Personal Finance To-Do’s in a Good Economy

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

According to recent reports, the economy is in a state of thriving optimism. Check out this recent news article snippet:

“Upbeat economic data continue to emerge from the U.S. economy despite the turbulent political atmosphere. Leading indicators suggest that activity is firming in the first quarter of 2017 after GDP growth slipped in the final quarter of last year. The ISM manufacturing index rose to an over-two-year high in January, retail sales grew healthy and employers added jobs at the quickest pace in four months.”  (Source: http://www.focus-economics.com/countries/united-states)

After many years of digging out of trouble since the 2007-2008 housing bust, things might actually be starting to seriously improve for America’s citizens, at least from a financial standpoint. So what can you do to take advantage of a good economy and use the opportunity to improve your personal financial situation? Consider these options.

 

Assess Your Financial Situation

How have the last nine or ten years affected your finances? Have you gotten into debt? Depleted your savings? Ignored your retirement accounts as you work to be able to pay the bills? Make an assessment of your current financial situation and set some goals for where you want to be financially. Then make a plan for how you’ll get there and start moving forward with your plan today.

 

Make More Money

Jobs are being added at a quick pace, which means you have more opportunities to increase your income. Consider taking on a second job if necessary or getting overtime hours at work if they are available in order to help you reach your financial goals. Take advantage of the chance to increase your income while things are good and business owners and consumers are in a spending mood.

 

Don’t Get Too Comfortable With the Boom

In the years prior to the Great Depression, Americans had a “What could possibly go wrong?” attitude about their money. The stock market was thriving and the Roaring Twenties had people buying houses on credit, cars on credit and living a life of financial reckless abandon.

When the crash hit, many people lost everything and the foreclosure rate skyrocketed to over twenty-five percent.

History shows that every boom is followed by a bust – eventually. In a thriving economy that bust may come years down the line, or it may come in an instant due to a terrorist attack or other major widespread issue like a major drought that causes an increase in food prices.

In order to protect yourself and your finances, stay reserved about the immediate economic success and continue to plan for future economies as opposed to simply taking comfort in the current good one.

 

Beware of Potentially Rising Interest Rates

We’ve lived with super low interest rates for the last several years as the government worked to make it possible for people to keep spending in spite of the housing bust and its after effects. Now that things are looking up we can expect rising interest rates which will affect mortgage loan rates and credit card rates as well, so borrow carefully.

A good economy is a great thing, but it’s also a great time to keep in mind that economic booms don’t last forever and to prepare to be financially stable no matter what the economy may be doing. Ditch your debt, increase your savings and work your way to a healthier financial situation while the getting is good.

How about you all? What steps are you taking to improve your current financial situation?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/koalazymonkey/3596829214/in/

Office Work Hacks

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

Getting along and getting ahead in the office involve age old problems.  Here are some problems with ideas on solutions.

Inability to focus is causing you to be less productive.

You head into the office each day refreshed and ready, but once you get logged in to your applications, the next thing you know it’s lunch time and you haven’t accomplished anything!

Hack: Downsize distractions and focus on priorities.

You can’t control your office environment, but you can change its effect on you.  If the guy in the next cube has a constant stream of visitors, talks to himself out loud, plays loud music or just otherwise distracts you – put on your headphones (they will discourage visitors from approaching and can block the noise).  Reduce clutter in your area so that you aren’t distracted by it.  If you are in a high traffic area, see if the company will put up some noise and sight protection in the form of higher cube walls, signs or other preventative measures.

Focus on priorities by writing down the very most important things that you accomplish each day, and listing tomorrow’s priority tasks.  Check in once in a while with the boss or project leader to make sure you are on track.  Avoid diverting phone calls, emails, text messages, and non-essential or less important project tasks so that you have laser like focus on the priority items.  BUT, if you get stuck working on priority items, it is OK to switch off temporarily to work other items – as long as you get back on track fast.

You feel invisible to the boss.

A boss or mentor higher in the corporate chain of command is an important ally when trying to advance your career.  He or she can steer special projects to you, make you known to other executives, put you in for a raise or bonus, push your ideas, save you from a general layoff, or help in a myriad of other ways.

Hack:  Go face to face

Electronic or phone communication is fine, but your boss is inundated with it day in, day out.  Get to know the boss by going face to face on select topics.  You won’t be invisible long – but take care to be visible in a positive way!

Here are some ways to to meet person to person with your boss.

If he assigned a task or deliverable to you and you finish it successfully, try hand delivering it with a very short verbal reminder of what it is and when it was requested.

If your boss does an annual evaluation, request a touch base meeting once a quarter or twice a year to ‘verify that I’m on track’ with what is needed.

Ask around to see what your boss’s outside interests are, and if you have similar ones, strike up a conversation in the lunch line, bathroom or break-room about the topic.

Volunteer for special projects or activities in which your boss is also involved.   Working directly together on a project will allow you to directly demonstrate your ability, creativity and productivity.

If your boss is not at the same location as you are, try using the phone, video calls or attempting to schedule a visit to his or her location for a special meeting on something important to the boss.

Your work performance suffers due to co-worker or staff member office socialization.

Yes, you are part of a group.  Yes, the group is important.  Some socialization is good for the group and good for productivity, but too much is just a waste of time.  Creativity can be spawned by some group socialization, but so can negative, hurtful gossip that distracts you from the job at hand.   If your good friend in the next department makes a habit of stopping by for a chat each day, and ends up talking for half an hour, the benefit of inter-department communication is outweighed by the loss of work time from both of you.

Hack: Turn the talk back to work subjects.

Don’t be a jerk, do visit for a few minutes, but then gently turn the talk back to what is going on with the project, or a new idea you had to make things better, or a discussion of how to go about the next steps you both need to take.  Don’t get me wrong, managers can gain a lot of good perspective by being open to informal communication with their staff and peers, but perspective on who will take the Superbowl may not be all that beneficial.

Use off hours (such as breaks, lunch and after work time) to really socialize with co-workers.

Meetings suck your office time, then you have to stay late to get your actual work done.

As a manager, I attended and ran a lot of meetings.  There were very good reasons to hold many of the meetings, but often the purpose was not realized.  Sometimes (actually many times) the meeting participants are unprepared to fully participate in what could be a great meeting. Sometimes the meeting organizer isn’t aware of other work that should be happening in the meeting time frame.  Meetings don’t equal work done (usually), but can be beneficial in some cases.

Hack:  Make your meetings meaningful.

When you attend a meeting:

  • Understand its purpose.

Question the meeting purpose it doesn’t make sense or if a meeting is not the way to achieve that purpose, but question in private.

  • Make sure you should be attending – are you an interested party, can you contribute? Check in with the meeting organizer or your boss if you are unsure why you are attending and then:
  • Participate fully.

As the meeting organizer:

  • Make sure you have a purpose.

Consider carefully whether a meeting is the very best way to achieve that purpose.

  • Verify that each and every meeting participant is required.
  • Hold the meeting for the shortest possible time, with the tightest possible agenda.
  • Lead efficiently.
  • If you hold a lot of meetings, get training on how to lead effective ones and how to accomplish things without meetings.

Any meeting where the leader talks and everyone else sits around fidgeting is a failure!

Work sucks but you don’t feel like you can do anything to change the way things are.

When we lack seniority, we often don’t feel empowered to put our own imprint on our work place.  If we try, sometimes we are told “This is the way we do it – it’s always been done this way”.  Yet you do know of a better way – or at least think you do.

Hack: Figure out how your company solicits or allows input. 

Most companies have implemented multiple ways for employee ideas to trickle up to higher levels of management.  Many companies long for the great employee suggestions and go to great lengths to make sure they are heard.  You just need to figure out what those currently are.

A few methods I have seen at various employers include:

Company wiki’s with sections for various parts of the company – where anyone can post an idea.

Ongoing braintrust meetings – open invites for certain departments, levels or mixes of employees gather to present and discuss ideas for new products, process improvements and etc.

Awards – formal channels to submit written proposals to an award committee to review and get implemented.

Third party award systems – third parties sometimes are hired to come in and solicit money saving suggestions from the folks closest to the work.  These usually come with some pretty significant ‘prizes’.

Special calls to action – a director or vice-president is on a special mission and requests ideas on how to accomplish that mission.

Company Strategic mission committees – most companies have a mission, with goals, strategies and tactics to get to them.  Ask around to find out who is eligible to work on these committees, offer up strategies and tactics or be on the projects to implement them.

Brainstorming meetings – typically held around one particular topic.

Once you understand the change procedures, explore the particular item you want to change.  Learn the history of how and why the process came to be.  What was tried before, would it fail again now?  Was your idea previously suggested?  How could it be implemented differently to be more effective?

Of course, you can always just talk it over with the boss or your other co-workers.  Building support for your change can give its chances of adoption a big boost.

The above work hacks are based on my own work experience and may not necessarily work for you.  It’s always good to get the lay of the land before diving in head first on some of these things.

How about you all? What work hacks have you seen?  Are there issues in your workplace interfering with your productivity?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/83532250@N06/7650804342/

Set Goals to Create Additional Streams of Income

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

How many streams of income do you have? When my husband got laid off early last year, we realized that one stream of income just won’t cut it anymore.

Diversifying your income can provide you with more financial security which is why it’s a great idea to set goals to create additional streams of income this year.

Why You Need More Income Streams

Most millionaires have an average of 7 different streams of income. Whether you’re trying to be a millionaire or not, you can probably agree that the more income you have coming in from various different sources, the more financially secure you’ll be.

When my husband got laid off, he lost his entire income in one fatal swoop. Luckily, I was working at the time and freelancing on the side with more than 10+ different clients. It was safe to say that by me having multiple streams of income, it really helped up get through that rough patch.

Income diversification can not only help you feel more stable, it can also allow you to meet your other financial goals quicker and allow you to earn more money over time as well.

Here are a few ways to diversify your income this year.

Start Freelancing

If you can provide a service to others on the side of your full-time job, it can be a great way to create an additional stream of income. There are so many different ways to freelance whether you like to write, edit, design graphics, take photos, do customer service or data entry work and so on.

The best part about freelancing is that you can choose your own clients to work with and set your own rates and hours. You don’t have to work an extra 30 hours per week if you don’t want to or know you won’t have the energy. Once you build your network and start finding clients, you can maintain as little or as much work as you want.

If you want to perform the tasks you do at your day job on the side for others as well, that’s an option as long as your employer is okay with it. For example, if you work at a daycare and want to offer some of the parents babysitting services on weekends, as long as your employer is fine with it, you can earn some extra money that way.

I used to take my son to a child care center that allowed that and parents like me were relieved since the center was closed during evenings and weekends.

Back when I worked at a web design firm, I used to think about how much the graphic designers and programmers I worked with could have earned if they did a few freelance projects on the side.

A graphic designer can easily earn an extra $1,000 per month by taking on only 1-2 extra projects on the side.

Sell a Product

Want to sell a product your created or a product on the market that you believe in? Consider this semi-passive way to diversify your income.

If you like to create handmade products and goods, consider setting up an Etsy shop and selling your items online. You can also design t-shirts to sell, create an e-book, flip used items for profit by selling them on sites like Amazon and Ebay.

I knew a blogger who wanted to pay off her student loans so bad that she started buying gently used designer clothing at thrift stores for cheap then selling them online for a profit.

As another option, you can sell products through a direct sales company so you can earn commission from each sale. Companies like Avon, Stella and Dot, Beach Body and Premier Designs, are all great options but there are tons of direct sales companies out there depending on what you’re interested in.

You can show your product catalogs to family, friends, and coworkers and make extra money that way.

Invest

Investing is a great way to diversify your income by creating passive income streams. You can invest in the stock market or in peer-to-peer lending.

You can also invest in real estate. Crowdfunded real estate will allow you to share the costs of investing in commercial and residential properties if you don’t want to purchase a property entirely on your own.

However, if you do purchase a small home or condo, you can earn money each month by renting it out and allow your tenants to pay off the mortgage for you.

Start Brainstorming With This Master List of 20+ Ideas

As you can see, there are quite a few options for diversifying your income this year. Below, I’ve compiled a list of specific ways that you can create additional streams of income. With these ideas, you shouldn’t even consider having one job or a single income stream a possibility anymore.

  • Babysit
  • Offer a cleaning service
  • Buy a rental property
  • Drive for Uber or Lyft
  • Rent out your car when you’re not using it with Turo
  • Rent out your home or a property with Airbnb
  • Write an ebook that helps a specific target audience solve a problem
  • Start a blog and monetize it
  • Sell your crafts and creations on Etsy
  • Design T-shirts via Tee Spring to sell online
  • Become a freelance writer
  • Become a virtual assistant
  • Become a freelance photographer
  • Sell your images to stock photo websites
  • Sell clothes or books online
  • Tutor students online or in your community
  • Invest in the stock market by building a dividend portfolio
  • Flip a house
  • Become a peer lender
  • Buy website domain names then resell them online
  • Host direct sales parties

How about you all? How will you create additional streams of income this year?

Share your experiences by commenting below!

****Photo courtesy https://www.flickr.com/photos/striatic/101594790/

One of the Benefits of Financial Independence: Sabbaticals

boat-vacation-my-personal-finance-journeyThe following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

One of the benefits of achieving financial independence is the possibility of creating sabbaticals. These are breaks you can take from work, every few years. They can last anywhere from a few months to a couple of years. They are more typical in the education field, but if you have financial independence, you can work them into your own lifestyle.

After all, since we all have limited time in his life, there’s often a trade-off between time and earning money for a living. We can see the value in weekends and vacations, so periodic sabbaticals aren’t a ridiculous idea.

Early Retirement Doesn’t Have to be the Ultimate Goal of Financial Independence

The whole concept of financial independence has now become almost synonymous with early retirement. The idea is that you will reach a level of financial worth where you will no longer need to work to earn a living.

That’s certainly a worthwhile goal, but it does have a few flaws in it. The first is that it’s not likely that most people are going to reach a point where they can stop working fairly early in life, and never have to worry about money again. Another is that not everyone necessarily wants to stop working and retire. For many, it’s enough just to have the ability to retire, even if you never do.

But that’s where sabbaticals can come into the picture. Even if you don’t fully retire for the rest of your life, you can take periodic breaks during your career. For example, you could decide to work for five years, and then take a year off.

One of the advantages of this is that you don’t have to wait until you have the enormous amount of money you will need to keep you from having the work for the rest of life. Instead of waiting until you can early retire at say, 50, you can take sabbaticals much earlier in life. If you create some level of financial independence, you could even do it as early as 30. It’s a less challenging task, which makes it more doable in the near-term.

Sometimes You Just Need a Break for a While

So why would you even want to take a sabbatical? Sometimes you just need a break. For many people, working year after year is a recipe for job burnout. But if you take a break every few years – and schedule that into your life – just the idea of doing it could prevent burnout from happening.

It may not even be that you dislike what it is you do for a living. Sometimes just getting out of it for a while helps you to reorganize yourself and clear your head, so that you can come back with a fresh perspective and a new determination.

Recharging for the Next Major Advance in Your Life

It may also be that you just need some time to get yourself ready for a major change in your life. It could be a career change, starting a new business, taking a different approach with the same career, or perhaps taking some time to get some additional training or education. A sabbatical can help you to bridge the gap between where you are and where you want to go.

Sometimes those advances are not necessarily career related. For example, you may need to take some time off to be with ailing relative, or even to welcome a new child into the world. Your employer may allow you up to 12 weeks for either of those responsibilities, but you might choose to take more time. If you have achieved a solid level of financial independence, you can take that time.

Adding Rich Experiences to Your Life

Maybe you just want to take some time off to travel the world. While it may be nice to have such a plan for when you retire, what if you don’t want to wait another 10, or 20, or 30 years to do it?

Planning a sabbatical can enable you to take such a trip in just a couple of years. There’s no need to wait until you are 50 or 55 or 65. And let’s face it, even if you’re on track to retire early, there’s no guarantee how it will all play out, or what your outside circumstances will be at the time.

If you’ve achieve financial independence, you should be able to take that time now, rather than waiting for sometime in the distant future.

Creating a Series of Mini-Retirements

It’s not necessary to try and pack a lifetime of experience into a single sabbatical. You can plan one every few years. That will give you time in between to decide on new goals and directions.

It will also help you to prepare financially. Let’s say that you want to take a sabbatical in five years. If you can save 20% of what you will need to live on for a year, each year between now and the time the sabbatical starts, you will be able to take the time off and not worry about how you would survive.

Usually when people achieve financial independence, it’s because they are able to save a much higher percentage of their income than most other people. For example, while the average person might save 10% of their income each year, you may be able to save 20%, 30%, 40% or more. If you allocate some of your savings for your sabbatical, and some for longer-term savings and investments, you will be able to have the best of both worlds. That means a sabbatical in the near-term, and greater wealth in the future or whatever else you want to do.

Early retirement is an excellent life’s plan. But if you don’t entirely trust all the possibilities that the future may hold, it’s not a bad idea to plan on taking some extended time off in the not so distant future. Think about what you want to do with your life, and how a sabbatical might help you do it. You may find out that it’s the best time off you’ve ever had.

How about you all? Have you ever taken a sabbatical from your career? What were your experiences and what did you learn?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/tylerkaraszewski/2654986116/sizes/q/

How to Start a Profitable Home-Based Business From Scratch

home-office-my-personal-finance-journeyThe following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

Working from home is still a big craze on the internet these days. What some people may not realize is that it take a lot of hard work to work from home regardless if it’s a side hustle or a full-time business.

Yet and still, the results can be very rewarding. As someone who just quit my job to run my home-based freelance business, it was important for me to understand what to do in order to set up a profitable online business that could allow me to meet all my needs and financial goals.

Since I’m the breadwinner in my household and my family still has some debt, it was crucial that I set up my online business up for success. If you are in a similar boat and you want to work from home, one of the best ways to earn a good income is to set up a small home-based business.

Benefits of Starting a Home-Based Business

There are numerous benefits to setting up a home-based business and they include:

  • Having the flexibility to work from home and cut out tedious tasks like dealing with commuter traffic.
  • The ability to set your own hours (if you are completely location independent, you can work from anywhere)
  • An unlimited earning potential. Since you control how little or how often you work along with other aspects of the business like sales and marketing, the sky can literally be the limit in terms of how much you can earn. If you don’t like waiting around for an employer to give you a small raise once a year, this can be a huge perk that allows you to have more control over your future.

If all of those benefits sounds good to you and you’ve been playing around with the idea of working from home or starting a full online business, here are a few things you need to do in order to set yourself up for success.

Brainstorm Business Ideas

First you need to determine what type of business you’d like to have. This initial step may take a while because it’s very important. You need to choose something that you are good at and something you can see yourself doing in the long run. In other words, it should be enjoyable and a passion.

It’s also important to focus on earning potential because going into business for something you’re passionate about and not earning money will just turn it into a hobby and won’t put bread on the table. Who will you serve and what type of demand exists in that industry.

For example, if you plan on running a travel agent business because you love helping friends and family plan their trips, decide who your target market will be to gain clarity.

You can look at the industry as a whole and see if there is potential for growth and what competitors are doing to bring in income. If you can see longevity in the idea in terms of income and your happiness, it may be worth looking into further.

Some top home-based business ideas include:

  • Private Tutor
  • Childcare
  • Business Coaching
  • Consulting
  • Transcription
  • Freelance Writing
  • Virtual Assistant
  • Accounting
  • Web Design
  • Photography
  • Bakery
  • Wedding Planner

Develop a Business Plan

After you’ve determined what you will be doing and who you will be serving, it’s time to write out a business plan. Your business plan doesn’t have to be super extensive, but it should be thorough, clear, and summarize the mission of your business and how you plan to grow it.

This will help you stay organized when making certain decisions regarding your services, clients you work with, partnerships you develop, etc.

You should also include some financial information in your business plan since you might need to show it to potential investors. Determine what your start-up costs will be, if you will be providing specific services or resources to the community, and how much funding you may need to meet certain business goals.

Find Funding

Depending on what type of business you establish, you may need funding from outside sources.

If you have low startup costs and can invest your own money into your business, that’s fine, but it’s best to avoid taking out a business loan if you can.

You can start by pitching family and friends to invest in your business, but don’t stop there. You can also reach out to private investors or ask if they can sponsor a project, event, or campaign you’re having.

One business owner I know who started a remote business in order to travel around the country with his wife pitched a well-known job board to assist him and they ended up sponsoring a documentary he was working on.

Depending on the type of business you have, you may be able to qualify for some government grants. The Small Business Administration offers different types of loans and grants to businesses but the requirements vary. You can learn more about SBA grants here and search for various different grants at Grants.gov.

Sort Out the Legal Matters

You may not have to legitimize your business by forming an LLC or S-Corp, but it could help you out around tax time. Entrepreneurs need to set aside a rather large amount of their earnings aside for taxes because they don’t have an employer to supplement it for them.

Depending on your needs, you may want to just be a sole proprietorship, or become a limited liability company (LLC) or an S-Corp. You can learn more about your federal tax responsibilities here.

Trusted sites like LegalZoom.com can help you legitimize your business and if you choose this route, you’ll also need to make sure you register your business name with your state and get a tax identification number.

It’s Best to Start On the Side

While all of these steps may sound overwhelming, it’s important to realize that you can go at your own pace when setting up your business. One of the best things I did to ensure that my business was profitable was starting it on the side of my full-time job more than two years ago.

I started out slow and paced myself. I made use of the extra time I had to get organized, gain clients, and execute my business strategy and slowly it started to pay off and I was able to replace the income I was earning at my full-time job.

It was a lot of trial and error though but it wasn’t as risky because I knew that if my side business’ income didn’t meet the goals I had for the month I could always fall back on my full-time job.

Starting your business off on the side is a great way to play it safe so you can reach success when you make the leap and leave a traditional job with steady income.

How about you all? Have you ever thought about starting a home-based business? Do you have any side hustles?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/duskblackwolf/4286862314/