Articles

Here I go again. I am so tired of listening to people complain that they are in debt because of their credit and debit cards. Those bills have rolled in from the annual holiday spending frenzy and now they’re all in debt. Or they whine about overdraft charges because they forgot to record debit card transactions. Sound familiar?

You cannot budget your money if you have no idea what you are spending. Put those credit cards away for emergency use only or better yet, shred them. You will never get out of debt if you do not create a monthly budget and stick to it. One easy way to help maintain a budget is to use cash for your everyday expenses and budget items. Every pay period, put money aside for your monthly bills and convert the money left into cash. That is what you have to spend and when it’s gone, you’re done for the pay period. How hard is that?

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In all my years practicing as a full charge bookkeeper, I discovered that many business owners do not know the difference between a bookkeeper and an accountant.

A bookkeeper record the numbers, the accountant analyzes the numbers.

A bookkeeper is responsible for recording transaction of all monies going in and out of a business. They are trained to understand a trial balance, balance sheet and most importantly a profit and loss statement. Bookkeepers do payroll, payroll and sales tax returns, pay bills and make deposits. They are involved in the actual running of a business and can answer questions to the owners, their accountants and of course the dreaded auditors. Bookkeepers understand how all accounting functions relate, and hand over to the accountant a balanced set of books.

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Are debit and credit cards responsible for putting us in debt? We should all take a serious look at our spending habits. Besides paying your monthly bills, have you been saving for retirement? Is there money put aside for your child’s college tuition? Have you saved for your next vacation? Are your credit cards at the limit? It’s never too late to sit down and prepare a budget.

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Hard copy documentation, partnered with your computer software is the only way to protect yourself.

Business owners wake-up….no hard copy of expenses will not get you through an audit. Why would you put yourself in that postion! You have the hard copy in your hand, don’t throw it away…file it.

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So many people I speak to are struggling with credit card debt, and no wonder. Money magazine reports that the average family with a credit card has nearly $9200 in credit card debt. And with interest rates on credit cards as high as 25%, or in some cases higher, paying only the minimum amount on your credit card each month will never reduce your balance. You need to take action, and my advice is to check into a Home Equity Loan.

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While watching news coverage of the recent fires that devastated California, I saw interviews with frantic homeowners who were forced to evacuate their homes. Firefighters gave them only five minutes to collect their belongings, and they mentioned family photographs or other mementos they managed to save and hoped there would be something left when they returned. So what would you save if you had to evacuate your house in only five minutes? Would you save photographs or would you scramble to save everything within your reach? What you should be running to save is your important documents such as insurance policies, property deeds, mortgage papers, birth certificates, will, Social Security card and much, much more.

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Happy New Year! It’s time to get on my soap box again and preach to the business owners who will owe the IRS big for 2007. If you’re one of those who complain in the New Year that you owe too much in taxes, you only have yourselves to blame. You could have prevented a big tax bill if your books were organized and you had made a plan to reduce your taxes.

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You open the mail and find a notice that your gas is about to be shut off due to non-payment. You know you’ve paid the bills and it’s their error, but you need the payment receipts to prove it. Your heart starts to pound and your mind goes frantic trying to remember where you can find the proof that you paid your bills.

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Hey guys, we’re now 50 years or older and many of us still have no real plan. I know. I remember. We are never going to get old or die. Guess what? It's not true. We all are aging and will eventually die. So let's get serious, just for a few hours, or whatever it takes. Don't do it for yourself; do it for your children and their children and so on.

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Smart business owners rely on an accountant or an experienced tax advisor to prepare their tax returns. Why? Because there is no denying that tax laws have become so complicated that you need an expert to help you navigate the Tax Code. But to really save money, it pays to know the basic rules of deductions, record keeping and document retention requirements. Let me remind you that the responsibility for your tax return is on your shoulders.

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