In the United States, we spend little to no time working on figuring out how to manage our money, and in general, school tells you nothing about budgeting beyond the very general ‘having a budget is important’. Is it any wonder, then, that we live in a society where so few people have any savings account to speak of?
To make matters worse, we live in a country filled with nothing but easy credit. Do you want to buy something from Target? Why not get a Target card (actually a Target CREDIT Card, but that word has negative connotations, so we’ll call it something else)! Do you want to buy a guitar online from Guitar Center or Sweetwater Music? Don’t pay for it all now, but take out a credit card with the company and make twenty-four monthly payments, while we eat away at your credit score and add interest! It’s a great thing, except it really isn’t. You ought to be waiting to buy those things outright. In fact, with the possible exception of college loans (depending on your degree. Really, if you’re going to get a degree in something that isn’t marketable, you’re probably better off just skipping college and learning a trade skill than you are taking out college loans) and with a home loan (and int his economy, even this is iffy), you should avoid debt like the plague, and whenever you accrue any, you should pay it off as quickly as you possibly can in order to make sure that you’re in good financial standing.
However, what with our general lack of budgeting skills, how are we to do this? Well, if you have trouble managing your money, you may find value in hiring personal accounting firms to help you do so more effectively. Here’s just three things they can help you with.
1. Filling out taxes and getting all the deductions possible.
Filling out taxes is a pretty awful experience, but when you do it your first time, or when you’re trying to save yourself money or get the most money back in your tax return, it can quickly become a nightmare. Then, of course, there’s the fact that nobody actually ever teaches you how to, you just get dropped into the IRS website with their questions about deductions and withholdings and what is and isn’t a valid business expense.
You can try and wrap your head around this, and you may have some degree of success, but you can also save yourself a lot of time and hassle and just hire a CPA firm to help you figure out how to save yourself the most money you can from falling into the hands of the Internal Revenue Service. That’s what I’d do, personally.
2. Paying off debts
If you’ve never had debt, congratulations! You’re a very lucky person. Or you’ve never gone to college, one of the two.
For everyone else, you’re going to hate having debt. There’s a lot of temptation to make minimum payments and just try to get to the forgiveness range, where after making payments for so many years, they just drop it. This just damages your credit, instead of your pocket.
Any useful accounting advisors that you may hire are going to tell you that the very first thing you need to do is pay off the debt, so that it stops accruing continued interest, which will slowly be harder and harder to pay off as it comprises more and more money. The faster you pay it off, the less you have to pay, so finding money to save and to pay off your debt is an important thing in personal accounting.
3. Budgeting for retirement
Someday, you’re going to want to stop working, if you live that long. When that time comes, you’re going to need a savings, a retirement fund to live off of, so that you can enjoy life to some degree and not have to worry about bills and other expense. You need to begin saving now for that, and that may mean that you need to cut back on the way that you spend money today in order to have money later on in life. If you don’t, you’re going to have to rely on the federal government for your retirement, and that just isn’t something you want to do.
In all things, you can improve your lot in life with better budgeting. Sure, it won’t make life perfect, but it’ll do quite a bit to make sure that your life is easier than it has been.