blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance

Budget-Friendly Features of Autumn Travel

While it may not feel like it in some parts of the country, the summer season has officially come to an end. This means that the comfortable temperatures and beautiful colors of autumn will be here in no time. One of the best ways to celebrate the turning of the seasons is by going on a nice vacation. These are the three ways you will save money when traveling in autumn.

Reduced Travel Cost

The most expensive part of going on vacation is the cost of getting to and staying at the destination. You will be able to greatly save on these costs by traveling in autumn. Since families are unable to travel with the kids back in school, airlines and hotels are forced to reduce their rates to entice travelers. Many people believe winter is the off-season for traveling, but airline tickets are actually cheapest in the month of October. Travel costs start to go up in the winter because of poor weather conditions and the holiday season.

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blog, John J. Bowman Jr. Accountant, personal finance, Uncategorized

Tips When Buying Your First Home

Buying a home is an exciting, yet stressful process.  You’re making one of the largest purchases you’ll ever make, and you want to ensure you’re going about things the right way.  For first time home buyers, this may seem even more difficult, since you aren’t exactly familiar with the process and everything that comes with it.  Additionally, depending on your state, the buying process may vary, to it’s important to be aware of any local differences. Generally, however, there are a few good tips to consider when buying your first home:

Enquire About Your Mortgage Options

As a first time home buyer, your mortgage options are one of the most important parts of your entire buying process.  Your mortgage loan determines the type of home you can afford (price wise), and how long you’ll be paying for it, depending on the amount of your down payment.  Keep in mind, your downpayment affects how much you need to borrow in your mortgage loan, so the more you have in your down payment, the better. However, for first time home buyers, down payments requirements also differ sometimes from that of someone who’s owned a home before.  Either way, find out what option works best for you, and work on your mortgage from there.

Start Saving Early

To ensure you have a solid down payment, you definitely want to start saving as early as possible.  Whether you’re putting down a “traditional” down payment of 20%, or taking advantage of a first time home buyer program, with a down payment as little as 3%, you will likely need a nice lump sum saved to cover the downpayment and closing costs…

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John J. Bowman Jr. Accountant, personal finance, Uncategorized

Increasing Your Savings Account Contributions

We frequently talk about ways to manage your credit score, combat debt, and be financially free.  One of the best ways to work towards financial freedom is having a savings account and directly contributing to it regularly.  A savings account is a great way to budget your money, and give yourself a nice fund for your future and any major life events that might come your way, such as purchasing your first home, or sending your child to college.  If you already have a savings account, you may want to find ways to increase your contributions. Here are a few key ways to do so:

Evaluate Expenses

Always evaluate your expenses before you get into forming your plan.  The amount of money you save will likely be based partially on how much you’re spending per month.  So you’ll want to calculate your monthly bills, and how much you spend on any other monthly expenses, such as food, gas, dry cleaning, etc.  If you’re finding your spending habits are extreme and are preventing you from regularly contributing to your savings account, find ways to cut back on things that may not be that necessary or important.

Set Achievable Goals

The first step in creating any solid savings plan is setting goals that are realistic and achievable.  You’ll want to base these goals on your current finances; how much money you bring in a month, versus your spending and expenses.  Once you have figured that out, set goals that make sense with your finances, whether that’s a specific portion of your paycheck per week or working on a monthly basis…

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blog, John J. Bowman Jr. Accountant, personal finance, Uncategorized

Steps to Setting Up a 529 College Savings Plan

As a parent, your number one concern is always your children and how you can best provide for them.  While they may be young still, the future of their education is likely only a few years away, and as time goes on, college tuition costs are increasing drastically.  This may concern you, especially if you’re still paying off your own loans from your college days! Luckily, there’s hope, and a great way to get your little one’s future college finances in order.  The solution: a 529 college savings plan. Wondering the best way to set one up? Here are some simple tips:

Pick a Plan that Works Best for You

When it comes to 529 plans, it’s not as simple as just one.  There are two main types of 529 saving plans that you can choose from.  You can decide if a prepaid plan works best for you, or if an investment plan is a better choice.  If you decide on a prepaid plan, you can think of it as a locked-in plan. You generally pay for a year or a portion of the tuition ahead of time, locking in the price.  Depending on your state, the requirement can vary. Investment plans give you the ability to choose how you want to invest your funds, and how you can use the money depending on the institution that’s chosen down the road.

Open the Account

To open your 529 account, you’ll need to submit an application; this can generally be completed online; however, in some cases, you may need to mail it in.  Additionally, you’ll need to choose the right account to work with, whether it’s an Individual (Custodial), Trust, or Business account. From there, you’ll choose the custodian (likely yourself), and the beneficiary, (your child)…

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John J. Bowman Jr Accountant, personal finance, Uncategorized

How to Maintain Financial Stability

If you’re looking for a better financial future, then maintaining stability should be at the top of the list of things you may want to focus on.  However, maintaining a financially stable bank account may often seem easier than it actually is. As you do your research, you will find yourself creating a path to help you reach your financial goals.  Build your path beginning with a few of these staple tips to help maintain and build your financial stability.

Set Your Goals

If you are going to get to your target of financial stability, you have to know what that looks like for you. After all, you can’t hit a target you can’t see. Set attainable goals that will act as stepping stones to your goal.  Keep in mind, unrealistic goals can often do more harm than good; keep your goals within realistic reach.

Always think SMART

Achieving goals requires SMART thinking.  SMART stands for, specific, measurable, achievable, realistic, and time-based. For instance, saying you want to have more money is not a goal.  However, saying you want to contribute 20% of your paycheck into your savings account for the next year, is setting a SMART goal for yourself to reach.

Seek Help From Mentors

It would be very safe for you to assume that there are people in your life who have similar financial goals, and have taken the necessary steps to achieve them.  Seek their guidance and ask for assistance if you need it. Additionally, look for books, teachers, seminars, and any kind of connection with a mentor or source of information that can help you get where you want to go. Now that you know your goal, you can be more selective in picking your program to get you there.

Cut Down on Spending

Spending on things you don’t need is the quickest way to decrease your financial stability. However, it remains a very common problem for many Americans. Understanding the smaller things that you may not realize you’re consistently spending on, is a great way to start.  Go further by making a list of all the things you spend money on in your life that you can cut out if you want to. Doing this will give you a great look into how much money you could really be saving.

When it comes to finances, it is something that is on everyone’s mind but few people take enough action on. Instead of suffering financially as an entrepreneur, you can have financial stability. But it won’t happen overnight. Use the tips above and start going in the right direction in your financial life. Eventually, you will be in a place of complete security and peace of mind.

 

This article was originally posted on jbowmanaccountant.com

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John J Bowman Jr Accountant - Finance Parents
blog, personal finance

Personal Finance Tips for New Parents

Raising a child is absurdly expensive. According to the latest federally-provided figures, a child can cost his or her parents an average of $233,610 over the course of eighteen years – and that isn’t even accounting for private or college tuition! Welcoming a child into the world is an exciting time for any parent, but it requires some practical thinking and hard financial conversations. Here, I overview a few strategies that every single expecting or current parent should implement to secure their own and their child’s financial future.

Create a New Budget

A new baby brings new expenses. The added financial cost posed by diapers, formula, and childcare can weigh down even a solidly made budget. Keep track of your expenses, and build a budget around the actual expenses you face, rather than those you projected pre-baby. Mind you, some of the costs you encounter might not be ones you anticipated; make sure that your health insurance will provide adequate coverage for your child in the case of emergencies. The last thing you want to discover on a trip to a needed doctor’s appointment is that your insurance doesn’t extend to your baby.

Bolster Your Emergency Fund

While every adult should have a sturdy emergency fund, these tucked-away savings are vital for new parents. After all, losing your job when the only person you have to worry about is yourself is one problem. Losing your job when you need to support a child is a problem of an entirely different magnitude. Make sure that you have enough in your emergency account to cover your family’s living expenses for three to six months in case of disaster, and ensure your financial security by reducing your credit card debt.  

Set Up a College Savings Account Now

It may seem odd to start saving for college when your child is still in preschool, but starting early is the only way to lessen the burden of tuition. Set up a 529 college savings account, and contribute however much you can afford every month. Your small inputs will add up over eighteen years; while it may not be able to cover the full cost of college, it should defray the overall burden and put your child in a position to graduate with a manageable amount of college loan debt.

Research Applicable Tax Credits

Knowledge is the key to financial security. Common tax credits include the child tax credit, which can give you a $1000 credit every year until your child turns seventeen, and the child and dependent-care credit, which provides qualifying filers the chance to claim up to $3000 for a single child under the age of 13. Do some research to find out which tax credits your child gives you eligibility for!

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John J. Bowman Jr. Accountant, personal finance

How to Stop Overpaying for the Basics

Households across America are struggling to make ends meet. High housing costs plague many cities. In others, stagnant wages offer little prospect for relief. Many people try to work multiple jobs and reach for just a few more billable hours, but even the hardest workers only have so much time and energy. This leaves people feeling pinched every month, concerned that paying basic expenses will tips them over the edge and into debt.

Ben Franklin is famous for the adage, “A penny saved is a penny earned.” With budgets so tight, this adage is truer than ever. The best place to start saving is on the recurring expenses that you resign yourself to paying every month.

Rethink Cable

Do you really need cable? If you have an Internet connection, you can save a bundle by cutting the cord and opting for streaming services like Netflix, Roku, and Hulu. Speaking of electronics, are you overpaying for your cell phone? Unlimited service is available for as low as $35/month via certain retailers; if you are paying more than that, shop around for other options.

Be Sustainable

Energy bills can leave you broke, especially if you live hot or cold climates. Every degree you lower the thermostat in winter and raise it in summer can save you up to 3 percent on your bill. If no one’s home all day, why pay to keep the place at 75 degrees? A programmable thermostat can help you adjust temperatures according to your schedule. When you head to work, are buses and trains an option? Many Millennials find they can do without cars and the payments, insurance, and gas that keep many Americans broke.

Eat In

Dining out can serve up an unnecessary burden on your budget. Avoid high costs and calories by learning some quick recipes to prepare at home. Brown bagging your lunch saves you money and calories. Cook a big dish over the weekend and take the leftover to work. For groceries, forget convenience and shop where you get the best value. Warehouse clubs can save you money if you avoid the temptation to buy more than you use. Be especially careful with perishables. Also, get a coffee maker to make your brew at home. If you like gourmet coffee, you’ll need to invest in gourmet maker, but you’ll make up for the expense over time. If you are stopping by the pharmacy, make sure to get the generic equivalents for both prescription and over the counter medications.

Find Low-Cost Entertainment

Unless you’re a monk, you probably need some entertainment now and then. Big movie theatre chains offer discount plans and second-run movie houses provide big savings. There are also great deals for kids.

These strategies can save you hundreds every month. That can be enough to fund an emergency savings account or retirement plan. Establishing a cost-effective lifestyle takes planning and discipline, but it’s better than being broke.

 

Originally posted on JBowmanAccountant.info

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John J Bowman Jr Accountant - Personal Finance Mistakes
blog, John J. Bowman Jr. Accountant, personal finance

Are You Making These Common Finance Mistakes?

It happens every month without fail. When payday rolls around on the third Friday of the month, your bank account looks healthy – filled with money to spare, even. With a few easy taps on your banking app, you’ve sent off your rent, covered your electric bill, and paid off a little of your credit card debt. You decide it will be alright if you splurge a little on dinner, a movie, a maybe even a quick weekend trip to the local shopping center. A week or so later, you absentmindedly swipe open your banking app – and stare in disbelief. Your bank balance is practically anemic. Where did all of your money go?

Spending Impulsively

Your morning Starbucks latte could be costing you. Crunch the numbers: a venti latte costs roughly $4 a pop. If you multiply that times the five days in a work week, you find yourself with a coffee bill of $20 a week, or a full $80 a month. In other words, the money you spend on coffee alone could have covered your entire grocery bill for a month. Small expenses add up – so avoid making impulse purchases. If you think you might be splurging just a little too often, check! At the end of the month, compile all of your card charges and assess how much you spent on necessary items or services (i.e., rent, food, gas) versus how much you spent on unnecessary treats or luxuries. You might just find yourself reconsidering your coffee budget afterwards.

Paying Too Many Subscriptions

Do you really need Netflix, Hulu, Amazon Video, and HBO Go? Probably not. Signing onto a service may seem simple and cheap when you’re in the free trial period, but those monthly fees accumulate quickly. Do an inventory of the subscriptions you have and decide which ones you can afford to cut ties with.

Living on Credit

Having a credit card doesn’t give you access to free money! Credit card companies make their enormous profits off of people who make minimum payments and allow interest to accrue. Just think – by leaving the expense of a single small item on your balance, you could end up paying out twice the original price in interest and fees. Believing in the “free money” myth could cost you money; living on credit could leave you bankrupt.

Overspending on Housing

You may want the in-building gym or slickly designed kitchen – but can you afford it? According to a report from Harvard’s Joint Center for Housing Studies, over one-third of all American households spend 30% or more of their take-home pay on housing expenses. Most financial advisors set the expense ceiling for rent at 30% of a person’s take-home pay; however, even this might be too high for someone struggling to pay off hefty student loans or provide for a family. Don’t let a nice apartment or charming home lure you deeper into debt. If you do, you might find yourself needing to sacrifice your personal life and stay home far more than you ever wanted to.

“Keeping Up” With Others

If all of  your friends leapt into crippling debt, would you follow? The answer might not be as easy as you think. Sometimes, it can be difficult to say no to a weekend trip or fancy dinner – even if you know that the expense would eat into your budget for the month. Make a habit of thinking your budget first, and fun second – or risk losing out on a significant chunk of potential savings.

 

*Originally posted on JBowmanAccountant.info

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