Paying mortgage interest, property taxes, equity loan interest, business expenses are all generally tax deductible. But does it make sense to incur excessive expenses just to produce a tax benefit?
For example, if you are looking to move to a bigger house, you will save a lot of money in taxes, right? Yes, you may actually save income taxes, but at the same time you will have spent much more money. Spending a dollar to save a quarter doesn’t make much sense at all.
Just because qualified business meals and entertainment may be deductible (generally only 50% deductible), it may not make sense to spend excessively. I have seen some business owners spend so much on meals that they could have used this money to hire an assistant so they can work less. Now, that’s real savings!
Wednesday, July 21, 2010
Wednesday, July 14, 2010
The One Most Important Thing Your Business Needs
You probably think I am going to say a good accountant is the most important thing your business needs. Although a good accountant is essential, it is not the number one priority. The most important thing your business needs is sales! Call it sales, revenues, fees, customers, or clients, but it is all the same. Without sales you do not have a business, therefore nothing else matters.
The recession has taken its toll on business owners, which is why it is even more important to focus on sales. The way to increase sales is to increase your marketing efforts. It doesn’t have to be expensive, but it should be effective. Your marketing efforts should be planned and focused.
As part of your marketing, you need to focus on who you want to target and how. For example, a veterinarian should only target pet owners. Lists can be obtained from database companies, such as infousa that are very specific.
The next step is how to contact your target market. Maybe the veterinarian can send a postcard to the pet owners. Maybe he/she can even get more creative and partner with a local, independent pet shop to cross market his/her services.
Just remember that a good marketing strategy is to diversify your marketing methods. I recommend marketing in at least 5 different ways because not all usually work at the same time. To obtain a list of marketing techniques for your products or services, please feel free to email me and I will send you the report right away.
The recession has taken its toll on business owners, which is why it is even more important to focus on sales. The way to increase sales is to increase your marketing efforts. It doesn’t have to be expensive, but it should be effective. Your marketing efforts should be planned and focused.
As part of your marketing, you need to focus on who you want to target and how. For example, a veterinarian should only target pet owners. Lists can be obtained from database companies, such as infousa that are very specific.
The next step is how to contact your target market. Maybe the veterinarian can send a postcard to the pet owners. Maybe he/she can even get more creative and partner with a local, independent pet shop to cross market his/her services.
Just remember that a good marketing strategy is to diversify your marketing methods. I recommend marketing in at least 5 different ways because not all usually work at the same time. To obtain a list of marketing techniques for your products or services, please feel free to email me and I will send you the report right away.
Tuesday, July 13, 2010
Are You Overwhelmed By Debt?
The number of bankruptcy filings has increased over the last several years due to the increase of household debt. Statistics can be found at www.abiworld.org, which is the website for the American Bankruptcy Institute. Bankruptcy is a tough decision to make and should be well thought out before filing. The focus of this article is not bankruptcy though, but debt management.
Why or how do so many people get into trouble with debt? When does it become a problem? There are so many reasons, such as job loss or, health problems, but overall it is a disconnect between income and spending, and not enough focus on financial management.
I’d like to share a few simple ways to reduce your debt and help to minimize its use in the future. If you keep it simple, you are more likely to be successful.
Stop incurring more debt: You can’t get out of debt if you are still using your credit cards. Do not increase your debt or you will never get out.
Emergency fund: By building up an emergency fund, you are less likely to take upon more debt for something unexpected. For now, it can be around $1,000 to start. Ideally, you will want to work towards 3 to 6 months worth of expenses, but it doesn’t make sense at this point to save $10,000 and simultaneously have a $10,000 credit card balance.
Budget: If you are serious about reducing your debt and improving your financial situation, you need to take the time to make a budget. You can use software, such as Excel or Quicken, but a very simple and effective way is to use envelopes. For example, if you are paid weekly by your employer and spend an average of $100 a week on groceries, then place $100 in an envelope labeled groceries. When you go food shopping, bring this envelope so that you can only spend$100 or less. This can be done with all other expenses. It is simplistic, but if it is done right it is extremely effective. My father taught me this one.
Know what you owe and prioritize: Make a list of all of the debts you owe, including credit cards, auto loans, equity loans, mortgages, student loans, etc. Now you need to work at chipping away those debts. The rational place to start is with the highest interest debt, but I don’t recommend this. You should actually try to pay off the smallest balances first because it will give a sense of accomplishment. Once the smallest is paid off, then use that payment toward the next balance. Finances are extremely psychological, as most of our financial decisions are emotional-based.
These few steps are a good place to start to manage and reduce your debt. If you are serious about debt elimination, you will not look for shortcuts, but rather ways to increase your income to pay off your debt sooner and take control. Focus and simplicity are the keys. If you need more help you can contact my office. Additionally, there is an excellent book on this topic that parallels my thoughts on debt, entitled “The Total Money Makeover” by Dave Ramsey.
Why or how do so many people get into trouble with debt? When does it become a problem? There are so many reasons, such as job loss or, health problems, but overall it is a disconnect between income and spending, and not enough focus on financial management.
I’d like to share a few simple ways to reduce your debt and help to minimize its use in the future. If you keep it simple, you are more likely to be successful.
Stop incurring more debt: You can’t get out of debt if you are still using your credit cards. Do not increase your debt or you will never get out.
Emergency fund: By building up an emergency fund, you are less likely to take upon more debt for something unexpected. For now, it can be around $1,000 to start. Ideally, you will want to work towards 3 to 6 months worth of expenses, but it doesn’t make sense at this point to save $10,000 and simultaneously have a $10,000 credit card balance.
Budget: If you are serious about reducing your debt and improving your financial situation, you need to take the time to make a budget. You can use software, such as Excel or Quicken, but a very simple and effective way is to use envelopes. For example, if you are paid weekly by your employer and spend an average of $100 a week on groceries, then place $100 in an envelope labeled groceries. When you go food shopping, bring this envelope so that you can only spend$100 or less. This can be done with all other expenses. It is simplistic, but if it is done right it is extremely effective. My father taught me this one.
Know what you owe and prioritize: Make a list of all of the debts you owe, including credit cards, auto loans, equity loans, mortgages, student loans, etc. Now you need to work at chipping away those debts. The rational place to start is with the highest interest debt, but I don’t recommend this. You should actually try to pay off the smallest balances first because it will give a sense of accomplishment. Once the smallest is paid off, then use that payment toward the next balance. Finances are extremely psychological, as most of our financial decisions are emotional-based.
These few steps are a good place to start to manage and reduce your debt. If you are serious about debt elimination, you will not look for shortcuts, but rather ways to increase your income to pay off your debt sooner and take control. Focus and simplicity are the keys. If you need more help you can contact my office. Additionally, there is an excellent book on this topic that parallels my thoughts on debt, entitled “The Total Money Makeover” by Dave Ramsey.
Friday, July 9, 2010
Thursday, July 8, 2010
Update to the Homebuyer's Credit
The homebuyer credit has been extended until September 30th for eligible taxpayers. If you entered into a binding contract to purchase a home by April 30th, then you have until this time to close on your home.
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