Tag Archive Lifelesson

ByUSACash

How to Create a Budget in 5 Easy Steps

e’ve put together these 5 easy steps for beginners to create a budget for monthly expenses and spending habits, because we know it can seem overwhelming.

At iCASH we understand how important it is to take the time to plan not only for your bills, but those rainy-day unforeseen costs, too. If you’re in need of some extra cash, an online short-term loan can be the perfect solution.

Step # 1. Include Your Net Income

The first thing to consider when creating a budget as a beginner is how much you make every month. List your take-home pay, which excludes taxes. This is known as your net income. Knowing this amount guarantees that you don’t have an overestimated understanding of your income.

Do this as soon as the money lands in your bank account. If you list your income before you possess it, you will have an exaggerated sense of how much you can currently spend.

Listing how much you actually make as soon as the money comes in is a great budgeting for beginners’ tip.

Step #2. Track Your Monthly Expenses

Track your monthly expenses by going through everything you spend and list them routinely. These expenses include everything, both big and small: gas for your car, school expenses, even a candy bar. Everything goes into the list.

Make sure to do this daily or weekly so you don’t forget your spending habits. This way, you will get to evaluate your purchases throughout the monthly budgeting process.

 

Step #3. Categorize Your Expenses

When creating your budget, even as a beginner, remember that fixed expenses remain constant every month. Variable costs differ based on usage.

Constants:
– Rent
– Insurance
– Subscriptions
– Car payments

Variables:
– Electricity
– Hot water
– Cell phone bill
– Gas

Once you’ve listed your expenses, categorize them accordingly: constant vs. variable.

Classifying your living costs allows you to stop paying attention to fixed payments because you cannot reduce these in any way. You can narrow down on the variables to examine how you can adjust your spending pattern to suit your savings goals.

Step #4. Calculate the Difference

This is an important step when beginning your budget: Add up your incomes and your expenses separately.

Once you have the total for each, subtract the expenses (include your monthly bills as well as anything you spend on entertainment, eating out, etc.) from your income, and see how much you have left.

The remaining amount will represent your monthly savings and money you can put toward paying off debt such as an online installment loan, as well.

Step #5. Review and Evaluate Your Budget

A good way to know if your budget strategy was successful is to look at your savings.

Did you reach the amount you wanted to keep in the bank? If not, this is when you get to trace your spending habits and evaluate how you can do better with your budgeting plan. Are there any expenses you can cut back on?

Reasons to Make a Budget

The budgeting process gives you a better understanding of your spending habits and can help you reach financial goals as an individual or family. Only 47% of Canadians currently use a budget to manage their money.

These are the main reasons why a budget is useful:

Increased Awareness of Your Income

A great reason is to know how much you make every month once you exclude taxes and other payroll deductions. Keeping track of your net income and how you use it shows you exactly how much you spend from that amount.

This is especially helpful if you work multiple jobs or are self-employed, like a freelancer with an unstable income flow.

Keep Track of Your Money

Organizing your money monthly really helps to track your expenses and tabulates your spending so you can easily tell where your money is going. This allows you to gain more control over your finances.

Improves Finances

Another great reason to create a budget it so you know where your money is going so you can improve your finances by understanding what you need to cut. Especially if you have a credit card, living beyond your means can happen subconsciously. Budgeting will stop you from doing this, preventing undue stress.

Improving your finances through a strategic spending and saving routine is ideal when preparing for those unexpected expenses or saving towards a large purchase or vacation. When you make a budget, you can plan around  by setting spending limits.

 

Get a Helping Hand from us

With a little bit of effort, you can spend less on groceries every week. By using these tips above, you’ll be able to cut down on your food expenses and keep your spending in check. Even if you already follow some of these tips and still need an extra hand, you can always consider getting an instant loan from USACASHMoney to cover your grocery bills until you can get back on your feet again.

ByUSACash

Maximizing Tax Refunds and Getting a Larger Cheque

USACashMoney has a #lifelesson series to get you further than others

1. Maximize your Filing Status

You can only file using the head of household (HOH) status for 2020 if you:

  • Are unmarried on December 31st
  • Paid more than 50% of the costs of maintaining your home in 2020, AND
  • Have one or more dependents living with you for at least six full months in 2020

Head of household usually gives you a tax advantage, so if you can, go for HOH over single filing status.

Also married filing jointly gives you tax advantages, typically.

 2. File Your Taxes on Time

By filing earlier, you can get the refund sooner and the value of a dollar in hand is worth more at a future point in time. Also you can avoid any late fees and payments. ou’ll have to pay 5% of your unpaid taxes over a maximum of five months—and that adds up quickly. If you have to file your tax paperwork late, make sure you pay any tax owed by April 15th to avoid interest and mail your tax return or e-file as soon as possible afterward.

 3.Claim All Available Deductions & Credits

Tax deductions are qualified expenses that can reduce your taxable income. Most taxpayers tend to focus on the most well-known deductions such as charitable donations

Common ones include charitable giving, including tithing to churches, synagogues, temples or mosques. If you made donations to any qualified charitable organizations, the value of the items donated may be deductible. It’s important that you keep all the receipts for the purchases of your donated items.

Credits are another way of reducing your taxable income. However, it can be said that they are more effective than deductions at reducing your tax bill. Credits are netted directly against the amount of income tax you owe, rather than merely reducing the amount of income upon which you owe tax, as tax deductions do

The Child Tax Credit and the Additional Child Tax Credit may be available to you if you have qualifying children. The Child Tax Credit (the Additional Child Tax Credit) is in addition to the Child and Dependent Care Credit.

 4.Decide if you Should Itemize

Every taxpayer should take into account is whether or not they should itemize deductions. Generally, you should itemize your deductions if it results in a lower total taxable income than if you claim the standard deduction.

Making the choice to itemize your deductions is generally recommended if you:

  • Incurred substantial unreimbursed medical and dental expenses in a given tax year
  • Paid interest or taxes on your home or other personal property.
  • Had large unreimbursed casualty or theft losses
  • Donated large contributions of cash or tangible goods to a charitable organization

At the end, if you are unsure please reach out to your local CPA firm or an enrolled agent. A larger IRS refund will get you further than your neighbor in paying down debt and saving some for a rainy day.