Personal Finance Blog by Debit versus Credit

Have You Made Your Financial Resolutions?

December 31, 2008 | Filed in: Personal Finance | No comment

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I spoke earlier about how it’s important to set personal finance goals. Today I’d like to expound on this idea a little. It’s absolutely important to sit down and make finance related goals, and what better time to do this than at the start of a new year? Of course if you’re going to sit down and make goals for yourself you’ll have to think about your finances and if you have a family it’s probably a good idea to talk with them about your financial situation as well (especially your significant other).

Have you begun to think about your financial situation and where you’d like to be in a year? If you haven’t yet it’s not too late. Go ahead and sit down, do a little brainstorming and see what you can come up with. Here are a few ideas to get you started.

Review Your Insurance Coverages and Needs

Do you have a family? Are you the primary (or the sole) breadwinner? Do you own a home?

If you’ve answered yes to any of these questions (or more than one) there is a good chance that you need life insurance. If you don’t already have life insurance then now would be the time to look into it. God forbid that something bad were to happen to you or your significant other, but if one of you were to tragically pass then what sort of a financial situation would that leave your family or significant other in?

Another thing to consider is disability insurance. If you were to become disabled would you lose your income? Most employers offer disability insurance as a benefit to their employees. Check to see if it’s a benefit that you’re receiving, and if you’re not then consider signing up for it. My friend Trent at The Simple Dollar has made it a goal of his to review his insurance needs so he can be prepared in the event of a disaster.

Review Your Retirement Accounts & Plans

Are you participating in your 401k retirement account, or if it’s not an offered benefit are you investing in an IRA or Roth IRA? It’s important to start planning for retirement at an early age because the sooner you begin saving for retirement the sooner you’ll be able to retire, or the more money you’ll have when you retire.

Make sure to review the retirement plans that you have in place and if you’re not already investing in a 401k or similar retirement plan it’d be a great idea to set a goal to start saving for retirement.

Pay Down Your Debts

Do you owe thousands of dollars in credit card or other unsecured debt? This would be a great time to review what you owe and what you can do to pay down your debt as much as possible. My friend Doctor S at Finance Your Life has set himself a goal to pay down a large portion of his student loan debt throughout the next year.

Don’t Do Nothing

I hope these tips have helped to give you an idea of the kind of planning and resolution setting that you can do in order to improve your financial situation. The important thing to remember is this: don’t do nothing. I know it’s worded weirdly, grammatically speaking, but it’s true. Plan for the future and you’ll be in a much better position than you’re in today. Good luck on those New Year’s Resolutions!

Tags: Debt, Goals, Insurance, Investing, New Years Resolution, retirement

5 Common Financial Mistakes Entrepreneurs Make

December 29, 2008 | Filed in: Business/Entrepreneurship | 1 comment

Today we’re featuring a guest post from Trisha Wagner of DestroyDebt.com.

The decision to start a new business is never easy; deciding to launch a new business in the current economy can be downright frightening.  Statistics show that you are just as likely to fail as you are to succeed, and one of the main culprits that shut down new businesses during the start up period is money.  Either the lack of money or accumulating debt can cripple your best efforts.  If you are considering following your dreams and striking out on your own in 2009, consider these common financial missteps that often stop a business before it gets off the ground.

Attempting to do too much too soon.

A common mistake that many entrepreneurs make is taking on too much too soon after launching their business.  There is some truth to the age old saying that you have to have money to make money.  While you may be bursting with great ideas and endless energy when you start out, you must remember to take things slowly.  With limited capital to work with you could easily be tempted to start numerous projects to get things rolling quickly.  However each new project requires time and attention to be successful.  If you stretch yourself too thin, both personally and financially you could be setting yourself up for failure.

Not sticking to necessities.

When you are first starting out, you have to remember to think small.  It takes both time and money to build a successful business and unless you have unlimited funds to start out, you could quickly go in the red by not sticking to necessities.  Use less expensive alternatives to accomplish core objectives and increase expenditures only as your revenue allows.  Once your business is off and running you can re-evaluate your spending to reflect increased cash flow.

Trying to do everything by yourself.

You are only one person and it is important to remember to delegate.  Even if you are starting out with a skeleton crew, remember you are the idea person.  It is natural to be tempted to have your hand in every aspect of your business, and of course you should know what is going on on all fronts.  However you are doing a disservice to yourself if you insist on micromanaging and not focusing on building your business.  Let your employees do the job you are paying them to do.

Racking up debt early in your venture.

Try to keep a handle on your expenses and pay the bills as they come in.  Many people are tempted to use a shiny new business credit card to keep cash on hand.  This is a common mistake that can have drastic consequences as your business grows.  Just as interest and accumulating debt can be a death sentence for your personal finances, the same theory applies to your business.

Failing to collect accounts receivable.

Sure you are just starting out and want to establish good relationships with your clients, but you must stay atop money owed to you.  Don’t be afraid to be a bad guy, you are providing a service and in order for your business to thrive you have to be able to collect payments in a timely manner.  A client who doesn’t pay isn’t a client you should worry about keeping.  There are numerous invoicing tools available that make it easier to collect accounts receivables, which ensure your business will have the capital needed to survive.

Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums.  Trisha writes regularly on the topics of getting out of debt and personal finance.

Tags: Debt, Economy, Entrepreneurship, financial mistakes

Merry Christmas To All And To All A Debt Free Life

December 24, 2008 | Filed in: Miscellaneous | 1 comment

It’s my favorite time of the year once again. I’m out of school until next semester and right now all I have to worry about is going to work and making money. I still have a job and I don’t have to worry about losing it either so to be completely honest with you, my life is going pretty well.

While things are going well for me, I am not naive enough to believe that everyone else in the World is having a merry holiday season. I know things are rough out there for a lot of people, and while I’m counting my blessings that right now I’m not facing a lot of difficulties I’m still concerned for others’ well-being.

I’m especially concerned that people are getting themselves into unnecessary debt this Christmas season, just to pay for the most extravagant presents they can think of for their kids or their significant others. While it’s nice to give and receive the best presents it’s really not practical to give what you can’t afford to give. Don’t get yourself into debt that you’ll be paying off until next Christmas just to pay for this one.

With that being said I’d like to ask you a question, and be honest with me here.

With any luck the answers are going to come back with very little to no debt taken on this year, but I’m worried that I won’t get the results I’d really like to see. Nevertheless I hope that you all have a Merry Christmas and if you’re not there already make sure you get started on creating a debt-free life for yourself!

Tags: affordability, Christmas, Debt

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