When forming a business, you will want to make sure you start off on the right foot. Keeping things above board is crucial and will prevent you from running into legal problems in the future. [Read more…]
The five easy steps that one should know when forming an LLC
The steps of starting an LLC are as easy as ABC but, for the LLC start-up to be successful the necessary steps need to be followed accordingly. The five basic steps of an LLC formation are: selecting a state, giving the LLC a name, choosing a legitimate and registered agent, the articles of the organisation need to be filed and lastly, the operating agreement needs to be created. [Read more…]
On this site, we talk about credit, investing, and how to pay off debt. One thing that’s often missed around the debt subject is rewards.
Rewards are incentives to keep going. It’s something we can use to motivate us on our journey, no matter what that journey is.
Whether we are trying to pay off debt, lose weight, or just, straight up, improve our life. You need to reward yourself, otherwise, it’s go go go, all the time.
In this article, we’ll talk about when it’s a good time to reward yourself, how, and things to look out for.
A reward should be centered around two things. Habit formation or commitment, and goals.
If you are trying to make an improvement on something, whether it’s your health or your finances, you have to develop good habits.
If you want to exercise more, do it six days in a row, then take a break. That break can be your reward. If you want to eat better, do it for six days and then take a little break with a cheat meal.
The first step is creating the habits to get yourself to that better place.
The next reward will come when you hit goals. You want to get to a certain place, say saving $20,00 for a down payment, eliminating your debt, or losing 20 pounds.
Those are great goals, but you should put in place incremental ones to help you get there. That could be a reward for every $5,000 saved, every $5,000 paid down, or every 5 pounds lost.
It’s a lot like Dave Ramsey’s “Snowball Method” with applications in different areas of life. The goal with that method is to give you small wins to keep you motivated.
If you put those habits in place and hit those goals, it’s time for the reward. The great, but the challenging part about that is everyone defines reward differently.
So when you create a reward for yourself, you should keep two things in mind. Make sure it’s good enough to release some dopamine, but small enough that it doesn’t set you back on what you are trying to accomplish.
If you’re trying to lose weight, your reward should be a little cheat meal or a day off from working out. Not a day of binge eating or a week without breaking a sweat.
If you’re trying to save money or pay down debt, don’t let whatever the reward is negate you from saving that month or add to your debt.
Large enough to make you feel good, but small enough so you stay on course.
The biggest thing to watch for is the size/duration of the reward. It mustn’t be too big or too small.
It’s a fine line and may require a little trial and error before you get it right. Start small and work your way up.
As I mentioned, it shouldn’t detract you from the pursuit of your goals, but it should also make you feel good about the progress that you’ve made or the habits you’ve created.
I won’t lie to you, rewards are a challenge for me. I’m very much a black and white type of person.
I keep junk food out of the house because I can’t be tempted with it. I make regular transfers from checking to savings in order to keep “discretionary money” out of my bank account for fear of spending it away (mostly on take-out, honestly).
It’s hard for me to put the pedal to the floor and take it off for a day. I’m either all on or all off, but I’m starting to figure it out. It really just takes some practice, a little will power, and some self-awareness.
My Life and How I Manage Stress
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
Many households do their best to save up for college. Their hope is to set aside enough in savings to avoid student loans. Debts that can often take years, if not decades, to pay off in full. Plus, having a hefty emergency fund is often considered wise. Ensuring a household can navigate the unexpected. However, many worry, “Will my savings account affect my financial aid?” If you’re wondering whether it has an impact. Here’s what you need to know.
The short answer to that question is yes. Savings account balances will impact your financial aid. Money held in a savings account is considered an asset. And it does affect a student’s expected family contribution (EFC) calculations when they complete their free application for federal student aid (FAFSA).
However, the impact of a savings account may not be as dramatic as you’d think. It’s only part of a larger equation. Students aren’t expected to hand over their entire savings account balance to cover tuition.
While your savings account balance may have a slight impact on your financial aid package. Your income level is a bigger factor. It’s given the most weight when it comes to calculating college affordability.
If you are low-income, you’ll usually qualify for a substantial amount of support unless your assets are high. It would take a considerable amount of savings to completely wipe out your financial aid. Though technically wouldn’t be impossible.
It’s also important to understand that the cost of your chosen college plays a role as well. After completing the FAFSA, your EFC is compared to the estimated cost of going to that college. Thus, influencing the amount of aid that may be available.
Generally, about 20 percent of a student’s savings account and other cash-oriented assets are counted on the FAFSA as being eligible for use when it comes to covering the cost of college. That means 80 percent is essentially protected from the equation.
For dependent students who are worried about the value of their parent’s saving, the math is even more in their favor. Less than 6 percent of those assets are viewed as potentially useable by the FAFSA.
Generally speaking, savings will potentially reduce how much you receive in financial aid. However, precisely how much of an impact it will have depends on a range of factors, including the total value of your assets, your income level, whether you’re a dependent or independent student, whether the savings is in your name or your parent’s names, and more. Often, the reduction is fairly minimal, as income level is the biggest determiner when it comes to how much a student receives in financial aid.
If the money you have set aside in savings is for college, then do put it toward your education. As that balance shrinks each year, it will have less of an impact on your EFC. As a result, if your income either remains largely unchanged or falls while you’re in school, you could qualify for more financial aid over time.
For dependent students who have money in savings but whose parents also set money aside for college, it’s best to spend your own money first. Personal savings has a bigger impact on your EFC than what your parents have in the bank, so it makes sense to spend the cash that’s saved in your name first.
Did your savings impact your financial aid? Did you decide to change how much you had in savings to secure more financial aid? Share your thoughts in the comments below.
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
Today, every resident of Nigeria can access the global currency exchange. This is the vastest market in the world as close to 6 trillion US dollars circulate there daily. Currency trading is booming: now, you can monetize knowledge and earn money without leaving your home. Everything is done remotely, which is another attractive benefit. ECN brokers are professional intermediaries that provide you with access, guidance, and tools.
When you’re looking for a company to invest in, you’ll want to do some research. Typically, you’ll have two options, technical analysis or fundamental analysis. Personally, I use fundamental analysis, so today we’re going to go over the most important financial statements you need to look at when conducting your research.
There are three financial statements you need to pay attention to, income statement, balance sheet, and the statement of cash flow.
The income statement is also known as the profit and loss statement. It shows the revenues and expenses for a given time period, typically on a per quarter basis.
You’ll gain some unique insights from an income statement, including an overview of operations, management efficiency, comparison to peers, and net income. Net income = (revenue + gains) – (expenses + losses).
There are two types of income statements. Single-Step and Multiple-Step. Single-step is one simple calculation ((revenue + gains) – (expenses + losses)). Multiple-step separates operating “net income” from non-operating “net income”.
The balance sheet is just as straight-forward as the income statement, except it shows assets and liabilities instead of revenues and expenses.
That means a balance sheet displays what a company owns and owes. It also shows how much is invested by the shareholders.
The cash flow statement provides data that shows a company’s operations, where the money is being spent, and how that money is being spent.
This data is broken down into three categories: operating activities, investing activities, and financing activities.
Operating activities will show the following information:
Investing activities are any money spent on the future of the company, which could include equipment, R+D, property, and other assets.
Financing activities include debt issuance, stock issuance, dividends, interest payments, and stock buybacks.
As I mentioned in the beginning, when doing research, you’ll fall into two camps. Technical analysis or fundamental analysis.
Technical analysis views everything as a security. A technical analyst will use charts and trading information to identify investment opportunities.
Fundamental analysis views everything as a business. A fundamental analyst will use the above financial statements to pass judgment on companies.
If you are doing fundamental analysis and you are looking at these financial statements, there are certain things you want to see.
You’re investing in a business. You want to see that management is using capital effectively, and they’re not biting off more than they can chew. Positive financial statements and healthy margins.
What Can You Learn From Different Market Environments
Cash Flow Analysis and Budgeting
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
Today, a surprising number of people may have old savings bonds lying around. Many Millennials received them as gifts when they were children. Many often tucking them away and forgetting about them until digging into a file much later. Luckily, forgetting about these savings bonds wasn’t a bad thing. As there’s a good chance they are now mature. If so, redeeming that old savings bond becomes an option. If you’re trying to figure out how to cash savings bonds that you’ve found. Here’s what you need to know.
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
Money anxiety is not an official mental disorder but is often treated. It manifests itself in a variety of ways, but I want to explain how anxiety and money affect my own life.
As I’ve mentioned here before, I have been diagnosed with anxiety so my feelings and experiences may be amplified to what you feel.
When it comes to money anxiety, I experience it in a few different scenarios.
Your willingness or ability to spend money in a relationship should not determine the strength of that relationship. If that’s the case, is that a relationship really worth having?
In my case, it’s directly correlated with my former spouse. She got dealt a few bad hands in life, so I was willing to spend beyond my means to make her happy. Not that the spending inherently would make her happy, it was more of a reluctance to say no due to financial constraints.
That inability to say no stuck me with debt that set me back on my personal finance journey. Obviously, there are other personal factors that resulted in these circumstances, but that’s the gist.
I’ll echo what I said in the first section, your willingness or ability to spend money in a relationship should not determine the strength or quality of that relationship.
Thankfully, I’ve learned from/outgrown this, but it used to be a real challenge for me. Growing up, I never really felt like I fit into a particular friend group. So I developed relationships that I’m thankful for now but otherwise appeared destructive.
Destructive from a personal and financial perspective. As I said, I’ve since outgrown that tendency, but it’s something to be aware of for yourself.
This section will specifically talk about my house. The one I’m currently renting. Before we bought that one, we were two years into a mortgage in a different city. The plan was to live there until my son was school-age, and then we’d move to a city with better schools.
The house we ended up buying, I found on a whim. We looked at it, loved it, and put in an offer. It stretched us SUPER thin from a financial perspective. I mean, exhausted all of our savings (including retirement), and we were incredibly close to being negative on our budget.
I knew in my heart that it was the right long-term decision, and I was willing to go through the pain/struggle in the short term for it.
Little did I know that circumstances would change dramatically in the next year or two. Plan for the long term, but also plan for short-term variances (even the dramatic ones).
Because of my profession, my training, and what I’ve read, I’ve seen what happens when you make poor decisions.
That said, many (if not all) of my financial choices are heavily scrutinized. When I say “financial choices” I mean the larger ones. Day-to-day spending and bills are factored into my budget, though I do a review (as you should) regularly to see where I can trim excess spending.
When I make a financial decision, my money anxiety kicks into gear, as I always second guess myself. I run through the possible scenarios that could play out.
Tim Ferriss calls it fear-setting. The Stoics call it premeditatio morum. It’s a practice of expecting the worst and planning for them as they will happen. Expect the worst, hope for the best. Not a bad thing to do, in money and in life.
My House and What Brought Me Here
Living with Anxiety and Depression
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
The term intellectual property (IP) often comes up, especially in terms of well-known brands and products, but what exactly is it? Intellectual property covers ideas, innovations, and inventions created by a person or a group of people (can also be anything from a company to small business). [Read more…]
Filing for bankruptcy is a tough decision to make. It can provide relief when you’re drowning in debt, but it does have consequences when it comes to your credit. How long does bankruptcy stay on your credit report?
We’re going to explore the answer to that question, as well as a few other items, in this article.
It’s a legal proceeding when an individual or an entity is relieved from some or all of their debts. Whether it’s all or some, and how that process takes place depends on the type of bankruptcy that’s filed.
Federal student loans are often excluded from being discharged, so you’ll be on the hook for that.
Let’s take a look at how bankruptcy affects your credit report.
I’ll state the obvious by telling you that bankruptcy negatively affects your credit. Typically, you can expect your score to drop by 20-25%. This also depends on your current credit score and credit strength.
Discharges on more accounts and/or accounts with higher balances will affect your score more than discharges on a small number of accounts and/or low balances.
Delinquency usually proceeds bankruptcy and those stay on your report for 7 years. Chapter 7 bankruptcy stays on your credit report for 10 years, while chapter 13 stays on for 7 years.
Inspect your credit report with a fine-toothed comb. Make sure that the debts discharged were actually discharged. If you find errors, go through the proper channels to get those corrected.
Once you’ve filed, you can immediately start building your credit back up. The first step is to ALWAYS pay your bills on time. I’ve stated before that on-time payment history is the number one factor when calculating your credit score.
The next step is to open a credit account. This should be something small and manageable. I often suggest a secured credit card. With this type of account, you make a deposit and that deposit acts as your credit limit.
Establish a positive payment history and keep your utilization well below 30%.
You don’t have to do anything to remove the bankruptcy from your credit report. It will fall off on its own.
Review your credit report once the 7 or 10 year period ends. At that point, depending which type you filed, the bankruptcy should come off.
Give it a few months as your credit report often lags a little after the activity actually took place.
Stay diligent. Bankruptcy is not a death sentence, it’s a fresh start. Pay on time, keep your utilization low, and keep your spending in check.
How to Answer a Civil Summons for a Credit Card
What You Need to Know About Bankruptcy
What Affects Your Credit Score
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com