Financial Planning Blog Posts

  • What You Need To Do To Keep Your Business Financially Sound This Summer

    June 15, 2017

      Don’t let the nice weather fool you; competition is heating up. And if you don’t maintain a strong awareness of your business and its finances, then you’ll no longer be able to complain about the pain and hassle of managing your business’s money; because it will be gone. So, let’s keep your dreams healthy and alive by doing the following this summer.


    1. Choose the right accounting software – not every accounting software is going to work for every business. Even if you have already have software, do your due diligence and click around the Internet to make sure you’ve picked the right one. With that said, the real pressing need is to move your financial data from desktop software to the cloud if you haven’t done so yet.


    2. Do you have a professional bookkeeper? –we often find entrepreneurs aren’t thrilled about doing the bookkeeping for their business, which actually makes a lot of sense. Most people aren’t numbers people, and those with big ideas typically like to focus on the forest instead of the individual trees. If you’re finding that you’re spending a disproportionate amount of time doing the accounting for your business instead of running it, it’s probably time for some outside help. In the end, you’ll make more money since you’ll have more time doing what you do best.


    3. Work with a trustworthy credit union – credit unions are ideal for small business owners. Credit unions do not have to answer to the whims of shareholders, so they are able to focus on you and your business’s needs. In addition, they generally keep profits local, so there’s a higher chance of them either investing in you or other area entrepreneurs in the future.


    Keeping track of your finances will enable you to take opportunities which would not otherwise exist. Like we said, just because it’s nice outside doesn’t mean it’s okay to get loose with your money or get distracted! You’ve come too far to let a little hiccup derail your dreams from coming true.

  • Bookkeeper vs. CPA: Which Do You Need?

    April 30, 2017

     Just because you’re a small business owner doesn’t mean you have to perform every job your business needs forever! And as experience tells us, most entrepreneurs dread the monotony of accounting. So, maybe you’ve finally decided your time and money is better spent on what you excel at, and that you should leave the number crunching for someone else. The question is, who should that someone else be – a CPA or a bookkeeper? 

    The question may seem daunting, but it’s not nearly as complicated as it sounds. The decision basically boils down to how complex the accounting needs to be. Bookkeepers are best used for simple accounting functions like day-day transactions, run payroll, make payments for business expenses, send out invoices and collect payments, as well as monitor bank account activity. Some bookkeepers will even prepare financial statements for internal business use. With that said, it’s important to know your bookkeeper’s background, as an education in accounting is not required in order to call oneself a bookkeeper.


    But when the going gets really rough, we recommend turning to a CPA for help. CPAs can help businesses obtain loans, file a tax return and help with tax planning, as well as offer general strategic financial advice. Obtaining a CPA is a rigorous process which requires passing multiple exams on tax, regulation, financial reporting, audit, economics, and ethics, but it’s still important to do a thorough background check before you spend the money on a CPA.


    What all of this means, is that you must divide to conquer. CPAs are expensive, so it’s best to use their services for truly difficult accounting issues. We recommend hiring a bookkeeper who can manage the day-day finances of your business and who can work well with a CPA when needed, or look for professional bookkeeping firms who can lend a hand.

  • Quick Financial Tips for Businesses

    December 12, 2016

    There’s no way to get around some of the challenges that come with being a small business owner. But the proper tools and support can help you navigate the world of debits and credits more smoothly. Here are a few financial challenges you may face and some small business finance tips for managing them.

    Small Business Finance Tips

    Cash Management

    Many small business owners can become overwhelmed by trying to manage their cash flow. Of course, you know you need accurate and timely data to line up the resources to handle crucial transactions – such as payroll – when needed. And the longer you wait to sort out your cash flow, the greater the risk for a mistake or oversight that can potentially damage your financial reputation.
    Accurate and timely financial statements are a must because they help you make important decisions and manage your fiscal obligations. They’re also a critical component to getting extra capital through a loan if needed. Unorganized financial records can be a red flag to lenders and may convey the wrong impression about the company’s fiscal health.

    Accounting

    Having a modern, often cloud-based, accounting system is a staple of many well-run small businesses. In fact, helpful accounting apps have become quite popular because they integrate into a lot of other services for easier and more efficient use.

    For example, if a sale is recorded in one department, a well-integrated accounting app can almost serve as a virtual employee and immediately make the necessary income or balance sheet adjustments to manage the transaction accordingly.
    Small businesses should consider utilizing financial/accounting apps offered through their business bank or business credit card to help them keep their finances in check.

    A Company Credit Card

    Is a company credit card the right choice for your small business?
    Naturally, there are pros and cons.
    For example, a business credit card such as Ink from Chase helps keep personal and business expenses separate. The card also rewards spending. And those reward points are capital that can be easily re-invested into the business.
    Burgeoning businesses can benefit from a business credit card too; this is a great way to establish credit and build financial stability.

    Meeting the Financial Challenge

    Even the smallest of companies today have access to financial and accounting tools and resources that can rival those of a business twice their size. These technological advances are narrowing the accounting and financing gap for small businesses.
    “Small businesses are strapped for time,” said Laura Miller, president of Ink from Chase. “The more we can bring together useful tools, the more we can help them be successful.”
    In the absence of a fully-staffed financial department — or even a single dedicated person — a small business owner can rely on the numerous services offered by their financial institute or business cards to help navigate any financial management challenges they may have.

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  • 3 Tips for Financial Planning in Your 40's

    August 15, 2016

    Finacial Planning in Your 40s

    If you're in your 40s, you are at a time in your life when you should be doing financial planning for your future and your family's future. Many people in their 40s say they need to be saving for college tuition for their kids, putting money into a retirement account and at the same time buying a house or saving for a down payment. Financial planning experts can help you see where your savings should be going. Not having a financial plan is worse than having a bad plan! These financial planning tips are meant to help people in their 40's find balance in their lives with spending and debt.

    The Tips

    Establish an Emergency Fun

    You should have three to six months of income in an account that's safe and liquid. You should also have in that account savings for planned expenses. For instance, if you know you will go on vacation next year, you should be setting aside money for that in your savings account. There's no right or wrong answer about how much cash to have on hand, but you need to be prepared in case your engine goes out or you lose your job.

    Eliminate Credit Card Debt, Student Loans and Medical Bills

    If you have credit card debt, you need to pay that down as quickly as you can. If you have student loan debt, then you should first look to see if it's tax-deductible based on your tax bracket. If not, then you should pay that off as soon as possible. In addition to financial planning, you should check the interest rates on your credit cards & student loans to see if you can get lower rates. If you have a lot of debt, you should be using all available funds to pay it off. If you have a little bit of debt you should use one-third to pay down that debt, and then use the rest for retirement savings.

    Max Your Employers 401K Match

    In your 40s, you should at least be saving as much in your 401(k) as your employer matches. Even if you weren't making any profit on that investment, your money doubles just because of the employer match. Every employer has a different retirement plan, you should find out how much you can contribute, and maximize your contributions up to that limit. People in their 40s can contribute up to $18,000 in a tax-deferred 401(k) in 2015.

    For more information on Financial Planning Click Here.

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  • Financial Planning: Helping You See the Big Picture

    July 29, 2016

    Financial Planning

    Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

    That's where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

    Why is financial planning important?

    A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them.
    *There is no assurance that working with a financial professional will improve investment results.

    Common financial goals

    • Saving and investing for retirement
    • Saving and investing for college
    • Establishing an emergency fund
    • Providing for your family in the event of your death
    • Minimizing income or estate taxes


    One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related--for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll know that your financial life is headed in the right direction.

    The financial planning process

    Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

    • Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
    • Establish and prioritize financial goals and time frames for achieving these goals
    • Implement strategies that address your current financial weaknesses and build on your financial strengths
    • Choose specific products and services that are tailored to help meet your financial objectives*
    • Monitor your plan, making adjustments as your goals, time frames, or circumstances change

    Some members of the team

    The financial planning process can involve a number of professionals.
    Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.
    Accountants or tax attorneys provide advice on federal and state tax issues.
    Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.
    Insurance professionals evaluate insurance needs and recommend appropriate products and strategies. Investment advisors provide advice about investment
    June 27, 2016 Page 1 of 2, see disclaimer on final page
    options and asset allocation, and can help you plan a strategy to manage your investment portfolio.
    The most important member of the team, however, is you. Your needs and objectives drive the team, and once you've carefully considered any recommendations, all decisions lie in your hands.

    Why can't I do it myself?

    You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

    Staying on track

    The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

    • Your goals or time horizons change
    • You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
    • You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
    • Your income or expenses substantially increase or decrease
    • Your portfolio hasn't performed as expected
    • You're affected by changes to the economy or tax laws

    Common questions about financial planning

    What if I'm too busy?

    Don't wait until you're in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

    Is the financial planning process complicated?

    Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, a financial professional will work hard to make the process as easy as possible, and will gladly answer all of your questions.

    What if my spouse and I disagree?

    A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground.

    Can I still control my own finances?

    Financial planning professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them.

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  • What You Should Do About Student Loan Debt

    July 14, 2016

     Student Loan Debt: We Can Provide the Decision-Making Details You Need

    Did you know that the average student loan balance is $24,803? Student debt is taking a heavy toll on borrowers, according to an American Institute of CPAs survey, which found that 75% of respondents or their children had made personal or financial sacrifices because of monthly student loan payments. Sacrifices included putting off saving for retirement (41%); delaying car purchases (40%); postponing a home purchase (29%); and even waiting on marriage (15%).

    Among the most troubling findings were that only 39% fully understood the burden that student loan debt would place on their future and 60% had at least some regrets about their decisions on financing their education. That’s why it’s always critical to understand the full potential impact of all your financial choices. The good news is that your CPA can help. Contact us with all your financial questions and we’ll provide the knowledge and insights you need to make the best decisions for you.


    Learn more about Student Loan Debt Here.

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  • How To Build a Financial Safety Net

    July 12, 2016

    Financial Safety Net - Financial Planning

    When an emergency happens, you don't want to scrape money from your piggy bank. If you already have a financial safety plan in place, then your protected from your next financial emergency. Setting up a cash reserve of readily available money will help you get through the toughest emergency.

    How Much Money Should I Save For Emergencies?

    Most financial planners recommend saving three to six months of living expenses set aside for an emergency cash reserve. The amount of money you save is different for every household and it should be based on your living circumstances. A few questions you should ask yourself are: Do you have a mortgage on your home or do you owe money on other loans? Do you have any long-term or short-term disability insurance? Are you making any payments to your child's orthodontics? Are you making monthly car payments? Some other factors you should consider include your job security, health issues, and your current income. If you don’t have an emergency fund for disasters, then it will be financially devastating.

    How To Start A Cash Reserve For Emergencies?

    If you don't have a cash reserve or if your cash reserve is insufficient, then you should follow these simple steps to get started:

    • Aggressively save your money, by using payroll deductions at work or add a savings plan to your household budget.
    • Cut back on eating out, going to the movies, buying lottery tickets and other splurges that you don’t really need.
    • Use existing assets or liquid assets (e.g., cash on hand or assets that convert to cash within a year, such as a short-term bank certificate)
    • Utilize earnings from other investments (e.g., mutual funds, stocks or bonds)
    • Check into other resources you might already have. (e.g., Do you have an insurance policy with a cash value that you can borrow money from?)


    A reminder: You could use your credit line as another source of funds for an emergency. However, when you borrow money it must be paid back. Usually, high interest rates are added to the borrowed money. Financial planners do not recommend using lenders as your primary resource for cash reserve.

    Where Do I Keep My Cash Reserve?

    Make sure your cash reserve is readily obtainable for emergencies or disasters. Most people think an FDIC-insured savings account that doesn’t accumulate much interest is their only option. However, there are several outstanding options and they all have different advantages. If you look into money markets and short-term bank CD’s it typically offers higher interest rates with little risk compared to low interest savings accounts.

    A word of caution: Do not get money market mutual funds confused with money market deposit accounts. Money market mutual funds are not insured by the FDIC. Although the mutual fund seeks to preserve the value of your investment you could still lose the money, when you invest in a mutual fund.

    If you’re considering a money market mutual fund, then don’t forget to read the small print from the fund’s pamphlet or brochure. Ask your financial advisor for the brochure that outlines the fund’s investment objectives such as the risks, fees and expenses. Read all the objectives, before you invest you money into these funds.

    CD’s will return your principal plus interest by a certain date, but they will also impose a large penalty if you withdraw it before maturity. If you plan on using a fixed-term investment for a cash reserve, then it is wise to stagger the maturity dates in a short period of time. The recommend time period to stagger maturity dates is between two to five months. Staggering maturity dates will ensure the availability of funds so you won’t receive a penalty for early withdrawal.

    Evaluate Your Cash Reserve Often

    We all know that our personal and financial situations change year to year. A new baby or a new home will increase your expenses. Most financial consultants advise their clients to review their finances annually. Your cash reserve should be your protection against financial devastation.

    Financial Planning Services are best done by someone who knows what they are doing and has done it for years!

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