We are only 27 days away from the start of the season of Fall 2017! Cut, minimize, reduce cash disbursements!

Providing you the best tips and practices for reducing your cash disbursements.

Generally during the months of September through December, most business owners and their tax consultants (CPA’s) conduct Year-End Tax Planning and also prepare to Forecast Sales and other financial metrics for the new year; 2018. Happy New Year !!

So, what I always recommend my clients do in the month of August is to review their current personal living expenses and also their business expenses AND evaluate which cash disbursements are completely unnecessary and thus creating a $$$$ leak!

  1. Do I need to pay for ALL of those monthly subscriptions of $10 each and above? How much use am I really making of these software services and applications? Why give my $$ away?
  2. Do I need to subscribe to ALL cable TV channels, even though I rarely watch them? Can I keep one or two instead of 7 or 10?
  3. Do I need to order take out food every night? How about finding simple healthy solutions to cook at home together with family as we chat about how are day went at work or at school?
  4. I love this one! How often do I need to buy a new iPhone or smartphone? Every Year?
  5. Business expenses: I always encourage business owners to sit down with their business team and CPA’s to gain a clear understanding of the return of investment on every $Dollar that is spent. Also, do a margin analysis: there are some products or services that will generate larger profits or margins because the cost or expenses are lower or minimal. This is a must exercise for every business in order to be profitable, and successful in the long term. This will also be the driver for choosing what products or services to focus on and promote for next year.

If you would like to chat further about this topic or any other topic of my Weekly Financial Tips, I invite you to reach out to me. Have a great weekend!

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Providing you the best tips and practices for reducing your cash disbursements.

So you are planning a vacation getaway!

Fun, Fun, Fun !!

Financially, what would I do first?

Depending on the duration of the vacation and the distance traveled, let’s consider the following:

  1. Let’s assume it is in the USA and it’s for 5 days of duration. Therefore, if we can afford it without saving ahead of time, then I would move to step 2.
  2. I would start with “how much, more or less, cash I have available in my bank account.
  3. If my bank account balance is at least 3 to 4 months of personal living expenses AND I have current steady cash coming in every month, then I go ahead and take the 5 days getaway without any hesitation.
  4. Budget? No way!! The moment I prepare a budget for this trip, I am automatically limiting my enthusiasm, my joy and the fun I want to experience. (I know! This is contrary to what many financial advisors would recommend.  Budgets are great for other purposes) The idea of taking this vacation is that if I can afford it, then why impose limitations in my vacation experience?
  5. Because I have the funds available for this trip, I would use my credit card, because I will be able to pay it within a month and possibly earn rewards points.
  6. I would be responsible on the spending on dinners, entertainment, etc. We should have an idea, a range in dollars amount, how much we can play with during this 5 days trip.

If I don’t have the funds available for this trip, it means I will end up using credit cards and this is exactly how I can get into a high credit card debt balance through time = TROUBLE.

So, if my next trip is Paris for 14 days, for example. I would revisit all of the steps above, and if necessary, save the funds months ahead of time, rather than paying for the vacation borrowing with credit card charges that add interest over interest to the unpaid balance.

Last but not least; enjoy the 5 days getaway trip! YOLO!!

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Creating financial habits for kids:

Yes! It’s back to School time! Do you remember those days before the start of a new school year? It was the excitement of a new beginning, new friends, seeing old friends again, new school supplies, joining the cheerleading team or the football team! Remember that?

Remember the school supplies, books, notebooks, pens, etc., it was all brand new, it smelled brand new!

As the shopping for new uniforms and new school supplies begins, it is an opportunity to teach our kids, young and older, about finances. Some parents may have all of the financial resources available to make those purchases and other parents may not!  In my school years, I wanted everything, everything looked beautiful!!  The truth: we couldn’t afford everything!

So, what’s really important? Let’s be realistic: do we need to buy the 5 most expensive pretty notebooks? Do we need to buy 10 uniforms now; how about buy 4 now, and then the rest in 3 months from now? Do we need to buy the most beautiful and expensive book bag?

My suggestion: Have conversations with kids that will allow them to make sound informed financial decisions; conversations that will assist them how to best utilize financial resources and make purchases that make sense!

My recommendation: let’s stay away from using those phrases like: “money does not grow on trees”, or “we don’t have any money”. I would suggest having conversations about “deferred gratification” and teach them to become resourceful in finding the store that offers the item they are looking for at the best lowest price.

I wish all of you: parents and kids, young and older, a wonderful 2017-2018 new school Year!

CPA, Public Speaker, Financial Advisor

 

 

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Who should make up your business advisory team?

So you are a business owner or you want to start a business. Generally, you build a business as the only owner or you build a business with associates. In addition to your business associates or partners, every business owner will benefit from building a team of advisors!

  1. Business consultant: this is your CPA and tax advisor. He or she will provide you with the business and tax consulting and Financial Statements, including bookkeeping. They can generally be the leader or first connection to your advisors team.
  2. Legal: your attorneys will guide you in creating the legal entity, provide you with information about permits and licenses, prepare the contracts, file your trademark applications, represent you in the event of a lawsuit and assist you in succession planning. You will need a team of attorneys since the area of Law is very vast and because of that, attorneys tend to specialize in 1 or a few areas of the Law.
  3. Bankers: a banker will assist you from opening your business checking account to providing you with a business loan or line of credit. You can choose from local community banks or larger national regional commercial banks.
  4. Human Resources and other benefits: these are generally institutions like ADP or Paycheck, for example. These will guide you in the hiring and retention process of your staff and provide payroll services, including workers compensation compliance.
  5. Marketing company: your marketing consultant will assist you in creating an online and offline marketing strategy; one that results in a return on investment on the dollars you spend.
  6. Other financial providers: you will need to purchase Errors & Omission Insurance, property insurance, professional liability insurance, health insurance coverage and set up retirement plans. It all depends on your industry, your product or service, and the number of employees.

Should you wish to discuss and explore further this topic, feel free to reach out to me at mlopez@bymarialopez.com

Who is in my business advisory team?

 

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What are your plans to today Saturday?

Yes, it’s Saturday!

What are your plans for today?

a) You may be working today; one of my best friends is already at the office until 3:00 PM today. In that case: think of the Why and the Purpose of the project you are working on, take a break every 40 or 50 minutes, engage with other colleagues and think of the rewards for your pocket or career benefits.

b) You  may be going to the stores to purchase new items: write down what you want, your budget, how you plan to pay for it, which credit card you will use, and whether it is a Need or a Want.

c) Your Saturday may already be planned for you: children soccer games, birthday parties or doing homework. Enjoy your day and the company of those around you!

d) My always favorite alternative is if none of the above applies: relax, recharge, or be spontaneous, be adventurous!

e) If business, money or finances are top of mind today: block 1 to 2 hours to focus on this item, use simple pen and paper to write down your concerns, your alternatives and I will guarantee you that as you write down, solutions will arise, write those solutions down as well!

Wish you all a fabulous Saturday full of Joy and Financial Abundance!

Abundance Now
Maria M. Lopez, CPA, Financial Advisor, Public Speaker

 

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Lease a Car vs. Buy a Car: What makes more economic and financial sense for business owners?

Should I buy or lease a vehicle for business use?

So, my car lease expires this December 2017, I started today to slowly look at the available inventory (this was the first time I ever leased a vehicle).

The questions most business owners have are:

  1. Do I buy or lease?
  2. Do I buy brand new or certified/pre-owned?
  3. Do I pay Cash or Finance?

Let’s address Question #1: Most business owners believe leasing is best because one can write off the monthly lease payment as a business expense.

I have news for you: Buying makes more financial/economic sense than leasing! (I know, this is contrary to what you have been told before. Just run the numbers: scenario 1 Lease versus scenario 2 Buy.

For more information or if you would like to chat about this topic, contact me at mlopez@bymarialopez.com

 

 

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