It's usually the little things that make the biggest difference in our lives. A good meal shared with a good friend. A glass of wine after a hard day. A bubble bath with a little pinterest action. OK...so I'm speakin' chick right now...I think you get the gist though.
In his new book "The Automatic Millionaire", David Bach recounts lessons learned from today's self made millionaires and one recurring theme emerged. Pay. Yourself. First.
Most of us get paid and start deciding what and how much to pay to bill collectors and creditors. Rent, utilities, cell phone, internet, car payment, mortgage, the list is endless, isn't it? We devise intricate budgets to determine how to get everyone paid and have a little left over at the end of each month or each year to set aside in a rainy day savings account. This mindset is absolutely, unequivocally financially backwards and is a surefire way to keep you controlled by your finances instead of YOU controlling your finances.
Bach writes, "Nothing will help you achieve wealth until you decide to pay yourself first … [It] means just what it says. When you earn a dollar, the first person you pay is you. Most people don’t do this.” Don't know where or how to start? Don't overthink it...JUST START!
1) Take it off the top. Have your employer directly deposit 1%, 2%, 5%...you decide what you are comfortable with...into a separate account that you don't see and you don't touch!
2) Consider a pre-tax retirement instrument like a 401(k) or Traditional IRA instead of a traditional savings account. These accounts help to hold you accountable and will deter you from sneaking money out of the account on a whim.
3) Continue to push yourself until you reach that 20% mark. This is you target percentage!
Having financial freedom is yours to take. It's just a decision away...with a healthy dose of self discipline, of course!
You should be getting knee deep in tax forms by now. Forms W-2, Forms 1099-MISC, DIV, INT. The list goes on and on. The deadline for filing most of these informational forms is February 1, 2016. Most companies are churning them out about right now, including our team here at CLO.
So what should you do when you start receiving your tax forms? Here are three quick steps you should take:
1) OPEN THE FORMS IMMEDIATELY. Many people know what's in the envelope the moment they receive it. Most of the time it's stamped right there on the outside. IMPORTANT TAX DOCUMENTS ENCLOSED. Our first inclination is to cram the envelope in a folder labeled "TAX STUFF" and just let the CPA deal with it. I can't tell you how many unopened envelopes we receive here at CLO. However, you should open all of these immediately and make sure they are correct. Copies of these forms are sent to the IRS and the amounts are matched with your social security number or EIN. If you report a different amount on your tax return, this can be a red flag for an audit. Insuring they are correct early can reduce or eliminate massive headaches in the future!
2) REPORT MISTAKES IMMEDIATELY. If you find a mistake on either your Form W-2 or Form 1099, you should call the company who sent the form and report the mistake. Ask them to submit a corrected form both to you and the IRS.
3) FILE IN SAFE PLACE. Now you can stuff the forms in that folder labeled "TAX STUFF". Keep them all together in one place to take to your CPA. The deadline for filing tax returns is April 18, 2016, however, you should get your documentation to your CPA at least a month in advance. This will insure your CPA has plenty of time to prepare an accurate tax return on your behalf.
Guess what? Tax season is upon us again! I can see it now, the beads of sweat forming on your brow as you think about stacks of receipts, missing bank statements, unpaid tax balances from years past, and where did you put that W-2 you received last week?
It's the same thing every year. And when you finalize your tax return in April...or October, you will promise yourself you'll never let it get this bad again. You'll be more organized, more on top of it, more proactive. The truth is, we're busy. We're all busy and we push things off because, in the moment, there are other pressing things that need to be dealt with.
That's where having a capable tax professional can help you, guide you, coach you throughout the year. But choosing a tax professional is much like choosing a dentist...we know we need one....but we really don't want one! So, what should you look for when choosing a tax professional?
1) RELATIONSHIP! Choose someone who is willing to form a long lasting professional relationship with you. Someone who will get to know you, your family, your business, your life. It is only when these relationships are formed that a tax professional can successfully guide and coach you along the way.
2) EDUCATION! Choose someone who not only invested time and money in their initial education but who truly values the continuing education experience. The CPA is required to get a set number of hours each year. Many professionals view this as a check in the box. However, the field is ever changing and extremely complex. It is only the professional who values the continuing education experience that can grow with you and your ever changing life.
"Running water never grows stale, so you just have to keep on flowing."
3) ACCESSIBLE! Ok. I"ll admit it. I"m human! There are times that I get behind! But for the most part, I try to return phone calls, e-mails, and text messages timely. Your tax professional should do the same. This is an extremely deadline driven industry and many times, if your professional does not get back with you in a timely fashion, you may miss an opportunity. Choose a professional who values your time, values your money, and values your opportunity.