Category Archives: Money

5 Things You Should Do When You Get a Raise

5 Things You Should Do When You Get a RaiseYou’ve worked hard, taken on extra responsibilities, and made sure to shine at every aspect of your job. It’s finally paid off and your boss let you know that you’ve been approved for the raise you’ve wanted for months. Your first instinct may be to start dreaming of all the things you can do with your money, but don’t rush out and sign a lease on a brand new car just yet. Naturally you want to enjoy your extra money, but you also don’t want to spend it so fast you hardly notice you ever got a raise. Instead do these things.

Review your tax withholding. Your raise might push you into a new bracket. Use the IRS’s online withholding calculator to see how much should be withheld from your paycheck based on your salary and exemptions. If you need to make changes, complete a new Form W-4 and give it to the right person in payroll or human resources. Otherwise, if you don’t adjust your withholding, you could end up with a tax bill when you file next year’s income tax return.

Don’t count your eggs just yet. A 5% raise might not really look like 5% on your paycheck, especially if you’ve had to adjust your tax withholding. Wait until you get your first paycheck so you can see how your pay really increased post-raise. Once you have a concrete idea of how your raise affects your take-home pay, then it’s safe to start making plans for your money.

Be careful about taking on extra expenses. A few extra hundred dollars in your paychecks makes you feel like you can say yes to anything. Premium cable channels? Go right ahead. Spa subscription? Why not? Another extracurricular for the kids? It will keep them busy. Watch out for lifestyle inflation, which can easily happen as you make more money. If you start taking on new expenses quickly, the extra money from your raise will be gone before you ever really get a chance to just enjoy having more money in your paycheck.

Increase your savings. Rather than spending your salary increase on more “things,” your raise will benefit you much more if you divert it to savings. If you’re comfortably living on your current salary, you won’t miss the extra money if you put it in your savings account. You can build up your emergency fund, maximize your retirement savings, or put money towards a summer vacation. You don’t have to put all the salary increase in your savings – you can split it 50-50 with another goal.

Use the extra money to pay off your debt. Move beyond minimum payments by putting some extra money towards your debt payments. Start by paying as much as you can towards your highest rate credit card and continue until all your cards are paid off. If you don’t have any credit card debt, consider putting extra payments toward your mortgage or car loan to pay these off ahead of time. Make sure you won’t face any prepayment penalties by paying before the scheduled date.

It may be awhile before you get another raise so maintain some financial freedom by avoiding too many new financial obligations.

5 Signs You Are Cut Out for Entrepreneurship

I’m a huge fan of people starting their own businesses. After reading The $100 Startup (if you haven’t read it, go pick up a copy right now), I truly believe that anyone can start a side business and grow it into something substantial. I started a blog carnival submission service which became profitable within a few months and I’m always exploring other opportunities. I’ve reached a $10,000 side business goal several years in a row.

Have you been feeling the urge to kick your day job to the curb and start your own venture? Does you lay awake at night thinking about the possibility of starting your own business and being your own boss? I definitely have the entrepreneur itch, and if you exhibit any of the following symptoms, you should start thinking about launching your own business.

You’re Self Motivated

Self-motivation is the most important characteristic of a successful entrepreneur. We’ve all experienced the feeling on just not wanting to work for a certain period of time. But as an entrepreneur, you don’t have a choice. You are the boss and there will be no one standing over your shoulder barking out orders. But if you don’t work, you won’t make any money.

The fate of your business is left in your hands and your hands only. You have to be able to work alone and motivate yourself to do the not-so-fun stuff.

You Go Above and Beyond

If you spend extra time on projects without being asked or paid – you’re going above and beyond. Not having to rely on the direction of a superior is a good sign you’re ready to be your own boss. You want things to be done right because that’s how they should be done. If you start a business, nobody will care more about it than you will. You have to be willing to do the work when nobody else wants to so that it comes out perfectly, just like you imagined.

Entrepreneurs generally enjoy doing their work and doing it well. This sometimes means putting in extra unpaid hours to make sure the job is done exceptionally well. This is a superb trait to have as a small business owner.

You Like to Improve Things

Entrepreneurs like to improve things. They see the weak spots in products or services and formulate a plan to improve. If you’re constantly pitching ideas to your employer about how he could improve his business product, you may have the necessary skills to start your own thriving business. If you like tinkering and making things more efficient, you may have what it takes.

You Are Impatient

While patience is often a virtue, when it comes to business, being patient and lettings things happen to you instead of attacking them can be a curse. With my blog carnival business, I went out and found business. I guest posted, I emailed people I thought could use my service, and it worked perfectly. Had I been patient after an initial slow day, I would have shut the business down and considered it a failure after months of nobody signing up.

Every business faces their own set of unique problems. It’s how you deal with those problems that sets you apart. Entrepreneurial spirits don’t let small hiccups gets bigger. They fix them immediately so that they don’t grow. 

You’ve Found Your Calling(s)

If you’ve found work that you are absolutely in love with (and that is somewhat profitable), your ambition alone could fuel the fire for success.

Something magical happens when you do work that you enjoy – you begin to excel and gain momentum. You put in those extra hours to perfect your craft and therefore establish an incredible reputation for yourself.

If you’ve found something that you love doing then you’ll probably be committed to putting in the initial time investment that often goes unpaid. When I started this blog, I put in 30-40 hours a week without even realizing that I could make money. It wasn’t until 8 months later that I made my first $50 and it’s sort of blown up since then.

One Word of Caution

If these five signs fit you to the letter, then yes, you probably are cut out for entrepreneurship. However, this doesn’t mean you should just up and quit your day job without the means to support yourself financially. Ease into entrepreneurship and try building a business in your spare time, in evenings and on the weekends. Save up some money and start your own business with firm feet on the ground. Small steps in the right direction can lead to something big over time.

Put in the work to fuel your entrepreneurial life and with time you’ll get to where you want to be. There’s no better place to get started than here and now.

Are you cut out to be an entrepreneur?

When You Should Pay Bills Manually

These days, nearly everything is automated. A rent check goes out monthly from our bank account, our student loans are auto-debited (and we get a discount for that!) and at the end of the month, our credit cards pay themselves by connecting to our checking accounts and withdrawing money.

However, there are a few times that I still pay bills manually: Our gas bill, our electric bill, and our cable bills.

Why We Don’t Automate Those Bills

I just logged into our gas company’s payment portal to look at their automatic payment options. They don’t allow credit card payments (whether you’re paying upfront or if it’s automatic), so it really makes sense to let this one pay itself by scheduling it to withdraw money from our checking account. So I did. Now it will pay the amount due 3 days before the due date. I will still have 20+ days to review the bill before it gets paid, so if something ever looks way off, I will know about it long before they take money out of my account.

Our electric company lets us make payments via credit card, but only on a one-time basis. They are actually in the middle of transitioning to a new system where hopefully this will be possible, in which case I would add my credit card and get. I’d prefer to automate it, but if it’s a difference between getting credit card rewards each month on it or not, I’d rather take the 2 minutes a month and pay it via credit card.

Finally, our Internet and cable bill can be paid automatically, but I choose not to. With Time Warner Cable, I have some promotions and can never remember when they are set to expire. With automatic payments, I’ll be charged significantly more when they do expire, and there won’t be a warning. By having to pay this one manually, I’m making sure that I will notice the increase before paying a bill. I’ll be able to call up and renegotiate to make sure our bill for cable and Internet stays as low as possible.

Do You Automatically Pay Your Bills?

In my mind, automatically paying bills is the way to go whenever possible. Only in a few circumstances is it better to pay bills manually. I mean, who wants to sit there writing checks, remembering to get stamps, licking envelopes, and going to post offices? It’s much easier to do things from the comfort of your home, and slightly cheaper too. And anything that can be put on a credit card should be, because even 1% cashback in rewards can add up (and if nothing else, you can use purchases to hit spending limits to get hefty sign up bonuses).

What bills do you still pay manually?