Categories
Budgeting

The Importance of Preparing a Budget

If you are like many other people, you probably find it difficult to make a budget, then stick to it. Too many times people will take the time to sit down and create one, only to abandon it soon after because it is either easier to go back to the old ways of money management or it simply cannot be followed because of incurred debt. Either way, it is important to keep in mind that a budget is a crucial part of money management and can actually help you get out of debt. By following courses such advice as that given in the Good Sense Money Budget course, you will learn how to save money in a way that is practical.

When you use such material to create a budget, you will also learn how to prioritize your financial goals in a way that will show you how to save money as well as where and when to spend it. You will then be able to develop a personal budget while reducing expenses by eliminating the things you do not need. Imagine having the knowledge to show you how to downsize debt right at your fingertips. Now you will.

Whether you are single and living alone, married with a family or single with roommates, preparing a budget will help you organize every aspect of your life. You can start by taking into consideration the amount of money you earn each month. Sense most people spend around the same amount each month on bills and other fixed expenses, this will serve as a good starting point.

Once you have figured how much you have to spend, you will need to go about planning how you will spend it. Prioritize your expenses. Write down in chronological order all payments you must make each month. If you find you actually owe more than you take in, begin looking at what you can eliminate. For example, if you do not need cable television, eliminating this bill may help you pay for other necessary expenses. Keep in mind you can always pick the service back up again once you are able to afford it. Cable television is only one example. If you find you do not have any bill you can eliminate, consider taking on an extra income to help pay expenses.

Once you have created a monthly budget, think in terms of one year. Here you will plan for unexpected incidents. In addition to the monthly expenses that will probably only vary slightly from one moth to another, you will need to factor in possibilities such as new tires on your car or air conditioner repairs. It is always necessary to factor in incidentals because they always inevitably do occur.

Planning a monthly budget will not only help you manage your money, but will also allow you to keep up with what comes in and what goes out. You will have beyond a shadow of a doubt what you have spent and on what, and can better plan for your future.

Categories
Budgeting

3 Benefits of Preparing Budgets

All large companies believed in budgeting. It is a busy affair for companies every year. No matter how good or accurate a budget is, it will not benefit a company if the employees do not support it.

Some experts defined budget as formal business plan. It is a financial target that what a company aims to achieve in the near future. It consists of series of plans and actions expressed in financial numbers and terms. A company can measure its successes and performances during the financial period easily by comparing the results with the budgets.

The process of preparing budgets can bring various benefits to a company. Some of the benefits than can derived from it are:

1. All managers involved will be made to think ahead and plan their targets and how to achieve them.

2. Top management will be compelled to review previous performances identify weaknesses. New action plans are also drawn up to remedy the weaknesses and identify new opportunities for further growth.

3. All departments are required to coordinate their efforts during the preparation phrase. This will enhance teamwork and further improve organization skills.

In order to ensure that a company enjoy the full benefits of budgeting, the top management must support it fully. Most of the lower level employees are influenced by the attitude of the top management. If they see that the top management is committed, they will automatically follows.

Once you have the support of the top management and other employees, your job of preparing budgets would be easier and half done.

Once the budget is completed, it does not mean that the company will automatically achieve its targets when the financial period ends. The budget is only the first step. The company has to ensure that all actions plans in the budgets are followed closely and all interim targets are achieved.

Categories
Taxes

Things to Consider When Preparing Wills

People are often unaware of the benefits of preparing Wills. Many believe they only need a last will and testament if they own valuable assets they want to pass along to heirs upon their death.

Individuals who procrastinate about preparing Wills may very well leave a mess for their family members to take care of. Instead of choosing an estate administrator and beneficiaries to receive inheritance gifts, the estate will be supervised by a probate judge because no directives were provided.

Probate is necessary for documenting a person’s death and settling their estate. If a person executes a last will and testament their property can be gifted to whomever they desire through a process known as testate probate. Without a Will, estates are settled in accordance with state laws using a process known as intestate probate.

The probate process is quite extensive and generally lasts several months. Assets cannot be transferred to beneficiaries until the estate is fully reconciled. During this time, property values can depreciate, but recipients are required to pay inheritance tax based on the date of death value.

Furthermore, if decedents did not engage in estate planning to cover settlement costs, administrators may have to sell assets to pay off outstanding debts, court fees and legal services.

Preparing a Will does not allow the estate to avoid probate, but does provide directives about settlement proceedings, beneficiaries, personal representatives, and distribution of assets.

The only way to ensure heirs receive inheritance property without delay is to setup a revocable trust. Since property held in trusts is no longer owned by individuals it is not considered as part of their estate. Trust property is exempt from probate and can be transferred to beneficiaries in an expedient manner.

There are many types of trusts, but each requires a last Will to provide directives regarding property holdings. A Trustee is chosen to handle settlement proceedings and distribute assets to designated beneficiaries.

Certain items cannot be placed into trusts. Therefore, individuals ought to execute a “pour over” Will and designate beneficiaries to receive their property. Items included in pour over Wills include clothing, collectibles, household belongings, and property with sentimental value.

The most practical way to protect assets and pass along to future generations is to work with an estate planning law firm. Attorneys can offer guidance and help clients understand the benefits and drawbacks for each estate planning strategy.

Before consulting with attorneys it can be helpful to prepare a list of goals, along with any questions you might have. It can also be beneficial to address the following questions:

• What kind of assets do you own and what is the appraised value?

• Do you own real estate located in another state?

• Are you a business owner and will the company be handed down to a successor?

• Who will become the legal guardian of minor children?

• Do you want to establish a children’s trust fund?

• Who will receive your estate assets when you die?

• Do you have life insurance policies?

• If your estate has to pass through probate, have you setup a financial account to pay off outstanding debts and probate expenses?

While establishing a comprehensive estate plan can be time-consuming it is worth the effort to protect your family legacy. Those who have had to settle an intestate probate estate will attest it is a frustrating and complex process.

Instead of adding stress to loved ones during a difficult time, make the effort of putting together an estate plan and executing a last Will. Doing so will not only make things easier for those left behind, but can also reduce estate and inheritance tax liability for heirs.

Categories
Mortgage

6 Steps, For Preparing, To Finance, The Home, You Buy

Although, many consider, owning a home, of one’s own, to be a primary component of the American Dream, far too often, we witness, many people, insufficiently, prepared, and/ or ready, to prepare, from a financial perspective! When one identifies, how home ownership, might serve their needs, and aspirations, and ensures, their choice is their personal best, in order to make certain, the process, from searching, to closing on a house, is as stress – free, as possible! Since, for most of us, the value of our home, represents our single – biggest, financial asset, wouldn’t it make sense, to proceed, wisely? With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 6 steps, which might help, in the process of preparing for as many of the financial considerations, involved, from the home buying step, to the home ownership, one.

1. Add no more debt/ credit: If you, truly, want to own a house, in the period, leading – up, to the search/ quest, be certain to avoid taking – on, any more debt, and, rather, attempt to, pay – down, whatever debts, you currently have. Your overall credit, is key, to whether you qualify for a mortgage, and, if you do, whether you will qualify, for the best possible rate! Evaluate you credit report, correct any errors, immediately, and address any weaknesses. Either do so, yourself, or hire, a professional, to best position you, in this area!

2. Pay down existing debt: Home financing/ mortgage lenders, use several ratios, to determine their decisions, as to whom, to loan funds to! One of these, significant factors, they consider, is the percentage of one’s overall debt, to their income. In order to prepare, use the period, leading up to your search, to pay down this debt!

3. Review Credit Report: Take your credit, and credit history, seriously! Before beginning, obtain a copy of your report, and examine it, carefully, for any errors, mistakes, or matters, which require an explanation. Either, personally, follow the process, for fixing these, or use, a professional, to ensure, you are best positioned. Examine your FICO score, know what is needed, and strive for improvement!

4. Build – up/ accumulate necessary funds, needed for downpayment: While, in most cases, it might require 20% downpayment, to qualify for a mortgage loan, there are, today, certain loans, which require less. However, when you put down less, you will have to pay more, monthly, and, it may be more challenging, to qualify! Take the time, between when you, make the decision, to search, and, when you find, the right house, for you, and your needs, to save as much, money, so you are ready, and prepared!

5. Prepare for contingencies/ 3 – 6 months reserves: When you purchase a house, there are, often, many unanticipated expenses, etc. It is wise, to prepare for contingencies, and create several financial reserves, including for, repairs, renovations, appliance repair, major components, and, unforeseeable employment interruptions. Three, to six months, worth of money, should be, put aside for these considerations!

6. Reserves: When you have all the reserves, you need, you significantly reduce your potential, unnecessary stresses, and strains!

Congratulations of making the decision to buy a house. Now, proceed, wisely!

Categories
World

Chicago Teachers Union preparing the betrayal of teachers’ strike

Classes remain canceled on Wednesday, the 10th day of the strike of about 25,000 teachers in Chicago, the third-largest school district in the US.

The central issues in the strike for teachers are significantly reducing class sizes and substantially increasing staffing at all levels to relieve overwork and overcrowding. Conditions in the schools have reached a crisis point, with classrooms of upwards of 45 children, crumbling and filthy buildings, and lack of basic resources.

The Chicago Teachers Union (CTU) House of Delegates met at CTU Headquarters Tuesday evening to hear an update on negotiations with Chicago Public Schools (CPS). The delegates meeting was called after CTU President Jesse Sharkey met with Mayor Lori Lightfoot for 45 minutes Tuesday afternoon. Despite conflicting press reports, no tentative agreement was announced at the meeting, though the CTU is clearly preparing to announce a sellout agreement as early as today.

Teachers marching on Tuesday

At an evening press conference, CTU Vice President Stacy Davis Gates said, “The things that were discussed at the table are not concretely on paper.” Sharkey added, “If we can achieve a tentative agreement [Wednesday] morning, we would bring our delegates in in the afternoon.”

CPS released a one-page summary of a five-year tentative agreement on Tuesday night that fails to commit to even the most basic demands of teachers. The city offers paltry staffing increases of 250 nurses and 209 social workers over five years. No class size limits are indicated. Instead, the lowering of class sizes is to be “phased in,” in partnership with the CTU.

These are promises teachers have heard before. CPS is also offering a 16 percent pay increase over five years, which has been repeatedly used by CPS and the corporate media to try to portray the teachers as “greedy” and discredit their fight for the most basic resources in schools.

The Democratic leadership in Chicago is staking out an aggressive position, imposing austerity that has been its policy for decades. While insisting there is no more than $500 million for schools before and during the teachers strike, Lightfoot’s 2020 budget proposal increases spending for police by 7 percent, or $100 million.

Lightfoot and CPS are giving the CTU nothing that they can try to sell to teachers to force through an agreement. This is why the CTU has not moved to shut down the strike quickly, as it pledged to do before it began.

The Democratic administration is applying financial pressure to teachers to try to force an end to the strike. On November 1, teachers may lose their health insurance for the duration of the strike and be shifted onto the federal COBRA insurance, known for its high cost.

For its part, the CTU is not paying teachers any strike pay, contributing to the financial pressure on educators to end the strike.

According to the CTU, the negotiations have come down to three issues: additional elementary school teacher preparation time, and two items of legislation, one for an elected school board and another for expanding the number of issues that the union can bargain over.

Even if these demands were met, they would do nothing to resolve the basic issues teachers are striking over.

Over the weekend, the CTU declared that it was only $38 million away from striking a deal with CPS. The school board claims that the CTU’s demands are closer to $100 million. Both figures are grossly inadequate to fund the city’s public schools, amounting to less than one-half of a percent of the school district’s $7.7 billion operating budget.

As vice president of the CTU during the 2012 Chicago teachers strike, Sharkey was instrumental in negotiating the concessions deal with then Mayor Rahm Emanuel that eroded tenure and enforced standardized testing for teacher evaluations. The shutdown of the strike paved the way for the closure of 49 public schools, thousands of teacher layoffs and the expansion of several networks of privately run charter schools.

The CTU has engaged in political theatre throughout the strike, posturing as an opponent of Lightfoot’s proposals while simultaneously working out a deal with the mayor.

Teachers and school staff face the threat of a repeat of the 2012 betrayal, in which they will be forced to swallow a concessions contract branded as a “victory” without adequate time to read and discuss it before voting.

A section of the striking teachers

To defend public education, teachers must expand the strike and break through the isolation imposed by CTU, which is aimed at pressuring teachers to accept the concessions demanded by CPS.

Teachers are determined to fight back against any concessions that the city attempts to impose with the aid of the CTU.

One teacher outside of the House of Delegates meeting told the World Socialist Web Site Teachers Newsletter: “I am willing to fight for as long as it takes. I definitely think this strike needs to be expanded. The whole city should be on strike.”

Addressing the CTU’s betrayal of the 2012 teachers’ strike, the teacher continued: “It did nothing. Today we’re fighting for the same things we were fighting for then.”

Several thousand teachers, students and supporters marched in the city early Tuesday morning, targeting the city’s planned Lincoln Yards development, a former industrial corridor that the city has committed public funds to transform into a luxury business district. Nine teachers were arrested occupying a lobby of a company receiving public funds for private development. They were later released.

The WSWS calls on teachers and school staff to vote “no” to any concessions contract imposed by the CTU and to take the initiative for their struggle into their own hands by forming rank-and-file committees to discuss and democratically decide on their own demands.

These committees must link up with hotel workers, logistics workers, autoworkers, and others across the city to prepare for a general strike and expand the fight to defend the right of public education to the working class worldwide in a global offense against the capitalist system.

Categories
Taxes

What You Need to Know When Preparing for Your 2017 Tax Return

As Spring draws closer (hopefully), so does the time to prepare and file your 2017 taxes. Since we last posted, you should have received all the required paperwork from your employers and investments. Now it's time to catch up on the latest changes to the tax laws as some of them may affect you.

Caregivers

Are you a caregiver of a family member with a physical or mental impairment? If so you may be eligible for the Canada Caregiver Amount tax credit. The government recognizes the extra financial responsibility being a caregiver can have on your finances. This year determining if you qualify for the credit will be much simpler.

Education

Until recently, only post-secondary level course tuition qualified for a tax credit. If you took other courses at an educational facility, these fees weren't eligible. With the recent changes, courses such as second language skills and occupational improvement courses such as computer skills may allow you to benefit in more ways than intellectually.

While this option was added, the credit for post-secondary textbooks has been eliminated. This did not affect the tuition tax credit nor the ability to carry forward unused education and textbook amounts from years prior.

Parents

The Children's Fitness and Arts Tax Credits were eliminated in 2017.

Transportation

It appears the tax credit for utilizing public transit was not enough motivation for travelers to change their transport habits. Therefore, the public transit credit was eliminated mid-year 2017. If you used public transportation in 2017, this is your last chance to claim this benefit as amounts purchased for travel between Jan 1 and June 30, 2017 are still eligible.

Infertility Treatments

Financial help has become reality for those needing medical assistance to conceive. As of 2017, infertility treatments are now included as an eligible medical expense. As an additional benefit, this has been made retroactive. Meaning if you have received fertility treatments within the past ten years, you can request adjustments of past returns.

These are just a few of the highlights for the 2017 tax filing, not that taxes are ever a highlight. While it's great to know how to benefit during the current tax season, maybe it's time to start planning to benefit next year. Financial Planners are able to look at your current and future finances and create the most beneficial plan for you.

Categories
Taxes

Preparing Income Taxes – When the IRS Disallows My Schedule C Filing

What happens when your claims regarding small or home-based business expenses on IRS Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) are disallowed? The Internal Revenue Service (IRS) has guidelines that determine whether or not a business activity is carried on for profit. Rulings fundamentally rest on a determination whether or not business activity has been profitable in three of the last five (or the special case; two out of the last seven) tax years (including the current year) reported. If your business fails the "three-years-of-profit" test, the IRS applies Internal Revenue Code (IRC) Section 183 (Activities Not Engaged in for Profit), also known as the " hobby loss rule ". When your activities are viewed as a hobby rather than a for-profit business, tax claims reported on the 1040 Schedule C are disallowed, but not forgotten! All income previously reported on Schedule C is now reported as a write-in entry "hobby income" on Form 1040 Line 21, Other Income. Unlike business losses that are subtracted from any reported business income, hobby "losses" can only be reported as an Itemized Deduction on Line 23, IRS Form 1040 Schedule A under Certain Miscellaneous Deductions. This category of deductions is subject to a 2% threshold based on the adjusted gross income (AGI). If a taxpayer does not itemize their deductions, these previously legitimate losses will be lost leaving all the income subject to income tax rates.

The fact that the expenses, associated with "hobby" -related activities, are now reported only if the taxpayer chooses to itemize deductions and then, subject to the 2% -of-AGI limitation, is only half the story! Like gambling income, all hobby expenses are limited by the total amount of hobby income reported on Form 1040 Line 21. Furthermore, expenses can only be deducted in a specific order from the reported income. The first category to be deducted from the income relates to home mortgage interest and real estate taxes especially if your hobby requires physical space. After these expenses are applied to the reported income, deductions for advertising, utilities, insurance premiums, and operation-related costs can be deducted. Finally, if any amount of hobby income remains, depreciation and amortization of property can be applied. When only part of the depreciation expense can be applied to the remaining reported income, it is allocated across all depreciable assets involved with the hobby.

Do you have a record of profitable past performance and believe you are just in a business cycle slump? If you receive a notice from the IRS that raises the question of profit motive because of the "three-years-of-profit" guideline, you have 60 days to file IRS Form 5213, Election to Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit. Best practices suggest that you should file this request only in response to correspondence from the IRS rather than as a proactive measure. Seek professional advice especially regarding the timing of any tax-related filings with the IRS. Pay for professional advice especially when filing income taxes; don't be penny-wise and pound-foolish!

Categories
Bankruptcy

Preparing for Foreclosure – Can Bankruptcy Protect You From Foreclosure?

What does bankruptcy do to a foreclosure sale?

Let’s take a look at what happens when someone files a bankruptcy petition. Immediately at the time of the bankruptcy filing, an automatic stay goes into effect. The automatic stay is governed by federal law specifically 11 USC § 362. There are some exceptions to what the automatic stay can and will stop. Most notably if the debtor has a pending bankruptcy that has been dismissed within 1 year prior to the new filing, the automatic stay expires on the 30th day after the new filing. If the debtor has had 2 pending bankruptcies within the past year, there is no automatic stay and the debtor must request one from the bankruptcy court.

So, if the debtor has not had a pending bankruptcy case within the preceding year, the automatic stay kicks in immediately at the time of filing. This is a very helpful tool to the debtor in many regards. First, the sale of the debtor’s home through a foreclosure auction is halted. Second, the stay allows the debtor time to regroup and project a path forward through their reorganization plan without the threat of having to worry about losing their home.

How do the mortgage company attorneys know to stop the sale after bankruptcy

After filing bankruptcy, the debtors creditors, which include the mortgage company, receive notice of the new filing. This alerts all creditors that an automatic stay may be in place and they should cease collection/legal activities.

What can mortgage company do to get out of the bankruptcy

If the mortgage creditor believes they have cause, the mortgage company may file a motion with the bankruptcy court requesting relief from the automatic stay. Primary instances where their motion will be granted are when the debtor does not maintain mortgage payments after the filing, the debtor does not put forth a reasonable or viable reorganization plan, or the debtor chooses Chapter 7 protection which does not have a reorganization component as with a 13.

Timing of bankruptcy filing

The timing of the bankruptcy filing and the foreclosure sale date are two dates to consider carefully. If the foreclosure has been listed with the court clerk’s office, the hard deadline to file a bankruptcy would be the sale date. If the debtor has not received notice of a foreclosure sale, the debtor may have more leeway as to the timing of their bankruptcy filing. If the debtor files after the sale has gone through, the likelihood of saving the property is slim however, issues with the sale could be raised to overturn the sale.

Foreclosure sale occurred and debtor did not stop it

If there is a deficiency created from the foreclosure of the debtor’s home, the debtor may face collection attempts for the deficiency amount. In this case, a bankruptcy could help the debtor deal with that new debt.

In summary, should the debtor file bankruptcy to stop a foreclosure

This question is one that cannot be answered because each person’s situation is going to be different. A debtor considering this option should seek counsel from a local bankruptcy attorney, most of whom offer free consultations. The best advice is to not wait until the last minute to look at your options so that the debtor can make the best decision for them and their family.