How to Be Smart with Money

How to Be Smart with Money.

Being smart with money doesn’t have to involve high risk investments or having thousands of dollars in the bank. No matter what your current situation is, you can be more financially savvy in your everyday life. Start by building a budget to help you stay within your means and prioritize your financial goals. Then, you can work on paying down your debt, building up your savings, and making better spending decisions.

Method 1 Managing Your Budget.
1. Set your financial goals. Understanding what you are working toward will help you build a budget to meet your needs. Do you want to pay down debt? Are you saving for a major purchase? Are you just looking to be more financially stable? Make your top priorities clear so that you can build your budget to fit them.
2. Look at your overall monthly income. A smart budget is one that doesn’t overextend your means. Start by calculating your total monthly income. Include not just the money you get from work, but any cash you get from things like side-hustles, alimony, or child support. If you share expenses with your partner, calculate your combined income to figure out a household budget.
You should aim to have your overall monthly spending not exceed what you bring in. Emergencies and unforeseen occasions happen, but try to set a goal of not using your credit card to cover non-necessary items when your bank accounts are low.
3. Calculate your necessary expenses. Your first priority in building a better budget should be those things that need to be paid every month. Paying these expenses should be your first priority, as these items are not only necessary for daily function, but could also damage your credit if you fail to pay them in full and on time.
Such expenses may include your mortgage or rent, utilities, car payments, and credit card payments, as well as things like your groceries, gas, and insurance.
Set your bills up on autopay to make them easy to prioritize. This way, the money comes right out of your account on the day the bill is due.
4. Factor in your non-essential expenses. Budgets work best when they reflect your daily life. Take a look at your regular, non-essential expenses and build them into your budget so that you can anticipate your spending. If you get a coffee every morning on the way to work, for example, throw that in your budget.
5. Look for places to make cuts. Creating a budget will help you identify things you can cut from your regular expenses and roll into your savings or debt payments. Investing in a good coffee pot and a quality to-go mug, for example, can really help you save long-term on your morning fix.
Don’t just look at daily expenses. Check things like your insurance policies and see if there are places you can scale back. If you are paying for collision and comprehensive insurance on an old car, for example, you may opt to scale back to just liability.
6. Track your monthly spending. A budget is a guideline for your overall spending habits. Your actual spending will vary each month depending upon your personal needs. Track your spending by using an expenses journal, a spreadsheet, or even a budgeting app to help you ensure that you are staying within your means each month.
If you do mess up or go over your budget goals, don’t beat yourself up. Use the opportunity to see if you need to revise your budget to include new expenses. Remind yourself that getting off-target happens to everyone occasionally, and that you can get to where you want to be.
7. Build some savings into your budget. Exactly how much you save will depend upon your job, your personal expenses, and your individual financial goals. You should aim to save something each month, though, whether that’s $50 or $500. Keep that money in a savings account separate from your primary bank account.
This savings should be separate from your 401(k) or any other investments that you have. Building a small general savings will help you protect yourself financially if an emergency comes up, such as a major repair around the house or unexpectedly losing your job.
Many financial experts recommend a target savings of 3-6 months’ worth of expenses. If you have a lot of debt you need to pay down, aim for a partial emergency fund of 1-2 months, then focus the rest of your cash on your debt.

Method 2 Paying Off Debts
1. Figure out how much you owe. To understand how to best pay down your debt, you first need to understand how much you owe. Add together all your debts, including credit cards, short-term loans, student loans, and any mortgages or auto financing you have in your name. Look at your total debt numbers to help you understand how much you owe, and how long it will truly take to pay it off.
2. Prioritize high-interest debts. Debts like credit cards tend to have higher interest rates than things like student loans. The longer your carry a balance on high interest debts, the more you ultimately pay. Prioritize paying down your highest interest debts first, making minimum payments on other debts and putting extra money into your top debt priorities.
If you have a short-term loan like a car title loan, prioritize paying that down as quickly as possible. Such loans can be devastating if not paid off in full and on time.
3. Go straight from paying off one debt to the next. When you pay off one credit card, don’t roll that payment amount back into your discretionary funds. Instead, roll the amount you were paying into your next debt.
If, for example, you finished paying down a credit card, take the amount you were putting toward your credit card and add it to the minimum payment for your student loans.

Method 3 Setting Up Savings.
1. Pick a savings goal. Saving tends to be easier when you know what you’re saving for. Try to set a goal, such as building an emergency fund, saving for a down payment, saving for a major household purchase, or building a retirement fund. If your bank will let you, you can even give your account a nickname such as “Vacation Fund” to help remind you of what you’re working toward.
2. Keep your savings in a separate account. A savings account is generally the easiest place to put your savings if you are just starting out. If you already have a solid emergency fund and have a reasonable amount to invest, such as $1,000, you may consider something like a certificate of deposit (CD). CDs make your money much harder to get to for a fixed period of time, but tend to have a much higher interest rate.
Keeping your savings separate from your checking account will make it harder to spend your savings. Savings accounts also tend to have a slightly higher interest rate than checking accounts.
Many banks will allow you to set up an automatic transfer between your checking and savings accounts. Set up a monthly transfer from your checking to your savings, even if it’s just for a small amount.
3. Invest raises and bonuses. If you get a raise, a bonus, a tax return, or another unexpected windfall, put it in your savings. This is an easy way to help boost your account without compromising your current budget.
If you get a raise, invest the difference between your budgeted salary and your new salary directly into your savings. Since you already have a plan to live off your old salary, you can use the new influx of cash to build your savings.
4. Dedicate your side gig money to your savings. If you work a side gig, build a budget based on your primary source of income and dedicate all your earnings from your side gig to your savings. This will help grow your savings faster while making your budget more comfortable.

Method 4 Spending Money Wisely.
1. Prioritize your needs. Start each budget period by paying for your needs. This should include your rent or mortgage, utility bills, insurance, gas, groceries, recurring medical expenses, and any other expenses you may have. Do not put any money toward non-necessary expenses until all of your necessary living costs have been paid.
2. Shop around. It can be easy to get in the habit of shopping in the same place repeatedly, but taking time shop around can help you find the best deals. Check in stores and online to look for the best prices for your needs. Look for stores that might be running sales, or that specialize in discount or surplus merchandise.
Bulk stores can be useful for buying things you use a lot of, or things that don't expire such as cleaning supplies.
3. Buy clothes and shoes out-of-season. New styles of clothes, shoes, and accessories generally come out seasonally. Shopping out-of-season can help you find better prices on fashion items. Shopping online is particularly useful for out-of-season clothes, as not all stores will have non-seasonal items.
4. Use cash instead of cards. For non-necessary expenses such as going out to eat or seeing a movie, set a budget. Withdraw the necessary amount of cash before you go out, and leave your cards at home. This will make it more difficult to overspend or impulse buy while you're out.
5. Monitor your spending. Ultimately, as long as you're not spending more than you bring in, you're on target. Regularly monitor your spending in whatever way works best for you. You may prefer to check your bank account every day, or you could sign up for a money-monitoring app such as Mint, Dollarbird, or BillGuard to help you track your spending.

April 11, 2020

how to analyze your current finances

How to Analyze Your Current Finances.

Before you can improve your financial health, you need to analyze your current finances. Keep track of your expenses for a month and look at where you are spending the most. Use extra money to pay down debts, build an emergency fund, and save for your retirement. Although saving might seem difficult, it’s actually quite easy once you find out where your money is going.

Part 1 Tracking Your Spending.

1. Record your spending. Record all purchases that you make in a month. Write down the amount spent, the day, and the time. Some of the more popular methods include:

Create a spreadsheet. Remember to enter every purchase or expense. You should probably hold onto receipts so that you don’t forget how much you spent during the day.

Keep a notebook. This is a lower-tech option, but it is convenient. Carry your notebook around with you and record purchases as soon as you make them.

Use checks. This is an old-fashioned option, but you can easily track your expenses when your monthly bank statement arrives.

Use an app. Many apps are on the market that help track your spending on your smartphone. The most popular include Mint.com and Wesabe.com.

2. Add up your fixed expenses. Your fixed expenses don’t change month to month. Common fixed expenses include the following: Rent or mortgage, Insurance, Car payment, Utilities, Debt repayment.

3. Look closer at your discretionary spending. Your discretionary spending is any spending that isn’t fixed. Instead, it goes up and down each month. Pay attention to what you are spending money on. Break out the amounts spent on the following: Groceries, Eating out, Gas, Clothes, Hobbies/entertainment.

4. Pay attention to when you spend the most. Look at the days and times when you make most of your discretionary purchases. Do you buy impulsively immediately after work? Do you spend too much money on the weekends?

You might need to change your routine, depending on when you spend. For example, instead of pulling into the mall on your way home from work, you can change your route so that you don’t pass the mall.

If you’re a weekend spender, you can try to fill your time with other hobbies, such as exercise or visiting friends.

5. Compare your spending to the 50-20-30 rule. According to this rule, your monthly expenses should shake out this way: 50% should go to essentials, such as food, rent, and transportation. 20% should go to saving and debt reduction, and 30% should go for discretionary spending.

The 50-20-30 rule probably won’t work for many people. For example, your fixed expenses like rent might eat up more than 50% of your budget. If you have debts, then you might need to spend more than 20% to pay them down. Nevertheless, the 50-20-30 rule can help you identify where you are falling short. It also gives you something to work towards. If necessary, reduce your debt load by refinancing or paying down debts.

Part 2 Looking Closer at Your Debts.

1. Draw up a list of your debts. Go through your paperwork and find information on your debts, then draw up a list including the following: Name of the account, Total current balance, Monthly payment, Interest rate.

2. Pull a copy of your credit report. You might not remember all of your debts, so you should go through your credit report to make sure you haven’t forgotten anything. In the U.S., you are entitled to one free credit report annually from each of the three national credit reporting agencies. Don’t order the report from each agency. Instead, order them all by calling 1-877-322-8228.

You can also visit annualcreditreport.com. Provide your name, date of birth, address, and Social Security Number.

3. Check if you can reduce your debt load. Depending on your situation, you might be able to lower the overall amount you pay on your debts. Although this might not lower your monthly payments, you will ultimately save money in the long-term. Consider your options:

You might be able to refinance a 30-year mortgage into a 15-year mortgage. This will probably increase your monthly payments, but you can save big on interest.

Call up your credit card companies and ask for a better interest rate. This will lower your monthly payment and your overall debt.

Consolidate debt. For example, you can transfer credit card debts to a balance transfer credit card, or you can take out a lower-interest personal loan to pay off debts.

4. Find ways to reduce your monthly debt payment. In a cash crunch, you’ll need to reduce how much you pay each month, even if you end up paying more over the long-term. You can lower your monthly debt payments in the following ways:

You might be able to stretch out the length of the loan. For example, you might refinance a car loan and stretch out the repayment period to six years.

If you have student loans, you can ask for deferment or forbearance. These options temporarily suspend your payments, though interest will continue to accrue with forbearance. When you get back on your feet, you can begin making payments.

Debt consolidation can also reduce your monthly payments, depending on the interest rate and repayment period.

5. Pay off your debts. You need to pay back your debts, preferably sooner rather than later. Some of the more popular approaches to debt reduction include the following:

Debt avalanche. You pay the minimum on all debts except the one with the highest interest rate, to which you dedicate all extra money. Once that debt is paid off, you commit all resources to the debt with the next highest interest rate.

Debt snowball. With this method, you pay the minimum on all debts except the smallest one. You devote all available money to this debt until it is paid off, then you focus on the remaining debt that is the smallest. This method can give you momentum as you see your smallest debts disappear.

Debt snowflake. You look for ways to save money every day and make multiple payments each month to your debts. You can combine the debt snowflake method with either the avalanche or snowball method.

Part 3 Reducing Your Expenses.

1. Set a savings goal. Ideally, you should save 15-25% of your monthly paycheck. This means that if you bring home $2,000 a month, you should save between $300 and $500. That might not be a realistic goal right now, depending on your expenses.

If you can’t save 15%, then work on ways to reduce your discretionary spending. Every little bit helps, and there are many ways to save every day.

2. Reduce your spending on food. Stop eating out and instead cook at home. Buy a cheap cook book and have fun making new recipes. Remember to buy groceries in bulk for extra savings.

Clipping coupons will help reduce the amount you spend each week. Find coupons in your local newspaper or in the circular at the grocery store.

Use popular apps such as Checkout 51, Grocery IQ, and Coupons.com.

3. Find cheap entertainment substitutes. Everyone needs to unwind a little bit. However, you can usually find a cheaper substitute for your favorite activity:

Instead of paying for a gym membership, exercise outdoors. Join a jogging or walking group, or do pushups or sit-ups in the park.

Get your library card and check out books and DVDs instead of paying for them.

Instead of joining friends for happy hour, host a potluck at your house. Ask all guests to bring a dish or a bottle of wine.

4. Cut your electricity use. Install LED lightbulbs, which are four times as energy efficient as regular lightbulbs, and remember to unplug electrical devices when you aren’t using them.

You might also weatherize and insulate your home for increased savings. Obtain a home energy audit and apply for any local government programs. An energy audit can reduce your energy expenses by 5-30%.

5. Reduce your fixed expenses. These can be the hardest to reduce because they often require that you make big lifestyle changes. However, consider whether you can make any of the following changes, especially if you are living beyond your means:

Move in with friends or family. If you can’t afford your rent or home, then you might need to crash at someone’s place, at least temporarily. This can save a lot of money.

Take public transportation. Sell your car and pocket the money. You’ll also save on insurance and gas.

Get cheaper insurance. You can lower your auto or homeowners insurance by shopping around using an online aggregator. When you find a cheaper option, call up your current insurer and ask them to match it. If they won’t, you can switch.

6. Freeze your credit cards. Reduce the temptation to spend by freezing your cards in ice and carrying only cash on you. If you’re afraid of carrying cash, get a secured credit card or reloadable debit card.

Part 4 Saving for the Future.

1. Build a cash cushion. If your car broke down or you lost your job, could you continue to pay the bills? Build a cash cushion by saving six months’ worth of expenses. Start small, by putting aside whatever extra money you can spare.

Don’t let debt repayment get in the way. Most financial experts recommend that you build up at least a small emergency fund at first—say, three months. Then you can tackle your credit card debt.

Ideally, you can do both at the same time—contribute some money to your emergency fund and some extra to paying debts down quickly.

2. Contact Human Resources about retirement plans. You might be surprised that your employer offers a retirement plan. Call up HR and ask. Also check whether or not they will match any of your contributions.

For example, some employers might match up to 4% of your base salary. This means you contribute 4% and they contribute 4%. If you only contribute 3%, then they will match that.

3. Research IRAs. If your employer doesn’t offer a retirement plan, don’t worry! You have plenty of options to choose from. The two most common are Individual Retirement Accounts (IRAs) and Roth IRAs. You can open an account with many online brokers. Choose which IRA works for you:

IRA. With a traditional IRA, your contributions are tax-free. This is a good choice if you anticipate being in a lower income tax bracket when you retire.

Roth IRA. The big advantage of a Roth IRA is that your withdrawals will be tax free. However, you pay taxes on your contributions. This is a good option if you anticipate being in a higher income tax bracket when you retire.

January 27, 2020

How to Analyze Your Current Finances

How to Analyze Your Current Finances.

Before you can improve your financial health, you need to analyze your current finances. Keep track of your expenses for a month and look at where you are spending the most. Use extra money to pay down debts, build an emergency fund, and save for your retirement. Although saving might seem difficult, it’s actually quite easy once you find out where your money is going.

Part 1 Tracking Your Spending.

1. Record your spending. Record all purchases that you make in a month. Write down the amount spent, the day, and the time. Some of the more popular methods include:

Create a spreadsheet. Remember to enter every purchase or expense. You should probably hold onto receipts so that you don’t forget how much you spent during the day.

Keep a notebook. This is a lower-tech option, but it is convenient. Carry your notebook around with you and record purchases as soon as you make them.

Use checks. This is an old-fashioned option, but you can easily track your expenses when your monthly bank statement arrives.

Use an app. Many apps are on the market that help track your spending on your smartphone. The most popular include Mint.com and Wesabe.com.

2. Add up your fixed expenses. Your fixed expenses don’t change month to month. Common fixed expenses include the following: Rent or mortgage, Insurance, Car payment, Utilities, Debt repayment.

3. Look closer at your discretionary spending. Your discretionary spending is any spending that isn’t fixed. Instead, it goes up and down each month. Pay attention to what you are spending money on. Break out the amounts spent on the following: Groceries, Eating out, Gas, Clothes, Hobbies/entertainment.

4. Pay attention to when you spend the most. Look at the days and times when you make most of your discretionary purchases. Do you buy impulsively immediately after work? Do you spend too much money on the weekends?

You might need to change your routine, depending on when you spend. For example, instead of pulling into the mall on your way home from work, you can change your route so that you don’t pass the mall.

If you’re a weekend spender, you can try to fill your time with other hobbies, such as exercise or visiting friends.

5. Compare your spending to the 50-20-30 rule. According to this rule, your monthly expenses should shake out this way: 50% should go to essentials, such as food, rent, and transportation. 20% should go to saving and debt reduction, and 30% should go for discretionary spending.

The 50-20-30 rule probably won’t work for many people. For example, your fixed expenses like rent might eat up more than 50% of your budget. If you have debts, then you might need to spend more than 20% to pay them down. Nevertheless, the 50-20-30 rule can help you identify where you are falling short. It also gives you something to work towards. If necessary, reduce your debt load by refinancing or paying down debts.

Part 2 Looking Closer at Your Debts.

1. Draw up a list of your debts. Go through your paperwork and find information on your debts, then draw up a list including the following: Name of the account, Total current balance, Monthly payment, Interest rate.

2. Pull a copy of your credit report. You might not remember all of your debts, so you should go through your credit report to make sure you haven’t forgotten anything. In the U.S., you are entitled to one free credit report annually from each of the three national credit reporting agencies. Don’t order the report from each agency. Instead, order them all by calling 1-877-322-8228.

You can also visit annualcreditreport.com. Provide your name, date of birth, address, and Social Security Number.

3. Check if you can reduce your debt load. Depending on your situation, you might be able to lower the overall amount you pay on your debts. Although this might not lower your monthly payments, you will ultimately save money in the long-term. Consider your options:

You might be able to refinance a 30-year mortgage into a 15-year mortgage. This will probably increase your monthly payments, but you can save big on interest.

Call up your credit card companies and ask for a better interest rate. This will lower your monthly payment and your overall debt.

Consolidate debt. For example, you can transfer credit card debts to a balance transfer credit card, or you can take out a lower-interest personal loan to pay off debts.

4. Find ways to reduce your monthly debt payment. In a cash crunch, you’ll need to reduce how much you pay each month, even if you end up paying more over the long-term. You can lower your monthly debt payments in the following ways:

You might be able to stretch out the length of the loan. For example, you might refinance a car loan and stretch out the repayment period to six years.

If you have student loans, you can ask for deferment or forbearance. These options temporarily suspend your payments, though interest will continue to accrue with forbearance. When you get back on your feet, you can begin making payments.

Debt consolidation can also reduce your monthly payments, depending on the interest rate and repayment period.

5. Pay off your debts. You need to pay back your debts, preferably sooner rather than later. Some of the more popular approaches to debt reduction include the following:

Debt avalanche. You pay the minimum on all debts except the one with the highest interest rate, to which you dedicate all extra money. Once that debt is paid off, you commit all resources to the debt with the next highest interest rate.

Debt snowball. With this method, you pay the minimum on all debts except the smallest one. You devote all available money to this debt until it is paid off, then you focus on the remaining debt that is the smallest. This method can give you momentum as you see your smallest debts disappear.

Debt snowflake. You look for ways to save money every day and make multiple payments each month to your debts. You can combine the debt snowflake method with either the avalanche or snowball method.

Part 3 Reducing Your Expenses.

1. Set a savings goal. Ideally, you should save 15-25% of your monthly paycheck. This means that if you bring home $2,000 a month, you should save between $300 and $500. That might not be a realistic goal right now, depending on your expenses.

If you can’t save 15%, then work on ways to reduce your discretionary spending. Every little bit helps, and there are many ways to save every day.

2. Reduce your spending on food. Stop eating out and instead cook at home. Buy a cheap cook book and have fun making new recipes. Remember to buy groceries in bulk for extra savings.

Clipping coupons will help reduce the amount you spend each week. Find coupons in your local newspaper or in the circular at the grocery store.

Use popular apps such as Checkout 51, Grocery IQ, and Coupons.com.

3. Find cheap entertainment substitutes. Everyone needs to unwind a little bit. However, you can usually find a cheaper substitute for your favorite activity:

Instead of paying for a gym membership, exercise outdoors. Join a jogging or walking group, or do pushups or sit-ups in the park.

Get your library card and check out books and DVDs instead of paying for them.

Instead of joining friends for happy hour, host a potluck at your house. Ask all guests to bring a dish or a bottle of wine.

4. Cut your electricity use. Install LED lightbulbs, which are four times as energy efficient as regular lightbulbs, and remember to unplug electrical devices when you aren’t using them.

You might also weatherize and insulate your home for increased savings. Obtain a home energy audit and apply for any local government programs. An energy audit can reduce your energy expenses by 5-30%.

5. Reduce your fixed expenses. These can be the hardest to reduce because they often require that you make big lifestyle changes. However, consider whether you can make any of the following changes, especially if you are living beyond your means:

Move in with friends or family. If you can’t afford your rent or home, then you might need to crash at someone’s place, at least temporarily. This can save a lot of money.

Take public transportation. Sell your car and pocket the money. You’ll also save on insurance and gas.

Get cheaper insurance. You can lower your auto or homeowners insurance by shopping around using an online aggregator. When you find a cheaper option, call up your current insurer and ask them to match it. If they won’t, you can switch.

6. Freeze your credit cards. Reduce the temptation to spend by freezing your cards in ice and carrying only cash on you. If you’re afraid of carrying cash, get a secured credit card or reloadable debit card.

Part 4 Saving for the Future.

1. Build a cash cushion. If your car broke down or you lost your job, could you continue to pay the bills? Build a cash cushion by saving six months’ worth of expenses. Start small, by putting aside whatever extra money you can spare.

Don’t let debt repayment get in the way. Most financial experts recommend that you build up at least a small emergency fund at first—say, three months. Then you can tackle your credit card debt.

Ideally, you can do both at the same time—contribute some money to your emergency fund and some extra to paying debts down quickly.

2. Contact Human Resources about retirement plans. You might be surprised that your employer offers a retirement plan. Call up HR and ask. Also check whether or not they will match any of your contributions.

For example, some employers might match up to 4% of your base salary. This means you contribute 4% and they contribute 4%. If you only contribute 3%, then they will match that.

3. Research IRAs. If your employer doesn’t offer a retirement plan, don’t worry! You have plenty of options to choose from. The two most common are Individual Retirement Accounts (IRAs) and Roth IRAs. You can open an account with many online brokers. Choose which IRA works for you:

IRA. With a traditional IRA, your contributions are tax-free. This is a good choice if you anticipate being in a lower income tax bracket when you retire.

Roth IRA. The big advantage of a Roth IRA is that your withdrawals will be tax free. However, you pay taxes on your contributions. This is a good option if you anticipate being in a higher income tax bracket when you retire.

January 27, 2020

How to Manage Family Finances

How to Manage Family Finances.

To live a happy and peaceful life with financial freedom, it's very important to manage family finances properly. Failing to manage spending or agree on financial decisions can cause a married couple to fall into endless arguing. To get through the many financial decisions present in married life, you have to coordinate a budget and financial planning with the whole family and keep an open dialogue going about the family's money.

Part 1 Coordinating Family Finances.

1. Talk openly about your finances. While this is important all the way through life, it is especially important to establish financial honestly before you get married. If one partner has a poor credit history or large debts that are not brought up before marriage, it can lead to resentment and problems down the road. Before getting married, you should meet with your loved one and discuss his current financial situation, including how much he makes, where that money goes, his credit history, and any large debts he is carrying. This sets the tone for financial openness in the rest of your lives together.

2. Meet regularly to talk about money. Decide on a time of the month to get together specifically to discuss your finances. Perhaps this meeting can coincide with the arrival of the monthly bank statement or the due date of monthly bills. In any case, use your time at this meeting to assess the previous month's expenditures, mark your progress towards long-term goals, and to propose any changes or major purchases that you want to make. Only by talking about money regularly can you make doing so a comfortable and productive experience.

3. Don't make one person the sole manager of the family's money. Many families choose to allow one person to take charge of all the family's finances; however, this places an unnecessary burden on that person and leads to others' being unaware of the family's current financial situation. In addition, if that person leaves through death or divorce, it leaves the others completely unaware of how to manage or even access the family's finances. Solve this problem by splitting up tasks between you or by managing finances in alternating months.

Both you and your spouse should attend any meetings with financial professionals, such as those with a loan officer or investment advisor.

4. Decide on an account setup. Families have options when it comes to setting up joint accounts. Some choose to keep everything together while others keep their finances mostly separate. At minimum, you should have a joint account to pay for household expenses and your mortgage payment. At the end of the month, you can split these expenses in half and each transfer in an equal amount of money into this account to pay these expenses. Having separate account can prevent arguments that might arise from one person's spending habits.

Just make sure to set limits to how much money each of you can spend each month so that one person doesn't end up spending all of the family's money.

5. Build up individual credit. Even though your finances will be combined, it is still important for each of you to have a strong credit score. Doing so will ensure not only that your credit will be good when you apply for credit jointly, but also that your credit history will remain intact if you split up. A simple way to manage this is by having separate credit cards, each established only in the name of the spouse who uses it.

Part 2 Using a Budget.

1. Choose a budget format. Before you create a budget, you'll have to decide how to keep that budget. While many people can get away with just using a notepad and pen, others find it easier to track their spending through a spreadsheet or financial software. There are a number of a free software platforms available online that you can use to establish and track a budget. For example, programs like Mint.com and Manilla offer free budgeting services. If you want full service financial software, try Quicken or Microsoft Money.

2. Assess your current spending habits. For a month, write down a note every time you spend money, even for very small amounts. Record the amount spent and what it was you paid for. At the end of the month, sit down with your spouse and total up both your spending. Add in major expenditures to get a clear picture of where the family's money went that month. Split up expenses by category (home, car, food, etc.) if you can. Then, compare that amount to your combined, after-tax income. This is your starting point for determining a budget.

It may also be helpful to work with your bank statement to make sure you didn't miss any recurring payments or online purchases when totaling your expenses.

3. Come together to create a budget. Look at your compiled spending habits. Do you have a surplus? Or are you spending more than you make? Work from here to identify areas where you can cut back, if needed. If at all possible, try to free up money that can be put into savings or into the retirement fund. Create spending limits on certain categories, like food and entertainment, and try to stick to them over time.

Remember to always leave room in your monthly budget for unexpected expenses, like small medical bills or car repairs.

4. Work to improve and change your budget as needed. Return to your budget regularly to eliminate unnecessary spending or to adjust your budgeted amounts as needed. For example, having a child may cause you to have to completely restructure your budget. In any case, constantly seek out areas where you can cut back and save more. You'll find that you can be just as happy while spending much less than you do now.

Part 3 Saving for Life Goals.

1. Decide on long-term goals together. Have an open conversation about your savings goals, including saving for a house, for retirement, and for other large purchases like a car or boat. Make sure that you both agree that the purchase or expense in question is worth saving for and that you agree on the amount needed. This will help coordinate your savings and investment efforts.

2. Create an emergency fund. Every family should strive to keep an emergency savings fund for when things go south. Who knows when one of you might lose a job or experience unexpected medical problems? An emergency fund can help you avoid future debt and provide some financial security and flexibility. The traditional wisdom is to keep three to six month's salary in a savings account; however, this would be more than enough for some families and not nearly enough for others. Luckily, there are several financial calculators online that you can use to calculate roughly how much you need to save to cover your expenses.

Try searching for emergency fund calculators using a search engine.

There is also an app, HelloWallet, that offers this type of calculator.

3. Reduce your debt. Your first goal should be to pay off your existing debt. Only by paying down student loans, car loans, and other debt can you qualify for more credit as a couple and move forward with saving for other goals. To eliminate debt, work together to pay more than the minimum payment on each loan (as long as there are no prepayment penalties for doing so). Work with your spouse to create a plan and schedule for paying off your outstanding debt. If necessary, have one of you in charge of making sure that debt payments have been made each month.

4. Save for retirement. Couples should start planning for retirement as early as possible. This is because, due to the effects of compound interest, money placed in a retirement fund at a young age will earn much more interest over its life than the same amount of money put in at a later age. Make sure to make every effort to increase your retirement savings, including seeking to max out your employer's 401(k) match (if they have one), maxing out IRS-limits for 401(k) savings, and regularly increasing your retirement savings amounts if you can fit it into the budget.

You should save for retirement before putting money into education funds for your children. This is because there will always be scholarships and grants available for education, but not for your retirement.

If you don't have a combined retirement portfolio, be sure to coordinate your risk profiles and asset allocations.

5. Plan for educational expenses. If you're planning to fund part or all your child's higher education, it's best to start saving early on. Start by investigating options like 529 savings plans, which have special tax benefits for students. Speak with a financial advisor to learn more and get started saving today. If you don't have much time before your child leaves for school, look into government loans and grants, as well as your option in earning federal student aid.

Part 4 Staying on Track.

1. Don't make large purchases without discussing them first. Establish a monetary limit for what constitutes a "major" purchase. Obviously, this will differ between families, but the important thing is that you have a set limit. For any purchases above this limit, decide that the spouse making the purchase must have the approval of the other before going through with it. If either of you ever breaks this rule, be sure to tell the other immediately. Keeping large expenditures private is just asking for trouble.

2. Avoid taking on unnecessary debt. Keep each other on track by avoiding taking on debt for medium-sized purchases like furniture or jewelry. Plan these purchases out beforehand with your spouse so that you can combine your resources and afford the full amount of the purchase. This will save you money on interest payments in the long term. In addition, always check in with each other about credit card debt. It may be in your best interest to help a spouse with her credit card payment if she can't make it; missing a monthly payment will hurt your combined credit, which you will need if you apply for a large loan like a mortgage.

3. Use software to monitor your finances. With all of the budgeting and financial planning software available today, you'd be a fool not to take advantage of these useful tools. For starters, try tracking your monthly budget in a shared spreadsheet like those available in Google Drive. This type of document allows both of you to access and change the sheet as needed. For budgeting, there is are apps available like HomeBudget or Mint, which summarize the family budget and assets into a simple user interface.

There are also apps for keeping track of financial paperwork, like FileThis.

Try a few of these apps out and decide which ones work for you. Most of them are free or inexpensive to use, or at least offer a trial period.

December 17, 2019

how to manage family finances

How to Manage Family Finances.

To live a happy and peaceful life with financial freedom, it's very important to manage family finances properly. Failing to manage spending or agree on financial decisions can cause a married couple to fall into endless arguing. To get through the many financial decisions present in married life, you have to coordinate a budget and financial planning with the whole family and keep an open dialogue going about the family's money.

Part 1 Coordinating Family Finances.

1. Talk openly about your finances. While this is important all the way through life, it is especially important to establish financial honestly before you get married. If one partner has a poor credit history or large debts that are not brought up before marriage, it can lead to resentment and problems down the road. Before getting married, you should meet with your loved one and discuss his current financial situation, including how much he makes, where that money goes, his credit history, and any large debts he is carrying. This sets the tone for financial openness in the rest of your lives together.

2. Meet regularly to talk about money. Decide on a time of the month to get together specifically to discuss your finances. Perhaps this meeting can coincide with the arrival of the monthly bank statement or the due date of monthly bills. In any case, use your time at this meeting to assess the previous month's expenditures, mark your progress towards long-term goals, and to propose any changes or major purchases that you want to make. Only by talking about money regularly can you make doing so a comfortable and productive experience.

3. Don't make one person the sole manager of the family's money. Many families choose to allow one person to take charge of all the family's finances; however, this places an unnecessary burden on that person and leads to others' being unaware of the family's current financial situation. In addition, if that person leaves through death or divorce, it leaves the others completely unaware of how to manage or even access the family's finances. Solve this problem by splitting up tasks between you or by managing finances in alternating months.

Both you and your spouse should attend any meetings with financial professionals, such as those with a loan officer or investment advisor.

4. Decide on an account setup. Families have options when it comes to setting up joint accounts. Some choose to keep everything together while others keep their finances mostly separate. At minimum, you should have a joint account to pay for household expenses and your mortgage payment. At the end of the month, you can split these expenses in half and each transfer in an equal amount of money into this account to pay these expenses. Having separate account can prevent arguments that might arise from one person's spending habits.

Just make sure to set limits to how much money each of you can spend each month so that one person doesn't end up spending all of the family's money.

5. Build up individual credit. Even though your finances will be combined, it is still important for each of you to have a strong credit score. Doing so will ensure not only that your credit will be good when you apply for credit jointly, but also that your credit history will remain intact if you split up. A simple way to manage this is by having separate credit cards, each established only in the name of the spouse who uses it.

Part 2 Using a Budget.

1. Choose a budget format. Before you create a budget, you'll have to decide how to keep that budget. While many people can get away with just using a notepad and pen, others find it easier to track their spending through a spreadsheet or financial software. There are a number of a free software platforms available online that you can use to establish and track a budget. For example, programs like Mint.com and Manilla offer free budgeting services. If you want full service financial software, try Quicken or Microsoft Money.

2. Assess your current spending habits. For a month, write down a note every time you spend money, even for very small amounts. Record the amount spent and what it was you paid for. At the end of the month, sit down with your spouse and total up both your spending. Add in major expenditures to get a clear picture of where the family's money went that month. Split up expenses by category (home, car, food, etc.) if you can. Then, compare that amount to your combined, after-tax income. This is your starting point for determining a budget.

It may also be helpful to work with your bank statement to make sure you didn't miss any recurring payments or online purchases when totaling your expenses.

3. Come together to create a budget. Look at your compiled spending habits. Do you have a surplus? Or are you spending more than you make? Work from here to identify areas where you can cut back, if needed. If at all possible, try to free up money that can be put into savings or into the retirement fund. Create spending limits on certain categories, like food and entertainment, and try to stick to them over time.

Remember to always leave room in your monthly budget for unexpected expenses, like small medical bills or car repairs.

4. Work to improve and change your budget as needed. Return to your budget regularly to eliminate unnecessary spending or to adjust your budgeted amounts as needed. For example, having a child may cause you to have to completely restructure your budget. In any case, constantly seek out areas where you can cut back and save more. You'll find that you can be just as happy while spending much less than you do now.

Part 3 Saving for Life Goals.

1. Decide on long-term goals together. Have an open conversation about your savings goals, including saving for a house, for retirement, and for other large purchases like a car or boat. Make sure that you both agree that the purchase or expense in question is worth saving for and that you agree on the amount needed. This will help coordinate your savings and investment efforts.

2. Create an emergency fund. Every family should strive to keep an emergency savings fund for when things go south. Who knows when one of you might lose a job or experience unexpected medical problems? An emergency fund can help you avoid future debt and provide some financial security and flexibility. The traditional wisdom is to keep three to six month's salary in a savings account; however, this would be more than enough for some families and not nearly enough for others. Luckily, there are several financial calculators online that you can use to calculate roughly how much you need to save to cover your expenses.

Try searching for emergency fund calculators using a search engine.

There is also an app, HelloWallet, that offers this type of calculator.

3. Reduce your debt. Your first goal should be to pay off your existing debt. Only by paying down student loans, car loans, and other debt can you qualify for more credit as a couple and move forward with saving for other goals. To eliminate debt, work together to pay more than the minimum payment on each loan (as long as there are no prepayment penalties for doing so). Work with your spouse to create a plan and schedule for paying off your outstanding debt. If necessary, have one of you in charge of making sure that debt payments have been made each month.

4. Save for retirement. Couples should start planning for retirement as early as possible. This is because, due to the effects of compound interest, money placed in a retirement fund at a young age will earn much more interest over its life than the same amount of money put in at a later age. Make sure to make every effort to increase your retirement savings, including seeking to max out your employer's 401(k) match (if they have one), maxing out IRS-limits for 401(k) savings, and regularly increasing your retirement savings amounts if you can fit it into the budget.

You should save for retirement before putting money into education funds for your children. This is because there will always be scholarships and grants available for education, but not for your retirement.

If you don't have a combined retirement portfolio, be sure to coordinate your risk profiles and asset allocations.

5. Plan for educational expenses. If you're planning to fund part or all your child's higher education, it's best to start saving early on. Start by investigating options like 529 savings plans, which have special tax benefits for students. Speak with a financial advisor to learn more and get started saving today. If you don't have much time before your child leaves for school, look into government loans and grants, as well as your option in earning federal student aid.

Part 4 Staying on Track.

1. Don't make large purchases without discussing them first. Establish a monetary limit for what constitutes a "major" purchase. Obviously, this will differ between families, but the important thing is that you have a set limit. For any purchases above this limit, decide that the spouse making the purchase must have the approval of the other before going through with it. If either of you ever breaks this rule, be sure to tell the other immediately. Keeping large expenditures private is just asking for trouble.

2. Avoid taking on unnecessary debt. Keep each other on track by avoiding taking on debt for medium-sized purchases like furniture or jewelry. Plan these purchases out beforehand with your spouse so that you can combine your resources and afford the full amount of the purchase. This will save you money on interest payments in the long term. In addition, always check in with each other about credit card debt. It may be in your best interest to help a spouse with her credit card payment if she can't make it; missing a monthly payment will hurt your combined credit, which you will need if you apply for a large loan like a mortgage.

3. Use software to monitor your finances. With all of the budgeting and financial planning software available today, you'd be a fool not to take advantage of these useful tools. For starters, try tracking your monthly budget in a shared spreadsheet like those available in Google Drive. This type of document allows both of you to access and change the sheet as needed. For budgeting, there is are apps available like HomeBudget or Mint, which summarize the family budget and assets into a simple user interface.

There are also apps for keeping track of financial paperwork, like FileThis.

Try a few of these apps out and decide which ones work for you. Most of them are free or inexpensive to use, or at least offer a trial period.

December 17, 2019

How to Start a New Life with No Money

How to Start a New Life with No Money.

Starting a new life can be a great opportunity to make refreshing choices and decisions. However, doing so with no money can present a bit of a challenge as well. To make the most of your new life, start by creating a list of goals and keeping a positive mindset. Learn more about saving and your spending habits. Get a job to bring in additional income and reach out to your friends and family for assistance, if needed.

Method 1 Deciding How You Want to Live.
1. Be clear on why you are starting over. Spend some time determining whether or not you are creating a new life out of necessity or desire. If this is a choice based out of need, then you’ll want to identify what life improvements you will need to make as well. If you are making a decision based out of want, then carefully consider what your ideal life looks like.
For example, if you are starting a new life because you need some space from negative family members, then you might include limiting contact with these persons as part of your plans.
Or, if you are starting a new life because you want a challenge and some excitement, then you might consider placing yourself in a unusual circumstance, such as living in a foreign country.
2. Make any moving plans, if necessary. You may need to move to a new apartment or house in order to truly start over in the same city. Or, you may need to head out of the country entirely. Do as much research as you can online to determine the best way to use your limited funds. Look for locations where the cost of living is cheap and jobs are plentiful.
Find locations with affordable living options by selecting cities and then searching online for rent and food expense estimates. For example, in the Cook Islands you can find an apartment to rent for $130 a month.
3. Decide who to keep in contact with. Starting over can mean severing some personal ties, but it doesn’t always require breaking your bonds with your loved ones. Go through a list of all of your friends and family and determine what place they should have in your new life, if any at all. You’ll also want to consider how you will break the news to everyone that you’ve decided to start over, or if you will just stay silent about your choices.
For example, if you are trying to rebuild your finances and you have a relative who has a tendency to be a bad financial influence, then you will need to determine if you should continue to interact with them moving forward.
4. Keep a goal journal. Spend at least 15 minutes a day writing and thinking about your current situation and editing your goals. Try to create goals for a month, for one year out, for five years out, and for ten years out. Reassess your goals on a regular basis and change them if you need to. Make sure that your goals closely align with what type of life you’d like to lead in the future.
For example, you might write, “I would like to have $500 saved by the end of the year.” This will help you to be more financially stable, so it will likely fit with your lifestyle choices, too,
Make sure to think both big and small when setting your goals. Don’t be afraid to push for a goal that seems a long-shot.
5. Break down each goal into a series of actionable steps. Consider exactly what actions you’ll need to take for each goal and write them down as a sequence. As you decide to tackle that particular goal, look at this list as a reference. This will make larger goals seem more possible. This, in turn, will make you feel more in control of potentially difficult situations.
For example, if you plan to save money, then you’ll probably need to start by monitoring your spending or perhaps opening a savings account.
6. Seek out exciting, new experiences. It can be easy to get bogged down in the unknown or the unusual when you are starting over. Instead, force yourself to use positive adjectives when describing what you are experiencing. Change from using “weird” to “exciting,” for example. If you feel yourself getting too anxious, tell yourself to open your eyes and find one thing positive about your new environment.
For example, try to seek out the natural beauty of an area. Look for how the birds fly in the sky or how the sunlight comes through the trees. If you are stuck in an office all of the time, you can even print out these images and place them around you.
7. Give yourself positive encouragement. Starting over takes time and a great deal of work. Don’t expect everything to be in order overnight. Instead, be gentle with yourself and acknowledge all of your victories, even the small ones. Tell yourself throughout the day, “You are doing good.” Give yourself compliments as often as possible.
It is helpful to see your life as a book. This is just one chapter of many and does not necessarily tell you what the end will be. You are still writing it out.
You will also need to be watchful when you fail, so that you don’t let these moments set you too far off course. For example, if you make a poor spending choice with your limited funds, see if you can correct it as quickly as possible.

Method 2 Rebuilding Your Financial Life.
1. List out your debts. Take out a piece of paper or open up a spreadsheet on your computer. Write down all of the details regarding your debts. Include information about required payment amounts, due dates, and interest percentages. Update this list often and mark off the debts as you pay them off.
This will also allow you to see which debts need to be paid off first and which ones can come later. For example, it is always a good idea to pay off high interest credit card charges as soon as possible.
One entry on your list might look like, “American Express Card, $1,800 balance, 18% percent interest rate, $25 minimum payment per month.”
2. Develop a savings plan. Even without any money at present, it is still a good idea to consider what you will do with cash when you have it. Your goal should be to move away from a lifestyle that involves surviving paycheck to paycheck. This could mean finding a job and moving a certain percentage of pay into a savings account each month. This could also mean spending some time learning about saving on a site such as Learnvest.
There are also some handy spending “tricks” that you can learn, such as setting aside the change from your checking transactions using an app, such as Qapital.
3. Choose a thrifty lifestyle. Make a decision to pursue frugal, but safe, accommodations. If you are moving, select a location that will allow you to live in a thrifty way. Look into the cost of living numbers and consider the benefits of living within a city versus in a rural area, for example. You can also investigate saving money on transportation by forgoing a car.
For example, Panama is one location where you can live comfortably for around $300 a month.
4. Find a job. If do not have a paid position, then look for one by creating a solid resume. It might help for you to list out all of your skills before you begin applying for positions. You could contact a temp agency as well or just browse the job sites on your own. Make sure that you only apply for legitimate work opportunities.
You might also consider putting your skills to work by creating a business.
5. Create back-up plans. Without a financial safety net, there are many moments in life that you will need to navigate carefully. You’ll feel less anxious if you create at least one back-up plan for all of the major decisions and actions that you take. Try to think about both worst and best case scenarios.
For example, if you are saving money by cycling to work and your bicycle breaks down, what will you do? You might want to investigate public transportation as a back-up option.
6. Talk with a financial advisor. Go online and enter your city and “financial advisor.” Then, contact each advisor and ask if they offer any fee-free assistance. If they do, make an appointment and bring all of your financial paperwork with you to the meeting. They may also ask that you attend a financial support group with some of their other clients.
You can also find a forum for financial advice online and ask the members for tips on savings and tracking spending.

Method 3 Getting Help From Others.
1. Take advantage of government programs. Talk to government officials in your area to see if there are any assistance programs available to you. Consider these programs a temporary way to give your finances a boost in order to prepare you for future success. Make sure to follow all guidelines involved with the program.
For example, there are many government grants available to small business owners. Some of these grants can help you to start over with a new business even if you lack the initial funding. Check with the Small Business Association (SBA) for more details.
2. Ask your friends and family for help. Tell your friends and relatives about your goals and your plans to start over. See if they have any suggestions or advice. They might also be able to provide you will additional resources, financial or otherwise, to help you get on your feet.
Be aware that your story and choices may also help others to make positive changes in their own life. For example, you might have a friend who is struggling with credit card debt and could use any information that you learn about paying it down.
When talking to your friends and family members you might say, “I have very little money to work with, but I’m planning to get a job in an industry that guarantees regular pay and insurance as well.”
3. Consider staying with friends. Living expenses can very quickly destroy your budget and ability to save. If you have a friend or family member who is willing to let you “couch surf” for a while, you might consider this as a viable option. It will allow you to save up money and give you enough time to find a living situation that suits your frugal lifestyle.
You may also find that you are not the only person living in someone else’s home, especially in big cities. It is quite common for people to open their home’s to others searching for paid work in crowded, competitive areas.
4. Make lots of professional contacts. Every time that you talk with someone, try to consider how they could work as a professional contact for you. This may sound mercenary, but considering these connections can also make it possible for you to help them as well. When you are out in public, try to talk with the people that you encounter and be friendly as often as possible.
For example, if you are a waiter looking for work it never hurts to talk with the wait staff when you eat out at restaurants. They may be able to give you some tips regarding looking for a job in that area.
5. Talk with a therapist. Go online and enter your city and “therapist” into a search engine. Contact these professionals to see if any of them offer free sessions or group therapy. If so, this can be a great way for you to explore your past choices and how you can make changes for the present. In a support group, you can also find people who can be your friends in your new life.

Community Q&A.

Question : What if I hate my field and would definitely be required to get a degree I can't afford to get to be hired at the very bottom of the only field I think I might not be miserable in?
Answer : Some public libraries and business organizations offer free courses in many fields, with certificates upon completion. They could be classes that would be included to earn a degree and may become transferable college credit. A certificate could be the beginning to getting your foot in the door. Add to the certificate some volunteer work experience in the field. Submit this on your resume and gain contacts from your free certificate training and volunteer experiences that you might want to use for job references. Talk with your new contacts for tips on how they got started. Present all these at the interview for an entry position in your new field of work.

Tips.

When you are starting over it might be tempting to work all of the time, but make sure to give yourself breaks as well

June 02, 2020

How to Set up a Fundraising Event

How to Set up a Fundraising Event.

Whether you want to get involved in activism or you need to raise money for a cause close to you, a fundraising event is a fun and effective way to do it. Choose a cause and an event type, then find somewhere to hold the event. Schedule the event and organize all the necessary supplies, services, and staff so you have the logistics taken care of. Market the fundraiser and sell tickets to get people to actually come. On the day of the event, make sure to set up for the fundraiser well in advance to ensure it runs smoothly. Soon enough, you’ll be raising money for something important to you and helping out others!

Part 1 Choosing an Event Type.
1. Define the cause of your fundraising event. Choose a cause or issue that is important to you if you want to raise money for a charitable cause. Write down the reasons you want to raise money if it’s a personal cause, such as raising money for your sports team.
For example, you could choose to raise money for the fight against cancer, the humanitarian crisis in Sudan, or the battle against wildfires in Australia. Pick just one important issue at a time to fundraise for to avoid getting overwhelmed.
If you aren’t sure what you want to raise money for, but you know you want to get involved with fundraising, try talking to organizations in your community. Homeless shelters, veterans organizations, schools, and libraries often need funding, and you'll make a real impact right there in your own community.
2. Set your fundraising goal. Determine the amount of money you want to net, which is the amount of money you are left with after you subtract expenses, by calculating how much you need or want to raise for the cause. Having this number to work towards will help you plan the rest of the event.
For example, if you are raising money to combat wildfires in Australia, you could set a net goal of $10,000 to donate to charities that help that cause. This means that you want to raise $10,000 for the cause plus enough to cover the expenses of the fundraising event.
If you are raising money for something like a sports team, you can calculate how much money you need for things like new equipment or travel expenses to help you set your goal. If you need $1,000 for new jerseys and $4,000 to travel to a tournament, you would set a net goal of $5,000.
It’s best to be completely transparent with your donors and supporters about where the money you are raising will go.
3. Choose a target audience based on who you think cares about your cause. Think about the purpose of your fundraising event and decide if it will be geared towards a general audience or if it will target a more specific audience, such as friends and family of your sports team members, business people, or parents. This will help you choose the type of event and determine who and how many people to invite.
For example, a big charitable cause, like raising money for children in Sudan, can have a large, more general target audience because it is a world issue rather than a local one.
If you are raising money for a more personal cause, like a pet’s veterinarian bills, it would make more sense to limit the audience to family, friends, and close members of the immediate community who the cause is more relevant to.
4. Create a budget. Make a list of all the things you know you will need to spend money on for the event. Include things like staff, event space, food and drinks, invitations, guest speakers or entertainers, and any other items or services that will cost money.
If you don’t know the exact price of everything you will need to pay for just yet, that’s OK. You can make a spreadsheet with all the expenses listed, then fill it in with the estimated costs of each item as you continue planning.
You may be able to get services, items, and even event space donated by local businesses or organizations. Explain to them that you are hosting a fundraising event for your charity and that they can help a worthy cause and get exposure for their business by donating to your event.
5. Select what type of event to hold based on your audience and budget. Choose to hold something traditional like a car wash, a silent auction, or a dinner if you aren’t feeling too creative. Try something different like a race, a water fight, or a dodgeball tournament if you want to do something more unique and fun.
For example, if you're running a fundraiser to benefit your school's band, you could set up a school bake sale or carnival.
Make sure the event is an experience that is fun to participate in. You could have guest speakers, a band, activities after dinner, or anything else you can come up with that will keep guests entertained and engaged. Get creative!
When you’re brainstorming ideas for the event, you can choose between service-based events, like car washes, and competition-based events, like sports tournaments.
Tip: Remember to consider the purpose of the fundraiser, your budget, and the target audience when choosing what type of event to host. For instance, you wouldn’t want to throw a water fight if your target audience is seniors.
6. Find a place to hold the event. Look for large indoor event spaces like schools, wineries, restaurants, or conference centers if your event will be held inside. Search for outdoor spaces like parks or sporting fields if you are hosting an outdoor event.
You could try to find out where other similar events have been held and ask about the availability of those places.

Part 2 Scheduling the Fundraiser.
1. Schedule a date and time. Make sure the space you want to throw the fundraiser in is available on the day and time you want and reserve it. Leave enough time between now and the date of the event for invitees to respond, if applicable.
Don’t schedule your event on the same days as major holidays or other big events to avoid conflicts and maximize the number of attendees.
2. Tour the chosen location’s facilities to plan for the event setup. Make sure there is adequate space and find out what supplies are available to use, if any. Make a map of the space and draw in where different things will go on the day of the event.
For example, if you are hosting a fundraiser at an event space like a conference center, they probably have things like microphones, sound systems, and other electronics available to borrow or rent.
If you’re hosting an outdoor fundraiser, make sure you plan out where things like parking and concession booths will be.
3. Notify the proper authorities and complete any required paperwork. Research online or talk to other people who have hosted fundraisers in your area to find out what permits are necessary. Fill out any required paperwork and pay any fees to ensure your event is legal and avoid any fines or other problems.
For example, if you are holding a raffle, you may need to speak with the gaming authority. If you're selling food, you may need to check with the health department.

Part 3 Organizing the Event.
1. Purchase all the necessary supplies. Refer to your list of items that you made for your budget. Purchase as many supplies as you can ahead of time and make sure you know where to get anything else you need to purchase right before the event.
For example, for a silent auction, you will need things like tables, clipboards, paper, pens, and donated goods and services to auction off.
If you are having a meal at your event, you’ll need things like food, drinks, glasses, plates, and cutlery.
Tip: You can rent larger items that you will only use once, like tables and chairs, from an event supply rental company.
2. Book any services you need for the event. Hire any staff you need, such as security or wait staff. Schedule food service, entertainment, and anything else you need for the fundraiser.
For example, if you want to have live entertainment at the event, book a band in advance. If you want to tightly control entry, hire a security guard to attend the front door. If you are serving food, reserve a team of caterers to supply the food and serve guests.
3. Assemble a team of volunteers to work the event. Talk to friends, family, people you know who support your cause and ask them if they are willing to help out with your fundraiser. Gather enough volunteers to help you with pre-event activities as well as help run the event itself.
The number of volunteers you need depends on how big the event is. You can make a list of all the different roles and responsibilities you want help with to decide how many volunteers you need.
4. Delegate leadership tasks and other responsibilities to your event team. Once you have a team assembled, assign tasks to your team members and make sure everyone understands their particular job or task. Encourage team members to ask Question : s if they're unclear about their assignment or responsibilities.
For example, if you’re holding a silent auction, you might need 1-2 people to help you out with marketing and ticket sales before the event. Then, you might need 1 person to receive donations and handle money on the day of the event, 1 person to direct guests in the parking lot, and 1 person to usher guests to their seats.

Part 4 Marketing the Fundraiser.
1. Promote the fundraising event online. Use social media, email, and possibly a website to market the event. Create pages for the event on Facebook and Instagram to advertise it.
If you’re just doing a one-off fundraiser, it might not make sense to go to the effort of creating a website for the event. However, if you see yourself throwing more, it’s worth it to spend the time and effort on creating at least a basic website that you can use as a landing page with information about the event.
Tip: Ask friends, family, and supporters of your cause to promote the event through their social media channels. You could also try asking local businesses if they would be willing to promote your event through their social media.
2. Do email blasts to all your contacts. Create several emails including an initial announcement and 2-3 follow-up emails advertising the event that include links to all the event’s social media channels and information about how to buy tickets, donate, and attend. Send these emails to all your personal contacts.
You can also ask your friends, family, and supporters to forward or send each email to their contact lists as well to spread the word to more people.
3. Use traditional media to advertise the fundraiser. Take out advertising space in a local newspaper if you can afford it or contact the editorial department to try and get news coverage of the event. Reach out to local radio and TV stations to see if they will give your event news coverage.
You could consider other forms of traditional media, such as posters and flyers, but keep in mind that these methods are not very environmentally friendly. Only use them if you deem it absolutely necessary to get the word out.
4. Pre-sell tickets to the event. Use a free website, such as EventBrite, to sell tickets online. Ask local businesses if they are willing to be points of sale for physical tickets and advertise where the tickets are available as you market the event.
You can offer an “early bird” discount to encourage people to buy early.
You can also offer a group discount to encourage people to tell their friends and book in larger groups.
Consider a VIP Early Access event. For example, if you are hosting a silent auction, you can charge extra for VIP tickets that let holders get in to the auction early and scope out the goods. Or, if you're hosting a benefit concert, you could have a pre-concert meet and greet for VIPs.

Part 5 Preparing Finances.
1. Open a bank account if it is required in your area. In many US states, for example, you must establish a bank account for your charity if you want to receive donations from the public. Do some research online to find out if this is necessary where you live.
Put a name on the account to be sure it is clear for tax purposes. For example, if you are raising funds for a child named Susan Baker, who is getting treatments for cancer, name the account something like the “Susan Baker Donation Fund.”
2. Get a lockbox and change if you plan to receive cash and check donations. Store the cash and checks you receive in the lockbox. Keep change in the lockbox as well or have the person in charge of donations keep change in a fanny pack or cash bag.
If you will receive donations by check, print or write a large, clear sign letting donors know to whom the checks are payable that you can place somewhere visible during the event.
3. Acquire the right equipment if you want to receive credit card payments. Get a credit card machine or a mobile payment device, such as Square, that works with mobile phones if you want to receive payments by card.
Be aware that Square has fees attached and credit card companies take a percentage of each sale as payment.
You can also set up a PayPal account to help you take donations.

Part 6 Setting up and Running the Event.
1. Start setting up the day before or very early on the day of the event. There are always last-minute glitches that cause delays, so make sure you start preparing well in advance of your event's start time. Ask if you can set up the day or night before the event if you are hosting it at an indoor space, or get there first thing in the morning to start setting up on the day of the event to make sure everything goes smoothly.
Try to get a team of volunteers to help set up by asking friends, families, and big supporters of your cause if they are willing to come help you set up.
2. Do a practice run of the event with any event staff after setting up. Make sure everyone knows where they are supposed to be during the event and what their responsibilities are. This will ensure the event runs smoothly and there is no confusion among the helpers.
For example, if there is parking at the event, have one of your helpers practice directing imaginary traffic. If someone will be seating guests, have them rehearse how they will do this.
3. Provide clear instructions for guests. Make sure that attendees know exactly where to go and what the function of each space is. Create signs or handouts with details about the event, such as a timeline and a map.
For example, if you are running a silent auction, make large signs specifying where bids can be taken, where people go to pay, and any other necessary information.
Tip: If you need to provide verbal instructions during the event, make sure to set up a sound system and a microphone and test it out before guests arrive.
4. Put someone in charge of receiving and handling donations. Set up a donations table and assign a volunteer to man the table at all times to collect donations and handle the money. Provide them with a lockbox for cash and checks as well as the equipment needed to take any other forms of payment, such as a credit card machine or Square system.
Make sure that you have someone watching the money and donations table at all times. If the main person in charge needs to get up and go to the bathroom or something, ensure that someone replaces them temporarily.
5. Engage with guests during the event. Be positive and energetic. Ask guests if they are having a good time and if they have any feedback. Let them know how thankful you are for their attendance and generosity.
Think about ways to get guests engaged online, too. For example, you could create a hashtag for the event and ask guests to share their experiences via social media with the hashtag. You could also create an event filter on Instagram and have guests upload pictures using the filter while in attendance.
6. Send thank-yous to supporters and guests after the event is over. Publish general messages of gratitude to supporters, donors, volunteers, and guests on social media as soon as the event is over. Send personalized thank-yous via email to anyone you have the contact info for 1-2 days after the event.
Make sure to include info about how much money you were able to raise and remind everyone what the money will go towards.
Provide any relevant information about how people can continue to support the cause. For example, links to charities that receive ongoing donations for something like world hunger.

Community Q&A.

Question : Can you be too young to host a fundraiser? I am under 13.
Answer : You may need adult help, but you are never too young to do a fundraiser. My daughter did one when she was 8 years old.
Question : What should I write on the flyers?
Answer : You should only write eye-catching key points, such as the name of the events, and what will be offered (Games! Raffles! Food!) etc. Make sure to include the name of who the event is for and the name of who is running it. Possibly include sponsors.
Question : Where can I hold a fundraising event?
Answer : Some options are a local gym, park, church, or community center.
Question : Is selling food a good fundraising event idea?
Answer : Yes, and many organizations have raised needed funds through things like bake sales.
Question : How can I find someone who is a good fundraising planner to plan one for me?
Answer : The internet is usually a good place to start. Make sure to check around and make sure that whoever you're looking at has an established record as a good planner. Feel free to run a quick google search on anything you find. Look for things like customer testimonials and reviews if you can. Remember that the little, less well-known guys are sometimes just as good, so you could try taking a chance.
Question : Can I hold a fundraising event outside?
Answer : Outside events are a great idea as long as the weather is good, and you own the property. If it is on property you don't own, you will need permission from the land owner before you can proceed.
Question : Do I need any legal documents to set up a fundraising event?
Answer : It depends on the specific events that will take place at the fundraiser. For example, if you're holding a raffle or selling 50/50 tickets, you should check with your local gaming authorities. Also, if you're serving or selling liquor, you should look into a liquor license.
Question : What should the decorations be like for a raffle?
Answer : You can put out signs, posters, and other forms of advertisement on the stand you are selling the raffle tickets from. Use lots of color, and, if possible, have the prizes displayed.
Question : Can I hire dancers, musicians and artists for my fundraising project?
Answer : Yes. You have to make sure the performers are appropriate for your event, and make sure you have their payment and any needed materials, supplies or equipment. You may even be able to find some artists willing to donate their time for your cause.
Question : Is it possible to hire volunteers, musicians, dancers, comedians and the like for these events?
Answer : Yes. Ideally, you should try to find entertainers willing to donate their time to support your cause so that you don't spend too much money.

June 25, 2020

How to Finance a Business

How to Finance a Business.

When it's time to finance a business, there can be substantial work involved to facilitate this step. Every small business is different, and businesses in different industries and sectors have different ways of going about getting credit. There are various costs which widely range over the span of particular sectors. However, for the core process of securing the financial assistance that a business owner needs for a start up, some basic guidelines and principles will help create effective programs and a solvent business model. Estimate the costs of doing business, find out what you need to borrow money, and then research your financing options.





Estimating Costs of Your Business.



Determine the one-time costs of your business. These are costs that will only occur at the very beginning of opening your business. These include mileage (getting to a location), market research, advertising, and training. You will also need to look up any fees which will occur, such as a lawyer or consultant fee.



Calculate the recurring costs of your business. These are costs that you will have to pay over and over again, usually on a weekly, bi-weekly, or monthly basis. These include costs of utilities, insurance, wages, etc. Recurring costs are generally larger than one-time costs, and span a length of 10-30 years depending on your financing options. Calculate not only the total cost over the lifespan of your business, but also that on a yearly, and bi-yearly basis.



Ascertain whether costs are fixed, or variable. Fixed costs are those which will not change. The cost of your utilities, or your administrative costs are all fixed. Variable costs are those which will change over time. This includes wages, insurance, and shipping/packaging costs. The best way to keep all this information organized is to create a spreadsheet (use Excel). That way you can graph out this information, and view it multiple ways(bar graph, line chart, etc.).



Create a balance sheet. If you are just starting a small business, it is important that you write out balance sheets, which include: assets, liabilities, and equity. Each of these three categories will help you keep track of the finances of your business, and make it easier to pay your bills.

Assets = current assets(cash, accounts receivable, notes receivable, inventory) + fixed assets(land, building, machinery, furniture, improvements) + intangibles(research, patents, charity, organizational expense)

Liabilities = current liabilities(accounts payable, accrued expenses, notes payable, current long-term debt) + non-current liabilities(non-current long-term debt, notes payable to shareholders and owners, contingent liabilities)

Equity = Assets - Liabilities



Develop a cash flow analysis. This measures money which goes in and out of your business. This is then broken down into operational activities, investment activities, and financing activities. This analysis will help you determine when you break even, and can start reinvesting/expanding your business. Once more, the best way to do this is to create a spread sheet. Find all of your financial statements and gather them together before you start to analyze.

Operational = net income, loses of business, sales, and business expenditures.

Investment = purchases and sales of property, assets, securities, and equipment.

Financing = cash flows of all your loan borrowing and repayment.







Borrowing Money for Your Business.



Use equity financing to start your business. Equity financing usually comes from a primary investor, or other business. They will provide you a sum of money, in exchange for part-ownership of your company. This is a good option because investors look further down the road than a loan company, and you will have more money on hand. However, the investors will naturally want to interfere, and change aspects of your business model.

There are networks online which can set you up with a primary investor.

You can also check out private equity firms, which contain a vast array of specialized and experienced investors.

Remember, that small business owners generally use very little equity financing. It all depends on your business model, and the potential for growth.



Start your business using debt financing. Debt financing is when you take out a loan, usually from a bank or lending institution. This is a great option because the bank will have no say in how you run your business. The loan is tax deductible, and you can get short-term or long-term loans. However, you must have the loan repaid in a certain amount of time, and if you don't, you could have a hard time getting capital investment.

Talk to your local bank, or lending institution about the qualifications for specific loans. You will probably have to fill out some paperwork to determine whether or not you are qualified.

When using a local bank, you may be able to set up a personal relationship. This way, you can postpone a few payments if you fall on hard times.



Find out about credit scores and ratings. The higher your score is, the less risky you are to investors. In many cases, the initial business loan will be based on the borrower's own personal credit score. However, in some cases where a business is already operational, a business plan and other documents can provide for a different kind of credit specifically for the continued operations of that enterprise.

Use the online company TransUnion or EquiFax to determine your credit score. It is important to get an independent analysis, otherwise your own calculated score could be biased.

The main focus of the score is how long you have maintained a credit line, and how many monthly payments you have made on time.

If you have no prior experience taking out credit, it may be hard to get a loan. It is best to start using a credit card on small things like gas, or grocery store trips. Then gradually build up. Show the creditors you are a responsible client.[12]



Maintain an adequate debt to equity ratio. You want to make sure that the total debt and liabilities of your business is no more than four times the equity in the business. Equity simply means any retained earnings and cash injections by investors. In order to start out with equity, the owner of the business usually has to put in anywhere from 20-40%. This will maintain an adequate debt to equity ratio, and allow you to get a loan.



Put up collateral to start your business. Before you get a loan, the lending institution or bank will ask for collateral. This means you risk some of the items you own. In the case you cannot repay the loan, the bank can seize your property. Collateral usually includes homes, cars, furniture, equipment, stocks, bonds, etc. this is a scary proposition, so you need to be sure that your business will be financially successful beforehand.



Shop around for different lenders. There are a variety of lenders who may or may not be willing to issue new business loans, and all of these potential lenders have their own terms and conditions. Talk to various lenders and ask them about what kinds of loans are available. Evaluate loans by timeline. Lenders will offer various short-term, long-term or revolving-credit loans to business owners. Look at which ones suit the needs of a startup the best.

Look at secured and unsecured business loans. Secured loans actually use existing assets as collateral. For example, the person trying to start a business can use his or her home, or other property, as collateral and get lower interest rates for the loan. However, this leaves the assets vulnerable to seizure in cases of nonpayment. Unsecured loans rest solely on the borrower's credit score. See which of these types of loans best matches desired risk.

Select the best deals. You want a loan that has the lowest interest rates and most favorable terms for repayment.









Financing Your Business.



Get a bank loan. Small, local banks have received more strict standards after the financial crash of 2008. However, large investment banks such as JP Morgan Chase and Bank of America have received a set of moneys from the Federal Reserve to lend out to small businesses. This is your best option to go with, although it takes the long to pay off. Local banks will set you up with a contract, and a monthly payment. The other benefit is that you can get this loan postponed if you are having trouble paying it off.



Place your home up as collateral. Banks will generally allow you to borrow up to 75-80% of your home's worth, as long as you have at least 10-15% already down on your home. This is great because the loan will have a much lower interest rate than a credit card. Talk with your financier, or local mortgage company for more detailed information.



Use your credit card. This is a very dangerous game to be played. You need to stay on top of your monthly payments. If you fall behind, you get trapped in a death spiral. However, when carefully managed, credit cards can be great to get out of an emergency. Only use a credit card occasionally, when you are experiencing a hole you know that you can get out of.



Tap into your 401(k) plan. You will need a financial expert who can start up a C Corporation which you can then roll your retirement assets into. This is also a risky business, because you are tapping into your nest egg. This should only be done if you have more money put away in a savings account, or if you are independently wealthy.



Try loaning money from your friends and family. Ask who would be willing to make a contribution, or purchase a percentage of the company. Go about asking members of your church for donations. Let local businesses to partner with you. You might make some acquaintances, and make some deals (you make cheese, they make wine, a chance to exchange).



Pledge your future earnings. Some companies, or peoples, are willing to gamble and put money upfront, if you are willing to commit a certain percentage of future profits. This is a gamble because they, and you, are betting that you will be able to earn enough in the future. There is usually a contract involved, guaranteeing that they will at least get some money back, so keep that in mind.



Kickstart your business. Crowd funding, in the age of the internet, has become a very popular way to finance businesses. Write a description of your business idea online, at sites like Kickstarter, and convince people to donate to your business. You will want to be really descriptive, and excited in your word choice. The downside of this is that it could take months or years before you raise enough money.



Secure an SBA loan. SBA (Small Business Administration) is a branch of the Federal Government that supplies loans to businesses struggling to get off the ground. However, there are a number of qualifications. You had to have been denied a loan from another bank before. You have to meet the government's definition of a small business. You will also have to meet other restrictions, depending on the type of SBA loan. Go to the SBA's website, and fill out a form if you think you might meet these qualifications.



Attract an angel investor. These are wealthy individuals who like to bet on the financial success of start-up businesses. Angel investors are usually found at private-equity, and venture capital firms. You will want to bring someone older, who looks like he has had experience in business before. Be passionate about your idea when you present, and know all of the financial details before you walk in the room. Keep in contact with the investor days and weeks after your initial meeting.





Tips.

Talk to numerous lending institutions before you pick a loan. Some will have better interest rates, while others will have better repayments.

Consult with family members first. Getting a small loan from them can avoid dealing with greedy credit lenders.

Get some experience in the business before you start your own. If you want to start a restaurant, make sure you have worked in a restaurant before. If not, you will wind up purchasing outside help which will cost you astronomical amounts of money.



Warnings.

Talk to a lawyer and a financial advisor to avoid colossal mistakes. The biggest regret of many first-time small business owners is not consulting with a professional before they begin the process.

If you are a person living paycheck-to-paycheck, it is best to wait to start a small business. If the business goes down hill quickly, you could lose your assets, and your life savings.

Take a year to save up money and make a detailed plan. You do not want to go into small business owning head first.

November 13, 2019