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

HOW TO SAVE MORE BASED ON YOUR INCOME

Do you want to be able to save more but don’t know where to start? If so, then this article is for you. First, we’ll talk about how your income affects the amount of money you can save each month.

From there, we will go over different strategies that can help you increase your savings rate and get closer to your goal of saving a certain percentage of your income each year!

CREATE A BUDGET TO SAVE MORE MONEY

The fastest way to save more is by reducing your expenses. Start by creating a budget and tracking your spending habits. This will help you identify areas where you can reduce expenses to increase the amount of money that goes towards savings each month.

Here are some specific ways in which you could create a budget:

  • Figure out how much income is coming in per hour or day so that it’s easier to know what percentage needs to go into saving each week, month, etc.
  • List all monthly fixed costs such as mortgage/rent, utilities, insurance payments, and taxes; then list variable costs from there like food or entertainment

GET A SAVINGS ACCOUNT

It’s also a great idea to open a savings account. In general, the higher your interest rate is on an account, the more money you will save in that given time period.

MAKE SAVING AUTOMATIC

It’s easier to take care of something when it becomes habitual – so get into the habit of automatically transferring a particular percentage of your paycheck directly into a savings or retirement account at work each month. Once this practice has become established for about six months and feels natural, adjust how much you’re saving by increasing or decreasing the amount you transfer based on what goals you’ve set for yourself.

For example, if health insurance premiums are going up next year, but there isn’t enough money saved yet to cover them, make adjustments now before it worsens!

SETTING GOALS

Set goals each month for your savings account and budget. Your goals might include putting aside an emergency fund, paying off student loans, or saving for a house.

It’s hard to know what you’ll need in the future, so it helps to consider all possible expenses and make sure there is enough money saved each month that can be used when necessary.

Your savings rate should increase as your income increases! Make adjustments as needed based on how much more you’re earning per year (as well as any other factors).

This article was originally published on John Bowman’s website.

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

Drafting a Personal Spending Rulebook

If you’ve never given much thought to personal finance, there’s no time like the present to do so. A personal spending rulebook is a great way to get started on saving and proper spending. If you want to be a smarter spender, these tips will make personal finance easier to learn.

Use Tried-and-True Methods

Anyone who has looked into personal finance has likely encountered the 50-30-20 Rule. Its popularity stems from its simplicity, making it ideal for people of all incomes and financial know-how. The numbers correspond with what percentages of your income should go where. According to the rule, 50% of your income should go to living expenses and other necessities, including rent, utilities, and food. 30% of your income counts as “flexible spending,” money to be used however you please for entertainment and non-essential travel. The last 20% should go towards savings or loan payments. While the percentages are flexible, avoid exceeding 20% or 30% limits for financial goals and flexible spending, respectively.

Categorize Purchases

It’s easy to see how much you spend each month, but that looking at the big picture doesn’t help on its own. Dive deep into your spending habits by categorizing the purchases you make. Basic categories include “necessities” such as rent, “loans,” “food,” and “entertainment.” Additionally, you can create subcategories to explore your habits more. “Food” can be split down further into “groceries” and “snacks,” depending on what and when you purchase. These categories explain what you’re purchasing and how much, and can be used to set individual limits on specific spending habits.

To read the full article, visit JBowmanAccountant.info.
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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.

To read the full article, visit JBowmanAccountant.org.
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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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To continue reading please visit jbowmanaccountant.info 

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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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To continue reading please visit jbowmanaccountant.org

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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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To continue reading please visit jbowmanaccountant.info

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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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To continue reading please visit jbowmanaccountant.org

 

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personal finance

Investment Firms You Should Know

Making any investment has to be done with a lot of care, and the investment firm whose services you use should be one with a good reputation. Choosing the best investment firm for your individual needs is not the easiest thing to do and requires a good deal of consideration before you actually select the firm that’s right for you.

To learn more about the best investment firms out there, I have compiled a list of some of the best firms in the world. Each one is known for providing exceptional service. Remember, though, this list is just a starting point. Make sure to conduct more research before selecting a firm.

Vanguard

Vanguard is one of the best investment firms around. It offers its services to both individual investors and financial institutions. When you opt for the services of Vanguard, you get to access your retirement plans very easily in addition to various other investments like mutual funds, ETF’s and personal IRA’s.

Fidelity

Fidelity is another a well-known investment firm whose services you can opt for if you are an individual investor. The firm provides services in the areas of IRA’s, retirement funds, and mutual funds Fidelity is well known for the fact that its services are inexpensive.

TD Ameritrade

TD Ameritrade is a good firm to invest with if you want to learn how to manage your money properly. This firm gives you an extensive range of investment and fund choices, lots of video guides, commission free ETF’s, and online courses that can be hugely beneficial for your financial needs.

Boglehead

Boglehead is the right firm to invest with if you want individualized or personalized advice in the area of finance. In order to invest with Boglehad, you need to become a part of the Bogle community and allow Bogle officials to help you make smart investments for the long term.

DIY Option

DIY Option is an investment firm where you get to come across investment brokers who tell you how to manage your money for a very low fee. Additionally, there are no huge service fees to dole out, and you get tips on how to manage your funds on your own without any external assistance.

If you keep the above options in mind, you will be in a good position to select the services of the right investment firm for your financial requirements and manage your money in the best possible way.

 

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personal finance

5 Tips to Save Money (1 min read) — Millionaire’s Digest

Written by Millionaire’s Digest Team Member: Zohaib Ali Founder & Owner of: Truth Behind the Image Millionaire’s Digest Team, Contributor, Books, Entertainment, Family & Life, Religion, Successful Living and Travel Writer 1. Save before you spend You need to know what money is a fixed outcome each month e.g. rent/bills and what is surplus. The best way […]

via 5 Tips to Save Money (1 min read) — Millionaire’s Digest

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