It's true. The job market's dreary these days--at least it seems more young people are ditching the search for biweekly paychecks and making their money project-by-project. Because freelance income can be erratic in frequency, and Tax Day can become a migraine rather than just a headache for self-employed workers, here are some pointers to help the self-employed track their finances.
Create an invoice system. Not all clients will provide you with invoices to fit their accounting systems, so it's best to develop your own. Look up simple invoice templates and send one after every job you complete, with an invoice number you can make up to form your own series. Then, record every invoice number, with a project description, in a spreadsheet. Include the date of completion, payment expected, and payment due date, as well as any expenses you may have incurred to deliver the service.
Be clear. When you input an amount in the "payment expected" cell of your invoice spreadsheet, make sure your client is expecting to pay you just as much. It's wise to politely confirm the terms of payment via email before starting to write an article or embroider a show costume. Depending on your expertise, familiarity with the client, and comfort level, you might be able to negotiate a higher payment. Whatever amount you two decide, get it in writing, and keep it in your records.
Weigh time and expenses against payment. It might be worth pushing for a larger amount if your project will be costly and time-consuming on your end. If you were an hourly employee, you'd be paid for as long as it took you to write a consumer's manual. Consider that when accepting payment for a freelance assignment. And if you're starting a set design project that will have you driving through town to buy supplies, you should factor gas, mileage, and tolls into the price you'd like a client to pay you.
Keep those receipts! Even freelancers who aren't lucky enough to get reimbursed for work-related expenses should archive their receipts. Transportation costs can be valuable tax write-offs later on--think about the wear-and-tear on your car, shoes, or bike--as can be some everyday commodities you might overlook. If you're a freelance writer, you have to stay current on trends, news, and pop culture. That's why you can write off your cable, Internet, and phone bills as work expenses. Keep track of every dollar you spend through the year and find a good accountant to decipher your monies.
Plan out your payment time. If someone wants to PayPal you a few hundred dollars immediately after you design a website, consider sticking with them. But plenty of companies still rely on snail mail to pay freelancers. Read any contributor agreements you sign carefully and ask how long checks usually take to arrive, as well as with whom to follow up if payment is delayed. Knowing when to expect your money will help you organize your bill-paying.
Freelancers know everyone's work rhythm is unique. So, when you look over these tips, pinpoint the aspects of invoice and receipt organization that you will truly adhere to. It might be the least fun part of life as a free agent, but the money you'll save through methodical bookkeeping will surprise you.
There's a sense of pride-in-ownership that comes from making a vehicle purchase, but the amount of car a buyer can get for his dollar might be a bit underwhelming. According to Edmunds, a monthly car payment should only account for a maximum of 20% of a buyer's monthly take-home pay. With an income of $1,000 per month (close to the take-home pay of a full-time minimum-wage employee), that gives you a $200 monthly payment. That's not much car. And on top of that, you'll need insurance (expensive stuff if you're a young driver), plus maintenance and repair costs (which could be significant if you end up with a clunker). But there are some interesting options other than buying that will help you get around.
Mooching from friends
Instead of buying a car, why not borrow a friend's car? Borrowing is basically free--except for the price of gasoline. Any maintenance and repair costs that aren't directly related to a borrower's use of the vehicle are the responsibility of the owner. As attractive as car-borrowing may sound, it presents two major problems:
- Finding a friend who will consistently lend a car out is difficult, since people usually have their own cars for a reason--go figure.
- Check with the insurance provider: If you're frequently borrowing the car, or using it for long periods of time, there's a chance you'll be driving without any coverage. Yikes. Surely we can find some less-risky options.
Leasing your dream
Leasing is like a long-term rental. Ownership of the vehicle is never transferred, but the rights to operate it are given to you for a specific period. Although lease payments are generally much cheaper than monthly payments on a purchase would be, leasing a car isn't as simple. According to Edmunds, a lot of variables need to be evaluated when shopping for a lease: lease length, amount due at signing, number of miles allowed per year (usually 12,000), monthly payment, and whether gap insurance is included.
Leasing a car has some excellent benefits: some leases come with maintenance packages, covering routine maintenance like oil changes and tire rotations. What's more, leased vehicles are covered under manufacturer warranty--no more worrying about how to afford to turn off that check-engine light. The major downside to leasing is that a lessee gains no equity with lease payments. At the end of the lease, the vehicle must either be returned to the dealer, or purchased for the residual price on the lease agreement.
Renting a car isn't only appropriate when on vacation. A traditional rental is normally short-term with daily rates starting around $20 for economy vehicles. Most rental companies offer long-term options with lower rates.
The traditional rental isn't the only way to rent, though (and it may not be the best, either). Services like Hertz On Demand or Zipcar let anyone get a car when it's most needed. Simply open an account by entering some demographic information and your credit card number, then wait for a membership card to arrive in the mail. Once you get your card, you can unlock and hop into a vehicle near you and use it for as long as you need. These services typically charge by the hour, and have daily mileage limits. For anyone who only needs a car once in a while, this option might be the most affordable and the least risky of them all.
Choosing to buy, borrow, lease, or rent is a decision based on personal priorities. Whether you value driving a flashy new vehicle or saving your money for something else will determine how you pay for your next car.
Since the Great Recession, many families have found themselves out of work, with fewer hours, or with less income. Families have been cutting back on unnecessary items to help save money.
Although unnecessary items can be cut from the list, there are still necessary grocery items to buy, which are usually the most expensive. So, people have been finding ways to save money on these items.
A popular show on TLC has brought couponing to the attention of the American audience with the hit Extreme Couponing, although there are less-extreme, and less time-consuming, ways to save money for families and individuals when grocery shopping.
A simple way to save money is to buy based on the cheapest price-per-ounce.
- Under each food item in the store, there is a tag that states the cost of the item, and, in the corner, the-cost per-ounce.
- Look at bulk items because they are usually the cheapest, but double-check by comparing the cost-per-ounce to the packaged version.
Buy in bulk
It may be hard to pay more money up front but, in the long run, you will save money by not having to purchase that item as often.
- Buy nonperishables in bulk, such as canned/boxed goods and rice, with later expiration dates.
- Choose items that you know you like and you have room for. Some of those items could include cereal, aluminum foil and plastic wrap, toilet paper, paper towels, tissues, toothbrushes, toothpaste, batteries, gum, and pet food.
Learnvest.com has a story on Eugene Fram, marketing professor at Rochester Institute of Technology, who, after visiting a cranberry factory in New England, said he saw the same product being distributed for the national brand and the store brand. Fram said the difference between name and house brands is name brands spend more money on advertising.
- Generic brands can be almost half as expensive as the same name-brand product. But, sometimes there can be a minimal price difference.
- Don't necessarily expect a large price difference between generic and name-brand products, although more often than not, there will be one.
Price matching is when the price of an item at one store is used instead of the price of the same item at the store where the customer is shopping.
- Not all stores price match. Call beforehand to make sure that the store allows price matching and if they allow online printouts of ads.
- Make sure the price of the item price matched is exactly the same, including weight and brand, otherwise the store might not match the price.
Coupons can help anyone save a little extra money. They are usually found in the Sunday papers or online.
- Good places to find coupons are coupons.com, couponmom.com, and shortcuts.com.
- Don't buy more than what you will eat. There's also no reason to buy what you won't eat.
- You can save even more money by combining some or all of the saving strategies in your grocery shopping.
- And, always remember to check the price-per-ounce. Even with a coupon, it may not be cheaper than the same product in the bulk aisle.
Pawnshops are an important part of American culture. Pawnshops provide consumers with the opportunity to buy, sell, and take out loans on virtually all types of consumer goods. Learning how to get a deal at your local pawnshop the next time you shop there is essential to never paying the sticker price on an item.
How Pawnshops Acquire Their Goods
One way pawnshops acquire goods is when a customer fails to pay off their loan's principal and interest. When a customer does not pay off the combined amount due to the pawnshop, the loan's collateral becomes the property of the pawnshop. Another way pawnshops acquire their inventory is to buy it from a seller.
How Pawnshops Price Their Goods
Pawnshop owners price their goods based on the price they acquire it from customers, whether that's through purchase or through loan offers (collateral). Generally, pawnbrokers pay or give a loan for about one-third of the item's value. Therefore, the sticker price on virtually all products in the pawnshop are much greater than what the pawnshop bought or loaned out for the item for sale.
Pawnshops expect consumers to sell or loan their item at a price below its retail value. However, pawnshops still need to pay their expenses and make a profit. They will only accept a price during the negotiations where they will still make a profit on the item.
How To Negotiate Your Best Deal
Many pawnshop owners recommend some strategies to help consumers get a good deal and never pay the sticker price on an item. Before you go into a pawnshop to buy an item, look up the value of what you want. The only way to determine what the fair market value and even what some pawnshop owners may pay for an item is to research it on the Internet. Treat whoever you are negotiating with fairly and honestly. Make a reasonable offer. If it is not accept, walk away. Sometimes your offer might be reconsidered.
Following my last post on saving in department stores, I thought I'd let you in on three more insider secrets you should know.
Take Advantage of Inventory Consolidation
Many people figure that if they didn't see anything they liked on the clearance last week, then the same will be true this week.
However, this is not necessarily true. Sometimes, new things appear on clearance racks that you've never seen before. This is true even if the store never actually carried it at full price.
Where does the new merchandise come from? Many large department stores take advantage of inventory consolidation, but never advertise it. Inventory consolidation is when the department stores gather everything that isn't selling well at other stores and send it to stores where they believe it will do better. Most often, inventory consolidation revolves around seasons; warm areas will get all swimsuits while stores located in cold places will receive all the jackets.
Take Advantage of a Defect
It's actually quite common in a department store to find a garment with a defect. It could have a missing button, a snag, or any number of minor problems. Many salesclerks are authorized to give you a defect discount between 5-10% without asking their manager for approval.
Like everything else, getting the defect discount is all luck, timing, and how you present it. No discount will be offered unless yours in the only item like it that is left in the store.
However, if it is the only item in that color or in your size, then the clerk might be willing to give you the discount because otherwise, they know they lose the sale.
The best way to get a defect discount is to say something like "I really like this, but there's only one and there's a button missing. Can something be done?"
Ask For the Coupon
At any given time in a typical department store, there is a coupon. Salesclerks usually have coupons for their customers to use. However, there is a catch; you have to ask for it. Salesclerks never mention coupons. This is particularly important if you are shopping a chain you know well, but are in a different town.
Department stores are great places to find reasonably high quality garments at more than reasonable prices. This is particularly true when they are having a sale. However, even without a sale, great deals are yours for the taking--if you know how to find them. Taking advantage of inventory consolidation, asking for coupons and knowing how to negotiate a lower price for a slightly imperfect item are shopping skills that will give you a deal so good, you can brag about it.
So you've rented your first apartment as a full-grown adult person. It's affordable, it's somewhat small, and it's yours--well, yours, and your three roommates'.
To give the new abode a personal touch and dash of decorating magic, look for key furniture pieces and splashes of graphics and color that fit your new-grad budget. Follow this step-by-step guide to assemble a home that's livable and is suitable for your cost of living.
The Basics: Furniture
While self-assembly furnishings from the likes of IKEA, Nebraska Furniture Mart, and Target can offer a more affordable option for a brand-new look, most recent grads will find outfitting an entire apartment in new pieces to be financially impossible.
For those with a budget that demands free or near-free furnishings, look to your local paper's classified section or your area's Craigslist for business closings or remodeling sales. Hotels occasionally clear the rooms of inventory before a remodel or a sale, offering up queen-size beds, nightstands, desks, chairs, TVs, and entertainment centers for zero dollars. Restaurants also clear outdated furniture, and may post ads for free dining room chairs, tables, or barware.
Look for these opportunities in the off-season for your city. In college towns, that means the early summer. In resort areas, that means any time of the year that being in a resort town is unpleasant. In larger cities, that means the dead of winter or other non tourist-friendly stretches.
The Gear: Kitchenware
If you've made the circuit of local garage sales without turning up any finds in the pots-and-pans department, consider low-cost options for purchasing new or lightly used cooking pieces.
New, brand-name kitchen gear such as pots, pans, serving platters, and gadgets comes cheap at overstock department stores such as TJ Maxx and Marshalls. As long as you don't have qualms with that coveted electric tea kettle being lime green, you can buy it for next to nothing.
Scan local antique stores for used, but extremely sturdy, pieces. A cast-iron skillet that was well-made decades ago is, if it was cared for, as useful now as ever. Many larger cities are able to support kitchen-specific antique stores that offer options for lightly used cooking hardware.
The Finishing Touches: Decor
Decorations might not make the top of the priority list for those outfitting an apartment on limited dollars, but a few investments in decor early on can ease the transition to full-blown adulthood.
Check local newspaper listings on Wednesday or Thursday for weekend estate sale listings. Unlike a standard garage sale, estate sales typically are curated by an outside company, and are an "everything must go" situation.
Estate sale furniture tends to be priced higher than it's worth to a younger buyer, but decorations can be packaged at a much lower rate. Many tagged estate sales allow buyers to submit bids--remember that everything has to sell and bid what you can afford to walk away with a deal.
Saving money is a priority for virtually everyone these days. When you are looking to pick up a tool, the first place you might think of is a box retailer. While there is nothing wrong with buying a brand-new tool from a national retail-chain, shopping at a pawn shop or two can provide you with gently used tools that work just as well for much less money.
The first advantage pawnshops have is that they buy and sell virtually any type of consumer good. Therefore, when you go to your local pawnshop, you will be able to pick up a few different types of tools at once instead of going from retail store to retail store searching for the best deal.
The advantage here is that you can get gently used tools that work just as well as ones you can buy from your local retail store. The goods pawn shops sell are virtually all used but are usually in good working order. Since the pawn shop owner does not want to damage their reputation and lose customers, they make sure that all of their goods are in sellable condition. Pawn shops are required by law to make sure that goods are not fake or stolen because the items purchased by the pawn shop must be reported to law enforcement to ensure they are not illicit goods.
Most big box retail outlets leave little room for negotiation. However, pawn shops expect buyers to negotiate for a better price. If you know the true value of the product and understand the difference between the retail and purchase price, you have a good chance of paying less than the sticker price.
Pawn shop goods, according to ABC News, can be as much as 70% cheaper than those of retail stores, while other pawn shops say they have prices one-third to one-half cheaper than retail outlets. Based on these figures and the quality of gently used goods being close to that of new consumer goods, shopping at a pawn shop gives you a much better deal. Some pawnshops may even offer warranties for tools and other consumer goods sold at their shop. Plus, depending on how new the tool is when you bought it, the tool may still have its original manufacturer's warranty.
Whether you've landed your first interview since your summer job ended at the local burger joint or you're getting ready for a much-needed and well-deserved night out with you're friends, you are eager to shed your t-shirt and sweats for a fashionable grown-up wardrobe. If you don't have much money to splurge on the latest fashion trends or must-haves because you just shelled out some cash to pay for rent, car payment, and food, there are some alternative ways to score yourself a nice wardrobe that will help you put your best foot forward without making a dent in your already-strained wallet.
Some retailers have jumped on the Internet bandwagon to entice customers into buying clothes and accessories online. Often, retailers will throw in a deal to ship the items at a cheaper rate or even ship the items for free. With a few clicks on the keyboard, you have found the perfect outfit for your mom's birthday celebration and still have enough gas in your car to get you there. A popular website for trendy shoppers is eBay. eBay can take you on a shopping excursion while you wait for your coffee at Starbucks. From a pair of knock-off boots that can pass for a pair of Australian Uggs to an almost-Michael Kors pocketbook, online retailers are an shopping playground.
Investing In Quality Pieces
When you buy a few good pieces of clothing, loading up on accessories can enhance the look for your outfit. A pair of black pants or jeans, a casual or dressy shirt can be transformed into a great ensemble when paired with a sweater or a pull-over. Throw in a fun belt and don't forget your foot candy. This technique is great for both gals and guys that are looking to spice up their closet with some fashionable add-ons.
Catalogs Are Fun
Catalog shopping is in style and here to stay. Remember the good old days when fresh faced models graced the pages of catalogs that pedaled upcoming clothes, shoes, and accessories? Now, most of the catalogs are online instead of piling up in mailboxes or doctors' offices. The catalogs give you the ability to see what would look good for the job interview that you finally landed after sending out over 100 resumes. Sometimes, a late-night Internet search can yield coupons or coupon codes to knock down the cost of clothes or accessories.
Reuse and Recycle
Stores like Plato's Closet or other consignment shops are a great way to find high-end clothes and accessories that have been recycled by the folks that wanted to gain back some space in their closet or their taste in clothing has changed. Instead of spending a fortune on a name-brand shirt or bag, you can browse through mountains of clothing and accessories that need a dose of your fashion sense to become the outfit you are going to wear when you shake hands with your new boss. If you are cleaning out your closet as part of your seasonal clothing purge, consider taking those duds to a consignment shop. Not only will you be helping another job or potential date-seeker make a great first impression with the clothes you recycled, but you will have some extra cash to burn a hole in your wallet.
It's never fun to lose your big-ticket items to a leaky pipe, a burglar, or a house fire, and even less joy in learning your insurance won't pay for it. Insurance is supposed to protect your stuff, but when stuff costs a lot, your insurance may not do the trick.
- Rental and homeowner insurance policies usually limit what they'll pay for one item or for a set of collectibles. If your antique necklace is worth $5,000 and there's a $2,500 per-item jewelry cut-off, you get half what your necklace is worth, no more.
- If you buy a high-powered computer for business, your check will be a token payment at best. Home and rental coverage doesn't offer much reimbursement for home-business losses. If you run a home business, ask about buying business coverage. You can buy basic coverage for $50, or more expansive insurance for $500. As it's a business expense, you can probably write the premiums off on your taxes.
- Your policy may only pay cash value--what your property is worth after you depreciate it for wear, tear and age--instead of what it costs to replace it. Even if your homeowners' policy pays replacement value for the building, everything inside may be cash-value only. Renter's insurance can go the cash-value route too.
- If your policy doesn't provide enough coverage, pay for changes. Replacement-value coverage is the ideal, although the monthly premiums reflect the higher coverage value. If your expensive toys are worth more than the single-item coverage, you can take out extra protection for them.
- Make a home insurance review every year. Your policy may cover everything you have now, but after you buy a few pieces of antique furniture and a top-of-the-line TV, you may need more coverage.
- Keep records of expensive purchases. Your insurer won't just take your word that you lost a first-edition Hemingway in the big fire. Sales receipts or photo or video evidence that it's sitting on your shelf will go a long way to proving your valuables existed. For collectibles, having it professionally appraised can prove you're not exaggerating the value.
Don't wait until your TV goes missing to find out the limits on your coverage. Read your policy and find out just what coverage you're paying for. If you can't translate legalese, call your agent and ask. You're entitled to answers.
It's great to have a 401(k), but not everyone knows that you don't have to wait until you're old before they become useful. There are a number of reasons you can take cash from your retirement account. It's basically taking out a loan from yourself. Funds from 401(k)s can be used to pay for a myriad of things, from medical expenses to financing a business to buying a home--although there should be a smart reason to take a loan. No vacations or big-screen TVs.
Among the benefits of borrowing from a 401(k) is that you can set the length of the loan. Via Forbes.com, Investopedia recommends a short term, such as a year or less. In addition, the interest rate (which is repaid to the account) can be much lower than the rate of other consumer loans, especially for those with little or no credit history. Also, there is no credit check and the loan isn't taxed. Hardship distributions, on the other hand, should only be taken when a heavy financial need arises. This money is not paid back to your retirement account. In addition, there is usually a period of six months or longer where no contributions to a 401(k) can be made after a withdrawal, so there is a little extra cash in your paycheck.
A major drawback to borrowing from 401(k)s is that money is not growing, so you miss out on money. Bankrate offers a retirement loan calculator to see how much could be lost. Also, make sure your job is secure before taking out the loan. It must be paid off immediately if employment with the company ends or upon retirement. If you don't repay before retirement, you could be slapped with a 10% federal tax penalty.
Hardship withdrawals are another financing option. They are funds taken out of your 401(k) that do not need to be repaid. These are best used for pressing financial needs or when you have exhausted other money sources. There are restrictions on what the money can be used for. These reasons can vary by employer; some plans don't allow using the funds to buy a home or repay tuition, while other plans allow those uses.
For hardship distributions, the major consequence is that the money may be subject to additional taxation. It helps, though, that the money to repay those taxes can be included in the hardship distribution. You must also go through the process of demostrating a financial need for the withdrawal to be approved. Also, you miss out on more account growth.
Both loans and withdrawals have limits on the amount that can be taken. The IRS offers specific guidance on what those limits are for loans. Check the employer's 401(k) plan information to find out the limits on how much can be withdrawn. Usually there is a percentage that can be taken out based on how much you have contributed to the plan, and sometimes you can take out only enough to cover the exact amount of the bill or expense you are trying to pay.