April is Financial Literacy month and helpful articles abound, ranging from teaching your kids about money to financial strategies as you head to retirement. Here is a sampling:

Teach Your Kids About Money - Good reading for parents.

Earning - from TheMint.org, “Earning” is one of my favorite words and an activity that creates positive energy. Earning is for any age. This web site is for kids, tweens and parents.

For the AARP crowd - Tips from finance guru Jean Chatzky.

Check out our video tip: Examine Your Tax Return.

Here’s why we recommend you take the time to do this:

• When you sign the return, you are declaring that you have examined it. Read the IRS text just above your signature.
• If you find an error, there’s a chance it will increase your refund.
• When you review your return, you may gain a better understanding of your tax calculations.

When you review, look for this:

• Does it look like the correct tax return form? If you are a corporation and your tax preparer sent you a Schedule C with your corporate info, something is wrong.
• Does your income agree to W2, 1099, your Income Statement, or other sources of income?
• With an individual tax return, do you see all the deductions you expected?
• With a business tax return, do your expenses agree to the detail you sent to your tax preparer?
• Is the result what you expected? If not, review further or ask your tax prepare to explain.
• At the end of the return, did your tax preparer calculate a penalty? If so, do you understand why?

Click on the slide below for larger images, to scroll, and for more tips.

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Work from the Bottom Up

Last week, I suggested you analyze your 2011 financial picture. You gathered information. Now, let’s bring the pieces together. Create main areas of spending: home costs (rent, mortgage, utitilities), travel, food, children, retirement. Pull in last year’s numbers and adjust them for 2012. Has your travel cost increased? Has your family grown? Be sure to factor in all these changes.

Do you anticipate new spending in 2012? Be specific. Are you planning a celebration for a milestone event? How much will that cost? Do you want to increase your insurance? Can you afford to be more aggressive to repay debt?

When building a budget, we can begin with historical information. Then we want to consider this year’s goals and build in new factors.

The Big Picture

It’s time to add all the pieces. What is the total spending? Once you have your outflow, compare it to your inflow. Does your annual net pay cover this spending? If it does, make a plan for investing any excess. If it does not, then it’s time to adjust.

Remember the Income Formula

The relationship we want is: Income exceeds Expense. There are only two pieces you can control – income and expense. Now the real work begins. If your planned spending exceeds your current income, look at your spending and figure out where to cut back. On the other hand, if you believe you can bring in more income, it’s time to get out there and start earning. A new job? A second job? Creating more value for your employer so that you can make a case to ask for a raise? With a solid plan and dedication, it is possible to reach your financial goals.

This is the third of a series. Related posts:

1. Budget to Earn, Earn, Earn
2. Budget – Analyze First
3. Budget – Begin with the End in Mind
4. Is it a Budget or is it a Spending Plan?
5. Budget for Yesterday, Today and Tomorrow

Look at your financial picture from last year.

How much did you earn? How much did you spend? What did you spend on?

• Get the info. You may have a wealth of information at your disposal if you use tools like Mint or Quicken. If you are budgeting for a business, get reports from your accounting software. If you don’t have reports, gather year-end statements and last year’s bills and checks.
• Organize the info. Sort from biggest expenses to smallest. Categories include:

• Rent or mortgage
• Taxes
• Insurance
• Education
• Transportation
• Food
• Telephone, internet
• Clothing

Think about what will change in 2012.

Do you have new financial needs or goals? Will you repay debt? Save? Reduce some expenses and increase others? Write down these changes.

Review the relationship between Income and Expense.

In my prior post, I noted that the relationship we want is: Income exceeds Expense. What is the source of your Income? What can you do to influence and increase it? How can you earn more?

• Is it time to ask for a raise? Have you increased your skills? Are you adding more value to your employer? If you are, consider asking for a raise. If not, consider building your skills to position yourself for a raise or a better-paying job.
• If you are paid by the hour, can you work more hours?
• Do you want or need to work a second job?
• Earning more Income yields powerful benefits beyond the financial.

Next Step

Congratulations. You’ve gathered and reviewed some of your recent financial history. Take a break. Next, we’ll create a 2012 net income goal.

This is the second of a series. Related posts:

1. Budget to Earn, Earn, Earn
2. Budget – Analyze First
3. Budget – Begin with the End in Mind
4. Is it a Budget or is it a Spending Plan?
5. Budget for Yesterday, Today and Tomorrow

Tip for Success

Focus on Income. Though, yes, we will plan expenses, I encourage you to shift your mindset to earning income. Think about how much we focus on spending and consuming. Our culture focuses far too much on outflow. Instead, move your mental energy to enthusiastically earning income.

Seven minus six = one (7 – 6 = 1)

If you can handle basic math, you can successfully create a budget. No excuses. It’s not complicated; it’s simple.

Before we get into the nitty gritty of creating a budget, remember this – an Income budget is the relationship between Income and Expense. The relationship we want is: Income exceeds Expense. Though the concept is simple; most people will admit it is a challenge to achieve.

Commit to this goal

“Over the long-term, I will enthusiastically earn so that my income will exceed my expenses.”

This is the first of a series. Upcoming posts:

• Analyze First
• Begin with the End in Mind
• Is it a Budget or is it a Spending Plan?
• Budget for Yesterday, Today and Tomorrow

• Manage my personal finances in one place.
• Easily keep my checking and credit card balances up-to-date.
• Download and match my transactions. Have more time to analyze since I spend less time entering data.
• Customize my categories.
• Plan my income and spending.
• Pay and record everything on time using the Scheduled Transactions feature.

Remember – Quicken has an unconditional 60-day money back guarantee!

It’s still early in the year and a great time to get on top of your finances. I’ve been using Quicken for over 20 years. It works.

- Regina Iulo, 2012

There are numerous resources available to help you grow and run a healthy small business— and no, I am not talking about computers, printers, and fax machines, etc.  Other electronic devices, software, and online websites offer products or services that can help make managing your business easier.

• Check scanner—saves you a trip to the bank by allowing checks to be scanned and deposited from the comfort of your home or office.
• Utilizing software to the fullest potential— for example, if your business useMicrosoft® Outlook for email there is also a calendar that can keep track of
  all your appointments and activities (as well as link to other employees calendars, to see what everyone else is up to), store contact information, and store your task list.  And Outlooks is used with the same ease as many other Microsoft ® Office products.
• Digital postage meter— stop running to the post office when you have to send a letter.  Besides you never know whose call you will be missing while you are away.
• Credit card machine/service—many people enjoy the ease of pulling out a credit card to make a purchase.  Don’t let a sale slip by because you are not prepared.
• Online storage—there are numerous free storage websites that can house your most important documents, for instance Google mail or Dropbox.
• LogMeIn—allows you to log into your computer, remotely, through the internet.  So, no big deal if you forgot your flash drive, you can still make that presentation to your investors.

Even though some of these may require a small fee, the benefits of using these resources will easily outweigh any costs.  The amount of time you can save by not having to stand in line at the bank or post office, or the security you will feel by knowing your important information is secure is irreplaceable. 

 Another simple way to save money is to follow a trend—ever heard of Going Green?  Reduce your carbon footprint and go paperless.  This will save you costs on paper, ink, and electricity.  And no need to worry, all your valuable information will be safely stored in your newly acquired online storage account!

QuickBooks, by Intuit, is a powerful tool that can organize your finances, track sales, and expenses, and make tax time easier.  You can use it to write checks, manage payroll, and even process credit cards.   Then, with a few clicks of the mouse, you can have a report detailing all your profits, expenses, and cash and even compare it with previous periods. 

For those who know how to use this remarkable software, the benefits of QuickBooks are
undeniable.  Even though QuickBooks offers numerous benefits, the lack of knowledge when using the software can cause negative effects because, as with all software there is potential for human error.      

For example, a person with limited accounting knowledge, using QuickBooks, may unknowingly misclassify a transaction, which could lead to misstated financial statements.  Incorrectly inputting information can lead to overstated assets or revenues or understated liabilities or expenses.  Mistakes like this may seem inconsequential, yet they can have detrimental effects on businesses.  Just because QuickBooks pulls up a report does not mean the report is correct. If the supporting information was not properly entered, then the report is not accurate. 

What Can Go Wrong?

• Incorrect Item setup— Items are directed to the wrong account.
• Transaction entered to the wrong period—wrong month or year.
• Misclassified transaction.

With any software, especially financial software, it is important to be properly trained.  Whether it involves tutorials, classes, or forums, it is important that any person using the software have an appropriate understanding.  If it is not possible to take the time to train yourself or your staff, outsides services may be able to provide the assistance you need.  Outsourced services can manage the system for you, full-time or part-time, and offer consultation services for assistance.

Tips to Ensure Accurate Financial Reports

• Have an expert (CPA or QuickBooks Advisor) review your item setup. If your financials look wrong, they can often quickly identify and correct the setup.
• Review all Balance Sheet registers. Transactions incorrectly coded to a future year will stand out. They are delineated after a blue line.
• Review reports that are customized by month. This will enable you to see inconsistencies that may be the result of data entry error.

Taking managing your finances one step further, if you have QuickBooks Online, there
is also a mobile application available for the iPhone that includes features that allow you to send invoices, track payments, and many other features.  The mobile application is free with the purchase of QuickBooks Online; for more information see the link below.

https://sckb.quickbooks.com/app/answers/detail/a_id/4493/kw/iphone/p/%20/c/%20/r_id/103897

Financial Comfort is an expanding consulting company in the Chelsea district seeking mid-level staff accountants to join our team.  This opportunity entails traveling in the NYC area to provide accounting services, financial management consulting and software training to a wide array of clients. The most energetic small businesses in the tri-state area call on Financial Comfort to help them grow.

We offer paid holidays; paid vacation; full health insurance coverage; transit deduction under Section 125; continuing education; flexible scheduling; and paid & unpaid sabbaticals. We support our staff by guiding you in client situations and grooming you with the latest and soundest management accounting practices. Our team members are known industry wide for their high level of skill and expertise and are always in demand.

 Job Functions – Staff Accountant

The ability to communicate effectively is key. Candidate will maintain an assigned portfolio of clients, traveling to client premises. Reports regularly to Financial Comfort. Works with client management and deals with their staff, vendors and customers. Keeps records of financial transactions for each client by performing the following duties.

 Qualifications – Staff Accountant

• The accountant will possess excellent written and verbal communications skills, and is an organized, analytical professional who takes initiative.
• Must be detail oriented, sharp, see the “big picture,” and be able to work under pressure and be responsive to management.
• Must have 3 years of relevant work experience.
• Must have 2 or 4 year degree; excellent PC, Excel and accounting software (QuickBooks, Peachtree or mid-range) skills. Familiarity with Mac is a plus.
• Must understand debits and credits COLD.
• Carry out the Financial Comfort mission. In providing financial management services, we want every growing business to have value-added, quality financial management. In interacting with business owners, managers and staff, we seek to increase financial awareness and promote financial literacy.

Do you have what it takes to work at Financial Comfort?  Apply here.

For instance, will you be applying for a credit card in the near future? A car loan? A mortgage?  When deciding exactly how much credit they are willing to entrust to you, lenders consider your credit score. Credit scores range from 300-850, and it is best to stay above 700.  The main credit reporting agencies are Experian®, Equifax®, and TransUnion®.

What Makes up Your Credit Score?

According to MyFICO, following are key categories that influence your credit score:

• Payment history — 35%
• Amounts you owe to creditors — 30%
• Length of credit history — 15%
• Number of accounts recently opened —10%
• Type of credit used —10%

Ways to Raise your Credit Score:

• Make payments on time!
• Keep balances low.
• Do not open too many new accounts—try to keep accounts for long periods of time.
• Have different types of debt (installment or revolving).

All this information and the credit score are reported in your credit report, which
you may request from one of the reporting agencies.  The reports also include information
pertaining to credit inquires and bankruptcy.  Many places offer free credit reports that contain general information about your credit, but for a more detailed report often times you must pay.  It is definitely worth the small amount to accurately know your credit score.

Keep in mind that it is very easy to lower your score, but it is extremely difficult
to raise it.  Your credit score will follow you for the rest of your life, so be sure to plan accordingly.   

For more on credit scores, check out http://www.myfico.com/crediteducation/whatsinyourscore.aspx