Financial Planning

If you spend a great deal of time using your personal or notebook computer – and if you are like most people around the world today – you likely depend heavily on your computer. And you may have concerns about the overall functionality and stability of your equipment. One issue that you may have heard or read about involves your Windows registry. With that in mind, you may have contemplated purchasing registry fix software. However, you may be under the illusion that this type of software will require what amounts to a hefty investment on your part.

The reality is that it is possible to obtain registry fix software in today’s computing marketplace for a very reasonable cost. In other words, it will not break the proverbial budget. Of course, as is the case with any software application, when it comes to registry fix software you will want to do some shopping around to make sure that you obtain the most effective product for the most reasonable price.

When making a purchase decision, you need to bear in mind that the cheapest software may not be the best. You must make certain that any registry fix software you select and purchase has an established track record for appropriately, efficiently and effectively cleaning up your Windows registry. You need to understand that there are products on the market that end up impairing the functionality of an operating system and that end up rendering a computer less stable. Obviously, you want to improve computer performance with registry fix software.

Finally, while you will have to spend at least some money on registry fix software – keeping in mind you most definitely will be able to find reasonably priced options – in the end, this type of application will be a worthwhile investment. In the end, you will be able to ensure that your computer runs more efficiently now and into the future – which will save you both time and money.

We may have come across this article because we are in a financial crisis or perhaps we just want a better grasp of where our money is going. So let’s go over some basics of financial planning.

The essential ingredient to having control over our finances is having a budget. The heart of budgeting is really quite simple; you bring in more money than you spend. At times it can be frustrating to balance it all out, but there are numerous resources out there to help us get started. We also live in a society of consumerism — we want the best and the biggest — NOW. If we can learn to save for what we want, while living within our means, then ultimately we can have what we want but owe nobody anything. At first, as we’re viewing our big screen televisions with our surround sound it may be wonderful, but the gnawing that we owe somebody else for something that’s quickly depreciating isn’t worth it. Of course, sometimes we have to put things on credit to survive — and I’m not talking about this — I’m talking about keeping up with the Jones’s. And if we decide to put something on credit — because we get cash back or free airline tickets — and if we pay it off immediately, then that’s actually smart. It’s accumulating things that we can’t afford that I’m talking about.

Make a Budget
Calculate how much money we have coming in per month. Categorize expenditures. Let’s first list the bare essentials that are required during that month. I categorize my budget into bills (like house payment, utility bills) — things that we owe and we can’t change. I then have a certain amount of money set aside for groceries and gas. I also have a category for entertainment and extras. That’s where we can really be prudent if we need to be, and also creative! Pay off debt. Let’s define what debt is first. Debt is the obligation of owing. Now let’s differentiate between good debt and bad debt. Bad debt would be credit card debt. We want to pay that off as quickly as possible especially if the interest rates are high. A good rule of thumb to remember is that if the value of something depreciates then it’s bad debt. For example, going to a show and putting in on your credit card — with the interest rate (and depending when you pay it off) you could end up paying 3+times what the actual ticket to the show cost! A bigger example is putting your car on credit — as soon as you drive that car off the lot, its value has depreciated significantly and now you have to pay for the car and the interest! Now on the other hand, good debt would be something where the value would increase over time. In other words — you are more than likely to make more money through this investment than the money you borrowed to make this investment. A good example of this is a home purchase or going into debt to get a higher education. You fully expect to make more money due to this investment. Pay off your bad debts. Of course, after your bad debts are paid off — attack your good debts. Make a plan to pay off your house quicker than 30 years if that’s possible. It’s all more money in your pocket, and less interest. Invest and Save. Now you’ll owe no-one anything and you can use that same amount of money you were paying things off to invest. Invest in your retirement, your children’s education, save for your future.

Having a financial plan is definitely a balancing act — between needs and wants — good debts, bad debts — and investments versus safe saving. There are numerous financial resources out there — books, programs — to help you know where to begin. Planning a budget takes time but it’s a worthwhile investment for your future!

In this article we are going to talk about some of the common personal budgeting mistakes that people make when writing and trying to follow their personal budget. The following personal budgeting mistakes are some of the most common ones that cause people to or quit on or fail on their personal budget.

1) Not creating a personal budget

I decided to put this first because I know that some of you are still thinking that you can get away with not writing out a personal budget for yourself. You think that you can keep it all under control in your head and you are wrong. This is the most important step in budgeting and it is sad that most people do not even make it to this step. You cannot fail or succeed in your quest for financial freedom if you do not try.

2) Being sure that you are adding correctly on your personal budgeting worksheet

This is a somewhat dumb, yet common among budgeting mistake. Often people make simple addition and subtraction mistakes and end up thinking that they are spending $200 less than they actually are. It is always a good idea to double check all of your budget numbers to make sure they are correct.

3) Lack of Consistency in Savings

People need to have a specific line on their budget worksheet that it dedicated to tracking their monthly savings. After doing this people need to establish a specific amount that they plan to save each month and then stick to it.

4) Failing to establish an emergency fund for unexpected expenses

The majority of people do not realize that they need to have an emergency savings funds to help in case unexpected expenses comes up. This money is set aside in a savings account so that you don’t have to deviate from your budgeting plan if unexpected expenses come up.

5) Making only minimum payments on your credit cards

When people setup their budget they often only budget to make the minimum payments on their credit cards. People need to do their best to allocate a large amount of money toward credit cards payments each month so that they can pay off their debts quicker.

6) Taking all the fun out of life by having a overly restrictive budget plan

When you make your budget plan you need to plan for a portion of your money to go to fun and entertaining activities. If you do not do this you will find your plan to be to restrictive and will likely not follow it. You can budget for this by cutting out some other expenses.

7) Spending more money than you make

This is often the biggest mistake in a personal budgeting plan. When making your budget you need to make a plan where you are spending no more than you make.

This is a short list of some of the major personal budgeting mistakes that people commonly make. If you can avoid these mistakes it will greatly increase your chances of being successful in your quest for financial freedom.

Getting started on creating your family budget can be as easy as 1,2,3. In just five steps you can be on the path to sorting your finances. Budgeting is an important first step in planning your family finances and evermore important in this day and age with rising costs. A budget is an empowering tool letting you control your money instead of your money controlling you.

Step one: Find out your monthly income.

This is your take-home pay and regular funds from other sources such as rental, interest etc. Income from all member of the household should be included.

Step two: Establish what your expenses are.

Writing your expenditures down will provide you with the unique opportunity to find out if your money goes for things that you do not really need. This list should include necessities such as food; regular bills such as rent; insurances, school costs, vehicle expenses and incidentals. Also include entertainment and any saving.

Step three: Work out how much you spend on each expense.

Some expenses will come in regularly each month but others are perhaps annual or quarterly. The trick here is to include each expense in your monthly budget. An annual bill for example will be divided by 12 to give you the monthly figure. This way there’s no nasty surprises when the bill comes through. Also allow a sum for unexpected expenses.

Step four: Compare your monthly expenses with your monthly income.

This could result in a surplus (positive) or a deficit (negative). A surplus is great as you can save more — or spend it. A negative means you are spending more than you have coming in and will need to cut costs.

Step five: Balance your budget.

If you have found that your family budget shows that you are spending more than you are earning you will need to cut back on spending. Work out how much you need to cut down on and find where you can make these changes. Do not make cuts in your budget that you are unable to live with or that are unrealistic. When you make these decisions keep your real expenses and living realities in the forefront of your mind. Re-balance your budget after you have made the cuts.

The good news is that whether you are “in the red”, just scraping by, managing to save a little, or a lot, this five step family budgeting process will highlight areas where your immediate attention is needed. And if you are trying to get out of debt cutting expenses is crucial and not only if you are over budget.

Re-visit your family budget often — it should be an active process and is an invaluable tool to help you keep your fingers on the pulse of your financial situation. If you can stick with your family budget it can help you to meet your goals, get out of and stay out of debt, to always pay your bills on time, keep track of your spending and make the most out of your dollar.

What is Class Tracking?

Class Tracking in QuickBooks is a way to break down different segments of a single business. Let’s say, for example, that you own a chain of restaurants. You have one in the north part of town, one on the south part of town, one in the east part of town, and one in the west part of town. You could establish classes with the following names: North, South, East, and West, and assign these to each transaction – writing checks, entering bills, generating invoices, etc.

If you want to see how of all the restaurants are doing as a group, you would run a regular Profit and Loss. But if you wanted to see how a particular restaurant was doing, you would still run a Profit and Loss, but you would filter it by Class. This report would give you the revenue and expenses for whichever class you chose, assuming all of the original entries were made correctly. Very nice!

What Types of Accounts Can Use Class Tracking?

Class Tracking is designed for Profit and Loss transactions, not for Balance Sheet transactions. On most screens it is very easy to tell if you are operating in a profit and loss transaction, or a balance sheet transaction with classes. Let’s take the Write Checks screen. You are familiar with both halves of this screen, no doubt. There is the upper half with the green “check,” and the lower half, with two tabs that say Expenses and Items in a white field.

If you have class tracking turned on in QuickBooks, open the Write Checks screen (from the banking menu, select Write Checks). Take a moment and look where the Class column is located. It’s in the lower half of the screen. The upper half of this screen is definitely a balance sheet transaction – it takes money away from the bank account. The lower half of the screen is often a profit and loss transaction. And it is in this section where the class is assigned.

The same holds for the Enter Bills screen. Open it now and see (from the Vendors menu, select Enter Bills). In the Invoice screen, it is is a little more difficult to understand, but still, the class assigned here will affect a profit and loss account.

Can I Have Separate Companies in a Single QuickBooks File, and Assign Each Its Own Class?

No. Each unique entity, with a unique FEIN, must have it’s own file.

I’ve often seen questions from people who have set up different companies in a single QuickBooks file, and assign a class name for to each company. At some point, the business owner inevitably wants a class report based on the balance sheet for each company – the bank accounts, accounts receivable, credit cards, accounts payable, etc., all broken down by class. QuickBooks Class Tracking cannot do this, and was not designed for this!

Another problem with establishing different companies within a single QuickBooks file is that ownership across the companies might not be the same. Retained Earnings for each company cannot be separated (at least, not automatically by QuickBooks). Maintaining separate Retained Earnings is crucial if the ownership across the entities varies AT ALL.

Also, if the entities are corporations, preparing the corporate tax returns becomes a real challenge if they’ve all been setup into a single QuickBooks file. There’s just no way to have QuickBooks breakout the separate balance sheets that are required for the tax returns.

What Should I Do If I Have More Than One Company in a Single QuickBooks File?

You will need to separate them into separate QuickBooks files. I know, I know – you don’t want separate QuickBooks files! I understand. But that is the way it needs to be – truly! If you need help doing it, go to the Intuit website and find a QuickBooks ProAdvisor to help. This is a sticky situation and should be handled by somebody who understands accounting principles.