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

Personal Finance for College Students

You’re finally living on your own, attending classes and joining new clubs and organizations. In college, it’s easy to overlook personal finance when focusing on your studies, but proper money management is vital for a successful future. If you’re new to college and money management, here is some personal finance advice.

Consider Your Credit

Swiping a card is convenient, but that money has to come from somewhere. If you’ve fallen victim to overspending on your card, try to set up a system to evaluate your spending habits. Perhaps you could limit card spending and use more cash. Or, perhaps you need to change your card limit to dissuade yourself from making unnecessary purchases. In addition, you should keep track of when your credit card payments are due—missing those payments can harm your credit score, which can be difficult to improve later down the line.

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

Why You’re Overspending (And How to Stop)

Compare your monthly income with your monthly spending. Do you notice a glaring discrepancy? Are your earnings in the red? Can’t figure out how you spent hundreds on groceries? You aren’t alone. Overspending is easy to do, and purchases can accumulate in the blink of an eye. Here are some reasons why you’re overspending and advice on how to stop.

You’ve fallen into a bad habit

Do you buy lunch at the deli down the street every day? This is just one example of a bad spending habit. It may be comfortable and convenient to make a daily or weekly purchase, but ten dollars per day, five days a week, four weeks a month equals $200 each month just for lunch.

The best way to remedy a bad spending habit is to ease yourself out of the habit. For the lunch example, try packing a meal most days each week, and only go out once a week or so as a special treat. You don’t have to quit anything cold-turkey, and easing yourself towards a better spending habit might inspire you to be more mindful of what you buy.

You ignore automatic payments

This one is easy to notice, especially if you subscribe to magazines and newspapers that clog your mailbox. Still, with the rise of streaming services and other digital subscriptions, you may not be keeping track of all the services you subscribe to. It’s easy to let automatic monthly payments slip through the cracks, but those payments are also an easy way to lose money.

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John J. Bowman Jr Accountant, personal finance, Uncategorized

Creating a Healthy Retirement Plan

Building a healthy retirement plan is possible. Sure, it may be more difficult for self-employed folks than those who have access to a workplace plan. However, no matter the source of an income, it’s possible to save for retirement. Here are some steps to take.

Open An Account

The first step toward building a healthy retirement plan is simply opening an account. Those who have access to a 401(k) plan from work can start there. Those who are self-employed can open up a Solo 401(k) or a SEP-IRA account. Both can open up a Traditional or a Roth IRA as long as they fit the income parameters. The important thing is to just start.

Pay Off Debt

Outside of a mortgage, it’s a good idea to pay off debt as soon as possible. Every dollar that goes toward paying off a previous debt is a dollar that cannot go toward retirement savings. Additionally, with debt, the power of compounded interest is acting against the borrower and in the favor of the lender. By paying off the debt, the power of compound interest begins to work in the favor of the saver, and over time, it can really lead to a healthy nest egg.

Think About An HSA

Health Savings Accounts, better known as HSAs, are intended to accumulate funds for medical expenses. Many people are unaware of another benefit of these funds. After age 65, account holders can access the funds without penalty. Only regular income taxes are due at that point. As long as the funds are used as intended before that point, the money is tax-free going in. They are also tax-free while invested and when disbursed to pay for medical bills. Every dollar that does not go to the tax man is a dollar that can be invested for retirement..

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Healthy Financial Advice for Couples

Combining finances can be one of the stickiest parts of starting a new relationship. While it might not be true that two can live as cheaply as one, it is true that couples can take advantage of economies of scale. For example, there is no need to pay for two houses or apartments. Here are some good pieces of financial advice that can really help couples.

Don’t Keep Secrets

This is especially important when you get married. Both partners need to provide full financial disclosure. Married couples legally share most assets. Unfortunately, they also share debts. Therefore, it’s imperative to get everything out on the table because keeping financial secrets can lead to unnecessary stress on a relationship.

Assess Your Comfort With Risk

Investing is the only way to really grow a nest egg over time unless you’re stashing tens of thousands every year. Not everyone has the same level of risk tolerance. Discussing the acceptable level of risk for each partner is a good way to stay on the same page financially.

Talk About Priorities

Many, if not most, couples will have a saver and a spender. For the spender, a new car or a bigger house might be at the top of the priorities list. For the saver, maxing out a 401(k) or saving for emergencies might take priority. Regardless, it’s a good idea to understand what your partner wants to accomplish with the money your household brings in. Making concessions in some areas can be a great way to avoid unnecessary conflicts…

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

4 Ways to Wisely Use Your Tax Refund

Now that tax season is fully underway, you may be thinking about what you want to do with your tax return when it comes in.  For some, it might go right into a savings account.  For others, it might be an opportunity to splurge on different items you’ve had your eye on.  A healthy balance between the two, is looking into some wiser ways you can utilize your refund.  If you’re waiting on your refund to come in, consider some of these great options to put it towards:

Contribute to Your Emergency Fund

You may have one already, and if you don’t, it might be a good time to consider starting one.  An emergency fund is a great tool to have in case you encounter an unfortunate major expense that you wouldn’t regularly have the funding for.  You can contribute to your emergency fund on a regular basis depending on your pay schedule. However, when your tax refund comes in, depending on the amount, you may be able to make a large contribution, and give yourself a better financial cushion in the event of an unexpected expense.

Invest in a Down Payment

You may be in the process of looking for a new home, or even a car.  Both of these purchases are likely to require some sort of down payment, especially if you want your monthly payments reduced as much as possible…

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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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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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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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Great Ways to Boost Your Credit

One of the many ways we are “defined” by society, is by our credit score and history.  Your credit information has a very significant impact on not only your personal finances but also a majority of your life and different events you may experiences, such as buying your first home.  The first step in credit management is establishing your credit score. Once this is done, it’s important to remember that you’ll want to continue to build your credit up in various ways; you can do this by gradually making small credit charges or larger transactions such as financing or leasing your first vehicle.  Always remember that any credit charges you make need to be paid back within a specific period of time, and late payments can negatively impact your score, as well as result in late charges and higher interest payments. Here are some great tips for boosting your credit:

Make Payments On-Time

Whenever you make a credit charge, you should keep the payment due date noted somewhere where it will help you remember.  Credit cards are a great tool for boosting your credit when they are used properly; however, they can do more harm than good when they aren’t managed correctly.  Any credit card charges you make should always be paid on early or on time. This will give you a good rapport with the credit company, as well as boost your score.  You’ll also avoid any late charges, and you’ll have a better chance of getting future credit cards and other purchases with low-interest rates.

Avoid Making Minimum Payments

While minimum payments are an option that you’ll usually see when you’re making a payment, it’s best to pay your bills in full if you can…

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