Twas the night before Christmas
Twas the night before Christmas………………
While we shop through the mall
We rush and we hurry, having no fun at all
We’re feeling the pressure to buy one last gift
In hopes that our conscious will get quite a lift
As we open our wallets, and pull out a card
A struggle within us asks “Why is this hard?”
The pressure to buy, the pressure to spend
The struggle within us wants the misery to end
So we gently put the card back in its place
Feeling guilty, but trying our best to save face
So we think and we ponder about what really matters
As it comes to us clearly, amidst noise and the clatter
This season is not about money or things
This season is about the joy that one brings
The peace, the harmony, the happiness and love
Are all the things we should really think of
So let’s join our forces and pray with great might
That we realize there’s no need to struggle or fight
What we really should be thinking about instead
Is the human experience we share that’s widespread
So forget that last gift, and head home with great speed
Have the happiest, safest, holiday indeed.
Jacqueline E. Ford
Financial Poet
Year end financial tips during this holiday season
Year end has quickly caught up with us all. With the holiday season in the midst of all our daily activities, we get caught up in the cycle of spend, spend, spend. We buy gifts, plan vacations, purchase enormous amounts of food and spirits, as our way of creating a season of tidings and great joy! After all the dust has settled, and we make our way back to the everyday hustle and bustle of life, it is then we take notice of all the resources we used to make such a joyous occasion happen. There are ways to still enjoy ourselves while keeping a close watch on how much money we spend. Planning ahead for major events always puts us in a better situation than if we haven’t planned at all. Take note of what your financial limitations are and put yourself on a budget. Giving yourself these parameters to operate within will guide you through this period of spontaneity, when you feel like having just a little bit more won’t hurt. And remember, tax season is right around the corner. This is not the time or place to have the attitude that your refund will cover all your holiday expenditures. That’s like robbing Peter to pay Paul. Your tax profile should be well organized so that you can have the best tax filing experience ever. Below are some suggestions to help keep you on track.
1. Set up a holiday budget for gifts, parties, vacations, etc. Be sure to add a cushion of maybe 5-10% extra to allow for surprises (ex: I forget to get cousin Susie a gift)
2. DON’T USE CREDIT CARDS. It makes no sense to create more debt during this period. It’s very easy to go overboard with your spending. I personally am a big proponent of using my debit card from my checking account. This way I can’t spend more than I actually have. If you use credit cards, be prepared to pay them off immediately in January.
3. Find unique ways to give gifts, such as hand crafts, baking a favorite dish, or even performing an act of kindness.
4. Keep a receipt for all purchases during this period. During the holidays many events occur, such as parties, galas, and fund raisers, that are actually tax deductible events. You will need this information come tax time.
5. REMEMBER: the holidays are a time for sharing and enjoying the company of family friends. Reach out to someone who you haven’t heard from in awhile and let them know you care. It’s not always about the “things we get”, but more so about the “things we give”, such as Love.
Have a joyous and safe holiday, and remember spend wisely!
Jacqueline Ford
Financial Strategist
Year end Tax Tid Bits for your business
With the end of the year right around the corner, it’s time we start planning for the upcoming tax season. So the next few articles will contain some bits of useful information to help prepare you and your business for a successful filing. Although the tax code can be torturous to understand, I’ve pulled out some of the most common ideas that the average small business will come across.
1) Owner participation: It pays to participate in your business to the fullest extent possible in order to deduct all your losses under the passive loss limitation rule. This rule only pertains to those business owners who have ownership interest but do not work in the day-to-day operations or management. If you qualify for this rule, be sure to keep good records of how and when you participated in the business.
2) Review qualified plan selection: Review your plan (SEP, IRA, SIMPLE )to make sure it optimizes your benefits while keeping your costs down.
3) Reimbursement arrangements: When reimbursing for travel or entertainment, be sure that the arrangement is treated as an accountable plan. The company deducts the expense and no income is reported to the employee.
4) Classify workers correctly: Make sure you are classifying workers as employees instead of Independent contractors. If you misclassified, the IRS will charge back employment taxes with interest and penalties.
5) Accelerate expenses: Pay outstanding bills in advance. Make purchases for needed equipment and supplies. Be careful not to prepay expenses that relate to items extending beyond one year.
Jacqueline Ford
Financial Strategist
COMMON CENTS (SENSE)
Normally I’d write about business issues as it pertains to bookkeeping. However, I’ve decided to stir the pot so to speak. With all the news about the downturn in the economy, I though it best to focus on some serious soul searching elements of our behavior as consumers. Enjoy the article.
The more we work the more money we earn. The more money we earn, the more things we buy. Which came first, the chicken or the egg? The real question is which came first, the desire for consumption or higher earnings? This is a real paradox. There is an argument to support each as being first. But when you examine closely, does it really matter which came first. More importantly what are you going to do about the situation? What I’m really talking about here is getting honest about our financial lifestyles. Individually, consumers struggle in their own rights to stay ahead of potential financial disasters. With the economy in the condition it is today, many are taking special attention to national and global financial states. Is it because now we believe that the world feels our personal struggle? Or, are we now anxious that our perceived “cushion of comfort” has deflated?
Consumerism has reached new heights, as we find reasons to validate the choices we make. From a psychological viewpoint, one could say that our spending habits are directly related to our desires to achieve certain social status. We surround ourselves with successful people, hoping that in some way the success will “rub off” on us. In the meantime, we spend our time and energy trying to emulate what we think is success! In the short and long run, this leads to more consumption; more meals at restaurants, buying gifts, attending special functions to network, etc. Yes, I know, it takes money to make money, but at what point do we do some serious soul searching about whom we are and what our life’s purpose is? Does it really involve acquiring the best of the best through consumerism? How important is that Lexus, or the Fendi suit, or even the Dolce & Gabbana bag?
Keeping up with the Jones’ has turned the American dream into an American nightmare. Our spending habits have become our alter-egos. We have convinced ourselves that more is better. Look at how major companies have warehoused everything from purchasing cars, to grocery shopping, to outsourcing skilled labor from other countries. At some point the bubble will burst, just like the “dot com” bubble burst in the late 1990’s. Looking at our economy today, that bubble has burst again. Why is it that during times of prosperity we forget that what goes up eventually does not stay there? We ride the wave of artificial enthusiasm for as long as it will carry us. Not giving any forethought into being prepared for the cycles that the economy experiences and its impact on our lifestyle. We’re like kids in a candy store, eating all the candy we can right now, not thinking of the tooth ache that comes later.
Our perception of needs versus wants is much skewed. We are in complete denial about our spending habits and how they are directly related to the social statements we make. Even on a national scale, we can compare the spending habits of major corporations to our own households. For example, the mortgage crisis. Mortgage brokers were mesmerized by their own wheeling and dealing in unique products and the profits to be realized from selling them. In turn, the consumer, who purchased these mortgages, thought they could increase their social status by buying more house at cheaper interest rates. The end result, everyone is suffering. The mortgage industry has gone practically bankrupt as consumers are facing an all time high in foreclosures. Each side was looking only at the here and now, and forgot to prepare for the inevitable cycle.
What can we do to stop the madness?
1. Do some serious soul searching about your true purpose in life. Does it really include all the things that you’ve acquired?
2. Always have a plan, or need I say a cushion of your own. Pay yourself first.
3. Be in control of your spending habits instead of them controlling you. Impulse purchases are not an option, ever!
4. Always live below your means! Remember the Jones’ are an illusion
5. Find creative ways to save money that can include the family, such as starting your own garden, cooking more fresh meals at home together, or having game/movie night vs. going out.
6. Make sure your home, if you have one, is weather sealed to save energy.
7. Re-cycle. It’s a must for our environment. Our future generations need an earth that will continue to sustain them.
8. Join forces with an associate and barter your talents and services.
9. Stop riding on the emotional momentum of the media. It’s like having someone else living your life for you. Make sound financial decisions and stick with them no matter what is happening in the world.
10. Stay healthy mentally and physically. We perform best when our bodies and minds are in sync.
It’s all a case of mind over matter. Take control of your life and your finances. Stop playing the victim role every time an economic downturn happens. Stand strong because we all have “Common Cents”.
Jacqueline E. Ford
Financial Strategist
JE Financial Services
Downsizing your life. The wave of the future
Americans have had it with their demanding jobs and stressful lives. “One-third of Americans say they always feel rushed, just over one-third say that their lives are out of control, two-thirds say they want more balance, and about 60 percent would like to simplify their lives”, according to Julie B. Shor, author of “The Overspent American”.
People are getting tired of the daily hustle and bustle, waking up in the darkness, before the sun rises, and getting home in the darkness, after the sun sets. Our lives are on fast forward; work, school, family, community. When do we get to the point of a simpler lifestyle where there is peace and balance? It’s up to us to take charge and make changes towards a more peaceful existence, but not without some drastic changes. For most we are forced into lifestyle shifts due external circumstances, such as lay-offs, salary cuts, re-location, or illnesses. This can be a time of reflection; to ask yourself the tough questions about what do you really want out of life.
Many times we associate our earning potential with our identity. We feel more accomplished with the higher paying demanding positions. Our rationale is we must be valuable because these companies require our skills and talents to succeed, and without us they would fail. Believe me when I say, if you leave today, your seat will be filled in less than 2 weeks. To downsize our lives appropriately we must change our relationship with money, time and work. We have to stop believing that the world will stop spinning on its axis if we don’t show up or stay late. We must stop excessive shopping; stop spending long hours working. A complete mental shift must occur in order to have a simpler life without all the frills and thrills of immediate gratification. Once we make up our minds, the possibilities are endless. Challenge yourself and see what you can let go of to make your life easier.
Partnering for your personal financial success!
Jacqueline Ford
Financial Strategist