money

Nine Strategies for a Debt-Free Life

August 3, 2021 By quadcities Leave a Comment

Detailed below is how you can achieve a debt-free life.

A debt-free life, what would that be like and how do you achieve it? Living debt-free is a life that is stress-free. A stress-free life is something that you can become comfortable with. Once you achieve such a goal, you will never go back.

Detailed below is how you can achieve a debt-free life.

LIVE ON LESS THAN YOU MAKE

This tip sounds simple, but it is not for many people. Most want to keep up with the Joneses. Trust me, the Joneses are not having fun. They are actually broke!

If you make $100, then only spend 80% or 90%. Never spend it all and certainly never spend more. If you are spending more, that indicates you are most likely borrowing to keep up.

STICK TO A BUDGET

Sticking to a budget, once you have detailed it out, is what a debt-free lifestyle feels like. A budget is not a restriction. It actually is permission to spend.

Setting your budget with reasonable spending targets and living within those targets is what freedom to spend feels like. Create enough flexibility.

PAY CASH FOR PURCHASES

When you pay cash for your purchases, actually, you create an environment that will cause you to spend less. When you pull out cash and count it out, it hurts your brain because you actually feel the act of spending.

Using plastic is not the same. Swipe the card and you are done. The money comes right out of your account or if you are using a credit card you will see the bill later when the purchase is just a memory.

SEEK WAYS TO REDUCE EXPENSES

Always look for a more cost-effective way to purchase needed items. Shop when things are on sale but make sure they are really on sale. Many times prices are marked up and then reduced.

ELIMINATE ALL DEBT

Those debt payments are only lining the pockets of the big banks or finance companies that are charging interest in the 15% or more range. Really? In most cases, you are paying for purchases for items long gone.

Do whatever it takes to eliminate these debt payments and put that money back in your pocket. Pay cash. Get off of the merry-go-round.

AUTOMATE YOUR SAVING

This strategy is the key to accumulating wealth. Use the pay-yourself-first method. When you set up automatic savings that comes right off the top of your pay, you will never miss it.

If your company has a 401k or a similar retirement plan, set up a percentage to go directly into it. This way, you do not take it home.

These savings should be invested in good solid mutual funds returning at least 10%. This is a long-term strategy.

CREATE AN EMERGENCY FUND

The thought here is it will rain almost 100% of the time. An unexpected expense will come up. These are items not included in your normal monthly budget.

An example could be an unexpected car repair, or perhaps a job loss.

Prepare beforehand and create a fund with at least three months of expenses, with a goal toward six.

I call this my “peace of mind fund.” It lets me sleep at night.

HAVE LONG TERM GOALS

Setting goals is perhaps the secret formula to achieving success. You need to have professional, financial, family and spiritual goals.

A well-balanced set of goals will be your roadmap. You don’t take a road trip without a map, so don’t go through life without a map. Create long-term goals, and short-term goals to get you to your long-term goals.

Make SMART goals (Specific, Measurable, Attainable, Relevant and Time Bound). And make sure they are in writing. An unwritten goal is just a dream.

SHOP AROUND

Never make the impulse buy. You will overpay! Do some research. Are you getting the best price for the quality product?

Or are you just getting a bargain and it is cheap, but you will buy it three times because it won’t last. Many times it is better to spend a little more and get a higher quality product and only buy it once.

There is no doubt that other strategies can be used to live a debt-free life. These are the tried and true. What is your favorite? Or do you have one you use that is not listed here?

So why wait? Get started now! QCBN

By Steven Calabrese, CPA

Steven Calabrese, CPA is the CFO of Polara Health. He also is the owner/operator of a website known as thebiweeklyadvisor.com, where topics such as budgeting, investing, paying off debt and goal setting are discussed.

Arizona Leads Nation In Personal Income Growth

March 30, 2021 By quadcities Leave a Comment

Wages, Salary Increases Help Drive Income Growth.

Personal income in Arizona rose last year at a rate faster than nearly any state in the country, according to new estimates from the Bureau of Economic Analysis. With a personal income growth rate of 8.4%, Arizona tied with Montana for the fastest rate of growth in personal income in 2020.

“Throughout the pandemic, we’ve sought to stretch and strengthen the social safety net to protect people out of work due to no fault of their own,” said Governor Doug Ducey. “We’ve also adopted a commonsense approach that prioritizes peoples’ health while keeping our economy open. As a result, Arizona’s economy is on the rise, providing higher wages and more opportunities to our citizens. We’ve got more work to do, including continuing to get the vaccine out quickly and equitably. That effort is at the top of our to-do list and will continue to be our focus as we bounce back from the pandemic.”

To see a snapshot of the latest Arizona economic statistics, click HERE.

In all states, increases in “transfer receipts,” a term used to describe money from government sources, were the leading contributor to personal income growth. These increases reflected relief payments provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, state unemployment benefits, and other pandemic-related programs.

In Arizona, however, that wasn’t the only driver of income growth. Arizona was one of just a handful of states also to see a substantial increase in 2020 in “net earnings,” which includes wages, salaries, and proprietors’ income. Net earnings in Arizona rose by 3.5% last year, well above the national average of 0.3%, and the 5th fastest net earnings rate of growth. More than half of states saw net earnings decreases last year.

“Arizona’s business owners and employees went above and beyond last year to protect public health and continue to serve their communities,” said Sandra Watson, President and CEO of the Arizona Commerce Authority. “As a result, we continue to see opportunity growing throughout our state, with higher earnings for workers. Arizona is poised to continue leading the nation in economic momentum in the months and years ahead.”

In addition, the Arizona Office of Economic Opportunity in February released a report projecting strong job growth in the state over the next two years, with the largest gains happening in sectors hit hardest by the pandemic.

1.1 Million Paycheck Protection Program Loans Forgiven So Far Totaling Over $100 Billion

January 15, 2021 By quadcities Leave a Comment

The U.S. Small Business Administration has already forgiven more than 1.1 million Paycheck Protection Program (PPP) loans for over $100 billion, providing an extraordinary amount of critical relief to America’s small businesses just 3 months since the earliest PPP borrowers’ covered periods ended.

“Today’s news is a key indicator that the PPP is working for all small businesses across our Nation,” said SBA Administrator Jovita Carranza. “For any eligible small business continuing to struggle due to the coronavirus pandemic, the Program has re-opened for new and certain existing PPP borrowers, and we encourage you to take advantage of the PPP to keep your workers on payroll, regardless of any local economic restrictions on your operations. SBA is continuing to work around the clock to forgive existing PPP loans and implement the next phase of this vital Program.”

The SBA has so far received 1,346,125 forgiveness applications for approximately $170.5 billion. SBA has made payment on nearly 85% of the applications, forgiving over $100 billion. For the smallest borrowers with loans up to $50,000, 88% have been approved for forgiveness.

The new data comes as the Paycheck Protection Program has recently re-opened as a result of the Economic Aid to Hard Hit Small Businesses, Nonprofits and Venues Act, signed into law by President Trump on Dec. 27, 2020. The Act added operational expenditures, certain property damage costs, supplier costs and worker protection expenditures, such as drive-through areas, ventilation and sneeze guards, as eligible expenses as well.

The SBA provides PPP Forgiveness Submission & Payment Metrics, as well as Paycheck Protection Program reports, online at www.sba.gov/ppp.

About the U.S. Small Business Administration

The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.

New Report: Arizona Ranks Third For Economic Momentum

October 8, 2020 By quadcities Leave a Comment

Arizona is ranked third best in the nation for economic momentum, based on a new report by State Policy Reports. The report ranks states’ economic momentum based on growth in personal income, employment and population. Arizona ranked in the top four for employment growth and population growth. Arizona is tied for third with Montana.

“Arizona’s economy was one of the hottest in the nation going into the pandemic,” said Governor Ducey. “As we follow commonsense guidance to keep people safe and employed, we can continue to be a national leader going forward. Arizona’s hardworking small business owners, innovative entrepreneurs and diligent workforce drive our economy, and we will continue to work together to come back from COVID-19 stronger than ever.”

In addition, the state’s median household income rose by 15.2%, according to new data from the U.S. Census Bureau that compared income growth averaged between 2017-2019 and 2014-2016. Arizona also experienced the fifth strongest personal income growth in 2019, according to data from the Bureau of Economic Analysis.

Data shows there are nearly 177,600 manufacturing jobs in Arizona. In Fiscal Year 2018, manufacturing across the state produced a total gross state product of $47.3 billion and total exports reached $24.7 billion.

Creating a Budget: Ten Easy Steps

August 30, 2020 By quadcities Leave a Comment

et out of debt, build wealth for your retirement, fund the kids’ college, live a life without financial worries. Creating a budget is a best practice of millionaires.

A personal budget is one of the most essential tools needed to create financial independence. A budget is simply a plan. A financial plan. Why don’t you have one? This is the foundation, the most essential building block.

You would not build a house without a solid foundation. You should not plan your financial future without this foundation.

Most people spend more time planning their weekend or vacation than planning their financial lives. Setting good, solid goals is a formula for success. If you don’t have goals, how do you know when you have arrived?

Let’s get started constructing your budget. It will not be perfect the first time. It takes at least 90 days, three months, to begin to fine tune. After the first three months, you will hopefully eliminate all the surprises. Do not get discouraged. This will take some practice. After a while, it will be second nature. You must tell your money what to do. If you don’t, it will leave!

Income

The best place to begin is with your income. You should know what you make. I do find that some folks don’t, which I find interesting. How could you not know?

As we all know, the government gets its share first. I suggest that you take a look at your most recent paystub. It will show you your gross income. Then, social security (6.2%) and Medicare (1.45%) tax comes out. This will be 7.65%.

Then, there will be federal and state withholding tax, followed by other deductions for health care, 401K and other items that are discretionary.

We do have some control over what we can bring home. We can opt out of certain employee benefit programs that are paid for by you, such as life insurance, vision and dental insurance and a 401K deduction.

The amount of taxes withheld can also be adjusted so that you are not over withheld. You also do not want to be under withheld. I have always adjusted this to approximate my tax liabilities. I do not want to overpay or underpay; I just want to pay what I am supposed to. Remember, if you are getting a large refund at the end of the year, you have been over withheld and the government is using your money interest-free. A tax refund is not a bonus or something the government is giving you. It is your money!

Having that little bit extra to take home will allow you to use it to build wealth.

So, now we have our income.

Include the Essentials

As you begin to build your budget, the first items that are absolutely necessary to be in your budget are food, clothing, shelter and transportation. Why budget these first? You must eat and have shelter; if you take care of these first, then you need not worry about eating and having a roof over your head.

Next is clothing because you need decent clothes to get to work and transportation to get there. Of course, the transportation does not have to be a car.

Accumulate Your Bills

Now, you want to build out the rest of your expenses. Do you know where your money is going? Locate all your bills that you paid in the last 30, 60, 90 days. Once you have these in hand, it is time to review them and write down where your money has been going. What have you been spending your hard-earned money on?

Create a list; make it detailed. Eating out, movies, coffee, lunch, cable TV, internet, cell phones, and so on. This should give you a good snapshot of what you have been spending your money on.

Once you have it all laid out, you will be able to see where you have been spending your money.

Track Your Spending

With this new information, begin to track your spending for a week or a month. Write it all down. A pack of gum, a cup of coffee, that new gadget. Did you need any of it or could you eliminate buying it?

This is a good exercise because it begins to make you intentional with your money, and that is really the goal. If you become intentional, you will be surprised as to how much you are actually spending on impulse buying.

We want to eliminate that impulse buying so we can stretch your hard-earned money to achieve building wealth!

A Work in Progress

So, now you have all your spending over the last 30, 60 90 days. Take a close, hard look at it. What do you see?

Perhaps you see a lot of debt payments on credit cards, auto loans, personal loans, mortgage and student loans. The list goes on. These are the very items that are stealing your ability to build wealth.

You most likely will see spending on things you really don’t need or are wondering why you bought them. Take this quick test: Look around and see what you could sell because you don’t use it. Accumulate all items you have that you can put into a yard sale. You will be amazed.

Now, begin to put all of your spending into categories. Begin with the items discussed above – food, shelter, clothing and transportation. Expand out from there debt payments, entertainment, vacations and so on.

As you begin to build out your expenses, be as detailed as possible. You will not get this right the first month. Something will come up that you have forgotten about. Don’t give up, just make the appropriate adjustment going forward. It will take a few months of finetuning until you get it right. And even then, things will pop up.

The important thing is that you are creating a plan for your money. This planning process is going to be the foundation for you to accumulate wealth and financial independence.

Be patient; don’t give up. It will become easier each month.

Adding It Up

We have discussed your income and have created a list of your expenses. Now is the time of truth!

Add up all your income sources and then all your expenses. Subtract your expenses from your income and …

Does It Balance?

Well, this is the moment of truth!

What is the result? Are your expenses higher than your income? Or, is your income higher than your expenses?

Either way, we most likely have some work to do!

What Next?

The good news is you now know where you stand. If your expenses are greater than your income, you know why it always seems that your money runs out before the end of the month or you are living from paycheck to paycheck.

Your next plan of attack is to roll up your sleeves and take a hard look at your expenses. What do you see? Are there things you can do without? Reduce those expenses! Our goal here is to get the income-less-expenses to come to ZERO! Or, better yet, to have something left over to either pay down debt or to increase contributions to your retirement.

It may be an increase to your income can help as well. But, if you are like most, there are expenses that you will be able to eliminate. Perhaps a side hustle might be considered to increase your income.

Looking to the Future

First, let me congratulate you in coming this far. You have now embarked on life-changing habits in building the most important skill in becoming financially independent!

You work hard for your money and up until now, you were just wandering around waiting for something to happen to get you on the path to financial independence. Well, you found it! It is forming the habit of telling your money what to do instead of your money telling you what to do. You have taken control!

Don’t Give Up

One last and final step. Keep at it! The first budget is the hardest. There was so much you did not know about where your money was going. Now you know! Is it not a relief? With this information and your persistence, you will be successful.

Creating a budget month after month becomes easier each and every time you do it. Remember, a budget is simply a plan for your money. With a well thought-out plan, you can achieve anything you set out to do.

If you need help getting started, here is a link to FREE Budget Tools: thebiweeklyadvisor.com/get-your-free-budget-tools/. QCBN

By Steven Calabrese, CPA

Steven Calabrese, CPA, is the CFO of West Yavapai Guidance Clinic. He also is the owner/operator of a website known as thebiweeklyadvisor.com, where such topics as budgeting, investing, paying off debt and goal setting are discussed.

Yavapai County Leads Arizona in Financial Health

January 4, 2018 By quadcities Leave a Comment

Experts say there is more to financial health than simply how much income individuals generate in a given year. It has a lot to do with where you live and your neighbors. SmartAssets, a personal finance company based in New York, did a survey on Arizona counties and discovered Yavapai County came out on top.

Rank	County	Debt as % of Income	Bankruptcies	Poverty Rate	Unemployment Rate	Financial Health Index
1	Yavapai, AZ	1.45%	1.59	15.10%	4.90%	70.56
2	Cochise, AZ	1.28%	1.55	16.90%	6.10%	67.76
3	La Paz, AZ	0.85%	0.89	22.20%	6.00%	64.89
4	Coconino, AZ	1.71%	0.99	19.50%	5.90%	62.89
5	Mohave, AZ	1.43%	2.02	17.40%	6.60%	62.81
6	Maricopa, AZ	1.81%	2.33	16.30%	4.50%	62.02
7	Pinal, AZ	1.83%	2.56	15.80%	5.50%	60.76
8	Pima, AZ	1.52%	2.18	18.70%	4.90%	60.32
9	Gila, AZ	1.31%	1.66	21.30%	7.20%	58.00
10	Graham, AZ	1.59%	1.06	22.90%	6.70%	56.44

“To find the most financially healthy places, SmartAsset took a holistic approach, considering debt as a percent of income, bankruptcies per 1,000 people, poverty rates and unemployment rates in our analysis,” said Steve Sabato, spokesman for the company. “To calculate debt as a percent of income, we divided debt per capita by income per capita. To calculate bankruptcies per 1,000 people, we divided total bankruptcies by the population, and multiplied that number by 1,000.”

The scoring was based on 100 percent being perfect, Sabato said.

AJ Smith, the vice president of financial education, said the studies are helpful for the average person. “We produce these studies to help get people talking about issues like home buying, retirement and investment. This study shows the financial health of each county and can help someone in Arizona see some local perspective on how the counties in the state stack up relative to each other.

He said it is important to know the financial health of a person’s own county. “Counties that perform well in this study will usually have low unemployment, bankruptcy, poverty and debt rates, which sends a positive signal about the local economy.”

“The methodology used to calculate the Financial Health Index, we weighted debt as a percent of income 10 percent, bankruptcies 35 percent, poverty rates 45 percent and unemployment rates 10 percent. We ranked the counties on each of the categories and then indexed each category,” Sabato said.

“In the study, a financially healthy county means people there have low average debt as a percent of income, along with a low chance of being affected by personal bankruptcies, poverty or unemployment,” Sabato said. QCBN

By Patty McCormac, QCBN

The sources used for the survey include: Bureau of Labor Statistics, U.S. Census Bureau, 2015 Small Area Income and Poverty Estimates (SAIPE) Program, Federal Reserve Bank of New York, U.S. Bankruptcy Courts

What Should I Do With My Money?

March 28, 2016 By quadcities Leave a Comment

January is supposed to be the month of positivity and renewal, but 2016 began with one of the worst months the stock market has ever experienced. While everyone is hoping the market finds a bottom and recovers soon, uncertain investors are asking, “What should I do with my money?”

Before we start exploring answers to that question, remember all markets are cyclical and asset cycles don’t tend to mirror each other. As one asset class peaks, there is usually another one crashing, one starting to perform well, and another that has been stagnant for a while. In this article, we will briefly cover some of the asset classes traditionally looked at for investment (stocks, bonds, commodities and real estate) and how they are performing today.

The Stock Market

Stocks, also known as “equities,” are in turmoil today. Most investors have lost 10-20 percent of their portfolio value in the first six weeks of 2016. Could this be the beginning of a larger crash or is it simply a market correction that was bound to happen? If you follow history, what just occurred has only happened three times in the last 100 years. Three times: 1929, 2000 and 2008, foreshadowing that the good times may be over for stocks. Nobody has a crystal ball, but the “big-money” is fleeing the market and seeking yields elsewhere.

The Bond Market

Bonds, which are sometimes referred to as “debt,” may be in favor today, only because they are viewed as a place to park money in times of uncertainty. There are many types of bonds, but in general, the return is fairly low so this is not a place where investors seek higher yields.

The Commodities Market

Oil has been crashing for more than a year, and each time it looks like a bottom has been reached, it goes down again. While not attractive today, it will likely be an incredible investment if you have the staying power to wait for the rebound, as most experts agree that the pendulum has swung too far to the downside.

Metals and mining are benefiting from the “flight to safety” that takes place during times of uncertainty, and could prove to be a great investment today, although with what is happening economically around the world, it is hard to find logical support for the demand. However, this has been one of the poorest performing commodity sectors for many years, so the upside looks greater than the downside.

Real Estate

As an investment class, real estate is proving to be very strong today. To continue comparing apples to apples, all of the asset classes we are discussing here are passive investments. So we are talking about a true, passive investment through a real estate syndication or a platform that operates in the private equity or debt arena. Private “equity” is the private sector’s equivalent to stocks, and private “debt” is the private equivalent to bonds. Today, if you want to invest in real estate, you don’t need to be an expert. You just need to know somebody who is, and purchase shares in his or her projects. Investors provide the capital, the syndicator provides the experience, and everybody profits.

The significant advantages of real estate are the ability to buy an asset below its current value, as well as the ability to influence the asset value. Stocks, bonds and commodities are not like that. This is a secret most investors miss: in a syndication, market appreciation is not required to be successful. You make money the day a property is purchased, and you have the ability to influence value (the real estate market could be flat, yet attractive yields are still available). This creates an environment of predictability, in a much more powerful way than any other investment class.

It is important to note that investors tend to be apologists for whatever they are invested in. Most will bury their head in the sand, hoping the market will turn in their favor, which is simply not a good strategy. Consider zooming out to see the opportunities in other asset classes. If the market does crash, where can you invest to be on the right side of the cycle?

Ultimately, the goal here is to find investment opportunities with great yields. Be assured that predictable, sound options are available if you are willing to explore.

Invest wisely.

By Jack Martin

Jack Martin is a passionate business and family man, a visionary and a people person. He has been building strategic relationships with capital partners, particularly in the real estate investment market, since he co-founded Bakerson, LLC in 2002. His ability to identify great opportunities is incomparable, as is his passion for powerful relationships, and his clients have more fun investing than they ever thought possible. Tweet with @JackMartinCo.

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The scoring was based on 100 percent being perfect, Sabato said.

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