What Small Business Must Do In December

We wish it was about letting our employees and ourselves find time for online shopping (yep, it’s a Covid Christmas this year — forget the Mall). It’s not about wearing red and green to the office and bringing in cookies to share. Or if you work from home as so many of us are doing, it’s not about wearing our comfy ugly Christmas sweater or Santa Socks.

What it is about is getting ready for 2021. Sort of a Christmas list, for business.

The List

Prepare the 2021 budget. Include your monthly revenues and expenses, and a projection of how much you need to bring in next year to remain solvent or hit revenue goals. If the numbers don’t add up, it may be time to shop for additional financing.

Double check SBA Coronavirus Relief Options. Be sure you have asked for or received all the help you can get from the SBA.

Take inventory. Calculate your ending inventory to avoid any surprises starting 2021.

Organize files. Lack of organization can hurt your business, and this is the best time of year to clean up your files so any mistakes from 2020 can be rectified now and not carried over into the new year.

Prepare for Tax Season. Start by understanding your tax filing deadline, then gather and analyze your records looking for tax deductions and credits. Set aside estimated tax payments or determine whether you need a filing extension.

Or, simply let DL MoneyMatters do handle most of this list for you (highly recommended)!

Finally, promise to put 2020 behind you emotionally and get energized for 2021. Do something kind for your employees and for yourself. Get together and set outrageous goals for the coming year. Then take some time off to spend with close family and to celebrate what Christmas is really all about—love, mercy, compassion, and the call for us to share our time, our attention, and resources with others, especially those who need it most.

Merry Christmas!

It’s Not Too Late to Save Money in 2019

How are you doing on your 2019 New Year’s resolution to cut spending and save more in 2019? Well, you’re not alone. For those of us who have strayed from the path, a few reminders and suggestions:

Build an emergency fund. Life happens. Appliances breakdown, cars need repaired, and people get sick or injured. Your emergency fund must have enough to get you through 3 – 6 months of unemployment.

Create a family budget. Having a budget doesn’t mean you will spend less, but it does give you a baseline to track success and a tool to control spending habits. Before you create one, take this challenge: write down every expenditure for one week. You will learn where the weak links are and help you be more realistic entering budget targets.

Carry a zero credit card balance. Start with a clean slate. If you can’t pay all credit cards off in one month, pay the one with the highest interest rate first and work down from there. Paying 18% or more to banks is like swimming against the current. Carry only the one credit card that you know you will pay off every month.

Save on food. Take your lunch to work. Fast food restaurant lunches are about $7.00. That’s $35 per week or $1,750 a year, almost the cost a new refrigerator or microwave and more than a set of tires. Besides, lunches packed from home are healthier, and that leads to less money spent for prescriptions, cold and pain medicines. 

Bonus food advice: Over the weekend, prepare evening meals in advance and store them in containers in the refrigerator. Knowing that a delicious homemade casserole is waiting for you makes it easier to pass up the fast foodie crowds on the way home.

Use coupons and shop sales. Never go to the food store without a list, and always check for coupons in mail, paper, or online. Almost all major chains provide coupons online on their store apps. Make it a habit to check for coupons before any shopping trip.

Have a savings plan. Have a specified amount direct deposited into a savings account from your paycheck. When receiving bonuses or tax refunds, deposit half or more of it into your savings. Maximize your 401(k) contributions as well as your employer’s match. The 401(k) contribution limit for 2019 is $19,000, plus $6,000 if you are over 50, and the IRA contribution limit in 2019 is $6,000, plus $1,000 if you are over 50 (and may be tax-deductible).

Start with the “easy” suggestions first before working your way up to the more challenging and impactful tips. Let us know how you’re doing.

Living Within Your Means

An editorial by P. J. O’Rourke, the editor of American Consequences, touched on a subject that had us thinking twice about the booming American economy and individual responsibility. He writes about the government shutdown and its effect on a married couple that happen to be senior managers in different departments of the U.S. government. He estimates their salaries to be $200,000 to $300,000 annually, putting them in the top 5% of American earners. Yet, during the shutdown, they were interviewed while standing in line for free food at a pop-up market run by the Capital Area Food Bank in Washington, DC. 

It’s shocking to realize that a recent study of 25,000 American adults shows that 6 out of 10 working adults are living paycheck-to-paycheck or, even worse, are accruing debt and saving nothing for emergencies.

Those that do save for the unexpected, the study shows, think that $2,000 is the right amount for a 3-month emergency fund. 

Earning more doesn’t seem to matter either. As incomes rise, the pattern of spending the entire paycheck every month continues!

After some research, we were able to list 7 warning signs that you’re living beyond your means:

  1. Carry credit card debt
  2. Do not contribute at least 5% to a savings account
  3. Have less than 3 month’s pay in an emergency fund
  4. Have no emergency fund at all
  5. Lease a car you can’t afford to buy or finance
  6. Have paid overdraft fees
  7. Don’t budget

If the government shutdown did any good at all (and we don’t mean politically), it may have us thinking about how to live within our means so we never have to take a handout meant for the truly poor, unlike the government employees in O’Rourke’s story. We can all live within our means and still enjoy life — it just may take a little imagination and willpower.