stock's market price might not rise above the strike price, rendering your options worthless. This risk is especially relevant in startups, where success is far from guaranteed.

Liquidity Concerns

Unlike a bonus or raise, which provides immediate liquidity, stock options often come with vesting schedules, meaning you'll have to wait a certain period before you can exercise them. Moreover, unless your company is publicly traded or gets bought out, it might be challenging to sell your shares.

Tax Complexity

The tax implications of stock options can be complex and often less straightforward than those associated with bonuses or raises. Non-qualified stock options (NSOs), the most common type, may be taxed twice; at the time they're exercised and when the shares are sold.

In contrast, ISOs are taxed only when you sell the shares, potentially at a lower long-term capital gains rate, assuming certain conditions are met. However, exercising ISOs could trigger the alternative minimum tax (AMT). The AMT is a complex tax area and could result in a significant tax bill, even if you haven't sold the shares and, therefore, haven't actually made a profit. Contact your CPA to learn more about the tax implications of stock options.

Making the Decision
Deciding whether or not to accept stock options in lieu of a raise or bonus involves several variables to consider. Here are some factors to keep in mind.

Financial Stability and Cash Flow Needs

Analyze your current financial situation. Are your earnings meeting your day-to-day expenses with some room for savings and investments? If you're living paycheck to paycheck, grappling with heavy debt, or foreseeing significant expenses in the near future, a guaranteed bonus or raise could be a safer choice. This immediate cash influx can address your current financial needs more directly and provide a level of comfort.
On the other hand, if you have a solid financial safety net in place and can afford to wait for a potentially larger payoff, stock options could be worth considering. The inherent risk of delayed gratification could translate into a substantial financial advantage if the company performs exceptionally well.

Assessment of the Company's Future Growth

Evaluating the company's prospects is also a crucial step. How well do you understand the company's business model, market presence, competitive advantage, and growth potential? If you're optimistic about the future performance of the company and trust its leadership, accepting stock options could provide a significant upside.

Your Personal Risk Tolerance

If you're a person who prefers stability and predictability in your financial life, then the guaranteed increase from a raise or bonus may be more appealing. On the other hand, if you're comfortable with a certain level of uncertainty and are willing to potentially risk some financial security for the possibility of a larger payoff down the line, stock options could be an attractive choice.

Tax Implications

If you're on the cusp of a higher tax bracket, a raise or bonus could tip you over the edge, resulting in a larger tax bill. On the contrary, stock options, especially Incentive Stock Options (ISOs), could provide tax advantages if handled correctly. The timing of when you exercise the options and sell the stock could affect your tax liability significantly. The tax rules regarding stock options can be complex, with implications for both ordinary income tax and the Alternative Minimum Tax (AMT).

Stock options can be a valuable part of your compensation package, offering potential profits and tax advantages. However, they also come with risks and complexities, and this kind of compensation is not suitable for everyone.

Understanding all the nuances before you agree to stock options is essential. Did you know that you can bring your unsigned deal to your CPA for review? Your CPA can go over all the fine print and discuss everything with you so that you can come to an informed decision.

Managing personal finances can be challenging, but reigning in family spending often proves to be a more significant challenge. When different family members have diverse spending habits, it becomes essential to find ways to bring harmony to the household's financial situation. This article will explore various methods that can help families take control of their spending, ensuring everyone works together to achieve financial stability and peace of mind.

Leverage Communication and Transparency

A significant aspect of controlling family spending is establishing open communication among all members. Discuss your financial goals, concerns, and expectations with your spouse and children, and encourage them to share theirs. Transparency allows everyone to understand the family's financial situation and work towards a common goal.

Schedule regular family meetings to review expenses, discuss any changes in the financial landscape, and brainstorm ways to save money or reduce expenses. Encourage everyone to share their ideas and provide feedback to create a supportive environment that fosters collaboration.

Create a Family Budget

A well-defined budget is crucial for managing family spending. Begin by listing all sources of income and expenses, including fixed expenses (rent or mortgage, utilities, insurance, etc.) and variable expenses (groceries, entertainment, clothing, etc.). Categorize these expenses to identify areas where spending can be reduced or eliminated.

Involve everyone in the budgeting process, assigning each family member specific responsibilities for tracking and managing their expenses. Encourage younger children to participate by teaching them basic financial concepts and helping them understand the importance of saving money.

Set Realistic Financial Goals

Establishing clear and realistic financial goals is essential to control family spending. These goals could include saving for emergencies, paying off debt, saving for a vacation, or funding a college education. Be specific about the timeline for achieving these goals and determine the required savings amount.

Once the goals are set, encourage each family member to contribute to these objectives by finding ways to save or earn extra money. Regularly track your progress as a family and celebrate milestones to keep everyone motivated.

Implement a Cash-Only Policy

To effectively rein in family spending, consider implementing a cash-only policy for discretionary expenses. This approach involves allocating a specific cash amount to each family member for their monthly non-essential spending. Once this allowance is used up, they must wait until the next month for additional funds.

By employing a cash-only system, all family members will be compelled to think twice before making impulsive purchases, ultimately fostering a culture of mindful spending. Not only does this strategy help to limit unnecessary expenditures, but it also instills valuable financial habits that can benefit the family in the long run.

Utilize Financial Tools and Apps

There are numerous tools and apps available that can help families manage their finances more effectively. Some popular options include Mint, YNAB (You Need a Budget), and EveryDollar. These tools can help you track expenses, set budgets, monitor savings goals, and even offer personalized financial advice.

Using a financial app can make it easier for family members to monitor their spending habits and become more accountable for their financial decisions. Additionally, these tools can help identify trends and patterns in spending, providing valuable insights that can be used to make smarter financial choices.

Teach Children Financial Responsibility

Teaching children about financial responsibility early on is essential for fostering a healthy relationship with money. Encourage them to save a portion of their allowance or earnings from part-time jobs. Help them set up their own savings goals and teach them about the importance of budgeting and living within their means.

As children grow older, involve them in more complex financial discussions and decisions, such as choosing between different investment options or navigating college tuition and financial aid. This hands-on experience will prepare them to make sound financial decisions throughout their lives.

7. Implement an Allowance Plan

To rein in the excessive spending of certain family members, consider implementing a personalized allowance system. By allocating a fixed amount of money for discretionary spending, individuals are encouraged to budget and prioritize their expenses.

This approach not only helps to establish healthy financial habits but also fosters a sense of responsibility and independence. In this way, the allowance system empowers family members to make wiser spending choices while simultaneously fostering a collective commitment to long-term financial stability. Incidentally, this isn’t a new idea; it’s just one that has been lost to modern generations. In the past, non-working spouses were given a weekly or monthly household allowance, as were dependent children.

Open Separate Checking Accounts

In order to protect one family member's credit from being negatively impacted by another's irresponsible spending habits, establishing separate checking accounts can be a prudent strategy. By maintaining individual accounts, each person assumes responsibility for their own spending, ensuring that poor financial decisions do not adversely affect others in the family.

This strategy not only promotes financial independence but also encourages accountability for one's own financial choices. Furthermore, separate accounts can facilitate better money management and safeguard each family member's credit score, ultimately contributing to a more stable and secure financial future for the entire household.

Just Say No

Adopting a balanced parenting style by thoughtfully considering and declining additional requests for money can be beneficial. Sometimes just saying no is the smart answer. This approach sets reasonable boundaries and encourages family members to understand the importance of living within their means and making responsible financial choices.

By maintaining such limits, parents impart the value of budgeting, distinguishing between needs and wants, and nurturing financial responsibility. Note that this will be difficult at first, especially if you tend to be swayed by repeated requests or pleading. But hold firm (within reason) and the money just may stop pouring out of your household coffers.

Reining in family spending is vital if you ever want to build family wealth or even avoid financial catastrophe. Otherwise, no matter what you do, your efforts toward responsible spending will be negated by other members of the family who don’t share your priorities.

Whether you're trying to reclaim your credit score, or simply looking for a way to reduce your credit utilization, a balance transfer credit card can be a great solution. Depending on the terms of your balance transfer, you can potentially enjoy low interest rates, as well as a long promotional period that will allow you to pay off your debts in a shorter amount of time.

Beware of High Variable APR After Introductory Period

During the introductory period of your new credit card, you may be able to take advantage of a 0% APR. When you are looking for the best balance transfer credit cards, you will want to know what the APR will be after your introductory period is up. This may be higher than the APR on your current card. You can find out when your introductory APR ends by calling the customer service department, or you can check it online. If you are able to pay off your balance before your introductory APR ends, you will be able to save money on interest in the long run.

Balance Transfer Fee

Depending on the type of card you have, you may also have to pay a balance transfer fee. This fee usually ranges from three percent to five percent of the amount transferred. You will have to pay that balance transfer fee in order to qualify for the introductory APR.

Penalties

You will still have to make your minimum payments by the due date each month. Otherwise, you’ll incur additional fees and potentially higher interest rates. If you make a payment late, you may be charged a penalty APR that is higher than the APR you were charged before the payment was returned. Also, depending on the card you have, you’ll probably also have to pay deferred interest if a payment is returned.

Promotional Period

Typically, balance transfer credit cards offer an introductory 0% interest rate for only a set period of time. Typically, this ranges from six to 18 months. This can save you money over time, especially if you pay the balance off within the promotional period. However, there are a few things you should consider before applying.

You'll need to calculate how much time it will take you to pay off the debt. This will help you decide if a balance transfer is a good option. If you know you won't be able to pay off the balance within the promotional period, consider whether you'll want to carry the balance on the new card.

Credit Card Perks

You should also consider any perks that the new card may offer. Some cards provide purchase protection, rental vehicle insurance, and purchase rewards programs. These programs can allow you to maximize your earnings. You might also be able to leverage rewards to pay for things that you already had planned, such as travel flights and hotel stays. When weighing your options, balance what rewards you might get versus the potential cost of getting a balance transfer credit card.

Credit Score

You also need to consider your credit score. A good FICO score will give you a better chance of getting approved for the best balance transfer credit cards. One of the biggest factors that will affect your credit score is whether you make your payments on time. You can check your credit report for free. You may be surprised at what you find. You may find that you have too much revolving debt or that an old credit mistake is keeping your score down. It might be worth waiting to apply for a balance transfer credit card until after your credit score increases.

Calculate Your Debt

You’ll want to calculate how much revolving debt you have. It may or may not make sense to get a balance transfer credit card, because the actual act of getting a new card could lower your credit score, at least for a short while. Also, you may not qualify for a balance transfer credit card with high enough limits to handle all your revolving debt.
Alternatives to a Balance Transfer Credit Card
Instead of getting this kind of card, consider whether you could simply make a more concerted effort to pay down your debt. Is it possible to take on a side job to double down on your monthly payments? You may have other options for paying your outstanding debt that don’t require outside approval.
Another alternative to applying for a balance transfer credit card is to just get another regular credit card with a lower APR than one that you already have. Then, make higher payments on your old card and use the new card if you need to make new purchases.

Things to Keep in Mind

Remember, your relationship with your new credit card company will probably last years. Even though you may apply in order to meet short-term goals such as transferring high interest debt, you’ll be “stuck” with the new card company. Make sure it’s a reputable company that will serve you well in the long-term.

Also, remember what got you into this position in the first place, which might be overspending. When you transfer your balance, consider canceling your old card. The last thing you want to do is to ratchet up your debt again on the old card. Then you would have doubled your revolving debt, which is exactly the opposite of what you wanted for yourself.

If you are still in the market for a balance transfer credit card, the first thing to do is call your bank or credit card issuer and ask if they offer any special offers. A representative should be able to tell you the best available offers. Next, check online at sites that compare various balance transfer credit cards to try to get the best deal for yourself.

Finally, you might want to review your choice with your CPA. Your CPA can help you make financially sound choices about how best to handle excessive debt.

Investing in pet insurance can be a great way to protect the quality of life of your pet. It could save you money on pet medical bills. It would also give you the assurance that you would be able to pay for pet medical emergencies down the line. However, if your pet ends up being healthy and strong, you could end up paying those monthly premiums for no reason.
However, there are a few factors to keep in mind before you make a decision.

Consider the Age and Breed of your Pet

The age and breed of your pet factors into the cost of the pet insurance plan. It will affect the monthly premiums and the coverage. Dogs of certain breeds are more likely to get sickness, disease and injuries than other breeds. Just like “people insurance,” pet insurance companies have complex algorithms that determine the likelihood of having to pay out large claims. Factoring that in will make coverage for certain breeds more pricey than others.

Consider Genetic Predisposition

Some pet breeds have genetic predispositions that make them much more likely to develop serious medical conditions. German Shepherds, for example, are prone to get hip dysplasia in their senior years. Several other larger dog breeds are susceptible to the same condition. Treatment for this and other pet health problems will run into the thousands. Without treatment, the consequences are heart wrenching.
If you own a breed of animal that has certain predispositions like this, then pet insurance is almost certainly a wise investment. Consult with your veterinarian to learn their thoughts on your pet’s genetic predispositions and whether pet insurance makes sense for your household.

Consider Coverage Options

When thinking about pet insurance, you will also want to make sure the plan covers illnesses that your pet is likely to get. You will need to figure out what your pet's health risks are and how much you can afford to spend on monthly premiums. You’ll want to check with your pet’s vet to educate you about coverage options that you should be looking for. Be sure to carefully review any excluded conditions on the policy before purchase.

Per-Incident Deductibles

There are many types of pet insurance, including annual and per incident deductibles. A per-incident deductible is the amount you must pay before obtaining reimbursement for each occurrence for which you make a claim. Each disease, injury, or veterinarian visit that your pet encounters is considered an event. Prior to submitting a claim for an occurrence, you must pay your deductible. In contrast to other pet insurance policies that need you to fulfill a yearly deductible, you will pay a deductible for each event. Rather than being fulfilled once a year, your deductible is "reset" after each event. The cost for this type of deductible is typically lower than an annual deductible, but it's still an expense that you need to consider.

Lost Pet Coverage

If your pet gets lost or stolen, there might be help available from your pet insurance policy. Some pet insurance companies offer terms that include reimbursement for lost pet rewards. So you could put out the word that you’re offering the safe return of your pet with a reward. If your lost pet is returned, the reward amount—determined by your pet insurance coverage—would be paid for by the insurance company.

Of course, you can get by without a pet insurance reward, too. Another way to locate a lost pet is to have the pet microchipped or equipped with a tracker that has a GPS chip. There are many companies that offer pet tracking services nationwide, so you are sure to find one that suits your dog's needs. Some models have a limited battery life, but you can usually get a few months out of a model if you are willing to commit to it. There are also several companies that offer a pet tracker paired with a mobile app, which makes the process of retrieving your pet easier.

Benefits of Pet Insurance

The benefits of having pet insurance include having the financial resources available to pay for any medical care your pet may need. For some policies, this may cover routine wellness exams, teeth cleaning, and minor treatments such as for ear infections.
If something terrible happens, such as being hit by a car, getting arthritis, getting a broken bone or something similar, knowing that you have pet insurance to pay for your pet’s treatment is a wonderful thing.

Veterinary costs are surprisingly expensive. Like everything else, the cost for vet treatment has risen quickly in recent years. Even something so basic as flea and tick treatments often get into the hundreds of dollars. Pet insurance can cover or supplement these costs.

Cons of Pet Insurance

Pet insurance isn’t terribly expensive, but it is still an added household expense. If you pay a monthly premium over years, the cost of the insurance itself can quickly add up. And, if things go well, you may never need to make a large claim on your policy.

Alternatives to Pet Insurance

Depending upon your financial situation, pet insurance may or may not make fiscal sense. There are alternatives. These include:
Setting money aside in an account each month for veterinary bills. This way, if something does happen, you’ll have the money to pay for it. If nothing major happens, you’ll have the money to use for something else. If you start this savings habit when your pet is young, you could have a good amount saved up years later.

Another alternative is to just pay out of pocket for vet bills. If you’re a high income earner, it may not make sense to pay for pet insurance. Even if your pet needs costly surgery at some point, you could just pay out of pocket with little impact on your wallet. Of course, you need to weigh this with your ability to pay, and your perceived willingness to pay. Some people may not want to pay thousands of dollars to only extend a senior pet’s life for very little extra time. If you had pet insurance to pay for it, the decision would be more straightforward to go ahead with the costly surgery.

Whether or not to get pet insurance is not an easy choice. There’s no right answer for everyone. It is one that you need to make as a family, taking into consideration the factors mentioned above, including getting input from your veterinarian.

How many times in the past have you been strapped for cash during the holidays? Do holidays always seem to come at the worst times, when you have a month of unexpected expenses or cash emergencies? Have you repeatedly wished that you could turn back the clock and plan ahead for the extra costs related to gifts and holidays? Managing the extra expenses is totally achievable. Here are some ideas to consider for smart ways to budget for gifts and holidays.

Be Aware of Developing Situations

This strategy isn’t as ominous as it sounds. It simply means to be mindful of likely events coming up in the near future. Did your niece recently announce that she’s expecting? Start putting a few dollars away in an envelope now so you’re ready to buy a baby shower gift and/or outfit in the coming months. Has your granddaughter recently gotten engaged? A year from now you’ll be glad you started saving early so you could give her and her new husband a nice wedding gift. If you start early enough, the incremental amounts you need to put in won't be much, and you’ll hardly notice a difference in your daily/monthly budget.

Be Ready For Recurring Events

Birthdays come around every year. Thanksgiving is going to come again this year, just like clockwork. The twelve days of Christmas are rolling around sooner than you think, and your boss’s son’s Bar Mitzvah party is certain, as soon as the boy turns 13 years old in eight months. One of the easiest ways to budget for recurring events is to simply keep a calendar and set reminders. New Year’s Day doesn’t “sneak up on you” at all. It’s been in the same place for eons. You’re the one who wasn't watching the calendar. So right now, set up your calendar with the holidays that are important to you. It doesn’t matter if you use an online calendar, your computer software calendar or a paper calendar hanging in your kitchen. Decide how much you want to have available to spend for the holiday or event. Count backward the number of days you have left to save. Have your budget handy and determine—realistically—how much you can afford to save every day/week or month for those special days. When the day arrives, you’ll be so grateful that you took steps early.

Set a Limit and Stick to It

You’re not alone. When the holiday season comes along, it’s so hard not to get caught up in the spirit of the season. Whether you’re celebrating Chinese New Year, Hanukkah, Christmas, Thanksgiving, it’s often impossible to quell the urge to spend. The trouble is, these urges can quickly wreak havoc with your budget. And, wonderful as holidays are, they aren’t worth going into debt for. The temptation is to just pull out the credit card and hope for the best come January when the bill rolls in. You can avoid that sinking feeling of opening up your first credit card statement after the New Year by setting hard spending limits for yourself. Everyone will have a different comfort threshold for spending during the holidays. But that limit must fit easily into what you can afford. And, of course, once you set that limit, stick to it.

Don’t Be Enchanted by the Sparkly

If you go into any store post-Thanksgiving, you’ll be surrounded by shiny, sparkling things that would look beautiful in your home. You want to make your home look as full of holiday cheer as your favorite holiday movies, your favorite stores and your idealized images of what the holidays are all about. It’s okay to succumb to a few new baubles each year. Just don’t let yourself become so enchanted that you bring home a bunch of “stuff” that you’ll regret buying later. If you want to buy a set of cute plastic poinsettia candle rings, go right ahead. Just stop and think about where you’re going to store them after the holidays and whether your holiday will be any less cheery if you didn’t buy them. One smart way to stay within your means during holidays is to visit stores more often. Enjoy all the sparkle. Immerse yourself in it. Then walk away and leave the sparkle at the store. Come home and feel great knowing that you didn’t overspend and you have enough to pay your bills and put money into your savings account.

Avoid the Abundance Trap

Not everyone struggles to pay for gifts and holidays. These days, with so many affluent “influencers” and crypto millionaires, a lot of people have plenty of money to spend on the things they desire, including non-essentials and luxury goods. But this is another kind of trap to avoid. Knowing that you have “plenty” can make you spend like a drunken sailor, so to speak. The sky’s the limit, right? If you see something you like, you buy it. But that’s not smart fiscal spending. If you talked to your CPA, they could think of all kinds of different ways to make that extra money work for you. Imagine having a lifetime of financial security instead of spending a bunch of money on things that will just collect dust? You don’t have to “top” what you did last year during the holidays. No one’s expecting a live band at your annual Christmas party. Certainly, no one’s expecting Miley Cyrus to sing at your daughter’s birthday party. If you are fortunate to have abundance, try using those resources for something more long-lasting than the most extravagant holiday party of the year.

If you keep all these things in mind during the gift-giving and holiday events throughout the year, your special times will be all the more sweet. Financial security is worth more than all the frosted ornaments and gilded presents in the world. For help keeping your finances in control, consult with your CPA.

If you have been fortunate enough to receive a cash windfall, you may be tempted to do something frivolous with your new riches, such as take an exotic vacation or splurge on new clothes. While these things are great, the fact is you will not be putting your money to excellent use by choosing these options. If you want to make the most of your cash windfall, here are some possibilities you should be discussing with your CPA.

Start Your Own Business

If you have always wanted to be your own boss, coming into some cash may now make your dream a reality. Whether it is only a few thousand dollars or much more, you may now be able to follow your desire to become a successful entrepreneur. Should you want to pursue this path, consult with your CPA to learn about taxes and other areas of finance you'll need to know before starting your business.

Pay Off Debt

While it doesn't sound like the most fun thing you could do with your cash windfall, you and your CPA will probably agree that paying off credit card and perhaps student loan debt will help improve your financial picture in a big way over the months and years ahead. If you do this, the frown you have on your face now will turn into a smile when you realize you now either have very little debt or are in fact debt-free.

Buy a Home

Rather than continue to pay rent to your landlord month after month, you may want to take your windfall and become a homeowner. Even though interest rates have gone up in recent months, there are still plenty of people who are eager to sell their homes. By having a large amount of money you can use as your down payment, this will make you a very attractive buyer to lots of sellers. By working closely with your CPA and a real estate agent, you can be in the driver's seat to get your dream home at a very affordable price.

Open a Retirement Account

Even if you are still decades away from retirement, taking your cash windfall and opening a retirement account will bring you plenty of peace of mind as the years go by. You may want to open a Roth IRA, which could help you keep much of your money tax-free. Should you work for an employer who offers you a 401(k) account, consider putting most if not all of your windfall into this account. If your employer is one who matches your contribution, this will be even better.

Buy a New Car

If you have been spending money right and left on car repairs because you haven't had the money needed to buy a new vehicle, your problem may have been solved thanks to your cash windfall. Even though a new vehicle will begin to depreciate the minute you drive it off the dealer's lot, you can still come out way ahead by not having to pay for one expensive repair after another on a regular basis. Should you decide to do this, talk to your CPA about how to get the best financing and how a car payment, insurance, and other costs may impact your budget.

Open a 529 Plan

If you are a parent of a small child, you probably worry about having enough money available to pay for your child's college education. Rather than stay awake at night worrying about this problem, take your cash windfall and open a 529 Plan. Once you talk this over with your CPA, you will discover you will not only earn interest on this money, but that it will also be tax-deferred.

Purchase Life Insurance

Should you be the primary breadwinner for your family, taking some or all of your cash windfall to purchase life insurance will be a wonderful way to give you and your family tremendous peace of mind. Even if you are older, there are many life insurance options available to meet your needs. Before deciding on a policy and paying any premiums, let your CPA look over the policy's fine print.

Start an Emergency Fund

Unfortunately, the vast majority of people have little if any money set aside for emergencies, such as losing a job, a car or home repair, or a medical emergency. Now that you have your cash windfall, this may be the perfect time to start your emergency fund. When you speak to your CPA about this, you will probably be told to have an amount in your emergency fund that is equal to about six months' worth of expenses. Even if your windfall is not for that full amount, putting aside as much as you can will be a smart decision.

Fix Up Your Home
Since your home is likely the biggest investment you will make in your lifetime, take advantage of your sudden wealth and use the money for some much-needed home repairs. This can be a new roof, an updated electrical system, buying some new appliances, or perhaps remodeling your kitchen or bathroom. By doing so, you will add to the value of your home, which can benefit you should you decide to sell at some point down the road.

Donate to Charity
If there is a cause that is near and dear to your heart, you can take your cash windfall and make a charitable donation. Along with the money being much-appreciated by whatever organization you support, you may be able to write off the donation come tax time. However, to do this, the charity will need to be a qualifying organization. Therefore, talk to your CPA about this before you try doing something for a good cause.

Since you have so many options regarding what to do with your cash windfall, do all you can to make a smart decision. By talking over various ideas you have with your CPA, you'll put your cash windfall to excellent use.

Gas prices across the nation have surged almost 50% this year. The “award” for highest price for gas in the nation goes to Mendocino, California, where it hit a record-setting $9.60 per gallon. State averages for regular gas prices are $5.26 in Alaska, $5.55 in Hawaii and $5.18 in Nevada.

Recently, gas prices have cooled down a bit, partially because the White House administration requested a gas tax holiday for three months. So far, six states (and counting) have suspended state gas taxes. After that three months is up, you can reasonably expect gas prices to go back up, too.

Many individuals online have spoken out about the need to stop complaining about the price of gas. They’ve said that it’s a first world problem, that it’s a small price to pay for peace in the Ukraine, that it’s not that big of a deal. But it is a big deal to many people, including those whose very livelihoods depend on being profitable, and gas expense cuts into those profits.

For the average working individual who needs to commute to work, exorbitant gas prices cut straight into the family budget. There are other people and companies that are even more directly affected by high gas prices.

Landscapers (both companies and individuals) who use up a lot of gasoline on a daily basis, running mowers and power tools.

Commercial truckers and trucking companies, who either need to keep fuel in their owner-operated rigs, or who need to keep a fleet of commercial trucks on the highways in order to stay in business.

Farmers and agricultural enterprises, where fueling irrigators, combines, tractors and the like is essential to realizing profits down the line.

Saving money on gas is important for everyone in this economic climate. Following are some tips for saving money at the pump:

Use Gas Reward Cards

Gas rewards credit cards are a simple way to earn cashback on gas purchases. Chase and American Express each offer cards like this. Be sure to use them for your business fuel purchases as well as personal, to maximize savings.

Sign up For Loyalty Programs

Speedway, Spinx and many other gas station outlets operate loyalty programs where all you need to do is enter your phone number at the pump to get 5 cents off per gallon. Five cents isn’t a lot, even if you’re filling up, but over a week or month, the savings does add up. Most of these programs give customers even higher reward points when you buy items from inside the store, like coffee, pizza, snacks and grocery products.

Use GasBuddy

GasBuddy is an app for Android and iOs where you can enter your zip code and it will tell you where the cheapest gas is that’s near you. You’ll also get a list of all the gas station prices, as reported by users. It’s free to use on your PC or phone and you can also contribute your own reports of the latest gas prices that you see in town to help out others.

Sign up For Grocery Store Rewards

Grocery store chains such as Kroger offer up to10 cents off each gallon of gas once you reach a certain level of points. Points are given based on your grocery store receipts. Considering the high price of food these days, it’s pretty easy to quickly rack up enough points for that 10 cents off reward.

Don’t Travel For Gas

As much as you may dislike actually stopping for gas, this is a better strategy than traveling solely for the purpose of buying gas. Make gas stops on your way to and from other errands so you aren’t wasting money on gas just to fuel your tank.

Fill up on the Best Days

Did you know that gas is historically lower on some days than others? It has to do with when the fuel tanks come in to fill gas station tanks. According to GasBuddy, the cheapest days to get gas are on Mondays and Fridays. However, this statistic is based on national trend data, so your local gas stations might vary from that. Consider just asking at the counter of your favorite gas station. They have to buy gas too, so they’ll understand your desire to know when is the cheapest day to fuel up.

Get a Tune-up

If your vehicle isn’t running efficiently, saving money on gas is going to be more difficult. A tune-up will help make sure your vehicle is burning gas efficiently and not wasting gas every time you drive.

Consider Home Deliveries

When you order groceries and other items online, you save on gas by not driving. Instacart offers grocery delivery at affordable prices, although keep in mind that you might pay slightly higher prices this way. Just be sure to give the shopper your grocery loyalty card number so you still get your fuel rewards points, even though you’re not shopping in person.

Turn Off Engine While Waiting

When you visit food drive-throughs, ATMs, or are just waiting inside your car for something, turn off the engine. Idling wastes gas. According to fuel efficiency experts, up to a quarter gallon to half a gallon of gas is burned per hour just by idling.

Pay Cash

If you don’t have a fuel rewards credit card, it’s worth it to pay cash at the pump in order to get the lowest possible price. Some gas stations, such as Valero, give customers a price break if they pay with cash. The inconvenience of having to pay inside is often worth it.

Drive Better

Being a “smoother” driver helps to conserve the gas in your tank. Sporadic fits and stops burn up more fuel than when you’re driving along smoothly.

Use Waze

Finally, Waze is a driving app that allows you to plan routes in the most direct way possible. By not double-backing, you’ll end up saving gas. Download it for Android or iOs phone devices online.

No matter who you are or what line of work you’re in, these tips for saving money on gas should be of help. As always, contact your CPA for more helpful tips on money management.

In today's world, it sometimes seems as if everyone is in debt to some degree. Between car payments, mortgage payments, credit cards, student loans, and other types of debt, it's easy to see why the average person is nearly $90,000 in debt. If you are determined to put debt behind you in 2022, the good news is that you've got plenty of viable options at your fingertips. As you begin discussions with your CPA as to the best ways to tackle your debt, keep the following tips in mind.

Pay More than the Minimum

If you really want to see your debt disappear very quickly, your CPA will agree that paying more than the minimum due on credit cards each month is an effective strategy. Of course, you'll need to plan your budget very carefully to ensure you can manage the extra bit of expense. Otherwise, you could be creating a new problem while tackling an old one. Along with ridding yourself of debt, your CPA will also remind you that you will likely save thousands of dollars in interest along the way. If credit cards are your main debt issue, this is a smart strategy to use.

The Debt Snowball

While you probably have some large debt, chances are you also have debt amounts that are relatively small. If so, you can use the debt snowball method to your advantage. With this strategy, you focus first on paying off your smaller debts, then work your way up to the larger ones. Along with getting rid of some debt in a short period of time, this strategy also gives you early success in your battle against debt, helping to keep you motivated as you tackle larger amounts.

Pay Off Title or Payday Loans Immediately

If some of your total debt includes payday loans or title loans, your CPA will emphasize that you pay off these loans as quickly as possible. While credit cards have high interest rates, remember that most payday or title loans have interest rates approaching a whopping 400 percent. In fact, it often makes sense to borrow money elsewhere—at a lower interest rate—and pay off higher interest titles and payday loans with it.

Refinance Your Debt

Refinancing your debt can also help you to ultimately eliminate your debt. You could refinance your auto loan, mortgage, student loan or personal loans. Though interest rates have risen over the past few months, you can still come away with interest rates that are lower than your existing debt, especially if you use a debt consolidation loan. Should you have credit card debt, take advantage of balance transfer offers. By doing so, you might be able to transfer debt to a card that will have a 0% APR for up to 18 months.

Get a Windfall? Apply it to Your Debt

If you happen to receive a windfall of money, such as a tax refund or maybe money from an inheritance, apply it toward paying off your debt. While you may be tempted to use your windfall to take a vacation or buy something you've had your eyes on for a while, using it to pay down your debt will benefit you far more in the future than any immediate satisfaction you may get from a purchase.

Negotiate a Settlement with Your Creditors

If you have a tremendous amount of debt that may be almost impossible to pay off through normal means, you may be talking with your CPA about filing bankruptcy. However, only do this as an absolute last resort. Instead, consider contacting your creditors and negotiating a settlement. Another possibility is to work with a third-party debt settlement company, although you will need to carefully select a company that is legitimate, charges nominal fees for its services, and has a verifiable track record of success with past clients.

Consider a Side Hustle

As more and more people grapple with debt, many are turning to a side hustle as a way to earn money to pay down debt. If you want to give this a try, you have lots of options, such as being a driver for such services as Uber or DoorDash. Also, you could take on a conventional part-time job at a local store, or even find online work opportunities you could do from home. Once you start looking around, you may be surprised at just what is available to help you earn extra money.

Take a Closer Look at Your Budget

Even if you have created a budget that you think is bare to the bone and have cut out all unnecessary expenses, take a closer look at your existing budget. When you do, you may find you can do a few things to help you save a few more dollars each month. For example, you may discover that you can cut your entertainment budget a bit more, or maybe opt for a monthly smartphone plan that is cheaper than what you currently pay.

Ask for a Raise

You may be able to tackle your debt problem by convincing your boss to give you a raise. As today's employers struggle to keep current workers and hire new ones, your boss may realize giving you a raise is much easier than trying to find someone who can fill your shoes five days per week. Just be sure to use any extra money to pay down debt, and don’t be tempted to spend more.

Stop Investing

If you currently contribute money to your 401(k) plan, stop doing so for a few months while you're trying to eliminate debt. Once you do, you'll find you may have enough money to get yourself debt-free much sooner than you expected. After you’re debt-free, be sure to resume saving, because this will give you financial security in the future.

While getting out of debt in 2022 can be challenging, it’s not impossible. By relying on the advice of a CPA you know and trust, it won't be long until you can kiss your debts goodbye.

When you invest in something, be it stocks, a business, or anything else, you of course want to make money, or have a return on your investment. To know if your investment has been successful, you will need to rely on the financial metric known as ROI, or Return on Investment. Excellent to use whether you are examining the return on only one investment or multiple investments, the ROI is a ratio that compares your investment's gain or loss to the cost of the investment itself. If you want to know how to calculate an ROI, its advantages and disadvantages, and much more, here is all you need to know.

Calculating Your ROI

To calculate your ROI, you begin by subtracting your investment's beginning value from its final value, which equals your net return. After doing this, your next step is to divide your net return by the cost of your investment, then multiply this number by 100. While it may sound a bit complicated, it's actually quite easy, and is in fact easy to understand, so much so that the ROI is used worldwide as the standardized measure of an investment's profitability.

An ROI Alternative

Along with calculating the ROI in the manner described above, there is an alternative method you can use to gauge your investment's profitability. To do so, you can subtract your investment's initial value from its final value, then divide the result by the investment's cost and multiply by 100. Since either method will yield you the same result, it matters little which one you prefer.

How to Interpret Your ROI

Now that you know how to calculate your ROI, it's equally important that you know how to interpret the results. In many cases, it's often a good idea to sit down with your CPA when doing this, since they may be able to point out things good or bad that you might be missing.

If you calculate your ROI and wind up with a positive number, your net returns will be referred to as being "in the black," meaning you made money because your total return was more than your total cost. However, if your ROI calculations result in a negative figure, you are now "in the red," meaning you lost money since your total costs were more than your total returns.

When you want the most accuracy when calculating an ROI, an annualized ROI works best, since this will let you and your CPA examine the total costs and total returns of multiple investments at once.

Leverage in Combination with ROI

In many cases when ROI is being calculated, individuals will also bring leverage into the equation, which can be both good and bad. On the one hand, if an investment was profitable, leverage will make the ROI look even better. However, if losses were sustained, leverage magnifies these as well, making an already bad situation look much worse. Almost always, ROI will look better if leverage is not included in the equation.

Unequal Cash Flows

If you are considering investing in a business that has an unequal cash flow, the ROI calculation will become more complicated, since the ROI is likely to fluctuate each year. When doing this type of calculation, you will need to use the internal rate of return (IRR) found in a typical spreadsheet.

In many cases where unequal cash flows exist, the ROI will be greater sooner rather than later, since larger cash inflows typically occur early on with most businesses. By having a positive impact on the IRR, this leads to a positive impact on the ROI.

ROI Advantages

The biggest advantage of an ROI is its simplicity in being able to be understood by investors. Since the basic ROI calculation is relatively simple, it is a metric that can be quickly determined and used to make business decisions on many levels. Whether it is an individual investor or a company that is considering making a multi-million dollar investment, the ROI is what is used when deciding whether to go all-in or look elsewhere.

ROI Disadvantages

While the ROI does have numerous advantages, it also comes with four disadvantages that you should talk over with your CPA so that you understand them.

First, an ROI will most often not take into account how long investments are held, which may create problems if you are wanting to compare various types of investment alternatives. However, if you use an annualized ROI, this problem can usually be solved.

Second, an ROI does not adjust for the risk associated with an investment. As you know, investment returns are directly linked to an investment's risk factor. Generally, if you wish to get extremely high returns on an investment, you are putting yourself at much greater risk of significant financial losses. Thus, as an investor, it is not recommended that you only use the ROI to determine if an investment is best for you. Instead, talk to your CPA and let them combine the ROI with other elements to help you make the best decision.

Third, ROI figures are sometimes exaggerated, especially if all costs are not included in its calculation. This often happens with real estate investments, since such expenses as maintenance costs, insurance, mortgage interest, and property taxes may be excluded by choice or by mistake.

Finally, an ROI only looks at the financial gains associated with an investment. In today's world, more and more investors are also concerned about the social or environmental impact associated with their investments. To calculate this, a new metric known as the Social Return on Investment (SROI) is being used to address these concerns.

ROI and Your CPA

While an ROI is simple in some ways, it does still leave the door open for many questions about how profitable your investments really are, how they are impacting the world around you, and so on. If you want your questions answered by a financial professional who can give you peace of mind, speak to your CPA.