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When it comes to planning for your future, and more specifically your retirement, a pension could be the best way to ensure you hang up your boots with a comfortable nest egg to boot.

Pensions come in many flavours (defined benefit, defined contribution, personal pensions, SIPPs, to name a few) and it can get a little overwhelming if you don’t know what you’re looking for, or how to go about kick-starting your savings.

But that’s no reason to bury your head in the sand — your retirement isn’t going to plan itself. And every day you delay could cost you dearly.

So, if you aren’t currently saving into a pension plan, or you don’t really see what all the fuss is about, this blog aims to help.

1. It’s never too early to start saving…but it could be too late

Thanks to that wonderful thing called ‘compound interest’, the sooner you start saving, the greater your overall pension pot and, subsequently, the greater your year-on-year returns.

Let’s say you’re targeting a pension pot of £10,000 a year during your retirement. If you start to save for your pension at 35, you’d have to contribute around £4,300 to your pension every year until you retire. But if you start at 50? You’re looking at £13,000 each year (ignoring for a second that this may be far less than you may need to fund the lifestyle you actually want).

And that’s not taking into consideration the cost of inflation — the true figure is likely to be much more.

Pensions aren’t typically top of mind when you’re in your twenties or thirties — retirement might seem like a lifetime away. But for every year you push your pension planning further down your list of to-dos, you’re leaving yourself with more catching up to do later on — precisely when you might have even more outgoings thanks to a growing family and sizeable mortgage.

There’s no such thing as too early. Unfortunately, there is such a thing as too late.

2. Tax relief

While you could keep your money tucked away in a regular savings account, it’s not going to do you any favours in the long run. Pensions come with attractive tax reliefs that make sure your money is working as hard as it can over your career.

Basic rate taxpayers will get 20% tax relief on anything contributed to a pension scheme, higher-rate taxpayers will get 40%, and for top-rate taxpayers, it’s 45%.

What does that mean exactly? Well, as a basic rate taxpayer, if you contribute £100 to your pension pot, it would only cost you £80 in reality. The £20 that would have been taken as tax is added back into your pension savings by the government instead. (For higher-rate taxpayers, it would take £60 in contributions to make up £100 in pension savings, and for top-rate taxpayers, it would take £55).

The annual tax-free allowance for all pension plans is £40,000 (gross) or up to 100% of your salary, whichever is greater. And the total amount anyone can contribute to their pension, tax-free, over their working career is £1.055m (this is called the ‘life-time allowance‘).

Tax relief on pension schemes is a huge incentive to save. If you have to rely on the state pension alone (up to £168.60 per week/£8,767.20 annually) it isn’t going to get you very far…

3. You might need more than you think

43% of the public don’t know how much they’ll need to retire comfortably. Not to burst any bubbles, but it’s usually much more than you think.

Although half of us estimate that £100,000 is enough to have a comfortable retirement, according to recent reports, the average recommended amount is actually £260,000–£445,000. (And remember —  ‘comfortable’ is entirely subjective.)

Think about what it would take to sustain the lifestyle you’re used to at the moment, or make it better. Most people look forward to their retirement because they imagine an improved quality of life, not one where they have to account for every penny spent.

So the big question to ask yourself is “what am I saving for?”

Do you want to send your kids to university or help them get a foot on the property ladder? Do you or another relative need support to pay for medical or long-term care? Or do you want to enjoy what you’ve earned and splurge a little? (after all, you’ve earned it).

Determining the big events in you and your family’s future, and what it is that you’re saving for, will help you better plan how to get there, and how much you’re going to need along the way.

Those that fly blind when it comes to how much they’re saving, or who don’t save at all, could end up living a retirement lifestyle that’s very different to the one they’ve dreamt about.

4. Employer contributions

The good news for UK workers is that as of 1 February 2018, every employer with at least one employee is now legally obliged to enrol all eligible members of staff into a workplace pension scheme.

Automatic enrolment applies to anyone working in the UK aged between 22 and the State Pension age, who earns at least £10,000 a year.

For the 2019/20 tax year, the minimum auto-enrolment contribution for workplace pensions has risen from 5% to 8%, and within that, employer contributions have gone up from 2% to 3%.

This is another significant advantage of saving into a (workplace) pension — your employer is helping to build up your pot at no expense. If you have the chance to contribute to a workplace pension — take it!

5. Turn your retirement dream into your retirement reality

Everyone has their own idea of what retirement looks like — it’s as personal as it gets.

Whether it’s spending more time with loved ones, going on that once-in-a-lifetime holiday, buying a property by the beach that you’ve always dreamt about, or filling your time doing more of the hobbies you’ve neglected, your retirement should be something you look forward to. And after decades spent working hard, why shouldn’t you get to live it the way you’ve always imagined?

The problem is, while it’s easy to dream about the lifestyle we might want, it’s much harder to make it a reality.

But by making smart financial decisions today, including saving into a pension, you’re setting yourself up to reap the rewards when you finally reach that all-important milestone.

If you aren’t already saving into a pension — there’s no time like the present.

Richard Wazacz is CEO of financial advice firm Octopus Wealth.

Octopus Wealth is home to a fast-growing team of highly experienced financial planners.

With a jargon-free, transparent and straightforward approach, they provide smart financial advice and tailored financial planning for those who want to do more with their money.

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As a business owner, you may find yourself in need of capital for expansion or simply for unexpected inventory purchases due to increased demand. In pressing situations like these, obtaining a bridging loan can help you scale through.

What is a Bridging Loan?

A bridging loan is a short-term solution that enables you to fund your business until you secure a more permanent source of finance. It is a quick-to-fund loan that you can take on to settle time-pressing expenses. When you obtain a bridge loan, you should pay it off quickly since the interest rates are quite expensive.

Commercial bridging loans differ from those secured by home buyers in the sense that the proceeds from the former are always channelled toward business expenses.

There are two types of bridging loans you should know:

  • Closed bridge loans: If you can determine the time when your income flow will be stable, a pre-specified date will be set for the repayment of your loan. When a concrete repayment date is agreed upon, the financial option is known as a closed bridging loan. When you miss the deadline for the repayment of a closed bridge loan, you will have to face some penalties.
  • Open bridge loans: these are used by borrowers who are not certain of when their expected future finance will be available. Open bridge loans do not have a fixed repayment date. You should go for this option if you would like to have more flexibility.

However, you should note that closed bridge loans come with lower interest rates since they allow lenders a greater degree of confidence in the repayment. As a result, lenders are more likely to grant a closed bridge loan.

It is wise to go for business bridging loans if you have a pressing deadline that could cost you a major business opportunity or may mean the success or failure of your small business.

Pros and Cons of Bridging Finance

Before you go ahead to secure a bridging loan, you should know the advantages and disadvantages that come with it.

Pros:
  • Bridge loans enable you to act fast so you don’t miss out on a business opportunity before you achieve a more stable income flow.
  • You can get a bridge loan even if your credit rating is low, as long as you can offer a decent collateral.
  • You may be allowed to defer interest payments until you repay the loan.
  • Most importantly, you can apply for a bridging loan very easily. You could be preapproved and receive the funding within a few days.
Cons:
  • Bridge loans often have higher interest rates and fees than other types of funding available for small businesses.
  • A bridge loan is a short-term funding option. You need to act fast to secure more permanent funding before the repayment period expires.
  • As with every loan, a collateral is required.
  • Sometimes, the interest on a bridge loan compounds monthly. You could end up paying a lot more than you expected if the project at hand overruns.
Conclusion

Smart business owners do all they can to ensure that they keep afloat and ensure expansion. Securing a bridging loan can aid the smooth running of your business until such a time funds become available again.

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Why do you want to start a business?  There are plenty of answers – but the answer that you give might tell you a lot about the business you should be running.

So if you just want a little extra money, perhaps you should consider a sideline. If you want more freedom and the chance to be your own boss, perhaps you should leave your 9-to-5 job and start something new. If your answer is that you want to use a skill or area of expertise that you already have things are simpler – but otherwise your first need may be deciding what kind of business to start.

You need a big business idea

If you don’t know what kind of business to start, you may need to do your research. Successful business ideas are often ahead of the curve.  Look at the trends and technologies on the horizon and how you might move into them. Innovations related to home technology for example might be the next big thing. But if you don’t believe that you can take on the likes of Apple and google, don’t despair. There are business opportunities from cleaning to dog walking that don’t require genius or multimillion budgets.

If you have a business idea that isn’t completely new, it could still be the basis of a thriving business. It is has been done before, don’t despair. Simply look at the current offerings and focus on how you can create do it better, cheaper or faster. For example, window cleaners have worked with ladders for generations. New technology allows cleaners to keep their feet firmly on the ground, and use extendable pressure washers to clean more windows in less time.  It can open up new customers too – the new style of cleaner can work on widows conventional cleaners simply could not reach.

You need market research

Before you launch your new business, whether it is a groundbreaking new concept or a new take on an old favourite, ask the key questions. Is anyone else already doing what you want to start doing? If not, is there a good reason why not? And perhaps even more important – what will people be prepared to pay?

There are plenty of ways of doing this. Start  by looking at your potential rivals or partners and put yourself in the position of a customer – you can make telephone calls or do your market research face to face. Try to get a feel for the costs involved and the services provided. Then start talking to potential customers. Find out what they would be prepared to pay for whatever it is you are thinking of offering.

You will have to be scientific about this. You can’t just do online research, or only talk to people you know. This is likely to be useful for planning the questions you will ask in the real world, to real potential customers.  If you can, let people see your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed, and their feedback is valuable to fine tune your offering.

Don’t expect everybody to like your big idea, and don’t be discouraged if some people are negative. But if you start seeing a pattern and find that not enough people share your enthusiasm, it is probably time to slow down and take the time to consider carefully what they tell you. Figure out why someone liked or didn’t like something. How could you make it better? What would be a better solution?

Also, one way to help you get through negative feedback is to create a “wall of love,” where you can post all of the positive messages you’ve received. Not only will this wall of love inspire you, but you can use these messages later when you begin selling your product or service. Positive reviews online and word-of-mouth testimonials can help make a big difference.

You need a business plan

A business plan is simply a written description of how your business will  work. It is important, because it will help you work out on paper all the details which you need to cover in the real world. So your plan should show how you will make money and who from, and how you will need to invest to do so.

This is not something to rush. Start with the name of your business. This can be crucial, especially with the web. Making a unique memorable and searchable name is essential for any business,  which is harder than it sounds. This article can help you avoid common mistakes when picking a name.

Next comes an executive summary. This is a high-level summary of what the plan includes, touching on the company description, the need the business is solving, the solution and why now. Being a summary, you should probably complete this section last.

Then provide a business description. What kind of business do you want to start? What does your industry look like? What will it look like in the future? What are your own strengths and weaknesses, and how will they affect the business you want to run. So if you are a qualified engineer, you will have a natural aptitude for an engineering business. It is a core strength which you should include.

Look at the market you will serve.  What exactly is your target market, and how can you best sell to the people who make it up? Will you go door to door, open a shop, set up a website?

Follow this with a competitive analysis. What are the strengths and weakness of your competitors, if they exist, and how will you beat them? If your business is so innovative that you will not have any competitors, how is the need you will answer being answered now?

Only now can you define your product or service. Define what you will do or produce,  and create a budget for that product or service. You will need to go into every detail – after all this will be the core of your new business.

Operations and management plan. How will the business function on a daily basis? Who will do the work? How will they be paid?

Then look at the finance. Where is the money coming from exactly? When and how will it reach your bank account? What sort of projections can you create? You need to show what the profits and the costs will be if you meet your sales targets – and what you will do if you don’t.

You need a team

You may be able to start a business yourself, but if you are serious about taking it further you will need a team who share your vision. You may have to start ith part timers and even freelancers who can work as needed but sooner or later you will need to take on full time people who can offer the dedication you need. You will be working hard to build your business, you want people who can help. In return, they will want paying. Good people are never cheap  – but you really can’t afford the other kind.

You need funding

Once you have a business plan, and made full use of it to fine tune your idea, you are ready to start looking for funding. You will probably have to put up your own money to set up your business, but you will probably need to borrow as well. Finding lenders willing to advance funding for a business startup can be difficult, but things can be a little easier if you have a good business idea and a professional looking business plan.

There are plenty of options. Friends and family may be one place to start, but you should also find out about government grants, crowdfunding and angel and venture capital investors. If you have a strategic partner or customer lined up you may be able to approach them. If they want your product or service enough to pay for it, there’s a chance they’ll want it enough to fund it too.

You need help

Business finance has moved on a great deal over the last few years and is no longer simply a matter of calling on your bank manager. The good news is that there are now many specialist and alternative lenders who will be keen to do business with you. Finding the type of finance you need to get your business plans up and running, might mean calling in a business funding expert who can look at the whole business lending market, and find those lenders who can help entrepreneurs with a good idea, and provide the solutions that will help your business be a success.

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International taxes can be complicated and also hefty if you’re considering international trade.

The taxes you should be aware of are taxes on your profits, VAT, custom duties and any taxes that are local to the overseas country in question. It is advisable to seek professional assistance from a chartered accountant so you can be sure that you are paying the right amount and handling everything above board.

First and foremost, let’s start by taking a look at the international tax on profits. You will pay tax on your profits in the normal way you already do if you are simply importing goods so that you can sell them in the United Kingdom. You should not experience any international tax complications, although it is a good idea to check with your accountant to be sure. Head to www.qaccounting.com to find an expert if you have not got an accountant yet.

However, if you have an international presence, for example, if you establish a local operation in another country to help with your exports, then you will find that you become liable to international taxes. This highlights why international tax planning is so important because you will need to separate your international profits from your UK profits, as both will be subject to different levels of tax. Needless to say, this can be extremely confusing, and mistakes are expensive, so search for the best-fixed fee accounting services for assistance.

You also need to take VAT and customs duty into consideration. This is largely dependant on who you are trading with, i.e. whether it is a country in the EU or one that is based outside of the EU. Let’s start with EU countries. In order to avoid paying any additional customs duty or VAT, you can ask your supplier to zero-rate the goods for VAT. This means that you still make a VAT declaration, but you don’t have to pay this. Of course, you can only do this if you are VAT registered.

It is worth noting that there is excise duty payable on some goods, including tobacco and alcohol. If you are exporting to the EU, you can also participate in the zero-rate option that has just been mentioned. If not, you should refer to the UK VAT rates that are in place unless you supply digital services, in which case you need to charge the VAT rate in the consumer’s country.

If you are dealing with countries outside of the EU and you are importing goods, you will pay the UK’s normal VAT rate. However, there may be excise duties and customs duty to pay as well; this all depends on where the goods are going. When it comes to exporting goods to countries outside the EU you can zero-rate these sales usually, however, you may have to pay international taxes in the country in question.

Hopefully, you now have a better understanding of the different taxes that are payable when it comes to international taxation. The best thing to do is use the services of a quality chartered accountant to ensure no mistakes are made.

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Earlier this month, TSB notified their members of a policy that makes them the first UK bank to offer a comprehensive fraud refund, regardless of the type of fraud that takes place.

While there are already protections in place to ensure that defrauded consumers can get their money back in some circumstances, there have been plenty of cases of people needing to fight tooth and nail in order to be reimbursed, and others where they haven’t managed to receive a refund at all. That’s because most banks will only offer refunds for certain types of fraud, leaving lots of victims out in the cold.

Named the ‘Fraud Refund Guarantee’, TSB have said that their new offer will help to protect consumers:


“Put simply, our guarantee means that from now on, if you’re an innocent victim of fraud, we will refund the money you lost from your TSB account. This goes further than any type of fraud guarantee offered by any other bank and is another example of our commitment to fighting fraud.”

What protections are already in place?

Traditionally, people are able to claim money back for fraud in cases where money leaves their account without their authorisation. This means that anyone who falls foul of a scammer or confidence trickster who convinces them to send money out of their account voluntarily would be left out of pocket.

Hopefully, TSB’s new guarantee will work in a ‘no questions asked’ manner – whilst it may be necessary to prove that a fraud has taken place, the victim shouldn’t then have to go to further trouble to prove that they aren’t at fault.

What does the guarantee cover?

As mentioned, it covers all cases of fraud, including those where a person has been convinced to move money out of their account for fraudulent reasons. It should go without saying that this only applies to people who move money out of their account without knowing that a fraud is taking place:  anybody who is a knowing and willing participant in the scam will lose their eligibility.

There is also a limit of £1 million (per claim) for cases where the customer has been duped into paying the fraudster voluntarily. As far as we’re aware, there’s no refund limit for people whose accounts have been accessed without their knowledge.

Why should people without TSB accounts care? TSB Launches Fraud Refund Guarantee

Firstly, this is a great win for consumer rights: it’s often felt unfair to us that people can get tricked by increasingly complex scams and still have no recourse. Secondly, modern banking is an incredibly competitive world. High street banks are falling over each other to give you the best service that they can and convince you to keep your bank accounts with them. This means that innovations introduced by one bank are often copied or even improved by competitors who don’t want to be behind the curve. It would be great to see this as a first step towards all banks offering similar protections for their customers.

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These days, there are so many products and services to choose from, that you have to set yourself apart.

Businesses are being judged by their ethics as well as the products they present. In this environmentally conscious world, it’s never been more important to be green fingered. But how can we do this in a way that helps improve our ethics, but also serves the business in that fundamental method of money saving?

Go Paperless

If you haven’t already, it’s time to truly embrace one of the major methods to cut back on your carbon footprint. Going paperless can seem like a very difficult idea to integrate. But as so many people are using their laptops and tablets for business purposes, not to mention the fact that the BYOD (Bring Your Own Device) process is up and running in many companies, going paperless needn’t be a difficult process. Granted, there are plenty of people who need to use paper for their own personal reasons, but you can switch to post-consumer waste (PCW) paper and paper products. PCW paper is made entirely from recycled paper. While you may look for the recycling symbol on a box of paper, it’s not as strictly regulated as you think.

Go Biodegradable

There are many different ways to use biodegradable products in your business, it’s not just using all natural products in aspects of the business that you don’t see significant results from. While there are biodegradable cleaning products out there that will minimise exposure to toxins, from the perspective of a business, you could get in contact with a manufacturer of biodegradable plastic tokens. When you are looking to save money when buying the round, plastic tokens, any unique form of currency like this can help to minimise overheads because it doesn’t encourage the idea of spending physical money. There are suppliers that deal with exclusively biodegradable office products and it’s amazing how many different items of stationery are biodegradable. In fact, from stationery to files and cups for the vending machine, the options are endless.

Using Alternative Energy

One of the most common methods that businesses try to go green is by using alternative energy sources. In many areas, you can sign-up to purchase green power from your utility provider, which is generated from renewable energy. There are so many renewable energy sources out there, such as hydropower, solar power, and even plant power. Even though it can increase your electricity bill by a small percentage, when you look at your business from a subjective viewpoint, this increase in cost can be offset in other ways, like alternative methods of transportation or buying used office furniture.

Green Web Hosting

When looking to improve your business budget, working with green web hosts that exclusively endeavour to reduce carbon footprints is one of the best ways to get ahead of the game. Many companies now purchase carbon offsets and energy certificates so they can reduce the environmental cost of their servers. The great thing with green web hosting companies is that they cost the same, or in some cases even less than those that run servers with fossil fuels.

Get An Energy Audit

There are numerous companies that will perform energy audits around your office for free. By pointing out the major errors in your office environment, and highlighting where you can benefit from additional insulation, or purchasing more carbon footprint friendly items, you could save up to 20% of the costs of your energy bills. 20% is such a significant saving and the fact that an energy audit can be done for free; it’s an easy way to really cut down your business expenses.

Install Energy Efficient Appliances

If you want to start now, purchasing compact fluorescent CFL or LED lights will make a significant saving. While these lights cost more upfront than standard bulbs, they will last a lot longer and use less energy. In fact, you can save up to £150 in energy for each bulb! So even if you don’t know where to begin, by making a few simple light bulb swaps, you will reap the benefits!

Being environmentally friendly comes with a lot of additional costs, but the great thing is that over time you will definitely save more money than you will spend. For those businesses that are tentative about jumping into this way of thinking, it’s common sense because it will save your business money. But as so many people are looking to purchase from ethical companies, this does your business a great service.

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Many budget conscious and ambitious individuals choose to escape the constraints their historically repressed salaries have placed on their lifestyle by going into business for themselves.

However, running a small business is the very definition of the long game. In order to become profitable quickly, startups need to storm out of the gate with their metaphorical guns blazing. They need to promote themselves in ways that will make them visible to the demographics that matter to them. However, we all know that weighty overheads are anathema to a small business that’s just finding its feet.

That’s why we’ve compiled this list of budget friendly ways in which new startups can promote themselves, grow their brand and hopefully take their small business to the next level without breaking the bank…

Attend networking events

Networking events are a wonderful opportunity to meet like minded people, learn and build contacts in a relaxed, socially charged atmosphere. They can work wonders in raising awareness of your business, your brand and your skillset. However, remember that they are not an opportunity for you to pitch. By all means go armed with some great business cards- check out business card printing from RCS Digital Printing. Nonetheless, you should go in expecting a meet and greet and nothing more. Go in with the mindset you’d bring to any social event. Be friendly, approachable, and meet people with the goal to build relationships. Conduct yourself well and the business relationships will sort themselves out when you’re ready to follow up.

Look for co-branding opportunities

Your brand is only in its infancy, but that doesn’t mean you can’t bring value to your market. You may want to consider allying yourself with another, more established brand with which you share that same market. Co-branding has a wealth of success stories of which yours could be the latest. You can introduce your brand and your product to a loyal following who are predisposed to like you by virtue of your association with a brand to which they’re already loyal. What’s more, you can build a strong relationship with your co-branding partner and bring value to their business, strengthening your foothold in the local business landscape. Speaking of which…

Get involved in your community

Involving your business with local community events is a great way to bring value to your brand and the area in which you operate. Helping out with local charitable causes, sponsoring local events and sitting on local boards are all relatively low cost ways in which to gain major traction in the locality which will also give your local SEO a nice boost.

Write content that builds value for your target audience

Finally, content marketing is not only a cost effective way of improving your SEO it’s also a great way to build trust in your brand and establish yourself as an authority in your field. However, in order to work well it needs to be of real value to the reader. It needs to provide them with useful information or help them to overcome a commonly encountered problem.

That means no fluff, no clickbait and nothing that doesn’t deliver on the promise of its headline. Just well written and expertly researched content that showcases your knowledge, experience and passion while also facilitating a useful function for the reader.

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If you were made redundant or taken ill, would you have enough savings to see you through?

The First National Bank of Omaha released its 2019 Savings Survey results which indicate that 23% of Americans do not put any money towards savings from their paychecks. The survey was based on Americans’ priorities, habits and behaviours with regards to saving.

The Executive Vice President (Consumer Banking) at the First National Bank of Omaha noted that setting and being consistent with financial goals is crucial. With the current increase in debt and the standard of living, everyone must have a savings plan.

Savings Survey Findings
  • Seventy-four percent of Americans save 10% or less of their monthly paycheck
  • Twenty-three percent of Americans save nothing at all from their paycheck
  • Twenty-four percent of Americans make monthly withdrawals from their savings account
  • Forty-nine percent (another word for a report) that they only have enough money saved for up to 3 months of living expenses
  • Thirteen percent say they do not have as much money saved as they would like because of student loan debt
  • Other thirteen percent say they cannot save enough money due to credit card debt
  • Twenty-six percent report that they do not have much in savings because of the high living expenses

On a positive note however,

  • Sixty percent of Americans state that they are consistent with their savings so that they can retire by the time they turn 65
  • Twenty-seven percent state that retirement is the major reason for their savings
  • Forty percent are majorly saving right now for their emergency fund
  • Twenty-five percent of Americans have never withdrawn money from their savings accounts
  • Thirty-nine percent say that they will put this year’s tax refund into their savings account

The above survey results show that there’s still a lot of work to do with regards to saving money. That involves creating an emergency fund and paying off your student loans and credit cards. The earlier you act on these, the sooner you’ll reach your financial goals and make the necessary investments for a comfortable retirement. Start taking action today with the following tips:

Create Your Emergency Fund Now

Many financial experts agree that after meeting your basic needs, you must create your emergency fund. However, much debt you are in, your emergency fund is a priority. There’s no telling when an emergency could come up. And there’s nothing worse than having an emergency and no money to handle it.

Why Do You Need an Emergency Fund? Unforeseen Medical Expenses

Exercising regularly and eating a healthy diet are commendable practices that enhance your health. This does not mean that you can’t face a medical emergency. Sometimes, despite your efforts, unexplained illnesses could still show up. Also, accidents happen without notice. You need to be prepared for such eventualities.

Sudden Unemployment

You could lose your job at any time for whatever reason. Some of them include layoffs, wrongful (or rightful) termination, physical or mental illness and business shutdown.

Car Repairs

If your car suddenly breaks down, it could affect the commute to your job and your other responsibilities.

Major Home Repairs

Unplanned home repairs will require immediate attention. For example, if a large branch fell and made a hole in your roof, or if your heating system stopped working right before winter.

Peace of Mind

Financial distress can cause many sleepless nights and have an impact on your physical (hypertension) and mental health (depression and anxiety). Knowing that you have something to fall back on in case of an emergency will give you a piece of mind.

How Much Should You Save In Your Emergency Fund?

The most popular school of thought is to save six months worth of living expenses. However, there are different recommendations made by financial experts. They include:

  • Build your emergency fund to $1000 first and then focus on paying off your debt. When you’re debt-free, continue to build your fund
  • Three to six months worth of living expenses
  • Two thousand to three thousand dollars for minor emergencies

Don’t let any of these figures and suggestions intimidate you. Any money saved towards your emergency fund is better than nothing, so save as much as you can.

How to Start Building Your Emergency Fund
  • Choose a high yielding savings account
  • Create a budget. This will help you to determine how much you can realistically save in your emergency fund. It will also show you whether you have any surplus income.
  • Decide what amount you want in your fund and start slowly. Although experts recommend 15% of your monthly pay, start with what you can. Even $30 per month makes a difference. You can increase the amount as your pay increases
  • Schedule automatic payments from your checking account into your emergency fund account
  • Deposit any surplus money from your budget into your fund account
Pay Off Your Educational Loan Debt

The survey found the 13% of Americans say that their student loan debt hinders their capacity to save. Paying this loan quickly would help them start saving sooner. Student loan refinancing is the best way to bring down the interest rate. Refinancing means that you can get a new loan with a low interest rate and pay off your old student loan.

According to Nerd Wallet, to qualify for student loan refinancing, you require:

  • A credit score in the high 600s
  • A steady cash flow
  • In case you don’t meet the above, a cosigner who qualifies is your best bet

Several student loan lenders offer interest rates in the range of 2.5% to 3%. This is significantly lower than the interest on private student loans and federal student loans. Student loan financing gives you the liberty to pay fixed or variable rates with a loan period of 5 to 20 years.

The absence of prepayment penalties allows you to make a lump sum payment or raise the amount of your monthly payment. You could add an extra $20 or $40 to your payments to speed up the repayment process.

Pay Off Your Credit Card Debt

Credit card debt is another reason that Americans aren’t able to save. So, how can they pay off their debt faster? Consolidating your credit card debt can help you pay it off faster. You can do this using a personal loan from realisticloans.com. This is also referred to as a credit card consolidation loan.

Using this loan, you can consolidate your credit card debt into an unsecured personal loan. The loan term is between 2 and 7 years. The amount that different lenders offer varies between $1000 and $100,000.

With a personal loan, you will constantly pay the same interest rate because it is fixed. You won’t have to worry about increasing your rate.

For every reason that Americans are not able to save money, there is a possible solution. The emergency fund is a priority and however little money you’re able to save, put it in that fund first. To make it manageable, you could build up a buffer of $1000 first, then continue with it later.

For the student loan and credit card debt, hopefully, the above information will help you make your payments faster so that you can start saving for retirement as soon as possible. Remember, it’s never too late to start.

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While entrepreneurs have many skills which they put to good use when setting up in business it can be easy to focus on the product, sales and marketing and overlook setting up the basic structure properly.

One of the areas entrepreneurs often attempt to cut costs when they first start up is accounting. They try to do the finances themselves thinking it will be simple, and it may well be in the early days.

However to give your business the best start in life and the best chance to grow and be profitable then it’s important to get the finances right from the very beginning. Understanding finance is not a skill which every entrepreneur has but it’s one which every business needs.

Burying your head in the sand and putting the books aside to do “on a rainy day” will be of no use to your business if you don’t have the financial knowledge to make sure you are correctly recording everything you need to.

For this post we asked the team behind Crunch to give us their top account advice for business owners. Here’s what they have to say:

Hiring an accountant

The first advice for entrepreneurs is to hire an accountant. No matter how good you might be with the numbers an accountant can prove their value in many ways, not to mention freeing up your precious time to focus on running the business.

A good accountant will have knowledge and experience which they can share with you throughout your entrepreneur journey, including advice on taxes and other financial specialist areas.

Accountants can spot patterns in your finances pointing to areas where you are spending too much and can identify potential problems with your money before it’s too late to resolve it. They can also help you through financial difficulties with expert advice.

They can keep you updated on any changes to legislation and can offer advice on issues such as payroll as your business starts to grow. A good accountant is not just someone who does your tax return; it’s someone who plays a vital role in the business growth.

Learn about business finance

Being an entrepreneur is all about learning new skills and having some financial knowledge so that you know what your accountant is talking about and can act on their advice, is really important.

While you will be relying on them to work for you, you should also make sure you make the most of their knowledge by learning from them so that you can understand their reports and know about your business cash flow and profit and loss levels.

Choose the right accounting system

When you first start out it’s important to keep the right records so make sure you have plans in place for an accounting system. If your accountant has one of their own that makes life easier but you still need a way to keep track of things like receipts, invoices and expenses before you hand them over to the accountant.

There are many online accounting systems now which make life easier for new entrepreneurs to record and keep track of finances so look at these as an option, particularly for a small business in the early stages, with simple accounts.

Ultimately an accounting system is only as valid as the information you put into it so you still need to make a commitment to work regularly on your books and accounts to make sure they are up-to-date and recorded correctly.

It may be that you opt for a simple manual spreadsheet to help keep records – as long as you choose a system that works for you and allows your books to be kept accurately so you can pass them on to your accountant, that’s the most important thing.

Hire a book keeper

Some businesses prefer to hire a book keeper to keep all the records for them and then only use an accountant at the end of the year to file the tax returns. It’s really about what suits your business and how confident, or not, you are in dealing with the financial side of the business.

Summary

As an entrepreneur there is already so much to take on and learn that dealing with all the financial recording is really one more headache that is actually the simplest to pass on to the professionals.

Whether you opt to do the books yourself and them pass them to an accountant, or use a book keeper to do that side for you, it’s important that you know your business finances are accurate, up-to-date and that all legal and tax requirements are being handled and met.

Rather than trying to do everything yourself, the best accounting advice is to hand over the accounts and all financial recording to a professional accountant to give your business the best possible start and to free up your time to be the entrepreneur.

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If you are looking to keep your finances in order, you have come to the right place.

In this article, you will find three simple steps that will help you to keep your finances in the best possible shape. We know that this is not an easy task and one that many people struggle with at some point in their lives which is why this article contains some of the simple information that you will find useful when looking at your finances. Keep reading down below to find more information on this topic.

Set A Budget

The first step that you need to take is to establish your budget. This is quite a straightforward task as it is what comes after that most people struggle with. To make your budget, you need two things: A list of all the money you receive, and a separate list of all the money you have to pay out in the month. To do this, you should get a copy of all your bills such as electricity, gas, water and so on, writing them all down into one list to work from. Once you have done this, you can then proceed to take off all the costs one at a time and work out what you are left with. Whatever the total is at the end of the page is what you have to either put into savings or spend on luxury items for you and your family.

Sticking to the budget is where a lot of people have problems. It is easy to create the budget and see what you have, but when it comes to putting it into practice, you might find yourself borrowing from allocated money. Try not to do this because if you do, you could end up in a worse position than before.

Figure Out The Worst Case

You should also be figuring out what the worst case scenario is going to be. For example, look at the minimum money that will be coming to your home and work out your budget from this. Make all the bills slightly higher than they should be with the lower amount of income to show you what the worst case looks like. This way, you know that you can cover everything even when things are a little tougher than usual. By doing this, you are helping to keep your finances in order, as well as giving yourself the peace of mind that you need throughout the rest of the month. You will also find that by planning for the worst, you can make plans for things like alternatives to bankruptcy and other scenarios you do not want.

Look At Things You No Longer Need

If there are items in your home that you know you no longer need, then you should look into selling them as soon as possible. This is going to be especially important if these items use electric or other utilities because this will add onto your bill. Not only will you save yourself on future costs, but you will also have a little bit of extra money for right now by getting rid of your old items!

We hope that you have found this article helpful, and now see how you can keep your finances in order in three easy steps.

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