Insurance Centre

Many consumers find that they are no longer able to mange their debt on their own. They need help. Debt management plans are an excellent tool for those that need assistance in eliminating their debt.

If you are considering a debt management plan, you probably have many questions as to how it works and what it costs. Each financial management plan agency will work differently, but in general, you should see some similarities between them all.

The debt management service will typically send a proposal letter to each of your creditors. The letter will request your creditor’s approval to enroll your account in the management plan. It will contain you several items, including your net income, living expenses, the names of your creditors, your proposed repayment amount for each creditor and the date of payment to creditors. This lays out the information for the creditor to see where you are financially and what your plan is.

Most debt management plans take you three to five years to repay your debts. This, of course, depends on the amount you owe and the terms set by your creditors. When you enroll, you should be given an estimate which lists all of your debts, the total debt owed to each creditor, the proposed payment to each creditor and the number of months estimated to complete the plan. You should know up-front how long it will take you to eliminate your debt.

The fees charged for your debt management plan will vary from agency to agency. You will usually pay for a copy of your credit report, a small set-up fee and a monthly administration fee. You want to make sure that the monthly fee is less than $50 a month. Be sure that you understand these fees before you enroll. Don’t trust any agency that asks for the first month’s payment up-front or a percentage of your total outstanding debt as the fee.

Most debt management plans require that you include all of your unsecured debts. There are specialized debt management plans designed for small business owners and those with good credit that allow you to keep one or two accounts outside of the plan. Once in the plan, you will most likely be unable to continue to use the accounts.

If a creditor rejects the management proposal, you can try to work with the creditor to reach an agreement. If nothing can be established between the plan and your creditor, you can elect to proceed with the debt management plan without the creditor. However, you will need to make these payments on your own.

Be cautious when choosing a company to work with. Make sure they are licensed and check them with the Better Business Bureau. It is also a good idea to check with your state’s attorney general’s office for any complaints or investigations.This is your financial security you are dealing with. Make a wise decision and then let the plan help you find financial freedom. Debt management plans are a great way to learn how to manage your finances while eliminating your debt.

Reading lots of books and articles about how to
become millionaire, I discover that most of the
millionaires are preparing budget to control
their cashflow.

Even I know how to prepare a budget for my daily
spending and know how budget is so important to
control my money, I do not like to prepare budget!

I just do not like to prepare a lot of paper work
just for controlling my expenses.

Yes, there are lots of software that I can use
to prepare my budget, but to me, it still requires
me lots of time and work to prepare budget.

However, if I want to become a millionaire, how should
I control my money without prepare budget?

This question comes in my mind quite a period, and
finally find out how to control my money.

Answer is simple.

What I do is just ready 100 bucks for one week
expenses. In other words, every week I can only
spend 100 bucks.

This trick is simple and everyone can apply
immediately. In one week, I can spend this 100
bucks to buy everything I like, to eat and use for
any expense, as long as I don’t over spend this
hundred bucks.

After I apply this simple trick, now I don’t have
to prepare any more paperwork and at the same
time, I can control my cashflow without over
spending.

But, sometimes I still cannot control my spending
for hundred bucks in one week. This is mainly due
to some emergency cases.

For this reason, I set up another limit, there is
every month when I receive my monthly salary or
other incomes, I will transfer part of my money
into another saving account.

The main purpose of this saving account is I only
can use the money from this account for my monthly
spending.

This is my simple way to control my cashflow.

If you like me, who want to control your money
but lazy to prepare your own budget, then these
two simple tricks could help you control your
money without prepare any budget.

What is Class Tracking?

Class Tracking in QuickBooks is a way to break down different segments of a single business. Let’s say, for example, that you own a chain of restaurants. You have one in the north part of town, one on the south part of town, one in the east part of town, and one in the west part of town. You could establish classes with the following names: North, South, East, and West, and assign these to each transaction – writing checks, entering bills, generating invoices, etc.

If you want to see how of all the restaurants are doing as a group, you would run a regular Profit and Loss. But if you wanted to see how a particular restaurant was doing, you would still run a Profit and Loss, but you would filter it by Class. This report would give you the revenue and expenses for whichever class you chose, assuming all of the original entries were made correctly. Very nice!

What Types of Accounts Can Use Class Tracking?

Class Tracking is designed for Profit and Loss transactions, not for Balance Sheet transactions. On most screens it is very easy to tell if you are operating in a profit and loss transaction, or a balance sheet transaction with classes. Let’s take the Write Checks screen. You are familiar with both halves of this screen, no doubt. There is the upper half with the green “check,” and the lower half, with two tabs that say Expenses and Items in a white field.

If you have class tracking turned on in QuickBooks, open the Write Checks screen (from the banking menu, select Write Checks). Take a moment and look where the Class column is located. It’s in the lower half of the screen. The upper half of this screen is definitely a balance sheet transaction – it takes money away from the bank account. The lower half of the screen is often a profit and loss transaction. And it is in this section where the class is assigned.

The same holds for the Enter Bills screen. Open it now and see (from the Vendors menu, select Enter Bills). In the Invoice screen, it is is a little more difficult to understand, but still, the class assigned here will affect a profit and loss account.

Can I Have Separate Companies in a Single QuickBooks File, and Assign Each Its Own Class?

No. Each unique entity, with a unique FEIN, must have it’s own file.

I’ve often seen questions from people who have set up different companies in a single QuickBooks file, and assign a class name for to each company. At some point, the business owner inevitably wants a class report based on the balance sheet for each company – the bank accounts, accounts receivable, credit cards, accounts payable, etc., all broken down by class. QuickBooks Class Tracking cannot do this, and was not designed for this!

Another problem with establishing different companies within a single QuickBooks file is that ownership across the companies might not be the same. Retained Earnings for each company cannot be separated (at least, not automatically by QuickBooks). Maintaining separate Retained Earnings is crucial if the ownership across the entities varies AT ALL.

Also, if the entities are corporations, preparing the corporate tax returns becomes a real challenge if they’ve all been setup into a single QuickBooks file. There’s just no way to have QuickBooks breakout the separate balance sheets that are required for the tax returns.

What Should I Do If I Have More Than One Company in a Single QuickBooks File?

You will need to separate them into separate QuickBooks files. I know, I know – you don’t want separate QuickBooks files! I understand. But that is the way it needs to be – truly! If you need help doing it, go to the Intuit website and find a QuickBooks ProAdvisor to help. This is a sticky situation and should be handled by somebody who understands accounting principles.

o Determine Your Asset Allocation – This involves matching your investment vehicles with your investment goals. Your investment choices should always be based on your age and level for risk tolerance. The earlier you begin to save and invest the more aggressive you can be in selecting amongst investment vehicles and options.

o Diversify your Portfolio – To maximize your returns, and manage your investment risk at the same time, you should not put all your eggs in one basket. Avoid placing more than 4%-6% of your investments in any one stock, including that of your own employer’s. Real diversification means spreading your money across multiple asset categories including stocks, bonds, real estate as well as investing internationally.

o Invest in Index Funds or No Load Mutual Funds – An index fund is a passively managed fund that seeks to mirror the performance of a particular index (i.e. the Dow, S&P 500, Wilshire 5000, NASDAQ, Russell 2000). These funds are specifically designed to duplicate the performance of the unmanaged market index they are tracking. Management fees of index funds are typically no greater than about 0.50%. A mutual fund is a pool of funds of individual investors that is actively managed by a professional investment manager who buys and sells securities for the fund. Mutual funds have different investment objectives (i.e. growth, value, income) as well as various market capitalization sizes (i.e. small, medium and large cap). Each investor owns a share of the portfolio assets equal to his number of shares in the fund. A no load mutual fund has no sales charges, commission fees or redemption fees associated with the purchase and sale of its shares.

o Use Dollar Cost Averaging to Buy Stocks – This technique involves investing equal dollar amounts of money at regular intervals over a period of time. The result of this practice should be acquiring a greater number of shares when the price is lower and fewer shares when the price is higher thereby achieving an average cost per share which is lower than the average price per share. Dollar cost averaging helps minimize the risk of timing the market and thus having to determine the optimal time to acquire shares.

o Track Your Investment Expenses – You must vigilantly track all the investment expenses and commissions you are paying as they will dramatically impact the overall return on your investments. If you are paying heavy loads (expenses) and high commissions on funds which are performing below their general market counterparts you will want to divest yourself of these investments, using a tax savings strategy, as soon as possible. Stick with no-load funds and low commission investment vehicles.

o Rebalance Your Portfolio – Requires matching your portfolio’s allocation of assets to meet your stated investment objectives after any area of your portfolio has experienced significant growth or contraction. This process goes hand in hand with asset allocation in that once you’ve determined your plan and the percentage you want in various categories of investments, you must rebalance or re-allocate your funds within your portfolio to insure that you are in compliance with your plan. Note that rebalancing your portfolio can be more complicated with your non-tax sheltered accounts as it could generate tax consequences.

o Don’t Obsess About Tracking Your Portfolio – Keep your eye on the prize in the horizon and don’t allow every downward market move to rattle you. It’s far too easy to panic when you’re watching daily, weekly or monthly results. You should be in it for the long haul and not influenced by trends and short term market fluctuations.

o Seek Out Investment and Tax Advice – Don’t shy away from seeking the help of a professional when you need it. It’s easy to understand the hesitation many people have in pursuing a so called expert’s advice. The number of advisors who sell products behind the advice they give can make it confusing to know the true motivation behind a professional’s recommendations. That’s why it’s essential to ask how any advisor is going to be compensated and what the amount of that compensation will be. Tax strategies should figure prominently into your investment planning as you want to balance both your pre-tax and after-tax retirement accounts.

If you’re a Loan Officer like I was, you have all kinds of loan officer training stuff in your desk, in your office or, and this was my favorite place, in the trunk of your car. Man, I remember I was all gun-ho about going to seminars, buying the products those guys were selling, ordering the coaching they were offering and thinking I would make a gazillion dollars in the mortgage business in the next 5 months! After all, these guys were the experts, if I followed what they taught, I was assured to make some big money from this mortgage stuff.

There was one big thing I didn’t quite understand (until recently), buying all this Mortgage Broker stuff was great, but I wasn’t using it. Oh sure, I would get the stuff and look at it and read parts of it and thought I understood everything. Heck, I figured I could refine the stuff to fit my situation because, of course, NO ONE ELSE IN THE MORTGAGE BUSINESS HAD THE SAME ISSUES AS ME. Sound familiar?

OK, I told that story to let you know that there are a lot of us that have been there, done that in the mortgage business. Realize, being a Loan Officer isn’t a team sport, it’s an individual effort. Oh sure, you may work in an office with others, but ultimately, it’s up to you. So, getting all this “self help” stuff from the industry experts is a great thing, but leaving it on the shelf is a waste of time on your part. Hence the title of this article, “Self Help” or “Shelf Help”.

The info you need to succeed in this business is out there. I encourage you to seek it out. BUT, if you’re a Loan Officer who won’t look at the stuff or read the stuff, I’ll tell you NOT to seek it out and try to do this business on your own. Why follow what someone else has already done? After all, what knowledge do these experts have that YOU that you don’t have?