Finances

You Just Received Your Tax Refund, Now What?

Maintaining a healthy relationship with your money is important. That’s why strategically spending or saving your tax refund becomes crucial. Many people view their refund as money to spend on frivolous things, however, this is a perfect starting point for travel savings or taking a chunk out of your debt. Here are some of the best ways to use your tax return to make the smartest investments:

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Pay Off Debt

Pay off your credit card with the highest interest rates first. It is always best to pay down your debt than to try and build unneeded savings. With that said, make sure you have emergency savings before paying off your debt.

Upgrade Your Car

Trade in your old car for a newer version. In order to get the most for your money, don’t buy a brand new car. Instead, purchase one that is a few years older. Also, be sure to weigh all the pros and cons of the car you intend to purchase. Don’t pick the first thing you see on the lot.

Plan a Vacation

No debt? Congratulations, statistics show you’re in the minority of American consumers! Plan a vacation and enjoy a break from the hectic everyday life. There are plenty of low-cost destinations available. Cruises are a great option with great deals and the option to travel the world.

Start a Tuition Fund for the Kids

Start a savings account for your kids’ college education. Start early so that you can help them start their own path with little or no debt once they graduate college. Talk with your financial provider about your options - many parents tend to make costly mistakes while maintaining the best intentions for their kids.

Create Investment Account

Visit with a financial advisor and start investing your money. If you find a compounding interest investment, you can grow your investment rapidly over the next ten to twenty years. It’s always good to start early.

Renovate your Home

Use your tax refund to upgrade your kitchen or make another home upgrade. Put your money to good use and invest in something that will benefit you in the future.

Emergency Savings

Set aside money for an “in case of an emergency” fund. If something happens with your job, a medical complication or another unexpected costs turn up, you should be able to coast for a couple of months without going to your credit card or line of credit.

Whatever you choose to do with your tax refund, make sure you analyze the pros and cons and make the best choice. Remember, your tax refund might seem like an opportunity to splurge, but making a smart decision and investing in something appropriate to your needs will allow you to splurge much more in the future.

 

 

 

Spring Cleaning for Your Finances

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The first day of Spring - March 20th - is almost here. This means that we need to account for Spring cleaning. Organization and cleaning help us purge the old and make room for the new. Most people think of spring cleaning as a time to clean the house and garden, but it’s also a perfect time to clean your finances. After all, you’re already looking through your financials to do your taxes!

Review your business structure

Are your personal assets separate from your business? If not, you can set up an LLC or incorporate your company to mitigate the risk of your personal finances.

Set up a plan with a CPA

You are digging through documents, receipts, and files for tax season, why not spend a little extra time with a CPA. Meeting with a CPA and setting up a plan can help alleviate the stresses of tax season in the future. They can help you identify what is necessary to keep and where to keep it.

Dig deeper into your finances

Look into your labor expenses. This is often times the most expensive part of your finances. Looking deeper into your labor costs can help you create extra incentive goals for your employees or help limit your spending if you end up short.

Pay yourself

Remember to pay yourself. Keep track of invoices and customer payments. Are you considered an employee, a partner, a corporate officer, or something else? Learn the different legal forms of business and how you should be paying yourself at irs.gov.

Maintain your newly organized system

Set aside 10-15 minutes at the end of each week to file, trash, and organize your files and documents. This includes physical and digital documents. Backup what needs to be saved digitally, shred sensitive document that are no longer needed, and maintain the system you put into place.

Speaking of CPA’s… we know a few. With a foundation of knowledge dating back to 1964, Schlenner Wenner can supply you with the highest knowledge and professional ability. If you would like to organize your business but don’t have the time or you feel overwhelmed, bring your receipts, documents, questions, and computer screens to us. Clean up your finances now and look forward to your company’s growing in the future.