Small Business Archives - Page 9 of 115

Apache is functioning normally

June 4, 2024 by Brett Tams

Inside: Learn how much is 6 figures? What exactly do 6 figures mean plus 6 figure salary ideas. Plus compare 7 figures, 8 figures, and 9 figures.

When you look at it six figures can be a lot of money for anybody.

One of the topics we discuss a lot here on Money Bliss is having money, which will allow the doors of opportunity to open up. That means the more that you save, the more that you keep, and the less that you spend, which will help you grow the amount of money you have.

The lifestyle possibilities are endless when you increase the number of figures in your net worth.

However, many of us struggle with even understanding how to reach our first six figures.

This is something that we are going to learn how to change along with strategies to improve your money management skills.

In this post, we are going to look at what it means to have 6 figures, 7 figures, 8 figures, and even 9 figures salary.

How Much is a Figure?

Simply put, a figure is just a symbol that stands for a number.

A figure is any of the written symbols from zero to nine that are used to represent the number.

A lot of times people would believe that using six figures is another way of saying $400,000 of cash.

For example, the more figures put together is how you count the number.

Four Figures = 4,698
Five Figures = 43,590
Six Figures = 234,859
Seven Figures = 1,343,896
Eight Figures = 12,549,475
Nine Figures = 124,349,000

Six Figure Meaning

The means of six figures means you have six digits in your number.

How much is six figures in cash?

Six figures means anything from 100,000 to 999,999.

There are two ways to look at a six figure meaning. The first is your net worth, and the second is your income.

The reason it is important to differentiate the two is they both have different meanings on what they can accomplish in your life.

For example, reaching a six figure net worth is a great achievement because you have reached your first $100,000 saved. The six year salary meaning means that you are making over $100,000 a year.

So this is important to note because you can still reach six figures on a median salary, just through hard work and dedication.

How Much is a Six Figure Salary?

This is exactly how much is 6 figures in money…

A six figure salary ranges anywhere from $100,000 all the way up to $999,999.

Specifically, that means over the course of the year, you make a gross salary above six numerical digits. In this case, it would be $100,000.

When you reach a six figure salary, it is much easier to reach financial freedom quicker because there is more money each and every month to save versus having all of your income go to your basic expenses.

But, don’t let that fool you! Plenty of people rake in over six figure salary and still live paycheck to paycheck.

Learn how much house can I afford with 100k salary.

How common is 6 figure salary?

Six figure salaries are relatively common. In fact, Statista reported that in 2020, 33.6% of US households made more than $100K a year. A salary of six figures is enough to live comfortably and in a healthy lifestyle.

Jobs That Pay 6 Figures:

Analyst – Financial, Management, or Computer System
Management Positions
Freelance Writer
College Professor
Managers
Computer / Cybersecurity Architects
Software Developer
Engineering
Day or Swing Trader
Anesthesiologist
Doctor / Dentist
Commercial Pilot
Bookkeeper
Air Traffic Controller
Power Plant Operator
Transportation or Distribution Manager
Inspectors
Statisticians
Real Estate Investment Trust jobs

How much is 6 figures monthly

To figure out how much six figures is monthly one must take the six figures and divide by 12.

Your yearly number / 12 = your monthly number

For example, 100,000 yearly would be $8,333.33 a month.

On the upper end of the spectrum, 999,999 yearly would be $83,333.25 a month.

How Much Is 7 Figures?

Seven figures would be over $1 million dollars or that coveted millionaire status.

The range of seven figures would be 1,000,000 to 9,999,999.

Once you reach over seven figures net worth, it is much easier to start thinking about retirement. More specifically, being able to live off of your financial investments

7 Figures Salary

On the flip side, a seven figure salary is almost impossible for most workers to even imagine. For the average worker, it would feel the same as winning a scratch ticket.

A seven figure salary is when you earn $1,000,000 to $9,999,999 per year in earned income.

It would take average worker making a modest $60k salary a whopping sixteen and two-thirds year to accomplish reaching $1,000,000 in income.

7 Figures Salary Jobs

Most people who earn seven figures of income do so by being their own boss. Very few people make it up the corporate ladder high enough to rake in that amount of salary.

Day or Swing Trader

This one comes with a lot of practice and slowly building up to making over $100k per year. But, you can have more time and freedom in your life, and make sound investment decisions. Don’t believe me? Check this review out.

C-Level Executive

This group of employees are your chief executive offers, chief operating officers, chief marketing officers, or chief financial officers. Typically, they work with a huge multinational firm with impressive annual revenues.

Entrepreneur

This is someone who starts their own business. To reach this success level, they must have spectacular products or services. With the online platform, it is much easier to start a business from scratch with little to no investment.

Consultant

A consultant is a seasoned employee who wants more flexibility and decision-making in their career choice. As a consultant, they can name their fee to be a part of a project or job. Many of those who chose the consultant path are highly specialized and sought after in their field.

Top Sales Producer

In many cases, an individual can earn unlimited income in the sales environment. This holds true across multiple industries. However, many top sales executives may form a team to have them improve their sales numbers year over year.

Social Media Influencer

A social media influencer is someone who establishes authority and a strong reputation and is able to influence others to make certain decisions. Brands love to work with influencers to get their product noticed.

For many influencers, this is when success is the best revenge.

Real People Earning 7 Figures

Portfolio Manager for Hedge Funds
Popular YouTube Stars
Most NFL Football Players
Owner, Pro Blogger
Small Business Owners

How Much Is 8 Figures?

Eight figures would be over $10 million dollars or that coveted double-digit millionaire status.

The range of 8 figures would be 10,000,000 to 99,999,999.

This is almost impossible for any of us to comprehend on a personal level. For some net worth may be a stretch; however, a very small percentage will actually have a eight figure salary.

This is where most companies would show an eight figure balance sheet or cash flow statement.

8 Figures Salary

Next, an eight figure salary is a dream for the average worker to even imagine. For the average worker, it would feel the same as winning a Powerball ticket.

An eight figure salary is when you earn $10,000,000 to $99,999,999 per year in earned income.

It would take the average worker making a modest $60k salary a whopping 167 times more to reach $10,000,000 in income.

8 Figures Salary Jobs

Hedge Fund Managers
Professional Athletes with Great Endorsements
Fortune 500 CEOs and top management
Actors
Larger Business Owners

Real People Earning 8 Figures

How Much is 9 Figures?

Let’s face it…nine figures is a completely abstract nominal amount.

Nine figures would range from 100,000,000 to 999,999,999.

This is something that most of us will never see in our lifetimes.

And those that have the privilege of enjoying nine figures of income, typically have some of the best wealth strategies available.

9 Figures Salary

An unbelievable nine figure salary is never going to happen for 99.99% of people. This is where wealth inequity comes up for the average worker.

A nine figure salary is when you earn $100,000,000 to $999,999,999 per year in earned income.

Just shy of making one billion dollars in just one year.

It would take the average worker making a modest $60k salary a whopping 1666x their annual salary to reach making $100,000,000 in income.

9 Figures Salary Jobs

Top Professional Athletes
Most Talked About Entertainment Stars
Fortune 100 CEOs

Real People Earning 9 Figures

Tony Robbins, Author, Speaker, and Self Improvement Guru
Kylie Jenner
Cristian Ranaldo
Roger Federer
Elon Musk

Must Know… How Much Is 10 Figures? Money Explained in Numbers

How do you know how many figures you make?

This is very simple to figure out. You need to count backward from the decimal point using your yearly salary.

For example…

77000.00 = 5 figures
143800.00 = 6 figures
1438594.00 = 7 figures
27357612.00 = 8 figures
107384939.00 = 9 figures

Not sure your annual salary, then figure it out with how much do I make per year.

Can You be Content with a 5 Figure Salary?

The further you get into the post, you probably feel a little bit demotivated because the chances of any of us reaching a 6, 7, 8, or even 9 figure salary is almost next to impossible.

However, a good majority should have a six figure net worth (hopefully before you turn 30) and work your way towards seven figures or that coveted millionaire status.

Crossing over to that eight figure or nine figure net worth is much more difficult to build on your own when you make a five figure salary.

My challenge is the look deep inside and ask yourself…

Am I content with my (fill-in-the-blank figure) salary?

Like we teach on this site, you can earn an average five figure salary over your lifetime and still reach the seven figure net worth.

Something to be proud of and something you should look forward to doing if you haven’t reached it yet.

One of the biggest difficulties is lifestyle creep in comparison with others.

That is something that’s gonna hold you back financially. The doors of opportunity that can come your way. At the end of the day, it is important to increase how much money you can make to provide the lifestyle you desire.

However, money is not absolutely is not everything.

That is an achievement! Making $200k a year is an accomplishment.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

June 3, 2024 by Brett Tams

Key takeaways

A bank statement loan allows you to qualify for a mortgage using bank statements rather than tax returns. It’s most often used by self-employed borrowers.
Not all mortgage lenders offer bank statement loans. You might need to work with a mortgage broker to find one.
If you qualify for a conventional or government-backed loan, it’s likely a better option.

If you’re self-employed or a gig worker looking to buy a home, a bank statement loan might help. With this loan, you use bank statements rather than tax returns for mortgage preapproval.

What is a bank statement loan?

A bank statement loan allows you to apply for a mortgage without having to prove your income via pay stubs, W-2s or tax returns. Instead, lenders use recent bank statements to assess your earnings.

This loan type can be helpful if your income is inconsistent, your employer doesn’t issue traditional paychecks or you claim significant tax deductions. This might apply if you’re self-employed or a small business owner, doctor, lawyer, real estate agent or investor.

“One example would be if your tax returns show that you made $100,000 last year when you really made $200,000 because you were able to deduct an expensive printing machine you bought,” says Brad Seibel, president of Sage Home Loans Corp. “Your bank statements, rather than your tax returns, would adequately show your income.” (Editor’s note: Sage Mortgage is owned by Bankrate parent company Red Ventures.)

How non-QM loans relate to bank statement loans

Bank statement loans are considered riskier than typical mortgages, and many banks and mortgage lenders don’t offer them. That’s because they’re non-qualified mortgages (non-QM), meaning they aren’t backed by Fannie Mae and Freddie Mac, so there’s less protection for lenders and borrowers.

Non-QM mortgages include any loan that doesn’t meet the conforming standards set by Fannie and Freddie. These standards cover characteristics like the maximum loan amount and debt-to-income (DTI) ratio.

Non-QM loans allow more borrowers to qualify for a loan. However, they tend to have higher interest rates, meaning they cost more. They also lack some of the consumer protections that conforming loans have. For example, a non-QM loan could negatively amortize or include a balloon payment.

How do bank statement loans work?

When you apply for a bank statement loan, you’ll provide the lender with bank statements as far back as two years. This includes statements for personal and business accounts. You’ll also need to disclose other information about your business and expenses, if applicable.

“The type of business, the number of employees and whether the business has a physical location are some of the questions that bank statement lenders will want to know to decide the expense factor,” says Darrin Seppinni, president of HomeLife Mortgage, a California-based lender specializing in bank statement loans.

The lender then analyzes your income to determine your net income. From there, if you meet the lender’s other requirements, you’ll be preapproved for a certain loan amount.

Bank statement loan example

Let’s assume you’re self-employed, have a credit score of 740 and want to purchase a home. Your income fluctuates month to month, averaging out to $6,875. You also put $800 a month toward other debt payments. If the lender allows a DTI ratio of up to 45 percent, you could potentially qualify for a mortgage with a monthly payment of about $2,295. The exact number will vary widely based on current mortgage interest rates, your down payment and other factors.

Bank statement loan vs. traditional mortgage

Traditional mortgages, such as 30-year fixed-rate conventional or FHA loans, are more common than bank statement loans. They are geared toward borrowers with consistent, verifiable income documented on pay stubs, W-2s and tax returns. You can get approved for a conventional loan with a down payment as low as 3 percent and a minimum 620 credit score.

However, bank statement loans are far less common. They cater to self-employed borrowers or those with inconsistent income. Typically, they come with eligibility guidelines that differ from traditional mortgages.

Bank statement loan requirements

Generally, you can qualify for a bank statement loan with a credit score as low as 620, but 700 or higher gets you a better rate and terms. If your credit score is on the lower end, though, you might also need to make a larger down payment. Doing so lowers the risk posed to the lender.

Overall, expect to meet the following requirements:

Provide two years’ worth of bank statements
Provide a profit and loss statement for your business
Make at least a 10 percent down payment
Have adequate cash reserves
Have a credit score of at least 620
Have a DTI ratio of 45 percent or lower (some lenders allow a higher percentage)
Provide business licenses, organization documents and other related paperwork

Should you get a bank statement mortgage?

A bank statement mortgage loan might be right for you if your tax returns don’t adequately reflect your income. Fact is, many self-employed workers are eligible for other, more traditional types of mortgages, even with inconsistent income. Given that bank statement loans have considerable downsides, it’s crucial to carefully consider all options. Ultimately, you want to try a conventional loan first.

But there are scenarios where it might make more sense to get a bank statement loan, such as if you’re self-employed and heavily use tax write-offs to minimize your adjusted gross income (AGI). Or maybe you’re a small business owner who acquires new businesses, but your personal income taxes are significantly reduced due to large one-time payments.

Borrowers like these will likely face challenges when seeking a conventional or jumbo mortgage loan. But a bank statement loan offers a viable solution, as it assesses income based on bank statements rather than AGI from tax returns or pay stubs.

Good candidates for a bank statement mortgage include:

Self-employed individuals
Freelancers
Small business owners
Entrepreneurs
Gig workers
Full-time real estate investors

You might also consider a bank statement loan if your income can’t be documented in a traditional way. For example, some employers pay workers via prepaid cards instead of direct deposit.

Bank statement loans give non-traditional income earners the chance to buy a home. Still, they aren’t without drawbacks. Weigh the pros and cons when deciding if this mortgage option is right for you.

Pros of bank statement mortgages

Flexibility: If you have non-traditional income streams, you can use your bank statements in lieu of traditional income documents to qualify for a loan.
Accessibility: You don’t need perfect credit to get a bank statement mortgage, as some lenders accept borrowers with credit scores as low as 620.
May have higher loan limits: With a bank statement loan, you might be able to take out a bigger loan than conventional loan limits.

Cons of bank statement mortgages

Higher borrowing costs: Expect higher interest rates due to the risky nature of these loan products.
Larger down payment: Lenders generally require a down payment of at least 10 percent, which is higher than those required for conventional and government-backed loan products.
Prepayment penalties: Some bank statement loans come with prepayment penalties that could make it costly to refinance or pay your balance off early.

How to apply for a bank statement loan

If you aren’t already working with a mortgage lender who offers bank statement loans, a mortgage broker might be able to help you find one. Brokers often have partnerships with several wholesale lenders, which gives them access to various unique mortgages and deals.

Brokers typically don’t charge borrowers for their services. Instead, they charge the lender, who then passes the cost onto you in the form of fees or a higher rate.

When comparing brokers, ensure whoever’s on your shortlist is licensed to work in your state and has experience with bank statement loans. Once you choose the right fit, connect with them to explore lenders that can assist you with securing a bank statement loan.

With a shortlist of lenders in hand, here’s how to move forward:

Step 1: Get preapproved. Connect with loan officers to discuss your situation and get preapproved. Doing so will give you an idea of the loan terms and how much you might be able to borrow.
Step 2: Compare loan offers. When comparing loan options from your top lenders, look carefully at estimated closing costs, APRs and other fees to choose the loan with the best terms that also suit your needs.
Step 3: Formally apply for a loan. Gather all the necessary information and documents needed to apply for a bank statement loan with the lender you select.

Alternatives to bank statement loans

Bank statement loans are one way for people to borrow money, but there are other mortgage loan options. Unlike bank statement loans, these options typically don’t require years of financial records and are typically less expensive to get. These alternatives include:

Conventional loans: Conventional loans are available through virtually every mortgage lender. They tend to offer much better interest rates and terms compared to bank statement loans. Simply put, “if you have pay stubs, it’s a much better deal to submit pay stubs,” says Seibel.
FHA loans: FHA loans are especially popular among first-time homebuyers due to their flexible qualification criteria.
VA loans: Eligible service members, veterans and surviving spouses can obtain a VA-backed mortgage with no money down.
Asset depletion loans: If you have no income but significant assets, a lender might be able to use those assets to qualify you for a mortgage. These types of loans are costly, however — it might make more sense to sell some assets to get the funds to buy a home.
DSCR loans: If you’re a real estate investor, you might qualify for a debt service coverage ratio (DSCR) loan, which is based on your portfolio’s cash flow and how that relates to your ability to repay the mortgage. Keep in mind that when calculating the DSCR, lenders tend to be conservative and account for higher expenses and a vacancy rate.
Interest-only loans: With this type of loan, you’ll only pay interest for the first few years of the loan’s term, then pay principal and interest. This keeps your costs low for a while, but you also won’t build any equity during the intro period, and you might not be able to afford the principal and interest payments once they kick in.
Portfolio loans: When a lender issues a portfolio loan, it retains that loan in its portfolio versus offloading it on the secondary mortgage market. Because of this, these types of loans have more flexible qualifying standards. They aren’t always advertised, however, and are typically reserved for high-value customers or those who already have a relationship with the lender. If you’re an investor, consider maintaining your bank accounts with a portfolio lender. This can give you a leg up when you need a mortgage.

Bank statement loans FAQ

It might be challenging to find a bank statement loan lender, but it’s not impossible. Some even specialize in this type of loan. If you can provide bank statements to prove your income and meet the lender’s other guidelines, getting approved might not be difficult at all.
It depends on the loan amount you’re seeking. You’ll need enough funds to cover the minimum down payment and closing costs, as well as some reserves in your accounts. Learn more about how much of your income should go to a mortgage.

Source: bankrate.com

Apache is functioning normally

June 1, 2024 by Brett Tams

A personal guarantee on a business loan reduces a lender’s risk, and ensures that they don’t incur too much loss on the capital they’re lending out. Personal guarantees are a standard practice for most business loans; however, the requirement is ultimately up to the discretion of the lender.

As a borrower, signing a personal guarantee on a small-business loan can increase your likelihood of approval, or improve your interest rates and terms. Business loans you can get without a personal guarantee will depend on factors like your business finances, assets available for collateral, lender policy and business history.

How much do you need?

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

What is a personal guarantee on a business loan?

A personal guarantee is a document signed as a part of a business loan agreement promising that an individual borrower will repay the loan in the event that the business can’t. When you sign a personal guarantee, you are essentially acting as a cosigner on your business’s loan, which means that your personal assets may be seized if your business defaults on the loan.

Personal guarantees are common to most business loans — even unsecured business loans often require a borrower, or any owner of over 20% of the business, to sign a personal guarantee.

Business loans you can get without a personal guarantee

Business loans that you can get without a personal guarantee normally require some other form of collateral to secure the loan; however, this requirement will vary based on the type of loan and the lender.

Term loans

Depending on the lender and your creditworthiness, term loans are one of the most affordable types of business loans, especially for large purchases. They provide a lump sum of capital upfront that is repaid over a set period of time, with interest.

While business term loans often require a personal guarantee, you may be able to negotiate, especially if you have strong personal or business collateral to offset the lender’s risk.

Lines of credit

Business lines of credit are revolving sources of capital that allow you to spend up to a certain limit, continue to draw on the line once you’ve repaid the amount borrowed and only pay interest on what you’ve drawn.

Similar to a term loan, a business line of credit without a personal guarantee will likely require another way of securing the line. For example, the Wells Fargo Prime Line of Credit does not require a personal guarantee, but is secured instead by a first position lien on business assets.

Equipment loans

Because equipment financing loans are inherently secured by the equipment being financed, you may have an easier time finding equipment lenders that don’t require personal guarantees.

Triton Capital, for example, is a California-based lender that provides term loans to finance equipment. They do not require a personal guarantee because the equipment being financed serves as collateral.

Merchant cash advances

Merchant cash advances (MCAs) are not technically structured as loans, and may therefore be more likely than other types of business financing options to waive a personal guarantee requirement. Credibly, for example, is an alternative business lender that does not require a personal guarantee or collateral on its MCAs, and only files a Uniform Commercial Code (UCC) lien on deals over $200,000.

MCAs are not regulated the same way traditional business loans are, and are one of the most expensive and riskiest types of business financing. They are best used for short-term needs, and as a last resort.

Invoice financing or invoice factoring

Invoice financing is a type of small-business loan that uses your unpaid customer invoices as collateral. With invoice factoring, on the other hand, you actually sell your unpaid customer invoices to a third-party company, which then collects on the invoices.

Both types of lenders are usually more focused on the creditworthiness of your customers, and may therefore not require a personal guarantee; however, this is ultimately dependent on the lender.

Business credit cards

Business credit cards function similarly to personal credit cards, wherein you can spend up to a certain limit continually as you pay your balance, and are only charged interest on any unpaid balance you carry over from month to month.

Like other financing options, business credit cards that don’t require personal guarantees have other requirements to offset the risk. Ramp’s corporate card, for example, requires a minimum of $75,000 in a business bank account, while the Sam’s Club Business Mastercard is available without a personal guarantee for businesses with $5 million in annual sales or revenue.



Est. APR 20.00-50.00%	Est. APR 27.20-99.90%	Est. APR 15.22-45.00%
Min. credit score 625	Min. credit score 625	Min. credit score 660

Why do lenders require a personal guarantee?

A personal guarantee protects a lender and decreases their risk when lending to your business by allowing them to seize your personal assets in the event of a loan default, helping them recover some of their losses.

When you are willing to sign a personal guarantee, it also shows a lender that you are personally invested in the success of your business, and therefore, have an extra incentive to make your loan payments.

What are the consequences of a personal guarantee?

Simply signing a personal guarantee shouldn’t have any immediate consequences to your finances. The document doesn’t cause a business loan to appear on your personal credit report, or allow a lender to seize any personal assets without reason.

If your business is unable to pay the loan, however, a personal guarantee means that you are personally liable. This may mean covering the loan payments from your personal income, or handing over personal assets that can be used to pay off the loan amount.

How can you avoid signing a personal guarantee?

Finding a business loan that doesn’t require a personal guarantee isn’t impossible, but it may require some negotiation. Since personal guarantees are used to protect lenders, you’ll need to find other ways to offset that risk.

Separate your business legal structure. Establishing your business as a separate legal entity is likely the first step in avoiding a personal guarantee. As opposed to a sole proprietorship, a corporation or LLC will allow you to build separate business credit, and demonstrate that your business’s cash flow, revenue and assets — and therefore, its ability to repay the loan — are independent of any personal contribution.

Establish business credit. Having strong, established business credit that demonstrates a positive history of repayment may offset some of the lender’s risk and show them that your business is likely to repay the loan. The catch is that to build your business credit, you’ll need a loan or a credit card that likely requires a personal guarantee.
Offer other high-value collateral. High-value business assets like real estate or large equipment is a great way to offset lender risk, especially if it’s worth more than your personal assets. Certain types of asset-based lending may automatically waive the personal guarantee requirement, but if not, it may be worth trying to negotiate with your lender if you have high-value collateral.

Looking for a business loan?

See our overall favorites, or narrow it down by category to find the best options for you.

on NerdWallet’s secure site

Source: nerdwallet.com

Apache is functioning normally

June 1, 2024 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Money is a tricky concept.

It can be both the best and worst thing in your life depending on how you manage it.

Understand how to manage your money wisely and apply a few helpful tactics to your daily life. Simple habits will help you manage money better every day.

You must make money management easier and understand what types of pitfalls to avoid while we’re at it!

The following are a few ways to manage money. You can save it, spend it, or invest it.

There are many ways to manage your money wisely, but you should always start with your own control. You might not make all the choices that are right for you, but you must be prepared for the future.

This blog post provides tips for managing money, avoiding common mistakes by other people, reducing debt, spending wisely – these are just some examples of topics covered.

If you are ready to learn how to manage your money like a millionaire, then you are in the right place!

How to Manage Money Wisely

The key to managing your money is following the steps that are outlined in this article.

Financial stress can be managed by following the steps of managing money wisely. It is important to prioritize spending, don’t overspend on things that are not necessary, and learn about saving too because it will help you move towards financial stability.

You can learn how to properly manage your money with these swift mindset changes.

Below are 10 money management tips that will help you make better use of your finances.

1. Build a Firm Foundation

In order to make money better, people should set a firm foundation for themselves. This means setting up a financial strategy and making sure you have a plan in place. It also means having the right mentality about money and spending less than what you earn every month to avoid debt.

The first step is to establish a firm financial foundation, which means you must spend less than you make, save money for emergencies, and get out of consumer debt.

2. Design a Money Management Blueprint

A financial blueprint is a tool that can help you to build and maintain your money.

The problem for most people is they are starting at one place in their financial journey and are stuck on how to move to where they want to be.

That is where you need to follow the Money Bliss Steps to Financial Freedom. These are the exact steps to help guide your journey and a helpful blueprint to follow.

By taking each step one at a time, you will be able to make progress faster.

3. Define Your Goals

You must identify what your financial goals are.

What do you want?
Are you looking for more income?
Work fewer hours?
Something else entirely?

By setting money goals, this process will help you set a timeline and map out your journey.

4. Analyze Your Current Situation

This step is about taking stock of what you currently have to work with, such as income and expenditures, debts and assets, and savings.

This will help you decide what changes need to be made so that your goals can happen.

Honestly, this is probably the hardest step, and when most people give up. Taking a look at your true financial picture can be scary and painful to do.

5. Get on a Budget

Money is a source of stress for many people. It can be difficult to manage money when it’s not well-organized and set up properly.

In order to make sure that your money does not continue being a source of stress, create a budget and track spending!

A budget is a plan that helps you organize your money so that it can be spent effectively. It also shows where your money goes and what you are spending it on. Budgeting is an important part of managing money wisely because it helps you stay within your financial means, which ultimately saves you from living paycheck to paycheck or needing to borrow more than needed.

To create a budget, first set aside time for research and planning (this will take one day). Then create and write down the basic budget in a well-organized manner. It is important that you have a budget that works with your lifestyle and spending habits, so take the time to create one that fits what you need.

Some people go into budgeting with the goal of changing everything, but this is not necessary.

It’s important to make sure you’re realistic about your goals and target in order to get the most out of it. This will ensure you can meet your financial targets without breaking account after account or losing track of what has been spent already.

6. Say No to Debt and Create a Plan to Pay Off Debt

Creating a plan to pay off debt is crucial in order to reach financial goals.

It is important to create a plan to pay off your debts in order for you to be able to manage them better. High-interest rates should be tackled first, then work your way down through the rest of the debts.

The other key aspect is to stay out of debt. There is no need to buy something you cannot pay for in cash today.

Tools and tips to help you pay off debt:

This includes creating a budget and sticking with it, getting out of the habit of using credit cards, and saving money for an emergency fund.

7. Track Spending

Tracking expenses can help you see where your money is going so that you can make better decisions. For example, tracking your spending will allow you to know if the $200 concert was worth it.

Tracking spending will help you manage your money better.

It is important to be aware of how much we spend and what we spend it on so that you can make the best financial decisions possible.

This will help you to manage bills and save money.

8. Save Money

Every month, save money and put it in another account to be used in the future.

In order to make large purchases, it is important to have money set aside for that purpose. It is also a good idea to budget and save money in case there is an emergency.

An important phase in making smart money management tactics is to start investing as soon as you can. This is how you make your money work for you. Learn how to start investing.

9. Invest in your Financial Future

Almost a third of older Americans have nothing saved for retirement. That is a statistic you do not want to be a part of.

It’s never too early or too late to start saving for your retirement.

You should always be mindful of the future and plan accordingly. Whether it is through a 401k, IRA, Roth IRA, or other investment vehicles that you can contribute to in order to save up money for when you retire; make sure that whatever vehicle you choose gives an appropriate return on your invested funds (e.g., stocks).

In order to learn how to properly manage money wisely, you must be contributing to your retirement accounts. It may seem like a long way off until it is not.

10. Be Persistent

Managing your money can be a difficult task.

There are many ways that you can take control of your money situation and make it easier for yourself.

When it comes to managing your money, persistence is key. You’ll need to be persistent at all income levels in order for your savings and investments to grow.

How to Manage Money Effectively Now

Only do what you need to, not what you want to or can afford. Set up a budget and stick with it. Pay yourself first before buying anything else. Always save for the future, even if that means sacrificing now on some luxuries like eating out more often or setting aside money for retirement since your employer doesn’t offer one of those options yet.

A budget is a plan for how much money you will spend in each category every month. This will help you to pay off debt and reach your financial goals.

1) Create a monthly budget.

2) Track your progress in the spreadsheet throughout the year.

3) Make sure you’re saving at least 10% of your income/income minus loan payments, bills, and other expenses for emergencies and savings.

4) Pick one of these how to manage money books.

Take Action!

This step is all about taking the necessary steps to achieve your goals.

Again, this will vary for each individual and goal setter, but might include: cutting out unnecessary spending on luxuries; increasing income by asking for a raise or starting up a side hustle; and spending less on debt repayment by extending the term of your loan.

Be Patient!

This step is about being mindful that not every goal can be accomplished overnight, but it will happen with dedication and patience.

Be patient with yourself, your progress, and the change that is happening in your life as you work on achieving these new goals!

Are you Ready to Manage Money Better?

Learning how to manage money can be overwhelming when you haven’t built a strong foundation with money.

We have covered ways to make your life easy and money management better.

You need to learn how to manage your money.

You have to be the one to implement these tactics.

Proper money management ensures better outcomes with your finances.

From all of the free and paid budgeting apps, here are our top budgeting apps to check out!

This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.

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Manage your money less in 5 minutes each week. Reach your money goals with confidence! The personal finance app gives you something to look forward to.

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Your automated financial assistant and budget tracker are designed to put you back in control of your money.

Stay on top of your spending, easily track bills, cancel unwanted subscriptions, and find ways to improve!

Photo Credit:
moneybliss.org

HoneyMoney increases your awareness about your money habits. Being fully aware of your money naturally changes how you spend it.

Great way to use cash flow budgeting. Plus uses “envelopes” to budget.

Start your free trial.

Moneyspire is user-friendly personal finance and small business accounting software that brings your entire finances together in one place.

Have total control over your financial life in one click.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

May 30, 2024 by Brett Tams

Inside: Get a financial budget binder to help stay on track with spending and saving goals. Learn how to use it as a guide to help you reach your financial goals! Stay motivated.

I know that when my family and I set a goal for saving money in our budget binder, we’re more likely to do so because we have visual reminders throughout the year of how much has been saved and what still needs to be done.

When it comes to financial goals, we want them all.

For example, you are trying to save more money or pay off debt, but you cannot track the progress you are making or find ways to make it happen.

You need to create a cute budget binder so you know the overall picture of finances and how it lines up with other events in your life.

It can be time-consuming to create a financial plan because most people lack what needs to be included. Save yourself some time and energy by using a personalized budget binder.

This in-depth guide provides step-by-step instructions on how to set up your budget binder along with downloadable worksheets to help get you started.

Learn how to create your budget binder and what tasks you can break up into sections for each week of the year.

Also, find out why it is important to be specific with your goals and how goal-setting can help us reach our financial goals faster!

What is a Budget Binder?

Budget binders are designed to keep track of expenses and income.

A budget binder is a tool that helps you organize your finances and plan for the future.

They can be used for various purposes, such as budgeting, tracking your spending habits, maintaining a financial diary, or even identifying the best times to save money.

Why a Budget Binder Matters?

It’s important to start this as early as possible because it will help keep you on track with your money goals and make sure you’re saving enough money for them.

A budget binder is a place where you can keep your personal finance worksheets. Each budget sheet found in the budget binder is tailored specifically to each person, so if there are certain aspects of managing your finances that aren’t working well for you, then it would be best to bring those sheets up with someone who can help fix them.

You can use it to create your own budgets from scratch or use a paid template.

If you’re creating your own personal budget sheets, don’t worry too much about making them Pinterest perfect! If they work for you, that’s what matters.

The Benefits Of a Budget Binder

It is important to have a budget binder. This is especially true for those who are looking to pay off debt or manage their finances in the future.

The benefits of using this budget binder as a tool include:

Helping you organize your finances and stay on track with your financial goals.
Providing insight into how much money you spend, where it goes, and what can be done about that.
Showing you exactly what steps will help you fix your current situation.

Ultimately, budget binders can help people with their personal finances by helping them stay out of the red and save for a rainy day.

It also helps in managing expenses and debt, which is important for saving up to live off of while still having some convenience. Plus anyone has access to the binder if they need it and can pick it up without skipping a beat.

With financial freedom comes an easier life where you don’t have to worry about money management and enjoy time freedom from your busy schedule because it all becomes automated!

Plus… This budget binder is also a great tool to use with children because it teaches them about saving up for their goals. This will teach kids that they can’t have everything right now and need to save.

How To Make a Budget Binder

A “Budget Binder” is a binder that contains the various budget printables for different places on the internet. These include sheets to help you get started, and use whatever sheets apply to your needs.

If you are tired of losing track of your finances and overspending money more than you would like. You don’t want to stress about what you spend or how much money is left over for retirement.

Let’s keep things simple with a custom budget binder!

This space-saving product will help you organize all of your receipts and bills so that nothing falls through the cracks, while still being stylish at the same time!

To help you get started, check out the Money Bliss Budget Binder.

What supplies do I need to put together a Budget Binder?

The budget binder can be as simple or fancy as you like and that’s the beauty of it – you’re creating something that you actually stick with!

At the end of the day, you need something to stay organized and keep you motivated.

Here are the supplies you need for your binder:

Binder: A 3-ring binder will do just fine. I use a 1″ inch binder and that suits my needs just perfectly. Here are some binders to choose from.

Dividers: Your budget binder will be divided into sections. So you need 5 or 8 tab dividers. Here are the ones with binder pockets (that I prefer) or ones without pockets.

Clear Sleeves: These are great to keep your vision board front and center as well as any other current financial goals you are working on.

Fun Colorful Pens: You need pens that will motivate you to actually use the binder. When I first started using my budget, it was hard because not many people know about this system. So what I did is I bought a pack of pens in my favorite color and I put them right on the inside cover. These are the pens I love!

Highlighter Set: This is a necessity. I have found color coding to be helpful and it makes the process of bill paying more fun. Especially, when you are coloring in your debt payoff chart or saving money chart. These are the marker set I use!

Sticky Notes: Let’s face it… we all love to use sticky notes.

Cash Envelopes: This is extremely helpful if you use the cash envelope system. You always know where your envelopes are located. Find cash envelopes that fit into your binder.

Printer: You have one of two options. You can print all of your budget binder printables from home or you can take them to get printed. The choice is totally yours. Personally, I have found laser printers to have the best value for printing at home.

Hole Punch: I would recommend a heavy-duty hole punch. This is something that will get heavy use and is easy to slide into a desk drawer.

Paper: Lastly, let’s talk about the paper. For the budget printables you use the most, you may want to upgrade from the basic 20# copy paper. You will see the difference by using at least 24#.

Budget Binder Categories

In your budget binder, you will need various sections to help you reach your money goals and improve your money management skills.

Specifically, this is what should be in a budget binder:

How many accounts do you have
How many credit cards are open
Any outstanding debt unpaid
How you want to live your life with money
When your bills are due
How to handle that stack of paperwork and mail
A budget
Your net worth
Your credit score
Investment summary
Your first money goal
Your vision board

You can also use these printable binders for keeping track of bills, debts, savings, expenses, and more!

Whatever your goal is for the financial aspect of your life, you can create a binder that will help motivate and inspire you to work towards it.

Budget Binder Printables

A budget is the most important tool to get your finances under control.

The Budget Binder Printables are a great way for you to create and stick with your own personal budget that has goals, targets, and an overall financial plan. It allows you to stay on track of what’s going into each account so that it can be tracked regularly throughout the year (and even before then).

A budget binder is a living and constantly used document that contains all of your financial and personal information, such as income and expenses.

These are the types of budget binder printables you need:

Establishing a budget.
Listing monthly goals as well as long term vision.
Organizing personal information into categories.
Tracking income and expenses.
Bill Payment tracker
Saving tracker
Debt payment tracker

The Budget Binder Printables is a great way to stay motivated with your financial goals.

It will give you the motivation and tools that you need in order to achieve what it takes.

It’s important to keep track of your income and expenses so you can stay on track with your goals.

Budget Binder Ideas

Many people have their own budget binders in order to help them practice spending only the amount that they earn and to motivate them to earn more income.

By creating your own budget binder, you are able to utilize whatever inspiration you want which is why one can use their binder as whatever motivates them. If you are looking to save money, then the budget binder can be full of pictures and graphics about saving up or getting out of debt.

Typically, I recommend making your own budget binder because it gives you the flexibility to add to it.

Many people rave about their budget binder with envelopes as well.

However, looking at other budget binders will give you the best budget binder ideas. Here are some great examples:

Budget Binder from Walmart

Here are the Budget Binders you can find at Walmart. As always, we look for those with higher reviews!

Walmart is known when you need somewhere cheap to buy all their necessities, that is the place to go!

Pen+Gear 5.5″ x 7.5″ Budget Planner, 80 Pages

Track your spending and set your financial goals with our Pen+Gear Budget Planner.

This colorful 80-page planner is designed to help you keep your budget on track while staying organized when it comes to your spending. With guided prompts for tracking spending and financial goals, this handy-dandy planner is a must-have item for any parent, student, traveler, busy body, or young professional.

Use the labeled sections to keep track of things like housing costs, entertainment spending, your emergency savings account, and even charitable donations. Plus, its compact size makes it easy to plan your budget from anywhere you are, wherever you go.

Buy Now on Walmart

12-Month Budget Planner Bill Tracker Organizer with Calendar and Pockets

Whether you’re managing your household finances, just venturing out on your own or running a small business, the Budget Binder is your comprehensive guidebook to help you stay on track to your dreams (and thrive within your means!).

Knowing your financial status each day/week/month is powerful intel that you can use to make good decisions about your money. Good decisions add up to a financial future you dream of! The first step of this journey is yours.

Buy Now on Walmart

Budget Binder on Etsy

Handmade items are becoming more popular, and Etsy is a great place to find them. If you are interested in purchasing an item that has been personalized, the seller might still be able to do so for you.

An Etsy budget binder is a unique way of keeping your financial goals in one easy-to-access location. It can be made from any material you choose – paper, cloth, or even wood! You can use it as a planner or just have it sit on your desk as a decoration.

Here are our personal favorites:

Paycheck Budget Planner, Printable, PDF, Instant Download

This PAYCHECK BUDGET planner is perfect for those who want to track their planned paycheck income, savings, and expenses against the actual amounts. Use this either to track your income and expenses during each paycheck period, or for the month.

Flexible to use for either traditional budgeting or for zero-based budgeting. With zero-based budgeting, all of your income is accounted for specific expenses and savings.

Buy Now on Etsy

Budget Planner Printable Finance Planner Bi-weekly Budget

This Budget Planner’ is based on the zero-based budget method, which is a great way to keep your finances in order and gives every dollar you earn a job to do.

By using this budget planner, you can understand exactly where your money is going and help you get on track with your finances.

You will be able to notice patterns in your spending behavior, whether good or bad, and gain control over your spending habits to reach your financial goals.

Buy Now on Etsy

Digital Budget Planner

If you’re ready to take control of your money, this is the tool for you. This digital budget planner was created to help you think critically about your spending habits and make better decisions with your money.

A hyperlinked PDF that can be used with your Apple iPad or Android device, stylus and favorite annotation app.

It includes a monthly and paycheck budget, along with a debt, expense & bill tracker, just to name a few. It’s the perfect tool for anyone looking to get their finances in order.

Buy Now on Etsy

Printable Finance Planner Print at Home Budget Plan Budget

This print at home page is one of our many, printable planner pages. It is perfect to assist you in planning your life, and keeping on top of your day-to-day life.

You will receive (instant download) .pdf files, which are ready to be printed at home or sent to a printing company for more professional printing.

Buy Now on Etsy

Budget Binder at Amazon

The best part of shopping for Budget Binders at Amazon is two-day shipping. Also, the prices tend to be more competitive than you would find elsewhere.

Even if you cannot decide which one you like put it in your cart for later or create a wish list of the budget binders you are considering.

Clever Fox Budget Planner & Monthly Bill Organizer with Pockets

Are you looking for the best monthly budget planner to keep your finances organized?

Clever Fox Budget Book will help you keep your money organized, spend well, start saving, set and achieve financial goals.

It can help you to manage all your personal finances, savings, budgets, debt, payments, bills due, cash flow and expense tracking in 1 place.

Buy Now on Amazon

02/19/2024 11:52 am GMT

Smart Planner Budget Book

63,28 €

Take control of your personal finances with our 12-month budget planner.

Containing a wide variety of trackers, calendars and budget planning sheets. This financial planner is ideal for tracking your income, expenses, budget, savings and money goals.

Buy Now on Amazon

02/19/2024 11:57 am GMT

Gogirl Budget Planner and Monthly Bill Organizer

Are you looking for the best compact monthly budget planner to keep your finances organized?

GoGirl Finance Planner will help you keep your money organized, spend well, start saving, and set and achieve your financial goals. It can help you to manage all your personal finances, savings, budgets, debt, payments, bills due, cash flow and expense tracking in one place.

Buy Now on Amazon

02/19/2024 11:53 am GMT

Lamare Budget Planner

A budget planner should help you gain control over your finances – but too many people LACK THE TOOLS to truly make a change.

The Lamare Budget Planner and money saver features highly effective money planner tools, including a Daily Spending & Budget Tracker, bill tracker, Money Saving Organizer, Debt Tracker, goal setter, and Monthly & Yearly budget overviews.
A 12 month plan to get you on your way to financial freedom.

Buy Now on Amazon

02/19/2024 11:57 am GMT

Budget Binder at Target

Most women like to shop at Target. they want clothes that are affordable without sacrificing style. Consumers flock to the chain for its wide selection of trendy items, reasonable prices, and convenient location.

Plus with curbside service, you can order online and pick-up same day!

Budget Binder Cover Ideas

Every personal goal, small and large, starts with a dream.

Without knowing it intuitively, we can think of something we want or want to do and you can make it a reality.

With your cute budget binder, create a cover page that you will love and inspire you.

This is something you will identify once you make your smart financial goals.

Are you ready to Make Your Budget Binder DIY

A budget binder is a DIY money tool for beginners and everyone along their money journey.

It contains a worksheet with the different parts of your budget and an open-ended spreadsheet to track how much you spend on each area.

If you want to live life with intention, creating a budget binder will help your progress faster.

Since the budget binder is a physical binder in which you keep all of your monthly bills, receipts, and other expenses. It is best to create a Budget Binder DIY.

It is easier for you to live life on your terms when you live below your means. The budget binder, whether in paper or digital format, can help you organize your tasks for productivity and success.

Once you finish yours, please share pictures with us!

This is one tool that will help you find long term financial success.

Whether you track your spending or use an app like Simplifi, having this tool at hand can help with staying on track financially even though there are always going to be unexpected expenses such as a broken appliance.

Now, learn how to budget on a low income.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

May 30, 2024 by Brett Tams

Retail banking involves offering financial services to individual consumers rather than businesses or other banks. It encompasses a range of products and services, such as checking and savings accounts, mortgages, personal loans, credit cards, certificates of deposit (CDs), and more.

Retail banking is different from corporate banking, which is the part of the banking industry that serves large companies and corporate customers. Retail banks can be local community banks, online banks, or the divisions of large commercial banks. Credit unions also offer retail banking.

Read on for a closer look at what retail banking is and how it differs from corporate banking.

What Is Retail Banking?

Retail banking, also known as personal or consumer banking, refers to financial services provided to individuals. This type of banking is designed to serve the general public and to help people and families manage their money, obtain credit, and save for the future.

Retail banks focus on making banking services easily accessible, either through physical branches, ATMs, and/or online platforms. These banks play a crucial role in the economy by offering checking accounts, high-yield savings accounts, certificates of deposit, loans, and other financial products that help individuals safely store, manage, and grow their money.

Though some retail banks also work with small businesses, retail banking is different from corporate (also known as commercial) banking, which involves working with commercial entities, such as large businesses, governments, and institutions.

Most large-scale banks have retail banking divisions. Credit unions and smaller banks, on the other hand, may be exclusively focused on retail banking.

Recommended: 12 Things To Consider When Choosing A Bank

How Does Retail Banking Work?

Retail banking works by offering financial products and services tailored to consumers. These services are designed to help individuals and families manage their finances efficiently, save for the future, and access credit cards and loans. Retail banks make money primarily through interest on loans, fees for services, and charges for various banking products.

Features of Retail Banking

Retail banking offers a hub for all of your basic financial transactions. Here’s a look at some of the products and services they provide.

• Savings and checking accounts: Retail banks offer savings and checking accounts to help individuals manage their money. Savings accounts typically earn interest, while checking accounts provide easy access to funds for day-to-day transactions.

• Consumer loans: Retail banks commonly offer personal loans, auto loans, and home mortgages. These loans can help people finance significant purchases or investments, such as buying a home or car.

• Credit Cards: Retail banks issue credit cards that allow consumers to borrow money up to a certain limit for purchases. These cards often come with rewards, cash back, and other incentives.

• Online and mobile banking: Retail banks typically provide online and mobile banking services, allowing you to manage your accounts, transfer money, pay bills, and access other banking services from your computer or smartphone.

• Investment services: Some retail banks offer investment products like mutual funds, retirement accounts, and brokerage services to help customers build wealth over time.

• Customer service: Retail banks typically emphasize customer service. Many provide personalized financial assistance through branch staff, call centers, and online support.

Types of Retail Banks

Retail banks come in various forms, each catering to different customer needs and preferences. Here’s a look at some of the main types of retail banks.

• Commercial banks: Many people access retail banking through one of the large, commercial banks, which generally offer a retail banking division along with corporate banking services.

• Credit unions: Credit unions are nonprofit financial institutions owned by their members. They often provide similar services to commercial banks but with a focus on serving the financial needs of their members, usually offering lower fees and better interest rates.

• Online banks: Online banks operate exclusively online, without physical branches, though you typically have access to a partner network of ATMs. They often offer higher interest rates on savings accounts and lower fees due to reduced overhead costs.

• Community Banks: Community banks are smaller, locally-focused institutions that prioritize serving the needs of their local communities. They offer personalized customer service and often have a strong understanding of their local markets.

Recommended: Big Banks vs Small Banks: Key Differences?

How Is Retail Banking Different From Corporate Banking?

Retail banking and corporate banking represent two different sectors of the banking industry, each serving different customer bases and offering different services.

Retail banking focuses on individual consumers, providing them with products like bank accounts, personal loans, and credit cards. Corporate banking, on the other hand, serves businesses and corporations, offering services like business bank accounts, commercial loans, trade finance, and employer services.

Transactions in retail banking are typically smaller in size and higher in volume compared to corporate banking, which tends to focus on larger, more complex transactions.

If you’re wondering whether you would be better served by retail vs. corporate banking, here’s a snapshot how the two compare.

	Retail Banking	Corporate Banking
Client base	Individual consumers	Businesses, institutions, banks, government entities
Products and services	Personal checking/savings accounts, mortgages, personal loans, credit cards	Business checking/saving accounts, business loans, merchant services, global trade services, employee benefits plans
Loan amounts	Lower	Higher
Transaction frequency and amounts	High number of transactions for low amounts	Low volume of transactions for more significant amounts

The Takeaway

Retail banking is the public face of banking that provides banking services directly to individual consumers rather than businesses or other banks. Most of us bank at a retail bank or retail division of a large commercial bank whether we realize it or not.

Whether you use a brick-and-mortar bank, online bank, or credit union, retail banking offers products and services that allow you to manage your money, access credit, save for the future, and work toward your financial goals.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is an example of retail banking?

An example of retail banking, also known as consumer banking, is when an individual opens a savings account at a local bank. The bank then allows them to deposit funds, withdraw money, and earn interest on their deposits. The same bank might also offer them a checking account for daily transactions, a mortgage to buy a home, and a credit card for everyday purchases. These services are all examples of retail banking, which is aimed at meeting the personal financial needs of individual consumers.

What are the largest retail banks?

The largest banks in the U.S. that offer retail banking include:

• Chase

• Bank of America

• Wells Fargo

• Citibank

• U.S. Bank

• PNC Bank

• Goldman Sachs Bank

• Truist Bank

• Capital One

• TD Bank

Who uses retail banking?

Retail banking is used by individual consumers to manage their personal finances. This includes:

• Students

• Young adults

• Working professionals

• Couples

• Families

• Retirees and seniors

• Small business owners

What are the retail banking products?

Retail banking offers a variety of products and services tailored to the financial needs of individual consumers. These include:

• Savings accounts

• Checking accounts

• Personal loans

• Mortgages

• Credit cards

• Certificates of deposit (CDs)

• Investment products

• Online and mobile banking services

• Debit cards

Photo credit: iStock/Passakorn Prothien

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK-Q224-1885621-V1

Source: sofi.com

Apache is functioning normally

May 30, 2024 by Brett Tams

Ramp and Brex are both financial technology companies that aim to help business owners track and manage company spending with software tools and financial products, including corporate credit cards.

Business owners can issue unlimited virtual and physical credit cards with both Brex and Ramp. Then, they can limit spending on those individual cards, create budgets, automatically categorize expenses and prompt users to upload receipts.

The key differences? Brex’s eligibility criteria focus on venture-backed startups, enterprise companies and businesses with annual revenue in the millions. It’s best for businesses that fall into those buckets and want a linked Brex business account for banking.

Ramp serves a broader group of small businesses, but they’ll have to do their banking elsewhere.

Looking for a business credit card?

See our overall favorites, or choose your business type to find the best options for you.

on NerdWallet’s secure site

Ramp vs. Brex: Comparison at a glance


Business entities that can qualify	Corporations, LLCs, limited partnerships and nonprofits.	Corporations, LLCs and limited partnerships. Nonprofits may be approved on a case-by-case basis.
Bank balance and revenue requirements to qualify	At least $75,000 in cash.	For daily repayments: More than $1 million per year in revenue, more than 50 employees or equity investment. For monthly repayments: Accelerator or venture funding, at least $100,000 in angel investment and at least $50,000 in cash. Enterprise companies need at least $400,000 per month in revenue.
Personal guarantee	Not required.	Not required.
Annual fee
Credit card rewards	1.5% cash back on all spending.	7 points per dollar spent on rideshares and taxis. 4 points per dollar on travel booked through the Brex portal. 3 points per dollar on restaurants. 2 points per dollar on software. 1 point per dollar on all other purchases. Rewards rates may vary for certain customers.
Customer support	Phone support available daily from 7 a.m. to 10 p.m. ET. Support request form available.	Live chat and phone available 24/7.

Do you have less than $50,000 cash on hand? Look at the BILL Divvy corporate card instead. That card works similarly to Ramp and Brex — it’s linked to expense management software, you’ll have to pay off your balance at the end of each statement period and it offers some rewards on your spending — but you may be able to qualify with as little as $20,000 in the bank.

Ramp card pros and cons

Pros

No annual fee or foreign transaction fees.

Simple, straightforward rewards.

No personal guarantee or credit check.

Direct integrations with popular tools and card-level spending controls and alerts.

Cons

Balance must be paid in full each month.

Not available to sole proprietors or unincorporated businesses.

Where Ramp wins against Brex

Available to a wider variety of entrepreneurs

Ramp is available to most incorporated or registered companies, provided they have at least $75,000 in the bank. While that still leaves out a large number of business owners — the majority of entrepreneurs in the U.S. are sole proprietors — it’s much more inclusive then Brex, which requires venture or angel investment or annual revenue in the millions.

Flat-rate cash back

Flat-rate cash-back business credit cards offer two key advantages: You don’t have to worry about making purchases through a specific portal to maximize rewards, and you’ll get money back on all your spending, regardless of whether it falls into certain bonus categories. Ramp’s rewards structure beats Brex’s in terms of simplicity, especially if your business doesn’t spend much on travel.

Brex card pros and cons

Pros

No annual fee or foreign transaction fees.

New cardholder bonus offer.

Bonus categories with high rewards rates.

No personal guarantee.

Cons

Complicated rewards structure.

High capital requirement for approval.

Daily repayment may be required.

Not available to most small businesses.

Where Brex wins against Ramp

Cash management account included

Alongside its business credit card and spending management software, customers get access to the Brex business account. This is a business cash management account that offers no monthly fee, unlimited transactions and a high annual percentage yield (APY) on cash invested in money market funds (uninvested cash doesn’t earn interest).

All these features make Brex a good choice for startups with venture investment sitting in the bank. Expanded Federal Deposit Insurance Corp. (FDIC) insurance protects up to $1 million in uninvested cash, and you can earn returns on the rest.

Rewards on travel spending

If your business spends significant amounts on travel and hospitality expenses and you’re willing to book flights and hotels through Brex’s portal, then Brex is likely to offer much more lucrative rewards than Ramp. Its rewards rates are up there with traditional business travel credit cards — including up to 3x points on restaurants, 4x on travel portal purchases and 7x on rideshares.

Traditional business credit cards vs. Ramp and Brex

In some instances, corporate cards like Ramp and Brex won’t make sense for your business. Instead, you should consider a traditional business credit card if:

Your business is a sole proprietorship. Corporate credit cards aren’t available to sole proprietors.
Your business doesn’t meet Ramp and Brex’s minimum account balance requirements. Traditional business credit cards focus on your personal credit history — not your bank account balance — when evaluating your application for a card.
You want the option to pay off large purchases over several months. Corporate credit cards don’t let you carry a balance from one statement period to the next, and some may require you to make payments as often as every day.



Annual fee $0	Annual fee $150	Annual fee $0
Regular APR 18.49%-24.49% Variable APR
Intro APR 0% intro APR on Purchases for 12 months	Intro APR N/A	Intro APR 0% intro APR on purchases for 12 months from the date of account opening
Recommended credit score 690850good – excellent	Recommended credit score 720850excellent	Recommended credit score 690850good – excellent

Ramp vs. Brex: Which one is right for your business?

For most small-business owners, Ramp is more likely to be a fit simply because it’s easier to qualify for. The card’s flat-rate cash back offers simple rewards on all your business spending. Plus, you’ll have access to powerful software that you can use to monitor and control expenses across the company.

If your business is a venture-backed startup, however, Brex is worth a look. That’s especially true if your team frequently travels for business, since you’ll be eligible for extra-high rewards rates when you use the Brex card on travel bookings, restaurants and rideshares. You’ll be supported by similar expense management software, too.

Source: nerdwallet.com

Apache is functioning normally

May 29, 2024 by Brett Tams

Inside: How to become financially independent? This is something you want to read. Don’t worry — there are steps you can take and strategies you can use!

One of the biggest struggles for most people is how to become financially independent.

There are many different ways you can be more successful in your finances, but there really isn’t one perfect answer. It’s important to think about what your goals are and then develop a strategy that will help you achieve them.

However, you may feel lost on what to do now.

There is no one way to make a living and there are endless ways to do it.

The concept of becoming financially independent may feel impossible to reach.

But, I am here to tell you that becoming financially independent is easier than you think.

I want you to join me on an adventure where we explore how being financially independent doesn’t have to be a huge sacrifice in your life. Just imagine what you could do with all that free time, money, and energy!

In this post, I am going to break down how being financially independent can actually create an amazing way that you live your life.

Financial freedom is the reason for your desire to be financially independent.

What is Financial Independence?

Financial independence is when a person or family has achieved a high level of financial stability and money does not control their lives.

You are working towards financial freedom that is when your assets have reached a point in which you estimate they will cover all of your expenses for the remaining part of your life. There is no need to work unless you desire.

These terms are heavily intertwined in their meanings.

This is something most people haven’t achieved as they are constantly living paycheck to paycheck.

Overall, by becoming financially independent, you have more choices in life.

We will discuss how it’s possible to create a generous and financially independent lifestyle while also staying grounded in your values.

How to Become Financially Independent

Financial independence is the idea that you can be completely free from money becoming a factor in your life.

In order to achieve this, you must find ways to reduce debt while increasing retirement contributions and having money on hand for emergencies.

There are two simple steps to achieving financial independence.

1. What you Want to Do with your Life

This one may seem overwhelming for most people to think about. You are working to the grind just to make money and focused on how much I make a year.

Everyone dreams of living a financially free life, where honesty isn’t needed, emotional attachments aren’t needed, and money can just come into your bank account without you spending a single cent making it.

But creating such a life isn’t easy; to make it happen, the first step is to take stock of what you want to do in your life and find the ways to obtain the following:

Your most fulfilled you have ever been, whether it’s artistic or financial. The freedom of not needing to check in with anyone, not feeling guilty about spending money you worked for.
Your time to do the things you love, whether it’s with family or friends or travel
The best relationships that are healthy and supportive in your life
The best physical health and emotional well-being that you can find.

By making those things your priorities, then you start to design the life you want.

The concept of time freedom is something that will become more important to you as you move from becoming financially independent to ultimately reaching financial freedom.

To create a life of financial independence, it is important to take stock of what one wants in their life and find ways to obtain that.

2. Matching your Money to Desires

You must take personal responsibility for your own finances.

If you don’t make the changes to reach your financial goals, then you will be stuck on a hamster wheel.

For example, debt will hold you back. Period. Until you finally get out of debt, you are a slave to money.

Another example that happens many times is out-of-control spending. The inability to spend less money than you make.

There are many ways for people to become financially independent. You have to craft a plan to match your money to the life you desire.

One way is by living within your means, another is to start making money on the side.

Your lifestyle must match your desires and what you can truly afford.

These two steps are essential in achieving financial independence.

Ways to Become to Reach Financial Independence

Financial independence is the idea that you can achieve financial freedom and continue to work or stay home without worry. Achieving this goal starts with savings and reducing debt, as well as monitoring progress as you work toward your goals.

If you want to learn how to become financially independent in 5 years, then this is exactly what you need to do today.

Making it happen will take hard work but with positivity and willpower, you’ll get there!

1. Know Where You Stand Financially

The first step towards financial independence is to find out where you stand right now (spoiler alert: it might not be where you think it is).

If they are not at zero savings how were they able to get there?

This means you need to understand your net worth.

You determine your net worth by subtracting all of your debts from your assets.

If you have a significant amount of debt, then it is likely you will be starting with a negative net worth. That is okay! You can dig yourself out.

To become financially free, you need to reach a magic number with your liquid net worth to quit working and retire early.

2. Income is Less than Expenses

First, you need to write out your income.

Next, add up all of your monthly expenses.

Take your income minus your expenses.

If your expenses are greater than your income, you will never become financially free and will live stuck in a debt trap.

If your income is higher than your expenses, that is great news! Make sure you start saving money for your future self.

3. Budget

Budgeting is a core principle of financial wellness. Budgeting your money, using the snowball method, and saving for emergencies are all keys to becoming financially independent.

A budget is a tool used to help organize finances and plan for the future.

It can be as simple as writing down what you spend on food each week or as complex as creating a full financial picture of your life.

To create a budget, decide how much income you want to generate in one month and compare that amount to what you currently spend.

Start by listing all your income and expenses for at least the last six months. Then make a plan to tackle any problem areas.

4. Reduce Debt to become Financially Independent

Financial independence is when you have paid off all your debts and are living below your means. This gives you the freedom to do whatever you want, knowing that you don’t need anyone else’s help and are not a slave to debt.

Debtors should find ways to pay off their debt and avoid creating new debt in order to become financially independent.

Pay off your credit card balance before interest or late fees are charged
Avoid taking on any additional charges by using debit cards for purchases
Borrowers should build debt payments into the monthly budget

Debt is inescapable: Drowning and leaning on others until you pay off your debt for good.

5. Save Money

Whether you’re 26 or 66, saving is an integral part of becoming financially free.

This is how you become financially stable.

It’s never too late to start saving money or learn how to invest it in different places.

Enjoy one of these fun money saving challenges!

6. Understand Your Needs & Wants

Achieving financial independence is about creating a life with only needs and wants. It’s about getting rid of the things that make us feel inadequate or less important, like debt, credit cards, and wasting time on social media.

Needs are things like food, rent/mortgage, utilities, transportation, and clothing.

Wants are all the things that make us feel like we’re keeping up with the Joneses’ or how we spend without thinking.

Most people do not have a clue on what is a need and what is a want. Most wants fall into fun spending. A no spend challenge is great for discovering what is truly a need!

7. Spend Less Than you Make

Financial independence is the ability to create a generous, balanced life without relying on others for financial support. That cannot happen if your expenses are greater than your income.

It is about spending less than you make and saving the extra money from your budget at the end of every month.

Track your spending for a few months, then analyze it to find out where you can cut back or save more money.

Look at how can you cut expenses. This could be as simple as cutting back or drastic ways to cut expenses.

8. Create a Rainy Day Fund

Financial independence is a term used to describe a person who has enough wealth that they do not have to work for money. A rainy day fund will help you to achieve this.

A rainy day fund takes your emergency fund one big step further.

Experts agree that a rainy day fund should have at least 6 months’ worth of expenses saved up in case life goes south.

Ideally, money should be pulled from the same day you receive your paycheck, so it never even touches your hands, avoiding temptation entirely.

9. Set Goals

Financial independence is a measure of personal finance that includes three components: financial goals, financial milestones, and knowing what you want your money to be used for.

You must set smart financial goals to become financially free.

Goals may depend on age and where you are in life. You must get clear about your vision for the future.

Ask yourself questions like:

How much should you have in your bank account?
What lifestyle do you want to enjoy? When is it achieved?
What your net worth should be.

Figure out what you need to do to reach your money goals.

10. Lifelong Learner

No matter how much you know, there is always room for more knowledge

Money, investments, and new technologies allow the possibility to grow your money exponentially. With a rich understanding of fiscal responsibility and a desire to progress, there are many ways to find financial liberation.

That happens by investing in learning about money, finances, and investing. Here are the best finance books I recommend.

Fastest Way to Become Financially Independent

It’s never too late to start investing in your financial independence. If you wait until the last minute, it will be difficult for you to make significant progress on your plan and stay on track with what needs to happen first.

You need to find ways to diversify your income and make more money.

That is the key for those who reach financial independence in 5 years or less.

Diversifying your income will help balance out how much money you make. You know the saying, “Don’t put all of your eggs in one basket;” the same holds true for your income.

This could be starting a side hustle that turns into a small business. Or freelancing your services. Even more important, learning how to make passive income in the stock market.

Stick around Money Bliss… We have lots of ways for you to make more money.

The Secret to Becoming Financially Independent

The secret to becoming financially independent is to take on one small financial challenge that will open up your eyes and help you understand the world of investing.

Investing is when you put money into stocks, bonds, or other low-risk investments that generate income without any work on your part. It’s called “passive” income because it happens without your involvement.

Investing in the stock market is one of the most common ways to invest, but there are other choices you might want to consider too. You can invest in bonds or look at real estate.

This is the secret of those who already have become financially independent.

How to Become Financially Independent from Parents

More than half of millennials over 21 are receiving financial help from a parent or guardian. However, many young people are beginning to realize that they can become financially independent from their parents by developing their own skills and connections in the workforce.

– Achieving personal independence is not always easy but does come with some benefits.

– It gives you more control over your life and allows you to pursue passions without feeling weighed down by debt or other obligations.

But, parents should also work on changes to help their children. For example, they can focus on showing proper money management skills and talking through financial decisions.

That way when high schoolers or young adults are ready to make their own financial decisions they have a strong foundation of knowledge of money.

How can young adults become financially independent?

Young adults are often advised to focus on building wealth in order to become financially independent.

Young adults must learn how to track expenses and make a budget.

Saving money needs to be a priority for them, so sharing housing with friends will lower expenses.

Young adults should also take into consideration their future income potential and consider whether or not they plan on continuing higher education after graduation.

What parents can do to encourage financial independence

Parents should encourage their children to become financially independent as it will benefit them in the future.

If parents always step in and solve problems, they may be preventing their kids from learning important skills that would allow them to meet their needs while putting off wants for the future.

This will only lengthen the amount of time needed to reach financial independence and this will eventually prevent an individual from reaching FI.

As parents, even if you have not been wise with money, teach those valuable lessons to your kids. Then, they can learn from your mistakes and change the trajectory of their lives.

Start Working toward your Financial Independence Today

Millions of Americans are financially dependent on someone else.

There is a lot to be said about financial independence and the perks that come along with it.

Do you want to avoid having a life of financial worry and debt?

There are numerous ways to become financially independent. Above, we have shared how to FI, ways to make financial independence happen faster, and the secrets to success.

Just to recap…

Budgeting can help you make sure you have enough income to achieve your financial goals.
Start by looking at areas of life that would be easiest for you to change, like your spending habits. The more you change how you spend, the easier it will be for that money to go farther and last longer.
If saving is another area that’s difficult for you, you might want to think about how much your spending is and then try to save that amount each week. Setting aside a specific chunk of money will make saving more manageable and help you meet the goal quicker.
Creating a generous lifestyle that includes leisure time and spending money on experiences over material things
Using the power of compounding interest
Living within your means.
Build wealth through investing in stocks, bonds, mutual funds, and other forms of investments.

In the long run, these principles will help you focus on what matters most to you so that your life is more meaningful and rewarding in general.

Now, learn how to become a millionaire with no money.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

May 29, 2024 by Brett Tams

An acronym for generally accepted accounting principles, GAAP is a set of rules and principles that public companies in the U.S. must follow when preparing their annual financial statements.

Without GAAP, it would be much more difficult for lenders, investors, and other interested parties to know whether a business is performing well or poorly.

Read on to learn more on what GAAP is and how it works, pros and cons of GAAP, the differences between GAAP and non-GAAP, and more.

GAAP Defined

GAAP, or generally accepted accounting principles, is a commonly recognized set of rules and procedures designed to govern corporate accounting and financial reporting in the U.S.

GAAP was established to provide consistency in how financial statements are created, eliminate the potential for fraudulent or misleading financial reports, and make it easier for investors and creditors to evaluate companies and compare them apples-to-apples.

All publicly traded businesses in the U.S. must use GAAP in their financial statements. While small businesses that don’t get audited aren’t required to use GAAP, doing so can still be helpful, particularly if your business may be interested in attracting an investor or exploring small business loans at some point.

How GAAP Works

• FAF oversees the FASB and GASB organizations

• FASB issues GAAP rules for businesses and nonprofits

• GASB issues GAAP standards for state and local governments

For businesses filing periodic reports with the U.S. Securities and Exchange Commission (SEC), GAAP dictates how a company can recognize revenue and expenses and how information needs to be presented to shareholders in an audited report. It also standardizes the financial reporting process so that third parties can easily compare and contrast two GAAP-compliant companies or entities.

GAAP incorporates three components to help eliminate misleading accounting and financial reporting practices:

• 10 accounting principles

• Rules and standards issued by the FASB or GASB

• Generally accepted industry practices

Recommended: Annual Business Revenue Explained

Pros and Cons of GAAP

GAAP offers a number of benefits. It guides companies in preparing accurate and clear financial data, reduces fraudulent financial reporting, and provides consistency in the financial statements of one GAAP-compliant company to another.

However, GAAP also has some limitations. Its “one-size-fits-all” approach to financial reporting, for example, doesn’t always address issues faced by specific industries. GAAP can also be overly complex, as well as costly to implement, for smaller businesses. And, it’s not a globally used standard, which can make it challenging for international organizations and for investors who want to compare companies operating in different countries.

Pros of GAAP

Here are some of the pros of GAAP:

• Fosters honesty and transparency in financial reporting

• Makes it easy to compare one GAAP-compliant company to another GAAP-compliant company

• Ensures that businesses follow the same accounting principles for all reporting periods

• Enables businesses to compare their performance with that of their competitors

Cons of GAAP

Here are some of the cons of GAAP:

• Strict accounting model does not address many industry-specific situations

• Can be costly for smaller companies to become GAAP-compliant

• Overshadows non-U.S. GAAP financial performance metrics, such as adjusted EBITDA

• Not a global standard

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10 Important GAAP Principles

GAAP has 10 fundamental principles companies must follow:

1. Principle of Regularity

Accountants must adhere to the rules and regulations of GAAP accounting. This principle keeps accountants from making up their own methods. With GAAP, any accountant can understand the work of another accountant. This is extremely important when comparing businesses and analyzing their worth.

2. Principle of Consistency

Accountants must apply the same standards and techniques for all accounting periods. This ensures financial comparability between periods. Any changes or updated standards must be explained in the footnotes to the financial statements.

3. Principle of Sincerity

Accountants must be as honest, impartial, and accurate in their reporting of a company’s financial performance as possible. They cannot lie or fudge numbers to make a company seem more profitable.

4. Principle of Permanence of Methods

All GAAP-compliant companies must be consistent with their methods and procedures. By doing so, all GAAP-compliant companies can be compared regardless of their industry.

5. Principle of Non-Compensation

Businesses must report all aspects of their performance, both good and bad, and without the expectation of debt compensation.

6. Principle of Prudence

Accountants should never speculate or give their opinion in a financial report. All records must only include expenses and provisions for spending that have or will certainly take place.

7. Principle of Continuity

While valuing assets, accountants must assume the business will continue to operate in the foreseeable future. Any potential buyouts or foreclosures should not be considered.

8. Principle of Periodicity

Accountants must report all revenue and expenses in the appropriate accounting period, such as fiscal quarters or fiscal years.

9. Principle of Materiality

Accountants must strive to fully disclose all financial data and accounting information in financial reports.

10. Principle of Utmost Good Faith

All parties that contribute to a company’s financial report are assumed to be honest and reputable.

Recommended: Unemployment Rates By City

Alternatives to GAAP

IFRS

The International Financial Reporting Standards, or IFRS, are another set of accounting standards, but these are used at the international level. IFRS is standard in the European Union and many countries in Asia and South America, but not in the United States. IFRS was established so that companies could be comparable from country to country.

The main difference between GAAP vs. IFRS is that GAAP prioritizes rules and detailed guidelines, whereas IFRS only provides general principles to follow. Accountants have more leeway when following IFRS, but often need to include explanatory documents. On the other hand, businesses that use GAAP may feel confined by the lengthy rules.

Recommended: How to Calculate Cash Flow

Tax Basis

Tax basis accounting follows the accounting that a company is required to use for filing its federal tax return. If allowed by creditors, investors, and other financial statement users, tax basis accounting can make sense for a privately held company, since it means less work when preparing the company’s tax return. When comparing tax-basis vs. GAAP accounting, tax basis accounting is less complex and often leads to less footnote disclosures in financial statements.

GAAS

Generally accepted auditing standards, or GAAS, is the framework that guides auditors. GAAS standards help auditors prepare a transparent and reliable audit report on companies. Following these standards also ensures that auditors don’t miss any important information. When comparing them, it’s important to remember that GAAP is used by accountants, whereas GAAS is used by auditors. Therefore, an auditor following GAAS may see how well a company is following GAAP.

The Takeaway

GAAP is the set of accounting rules and principles that public U.S. companies must follow when putting together financial statements. The goal of GAAP is to hold publicly traded companies accountable and ensure their financial statements are complete, consistent, and comparable.

For small business accounting, you are not required to follow GAAP regulations. However, doing so can make it easier for outsiders to evaluate your business and compare it with other companies in your industry. Publishing GAAP-compliant financial statements could make it easier for your business to attract an investor or get approved for certain types of business loans.

If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.

With SoFi’s marketplace, it’s fast and easy to search for your small business financing options.

FAQ

How many principles does GAAP have?

The generally accepted accounting principles, or GAAP, has ten principles. They are:

1. Principle of regularity

2. Principle of consistency

3. Principle of sincerity

4. Principle of permanence of methods

5. Principle of non-compensation

6. Principle of prudence

7. Principle of continuity

8. Principle of periodicity

9. Principle of materiality

10. Principle of utmost good faith

Is GAAP the same in every country?

No, only U.S. publicly traded companies must use GAAP (generally accepted accounting principles). IFRS (the International Financial Reporting Standards) is used in the European Union and many countries in Asia and South America.

Why is GAAP important?

GAAP (generally accepted accounting principles) is important because it ensures honesty, transparency, and uniformity in financial reporting. Without GAAP standards, businesses could report their earnings differently, which could make it difficult for investors and creditors to evaluate and compare companies, and could also provide opportunities for fraud.

What does GAAP stand for?

GAAP is the acronym for generally accepted accounting principles, a comprehensive framework of accounting rules. GAAP is primarily used in corporate accounting and financial reporting in the United States.

Who oversees GAAP?

Three nonprofit organizations — the Financial Accounting Foundation (FAF), Financial Accounting Standards Board (FASB), and Governmental Accounting Standards Board (GASB) — play a role in setting GAAP standards. FAF oversees the FASB and GASB organizations, while FASB issues GAAP rules for businesses and nonprofits and GASB issues GAAP standards for state and local governments. The U.S. Securities and Exchange Commission (SEC) can establish GAAP via government regulations, but it typically allows the private sector to establish the standards.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Source: sofi.com

Apache is functioning normally

May 27, 2024 by Brett Tams

Being a budgeter is just about the worst job in the world UNLESS you know about fun money and how to make it work for you!!

When budgeting, you are told to track for every single purchase, make sure you’re staying within your limits, and make sure you’re still saving for important things.

But all of that can be a little more fun when you use these tips to make your budget have a good time.

First, forget the math! You’re going to need some kind of online system that will do all of the math for you. You might have to pay a little bit, but it’s worth it when you don’t have to do any work! Check out my favorite!

You know the saying, “Money can’t buy happiness.”

I believe that money does not have to be the root of all evil either. We are surrounded by an abundance of material goods and services for ourselves these days—it’s easy to spend like there is no tomorrow!

That being said, let me tell you about some ways I’ve found how to make my day-to-day budget fun with a little bit of creativity sprinkled on top!

Fun money is a novel concept and is one of the most popular ways to spend money.

This guide will help you create the perfect balance between saving and splurging, including different ways on how to spend it wisely.

What is Fun Money?

Fun money is the money that you’re able to spend on yourself without feeling guilty.

It is the predetermined amount of money or allowance set aside for each person to have their own fun money.

Fun Money has many benefits, including giving you freedom from guilt when indulging in your favorite treats.

It allows you to spend your funds however makes sense in order not to restrict yourself on what you can do with them.

Why do you need fun money in your budget?

Many people use fun money to reward themselves for completing certain tasks or achieving some goal. For example…

If you are trying to lose weight by eating healthy foods but have a hard time sticking to your diet. Then, you may use fun money to buy yourself a new outfit or shoes.
If you have been saving for a house and have reached the amount of money needed to purchase one. Then, you might use some of your fun money to go on a vacation.

Fun money is usually not earmarked for anything specific but is typically used as an incentive to complete some task or achieve some goal.

Also, fun money can be used as your own personal “spend-as-you-wish” fund. There are no questions asked if you stay within the allotted amount.

1. Morale

Fun money is a morale-booster and budget saving tool. The more fun you make your budget, the less stress it will cause in your life.

It’s important to take time for yourself by spending some of the extra savings on something that makes you happy. This could be like buying new clothes or going out with friends.

2. Limits Impulse Spending

The ultimate pressure to spend is real and happens without thinking! Fun money is something that you put aside for those impulse buys. Like those candy bars by the checkout line at Target or buying an extra coffee on your way to work in the morning.

This will help keep you responsible and accountable as well as limit spending because it’s set aside before purchases are made.

3. Money Fights Go Away

It’s no secret that money is the root of many arguments in relationships.

However, there are ways to avoid these issues and save your relationship!

One way you can do this is by creating an account for fun money. Fun money should be used when one partner wants to spend time with friends or family without guilt tripping their significant other into giving them more space within the budget.

4. No Judging

Fun money is a way to make your budget fun by spending it for yourself without judgment.

This makes you feel like the amount of money in your account doesn’t mean anything because it’s not necessarily something that society deems valuable. Thus, feeling free from judgment will allow you to enjoy all aspects of life more.

“If I have fun while I’m there, then why would anyone care about what happens?”

5. Stick to Budget

Fun money is the perfect way to make your budget fun.

Without this, people are more likely to abandon their budgets altogether and spend their funds on things that don’t contribute towards achieving financial freedom.

It’s easy for people to forget about fun when they’re working through a serious list of obligations every day like work, school, or family commitments.

Fun money provides an outlet where you can not only enjoy yourself. But, also save some extra cash in order to put it away into investments later down the line.

6. Importance of Adding Fun

The importance of adding fun money to your budget is undeniable.

This money allows you to have the freedom and flexibility to do what you want without worrying about how it will affect your finances.

It allows you to save for something big, or just have some extra money for a rainy day.

Fun Money As a Budget Essential Category

Fun money is a type of budget that you can use for special things to make your life and budget more fun.

While there are many ways to approach budgeting, Fun Money helps you set a fun and enjoyable budget.

This is one of the personal budget categories you need in your budget.

These are funds that you set aside specifically for spending on whatever you want because it won’t impact the rest of your budget.

If this sounds like a good idea, start with $10 and then increase or decrease how much is allocated per month depending on what suits your lifestyle best.

The only rule is that Fun Money must be spent within 90 days. So, make sure whatever it ends up being used for fits this criterion!

How Much Fun Money per Month

Each month, the average American spends $8.37 on “fun money.” This is just a little over $0.25 per day and includes things like going to movies, eating out, and going to the mall.

The amount of fun money you need is largely dependent on your goals and income.

It’s important to know what you want out of the budget before determining how much cash it will take to achieve those goals, as well as how often one should spend this type of money.

It can be anything from $10 a month for something like coffee or streaming services all the way up to $100 per month if that aligns with personal/family needs such as groceries or utilities.

When it comes to the average budget, it is recommended to have at least $10 – 20 available every month for fun money.

How to Budget for Fun Money

Budgeting for fun money is a good idea because it will help you avoid spending too much money.

If you make sure to plan your finances well, then there should be no problem with budgeting for fun money.

Fun Money Budget – This is one way people can set up their finances and plan out what they need before purchases start coming up.

Fun Money Reserve – This is a savings account that’s separate from the main budget and can help people save for bigger purchases.

The overall budgeting process should include fun money.

Tips on How to Budget for Fun

In order to budget for fun, one must first figure out what one would like to do with their money. They should then decide which activities are worth the most and cut back on any unnecessary spending.

One should also take into account how much one want to spend on each activity and set a limit for those activities as well.

Separate Money from Main Accounts

Separating this money allows you to spend guilt-free while still having a budget in place for other things.

The fun money should not be left to your main checking and savings.

Keep that money in a separate checking account or a cash envelope. Money just for you!

As you get used to the concept of fun money, you will see how easy it is to pay all monthly obligations while knowing something exciting is waiting for you!

Fun Things to Spend Money On

Fun money is a way to spend your money on experiences rather than things. It’s an excellent way for individuals to have fun while also saving up for future financial goals.

It’s important to set personal guidelines before you get started, such as knowing how much of your income can go towards fun money and what types of items are allowed because the experience will be more satisfying when it’s done with intent.

Here are things to spend money on for fun:

Golfing
Manicures
Movies
A really nice dinner out for two
Happy Hour
Ziplining tour
Hobbies
That thing you have been wanting FOREVER!

Honestly, anything that feels like a luxury to you or spending that brings tension in your relationship.

Always try and find free forms of entertainment. Do you want to go see a movie? Check the library for free screenings! There’s always something going on in your city, and it’ll cost you nothing but time.

Another great way to have fun with your budget is to take advantage of all the free things in your city. Go on a picnic in the park, go ice skating at night when it’s empty, or try out the free classes that are offered at your local gym.

Most of the time having a fun time with your money is more important than spending it on things.

How to Save for your Fun Money

First of all, start saving for your fun money on a regular basis.

You’ll want to save at least $5 per week on average in order to have enough saved up by the time you want to buy your fun item. If you’re not sure how much money that is, just multiply $5 by 52 weeks and you will have $260 a year. Increase the amount each week or month and you will have more fun money spending!

Next, set up a jar or put some coins in a piggy bank. Do not touch it for at least two months.

Then, buy your fun item and use that money instead of spending it on anything else.

By focusing on what you want and not what you don’t, it is easier to save more funds so they have enough for when life gets tough during the week.

When they think about this new perspective, people understand why saving up isn’t always necessary. This is especially true if there aren’t any calamities or emergencies coming around the corner and will constantly find ways to make their money work for them.

A “Fun Money Budget” is Less Stress

A fun money budget is a type of spending plan that allows people to spend money on activities or experiences they enjoy, without having to worry about how much they are spending.

In fact, it is the opposite of a strict budget, where people must spend money on necessities.

By utilizing fun money, transparency will result in more trust and fewer money fights.

Money is a tool that you have permission to use.

There are numerous ways to break out of financial constraints and enjoy life with your money. All while staying on budget.

You can save for fun by doing something like taking up a hobby or spending time with friends and family! It’s all about having fun!

Budgeting for “fun money” can make all the hard work seem more doable by giving you a sense of purpose and making it easier to stick with your goals.

More Budgeting Resources:

From all of the free and paid budgeting apps, here are our top budgeting apps to check out!

This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.

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moneybliss.org

HoneyMoney increases your awareness about your money habits. Being fully aware of your money naturally changes how you spend it.

Great way to use cash flow budgeting. Plus uses “envelopes” to budget.

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Moneyspire is user-friendly personal finance and small business accounting software that brings your entire finances together in one place.

Have total control over your financial life in one click.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

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How to Manage Money Wisely

1. Build a Firm Foundation

2. Design a Money Management Blueprint

3. Define Your Goals

4. Analyze Your Current Situation

5. Get on a Budget

6. Say No to Debt and Create a Plan to Pay Off Debt

7. Track Spending

8. Save Money

9. Invest in your Financial Future

10. Be Persistent

How to Manage Money Effectively Now

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