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What Do You Know About Your Personal Finances? Learn About Financial Management Now

Today, there are many American consumers who are seeking debt relief help. They are doing this because they are in debt; they owe a lot of money to the credit card companies and other creditors. If you aren’t in debt right now, there are steps that you can take to ensure you don’t become a debt victim. What you need to do is familiarize yourself with the best forms of financial management.
First, it is important to know what you should be watching in terms of your finances. Why is it so important to know how much money you have, how much money is being spent, and how that money is being spent? It is this that can help you out of debt and prevent you from needing professional debt relief help.
As previously stated, you’ll want to know how much money you have, how much you are spending, and how you are spending it. This is an important part of managing your personal finances. Now, does require more work, but you want to focus month to month. Many of our bills are monthly (phone, internet, mortgage or rent, and so forth). It is a good idea to grab a pen and a piece of a paper and start writing down all the total bills you pay. Then, focus on the everyday purchases that might be little at the time, but ones that can easily add-up. These little purchases can include a pack of gum or a lottery ticket at the gas station.
Many of the American consumers who got into trouble with debt suffered because they weren’t prepared for an emergency. Many were already living paycheck-to-paycheck. Then, the worst happened and many lost their jobs or saw their pay or hours cut. This led to debt (often because credit cards were relied on heavily). If you want to avoid needing professional debt relief help, you want to create an emergency fund of money. If you don’t already have one or feel as if you don’t have enough extra money each month, it is time to start trimming your finances. Eliminate that weekly lottery ticket, make your coffee at home, and so forth.
In short, the tips above can help you stay out of debt. With that said, always remember that there is a lot of debt relief out there. The best action is to protect yourself, but know that professional help in the form of settlement and consolidation is there if you ever find yourself needing it.…

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Financial News

Benefits of Accounting and Financial Management

If you are in business, you know that it is important to understand how your business is performing. In order to do that, you need some way to keep track of and interpret the numbers that go along with your business. This is where accounting and financial management come into play. Accounting tools can be used to measure and interpret the financial progress of your business. They can also help you communicate the status of your business to important third parties, such as banks and the government. Here are some of the benefits of accounting and financial management.
No more guessing. By maintaining an accounting system, you can improve your odds of making the right decision for your business. While the information alone is not the only factor to consider, it does provide one very important piece of the puzzle in your decision making process. Good accounting records show you where you stand financially, so you won’t have to guess at what your financial position is.
Make better decisions. Accounting plays an important role by giving us a means of communicating the financial part of a business to others. The most crucial function of any accounting system is to provide real data, by which managers and owners can base their decisions. Having numerical facts greatly helps in making profitable decisions for your business. And while the accounting information gathered does not guarantee a good decision, it does greatly improve your chances of making the best decision possible.
Solve problems. Accounting systems provide reports that help you analyze the profitability and performance of your business. Not only can an accounting system help you make decisions, but it can also help you find areas of your business that need to be improved. Once you are able to identify trouble areas, you can focus on improving them.
Track complex information. If your business requires any loans, the lending institution will likely require financial reports to understand the net income and net worth of your business. They may also want to evaluate your financial statements periodically to monitor your ability to repay the loan.Providing this kind of information is next to impossible without an accounting system that can provide financial statements.
Good accounting records show where your business stands financially. Use every advantage available to your business to improve and enhance its performance. Implement and maintain your accounting and financial management system, and your business will be on its way to financial success!…

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Economic News

Freshening Your Financial Goals

The end of the year is approaching which means one thing, it’s time to start thinking about your New Year’s Resolutions. Whether you struggled to make ends meet, faced overwhelming credit card debt or the threat of foreclosure this past year, one resolution that should be on everyone’s list is setting new and improved financial goals.
The best way to start off a new year with a fresh start is breaking down your financial goals into smaller, more manageable goals.
Getting A Plan
Research has shown that people who take the time to write down their financial goals are more likely to stick to the plan and accomplish the goal. Making a list of your financial goals for the upcoming new year doesn’t have to include a long list of goals. Instead, pick 5 areas of your financial life that you want to improve such as:
1. Creating a budget — few people actually take the time to write down all of their expenses and properly budget their income each month. There are several online tools available to help you create a budget for your bills and leisure expenses. By keeping track of your money, you will have more money to put towards your remaining goals.
2. Prioritize spending — look at your expenses and prioritize them in order of most to least important. Your rent or mortgage should always be top priority, followed by other essential expenses like utilities and food. By prioritizing your spending on paper, you will be able to identify areas that are non-essential for reduced spending.
3. Paying extra on one or more sources of debt — once you have a better idea about your budget and which expenses are priority, you can begin identifying extra sources of money to use to help pay off your debts. Begin by paying all extra money towards the card with the lowest balance until it is paid off, then do the same for the card with the second lowest balance, and so on. You will be debt free in no time.
4. Not opening any additional credit accounts — make a commitment to yourself not to take out any additional lines of credit for one year. Not only will you have more money in your pocket, but you will be much closer to paying off existing debts by the time you are ready for a new one in 2013.
5. Saving money — saving money is always of high importance but many people simply don’t make it a goal. A good rule of thumb is to have saved enough to cover at least 3 to 6 months worth of your top priority expenses in case of an emergency. And don’t forget about retirement. With so many companies reducing their retirement contributions, it is never too early to start saving for retirement.…

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Business News

What is the Importance of Financial Management in Your Business?

If you plan to go big with your business, you can never neglect the importance of Financial Management. It is an essential tool that is required to move ahead with your expansion plans. Generally, this critical aspect is disregarded because the entrepreneurs are unaware of its advantages and uses. Financial reports can help aid in making important future decisions. If you have a solo or micro business, then it is not imperative to make use of Financial Management. But as I mentioned earlier, if you plan to make it big in the world of business and commerce, you should make Financial Management your forte!
o Accounting and Financial Reports – It is very important to keep track of your company’s origin and its past history, particularly an account of the money that has been spent. When you analyze the financial reports, you will be aware of all the spending and expenses accurately. The earnings from specific services, product lines and sales staff – all will come into clear focus once you have gone through the financial reports. This will help you to manage your expenses and marketing accordingly.
o Financial Ratios – These ratios gives you all the information that you need to know about your business. Moreover, it is very easy to calculate. This way you can compare your company’s standard with others. Financial ratios are not essential but it can point out your faults.
o Research – A little bit of research on the expenses managed by other companies will help you manage yours better and your bottom line could increase. You might need to tweak the procedures, alter operations, streamline competencies or shake up the staff for a better performance. Analyzing the financial ratios will guide you towards the area you are most weak in so that you can develop a strategy to enhance the efficiency of your business.
o Financial Statements – All the patterns in your expenses are exposed with the help of Financial Statements. Sales Trends comes into attention whether impacted by the season, changing consumer taste or other factors. This helps you to manage your inventories better, staff levels and sales promotions. Variable expenses and unusual or unauthorized expenses can be monitored with the help of Financial Statements. This will aid you in occasions of theft, embezzlement or other questionable activity before the stakes become too high.
Economic highs and lows affect all companies and these periods of change is a test for all. Some stumble, some even fail and there are some who stand unscathed. But the economic growth of all companies is affected collectively. Sometimes the growth is totally unplanned and the expansion occurs due to some external factor which can range from landing a large account to just finding a great deal on a second location space. Always remember that without proper and concrete planning, no business can survive.
Financial planning and management is not only for reviewing the financial statements but also to be aware of your expenses and then manage them in such a way that they don’t go waste. You can use it to fund your future realistic projects and help your business go big.…

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Starting A Business

Good Financial Management

Today’s worrying financial climate has made most of us more aware than ever of the need for good financial management in business. Businesses need to be competitive and fiscally strong in order to survive, and it is only through carefully considering several key areas of financial planning that any business can hope to achieve this. These critical areas of financial management may seem obvious when pointed out, but many business people still make silly mistakes in these areas or worse still overlook them entirely.
Cash flow Projections- Even the most inexperienced of business owners has probably understood the vital need for good cash flow long before starting their enterprise, but keeping cash flowing without the nightmare that a cash flow crisis can bring is nothing more than a matter of good planning. Every business should be making regular cash flow predictions that detail all cash expected in to the business from sales and other income and all anticipated outgoings of cash such as expenses and other payments. A�Regular cash flow forecasts of this kind allow a business to stay ahead of the game by giving it the opportunity to arrange finance in advance of any looming crisis.
Payment Management- For most businesses invoicing for payment is standard practice; for every customer sent an invoice, one will probably be received from elsewhere for supplies etc. To get the best from your cash flow it is wise to make good use of any terms offered, paying an invoice immediately might seem honourable, but it will mean that the cash used to pay it will be helping the supplier’s cash flow and not your own. When a supplier gives a business 30 days to pay, they are allowing 30 days to receive payment, so it is always good practice to use this time.
Debtor Management- Although when offering terms a business expects its customer to utilise the terms in full and will allow for this, there are always customers who push terms further than your business can stand. It is therefore crucial to have a workable system in place for dealing with bad payers well before the first bad debt occurs. It is important to know exactly what is owed to the business and when it is due at all times and so good record keeping in this area is essential; many accountancy software packages have debtors’ listings built in, but a simple spread sheet will suffice. Chasing the money due in to your business can be a valuable exercise, as it is often the case that debtors have simply forgotten to make payment or are merely pushing terms as far as they can, waiting to be chased before they pay. Many invoices will be settled once chased, so it is important to do this regularly, clearly and uniformly; using a standard letter, followed by a call if the letter remains unanswered is a useful system. When it comes to persistent bad payers, it is probably prudent to drop them as customers and to put the chasing of any accrued debt into the hands of professionals.
Monthly Records- Plenty of business owners prefer not to get involved in what they consider to be the remit of their Bookkeeper or accountant, and will shy away from regular bookkeeping. However this is an area of financial management that it really will benefit the business owner to hang on to. Keeping monthly records of transactions will allow a business owner to keep a firm control of the businesses finances; it gives a far better indication of business performance than most other indicators and will highlight profits and losses well in advance of the annual reports. As with other records kept, it is not necessary to have complex software packages to keep monthly books, a spreadsheet will work just as well.
There is no real alternative for enlisting the help of a good accountant to give your business the solid financial advice it needs, but decent financial management must also happen on a regular basis at the core of every business; there is no substitute for knowing what is going on with your business’ finances if you want to survive in today’s difficult climate.…

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Business News Articles

Financial Management – 3 Ways To Secure Your Family’s Financial Future

We would all like to know that our family’s financial future is secure – especially in a difficult economy like ours.
But when you think about it, how safe is your family’s future right now?
How can you tell?
Here are 3 areas that you can check – and if you can strengthen these, you can more guarantee that your family will be financially strong for years to come.
1. Inflation.
In 1980 a stamp cost only 15 cents. Now its up to 44 cents. That’s about a 300% increase in 30 years.
Inflation will eat away at whatever money you have – which means in the future, you will only be able to buy a fraction of the things you can buy now.
The inflation rate is currently averaging about 2-3% – if your money isn’t earning more than that – then you are losing your money little by little every year.
Tip: invest your money to earn returns that are greater than the inflation rate, (a bank won’t cut it) so that your money will grow to meet your family’s future needs.
2. Taxes
Many of us are preparing for retirement by investing in a 401K, or IRA. Its a great strategy -especially if your employer matches your investment.
Unfortunately, if this is your only source for retirement – when the the time comes to pull it out, you may have a tax time bomb on your hands.
This is because the money in most qualified accounts (401K, 403b, IRAs, etc.) are taxable as ordinary income, when the money comes out.
Tip: find other tax free sources to invest your money into – such as a ROTH IRA or a life insurance policy where you can borrow from tax free.
When the time comes for you to get money out, take your money from all three sources so that you can keep your taxable income at a minimum. This will keep you in a lower tax bracket.
3. The 3 deadly “Ds”
Death, Disability and Disease.
These three things, though scary – are common to us as we grow older in age.
But, can you imagine what would happen to your family financially if any of these inevitable situations were to happen?
Are you and your family ready for it?
Tip: Insure yourself and your family against all three of these with sufficient life insurance, disability insurance – and long term care insurance.
Do it now, when its cheaper. Also do it now, because if you were to get sick, it will be much more God forbid, no longer available to you.
Now, these are only a few of the challenges that need to be overcome in order to secure a better life for your family.
But if you conquer these, you can better guarantee a great financial future for your family, and know with confidence that you and your family will prosper in the years to come.…

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Business Owner

How to Avoid Five Financial Mistakes Entrepreneurs Make

Business startups are all about the bottom line — profitability is the standard by which success is measured. For many first-time entrepreneurs, “profitability” is an elusive concept. At its base, it makes perfect sense — bring in more cash than you spend, and the business will be profitable. At its core, however, there are numerous factors that keep a viable idea from ever actually turning a profit. One of the most common problems in business startups boils down to poor financial management. The fundamental mistakes that entrepreneurs make can be easily rectified with just a little effort and attention to accounting processes.
The most common financial mistakes made when starting, and how to avoid them, are:
Lack of fundamental accounting knowledge
Entrepreneurship requires a strong basis in basic business essentials, and standard accounting skills in particular. Simply purchasing an off-the-shelf accounting system is not enough — the tool is only as useful as its user. From correctly categorizing expenses to ensuring debits and credits are balanced, knowing how accounting systems work, and why they work, is not only a good idea, it is an absolute necessity.
Failure to develop accounting procedures
Every financial transaction in a business should follow a consistent, written, formalized procedure from decision-making to recording. That is, every income and expense should follow the same path from approval to data entry into the accounting software. Without standard procedures, transactions get lost, decision-making becomes inconsistent, and the numbers never seem to quite work out. Everyone involved with the company’s accounting system need to be handling transactions in the same manner, and those procedures need to reflect an understanding of financial controls.
Inaccurate data entry
Along with developing standard accounting procedures, it is essential to include steps that verify the accuracy of the data entered into the system. This may seem obvious, but every struggling business we have encountered had serious data entry errors in the books. A small error — an extra digit, transposing numbers (2521 instead of 5221) — can wreak absolute havoc in a fairly short amount of time. Establishing at least one double-check procedure can eliminate the majority of these mistakes.
Failure to review and analyze
One of the great features of every available piece of accounting software is a set of easy-to-create financial statements. Unfortunately, many entrepreneurs are number-phobic and do not take the time to learn how to use these crucial tools for financial management. A simple, consistent review of the numbers and running a few basic financial ratios can be extremely revealing, both in terms of potential problems and identifying exploitable opportunities. Business owners do not have the luxury of being “not-a-numbers-person” — business is all about the numbers, thus it is essential to use the available tools to keep control over your venture.
Failure to budget
It is nearly impossible to launch a successful startup without a well-researched budget, and even more difficult to survive without planning out the business’s financial future. No budget generally indicates no planning, and tends to result in throwing good money after bad, especially during lean times in the venture. Setting a budget allows a business to maintain focus on a well-developed strategy while ensuring the cash flow is sufficient to keep the business alive and growing.
It is a common but inadvisable error for first-time entrepreneurs to underestimate the importance of solid financial management. Simply ballparking expenses and taking a see-what-happens attitude with the cash flow are quick paths to failure. Doing your homework and mastering the fundamentals of accounting are not just a good idea, they are the only way to build a viable business idea into a thriving company.…