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

Common Financial Mistakes Many People Make

Rarely, does someone have a perfect financial history.  Mistakes in finance are common and it’s likely that most people have experienced them at one point or another.  The important thing is to figure out how to correct them, as they can tend to pile up and create somewhat of financial hardship.  However, don’t panic; with the right tools, you can easily change your financial habits. The following tips are a great guide and provide insight into the many financial mistakes people tend to make.

Too Many Monthly Payments

You may not realize it, but your monthly payments tend to add up, quickly.  Many people are seeking the “better” things in life, so they’re willing to tack on monthly finance payments to acquire the things they desire.  And while the monthly payments may not seem like a big hit at the time, the more you have, the more they tend to add up. Additionally, it’s not uncommon for people to have monthly payments that are more on the unnecessary side.  Consider the gym, for example. While for some, a gym membership is a great investment, for others, it may just be a monthly bill that isn’t regularly utilized.  Consider where your bills each month are going, and see which ones are actually necessary.

High Credit Balances

While credit cards may seem like a great way to get what you need, without having to see your bank account take an immediate hit, they can do more harm than good if they aren’t used properly.  Think of a credit card as borrowed money; money that needs to be paid back, and should be paid back in full to avoid any further charges like interest and late fees. The days of cash only are gone for many people, as credit cards are a regular part of today’s society.  Utilize your credit cards to purchases that you know you’ll be able to pay in full and avoid using them for everyday purchases that will increase your balance quickly…

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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

How to Curb Overspending and Avoid Debt

One of the most common problems adults deal with every month is efficiently managing their finances.  Depending on your salary, and your regular monthly expenses, you may find yourself struggling to stay afloat or save some extra money.  If you’re wondering where your paycheck is going, you may want to take a deep look into your spending habits. While you may be covering all of your necessary bills, you may also be overspending on things you don’t necessarily need.  Not to worry; this is something many adults deal with, and there are plenty of solutions to help better manage your habits.  Here’s how:

Track All Spending

The first and most obvious step to curbing your overspending is tracking your spending in general.  Every week, you should track where your money is going. By the end of the month, you should have a compiled list of what you’re spending each week, and where you can cut back.  Seems like an easy task, and something you really wouldn’t need to track; however, the smallest purchases can really add up and make a significant impact if you have enough of them.  For example, if you’re someone who goes out to lunch on your break from work, you’re likely spending almost $10 a day, if not more! This ad’s up to a minimum of $50 that you could be using for necessary bills, or putting into your savings account!

Know Your Spending Triggers

It’s not uncommon to spend based on your emotional or psychological triggers.  Things like your mood, environment, friends, etc., can really dictate the way you’re spending.  Take notice of this. Recognize what you’re feeling, or doing when you’re out splurging on things you don’t need.  For example, if you’re an emotional spender, you may find the need to go on a spree if you’re feeling down or even happy.  However, when you’re trying to save money, this can be detrimental to your savings plan. Be aware of your triggers, and do what you can to supplement them in ways other than swiping your credit or debit card…

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John J Bowman Jr Accountant - Debt Repayment
blog, personal finance

Strategies for a Quick Debt Repayment

It’s a warm Saturday afternoon, and you’ve decided that you deserve a day out on the town with your friends. You’re exhausted and burned out from a too-long work week, sick of the grind and needing a break. You’ve been so thoughtful lately, you think, minding your budget, that you deserve to splurge a little. You hit the mall with a gaggle of friends and start swiping; more than a few bag handles circle your wrists as you reach for your credit card to pay for overpriced popcorn and soda at the complex’s theatre. You haven’t gotten your paycheck yet, but that’s okay – you know that your credit will cover you for now. When you check your banking app the next day, though, you can’t quite believe the number that blinks up at you. How can your credit balance be so high?

Sometimes, using a credit card to cover purchases can feel like playing with Monopoly money. We spend and spend and spend, knowing that we don’t have to pay back our debt right now. The fact that the money will need to be paid back at some point is a concern for later…until later rolls around to the present, and we face a veritable mountain of debt. According to a 2017 nerdwallet study on household debt, the average American consumer owes $15,983 in credit card debt. Totaled across the nation, that’s $931 billion owed by US consumers. Paying off this debt is an intimidating endeavor, but not an impossible one. Here, I provide a few strategies for a quick and efficient debt repayment.

Put the Cards Down

If you want to lower the mountain, why would you add to its height? Stop using your credit cards, and avoid making purchases that would add to your overall balance. Steering clear of credit for a few days or weeks might help you keep better tally of how much you actually spend in a day; the dues feel dearer when you have to pay them immediately, rather than at some hazy later date.

Revisit Your Budget

Take a closer look at your current budget! Can you trim any of your costs? Be tough but fair with yourself; you probably don’t need Netflix, Hulu, and HBOGo. Being on a budget doesn’t require you to give up all entertainment, but treating yourself should only go so far. Once you have a pared-down budget, you can start crunching the numbers and make an estimate of how much you can afford to apply towards your debt each month. Remember, paying off your balance now will greatly decrease what you pay in interest later!

Pick Up a Side Hustle

Trimming a budget can only go so far. In the end, you’ll make more from a part-time job or side hustle than you would ever save by canceling subscriptions or couponing. Find a money-making gig that can fit with your schedule!

Apply Unexpected Income Sources Towards Your Balance

It can be tempting to splurge when you find yourself with an unexpected windfall. However, the money you spend on luxuries now could be handicapping your ability to pay for more basic needs later. Put bonuses, inheritances, and tax refunds towards paying off your debt! Once you live debt-free, you will be able to afford splurging now and again.

Be Consistent

Debt repayment won’t happen unless you hold yourself to a firm budget and repayment schedule. Be consistent! As much as it might hurt to pass on dinners out or afternoons at the mall, your debt-free future self will be much happier and more financially secure for your efforts.

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personal finance

Living Debt-Free

I know so many people who portray themselves as happy on Facebook, that I can see are not very happy at all. People are keeping up with the Joneses, piling up credit card debt, feeling the pressure of impending college tuition, wondering how in the world did I get in this much debt and how […]

via Why Living Debt-Free Creates a More Joyous Life — Dream Big, Dream Often

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blog, John J. Bowman Jr Accountant, personal finance

How To Eliminate Credit Card Debt

Carrying thousands of dollars worth of credit card debt is a burden that many individuals experience. If you dread viewing your credit card statement, you’re not alone. A recent study found that the average US household carries $16,061 worth of credit card debt (Issa). It seems that as the cost of living increases so does the amount of debt that Americans carry. If you are serious about eliminating your credit card debt, take a look at the below credit card debt elimination strategies.

Don’t Use Your Card

This is one of the simplest strategies to eliminate debt, but it’s also one of the hardest habits to break. Many consumers are used to using their credit cards to purchase everything. If you want to eliminate debt, though, you have to put the card away for good. Don’t buy anything unless you have the cash to pay for it. This strategy will also help you think about your spending habits. Be honest with yourself and determine whether or not you use your credit card to purchase unnecessary items. Remember, the first step to eliminating debt is to not increase the amount of debt you carry.

Pay More Each Month

The way to eliminate debt quickly is to pay more than the minimum balance each month. Interest charges pile up each month, and unless you pay more than the minimum, you’ll spend years paying off your debt. When you add more money to your payment each month, you also end up saving money that would otherwise go toward interest charges.

Consider Your Repayment Options

  • Snowball Method – Look at all of your credit card debt. Pay the minimum balances on each card except one. Each month focus on paying over the minimum balance for that card. Most people choose the card with the smallest balance as the one to focus on. Once the debt is eliminated move on to the next card and repeat the process.
  • Debt Ladder Method – List each of your credit cards from the highest interest rate to the lowest interest rate. Then pay the minimum balance on every card except the one with the highest interest rate. Every month you pay more on this card to eliminate it quickly. This method is similar to the Snowball Method, but you focus on interest rates instead of balances.

Utilize Your Savings

Keeping money in a savings account is important—especially for emergencies. Yet if you have a lot of money saved and you owe a lot of credit card debt, it might make more sense to use your savings to eliminate credit card debt. The interest rates on your credit cards are likely high while your savings account interest rates are low. If you don’t pay off your credit card debt quickly, it will continue to increase. Take care of your debt first and then focus on your savings.

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