Just when you thought you could tuck away the thought of taxes for while … here we are talking about it again. Relax. It’s all good and simple information that will make your tax season that much easier the next time around.
So how do you that? Here are a few ideas from Forbush & Associates that will lower the stress and increase your success for holding on to more cash this year than ever before.
Celebrate the end of tax season.
You made it. Your taxes are done, the IRS is paid, and you can stash your shoe box full of receipts in your favorite spot for another year. Nuff said.
Start over. Really.
There’s no better time than now to take a good look at what your final net income was this past year and start to plan on how you can keep more money in your piggy bank next year. Think of it as New Year’s Day when you and your friends toss out new resolutions to make your life ahead a little better. Use this time to set a new budget for yourself, household, or business. There are lots of simple steps to make this process actually enjoyable. For a good guide, you might want to invest in the book “All Your Worth: The Ultimate Lifetime Money Plan.
We like the idea that is outlined in that publication so much so we’ll share our own insight on how to make saving money a simple process this year, and in years to come.
The 50% Rule ~ Your total expenses for the year on household goods, groceries, healthcare and personal care should not exceed 50% of your total gross income. Take a look at your budget from last year and total up all of those expenses – and highlight them if you need to. Then, review where you think you can cut while you save some income for the more critical life-supporting elements (re: health care, etc.)
The 30% Rule ~ Here’s where it gets real personal. I call this ‘needs v/s the wants”. Do you really need flowers or a few nice bottles of wine every week? What about the cut of steaks: do you really need Filet or can you enjoy a nice BBQ of New York’s instead? The fact is, once you review your standard purchases, we’ll bet you can find some things you really don’t HAVE to have every week. Try to trim these costs to just 30% of your income.
The 20% Rule ~ Ideally, you should designate 20% of your income to cover debt and increase your savings. As noted in the book, a mortgage payment or minimum payment on credit card debt is actually a need (which counts toward your 50 percent), but anything beyond that is an additional debt repayment, which qualifies towards this 20 percent. You can learn more about that here.
Don’t wait. Plan now.
We realize that you are probably done with analyzing your finances for a while. So take a month off – yet no more. The longer you wait to evaluate your income v/s expense, the shorter the time you have to truly decide what you ‘need’, ‘want’, or ‘have to have’ to survive 2013 while you enjoy life along the way.
At Forbush & Associates, we think like this all the time. In fact, we actually enjoy reviewing spreadsheet after spreadsheet. Honestly, it’s an art to us. If you can’t even fathom the thought of reviewing your expenses again, just give us a call. We’d be happy to use our creative juices and professional insight to help you save money next year, and in years to come.
Call Forbush Associates today at 775-337-6001.