personal finance Archives | Page 24 of 39

Make your time count: Three tips for managing freelance finances

The on-demand economy is booming, driven by ride-sharing, peer-to-peer rental, project-based job platforms and the ease of e-commerce. There are unprecedented income opportunities for freelancers but this work comes with a host of new challenges – many of which are all too familiar for me and my family – like co-mingled and confusing business expenses, quarterly and year-end tax headaches, and a general lack of visibility into your ‘real income’.

My brother and uncle are entrepreneurs, and I’ve seen how they have setup their businesses starting at day one. Having the ability to track earnings, expenses, and taxes automatically are keys to success and always top of mind. Getting better insights into their financials, including net income and tax obligations throughout the year is also increasingly important.

For those who are considering hitting out on their own this year, or the increasingly popular ‘side hustle’, here are my three tips to maximize your financial success.

1) Don’t mix business and personal. I know firsthand the temptation of co-mingling your personal and business finances, whether it’s using your personal credit card for your freelance expenses or keeping your finances together in one bank account, but there are important legal, tax and financial reasons for keeping your finances separate. Self-employed workers often struggle to keep track of their finances without the luxury of an employer helping them manage tax or CPF contributions, and many have no visibility into their real earnings and income. Separating your finances will help you keep a closer pulse on the health of your business and prevent any unpleasant surprises when you find out how much you owe come tax time.

2) Ditch the shoebox. Our research shows that a large number of self-employed and freelancers are keeping track of their finances on paper and a fair proportion of on-demand economy professionals say that difficulty managing finances has the biggest potential to put them out of business. This is deeply concerning to me and points to a major financial literacy gap among this demographic. Part of feeling confident about your freelance business and its future is understanding the more in-depth financial aspects. Using cloud financial management software to track expenses, mileage and invoices all in one place can help you find more tax deductions and save thousands in taxes.

3) Don’t be afraid to ask for help. Just because you’re self-employed, doesn’t mean that you’re on your own. Working with an accounting professional can help you create the building blocks for your financial future and make sure you’re not missing out on deductions. Building a close relationship with someone you trust early on can foster a value-added relationship, where they aren’t just doing your bookkeeping but giving you strategic insights on how you can set yourself up for long-term success. Whether you’re working towards quitting your day job to freelance fulltime, expanding your client base, or achieving profitability, if you’re direct about your goals and open to guidance, a strategic advisor can be a critical resource to help you realize them.

As someone from a family of entrepreneurs and someone who has spent the greater part of my career working to advance entrepreneurship, I’m thrilled to see a growing number of people taking control of their own future and leveraging the technology available to them to shape their careers and support their families. If you’re one of the many Singaporeans who will enter this economy in 2017, be bold; be diligent; be well-organized. You’ve got this.

Shirin Anne Wan Bio

Shirin Anne Wan is the Head of Customer Care for QuickBooks Asia Pacific, with more than 15 years of experience in customer service, customer care, operations and service excellence. Based in Singapore, Shirin has served in her role with Intuit as member of the APAC leadership team since 2013. Previously, she worked for Citi in customer experience management.

Do You Have A Financially Toxic Friend?

Whether you notice it or not, the people whom you interact the most with are likely to shape your financial decisions. Some outcomes are less positive than others. The truth is, you may not be able to change the personalities of the people around. The only thing you can change is your exposure to these people.

Filter out toxic financial relationships by distinguishing these people from the rest:

The Dollar-Pincher

There is a huge difference between prioritizing your spending and conserving because you do not want to spend your wealth! “Dollar-Pinchers” see money as a tool that they must conserve at all cost. They aim to spend a little money as possible (i.e., synonymous to a cheapskate or a miser).

Let us be realistic. Many of us have encountered a friend who seemingly dissolves when the bill arrives. To save you from an embarrassing moment with the waiter and to keep your Dollar-Pincher quiet, you opt for paying his or her share. Doing so entails that you will spend more than your allotted budget.

The Investigator

As the name suggests, the “Investigator” digs deeper into your life to reap information that you would normally share with your trusted financial planner. He or she desires to know how much you made, saved, and spend. You need to be especially careful if the Investigator is a co-worker. You see, this type of friend is least likely to be concerned with your well being. Anything you say may be used against you.

When it comes to painting my future, I am not afraid to test the waters. I have had several occupations and there was one thing that I noticed. My Investigator friend would constantly pry into my professional life. He would ask me how much my current job offer was and how much my monthly salary is. He goes even further by asking if what was offered was higher than my previous job. Needless to say, we are no longer friends.

Image Credits: pixabay.com

The Show-Off

If you are a frequenter of various social media platforms, you probably came across a friend who has a seemingly successful life. The “Show-Off” brags about his or her financial capacity by sharing his or her local and international endeavors. It is especially hard when you are roughly the same age as your friend and you find yourself making comparisons between each other’s progress.

Regularly bombarding yourself with friends who display or tell you how great they are doing with their finances can trigger unhealthy emotional responses. You may start doubting your monetary choices or start feeling depressed with your career. Please realize that you do not need to keep up with the Show-Off! Simply focus on what you are doing right with your finances.

The Wheedler

Be careful! You do not want to be misguided by the “Wheedler”. This type of friend uses flattering words and thoughts to entice you to spend beyond the bounds of your financial capability.

To put things into perspective, let us say that you are shopping with your chum Atiqah. You wanted to buy an expensive dress that you do not really need. Instead of politely suggesting to skip on the dress, Atiqah encourages you to purchase it immediately. She continues to shower you with exaggerated pleasantry until you give in. If you cannot change the Wheedler’s ways, you must only bring the amount of cash that you are willing to spend with him or her.

Image Credits: pixabay.com

It is time to turn the tables around. Search within yourself and examine whether you have been financially toxic to others. Are you willing to change for the better?

Sources: 1 & 2

Expert-Approved Ways To Increase Your Financial Intelligence

Throughout the course of our lives, many of us have experienced unpleasant economic periods. These are characterized by times when money the budget seems to cut short or when money seems to run low. Experiencing these periods every once in a while is acceptable. However, you have to take action if you are constantly living from pay check to paycheck. Boosting your financial intelligence is one way to improve your current circumstance.

Online resources define financial intelligence as the collection of knowledge and skills reaped from understanding personal finance and accounting principles. Why is this important? For starters, applying your financial intelligence to money management will help you reach your monetary goals.

On that note, here are 4 Expert-Approved Ways To Increase Your Financial Intelligence:

BY MAXIMIZING YOUR BUDGET

Managing your finances starts with building a realistic budget. To strengthen said budget, you can either decrease your monthly spending or grow your streams of income. Both of these methods can solve the budget crunch. However, the latter provides longer lasting effects according to bestselling author Robert Kiyosaki. Kiyosaki’s arsenal of financial books includes the “Increase Your Financial IQ” book. The title says it all!

When it comes to budgeting, he stresses that time and money are very crucial assets. He believes that people who are going through rough times should spend less money on unnecessary purchases and more money on productive matters (e.g., self-promotion or continued education). Maximize your budget by prioritizing the important categories.

BY MODIFYING YOUR THINKING

Sometimes, the only person who keeps you from becoming financially successful is you! Your thoughts and beliefs dictate your money decisions. Imagine what will happen to your finances if all your thoughts are clouded by irrational beliefs and negative thoughts. Conquer the darkness by shifting your mindset.

Focus your thoughts on stretching your means and you may eventually find ways to earn more money. As financial coach Cindy Brochu once said: “Getting smarter means thinking smarter!” Let your money-savvy mindset guide you to the decisions that you need to take.

BY IDENTIFYING ESSENTIALS FROM NON-ESSENTIALS

People who are low in financial intelligence experience difficulty in distinguishing between their necessities and momentary “cravings”. For instance, you may see many impulse buyers during the Great Singapore Sale. These shoppers will simply purchase items for the sake of it or for the sake of flashy discounts. Trouble boils when these shoppers use credit cards as their only means of purchase. Piles of debts may rain on their finances for years. If only they had the ability to identify the essentials from the non-essentials!

So, ask yourself whether you could do without it in the future. Do you really need to buy a Prada bag and a humidifier?

BY EXPANDING YOUR KNOWLEDGE

Knowledge fuels your financial power. Robert Kiyosaki believes that the wealth of the person does not purely rely on real estate and other tangible assets. He says that it depends on the information and knowledge you have about money. Simply, financial intelligence makes one rich. Let us put his ideals into perspective. Purchasing a new set of golf clubs will not improve your game, but paying for golf lessons will.

Other ways to expand your knowledge on money include attending local finance seminars, reading informative books (e.g., Intelligent Investor), and downloading financial add-ons (e.g., Mint.com app). These methods are all recommended by Mark Riddix. Mark Riddix is the author of “Your Financial Playbook” and the president of an investment consulting firm.

Image Credits: pixabay.com

I have to be honest! Following the above strategies for a few days will not make you financially intelligent. It does not happen overnight. You need to work on these for the next few years in order to build healthy habits. Doing so will add more order and discipline to your financial life.

Sources: 1, 2, & 3

The Contemporary Social Media And Financial Affairs

Here is how social media platforms can blend well with your personal monetary affairs.

YOU CAN CREATE A BUSINESS REPUTATION.

Content meets entrepreneurship as modern technology allows you to craft an online business persona. Use social media platforms to reach as many consumers as you can. You are free to advertise your products or service, but be wary of oversharing. Oversharing information may cost you plenty of money.

As Robert Siciliano, the online security expert for McAfee, once said: “Online reputation management and mitigation companies are a booming business because people just can’t stop posting things they shouldn’t, which often have long-term negative effects on their personal and professional lives.”

EDUCATORS CAN SHARE ENLIGHTENING VIDEOS ABOUT MONEY.

To increase mutual engagement between the financial literacy material and the students, educators can present a video inside and outside the classroom. Video sharing websites such as YouTube allows lecturers to upload their lessons, which can easily be shared by the students. This enables the students to process the money issues at their own pace.

Turn up the kinesthetic facet up a notch by asking your students to create a video to supplement their assigments related to budgeting or managing debts. This activity will connect them more to the lessons that you are teaching.

YOU CAN USE YOUR PROFILE AS A LEVERAGE.

One of the “online rules” that you must live by is to assume that your posts are all public. This assumption will make you accountable for your actions. After all, your employer may be stalking your every virtual move.

If you despise your job or your boss, it may be tempting to rant endlessly on Facebook. Posting does not cost a cent! However, doing so could sabotage your career. Do you remember the former NTUC Assistant Director who got fired due to her racist comments on Facebook? Well, NTUC’s Membership Partnership & Alliance took immediate actions as they have zero tolerance for racism. On that note, never post anything negative or unpleasant about your previous or current employer. Always use common sense!

FINANCIAL EXPERTS CAN EASILY COMMUNICATE WITH YOU.

Image Credits: pixabay.com

Experts provide significant financial education that will benefit you throughout your lives. This is where the power of social media comes in. Social media platforms present a tremendous opportunity to reach diverse generations, especially the Millennials. Millennials use technology to learn about their personal money matters. So, use specific hashtag such as #financialaid or #guidetobudgeting to expand the discussion to more users.

Sources: 1, 2, & 3

Six Financial Beliefs To Have Or To Scrap

TAKE THESE IN

An article by Dr. Matthew James, the President of The Empowerment Partnership, enlightened its readers on the essence of prosperity. He interviewed several people who embodied a healthy relationship with money. This research led him to eight financial beliefs, which the “prosperous participants” agreed upon. Here are just three beliefs to consider:

“Money demands attention.”

Failure to keep up with your monetary affairs can result to trouble. Your mountain of bills and outstanding loans will not disappear on its own! Avoiding your responsibilities may make you blissful for now, but it will haunt you in the long run. Invest your valuable time on getting your finances straight. Pay attention to details and foster realistic commitments.

“The universe wants me to prosper.”

Dr. James stresses on the influence of the “Law of Attraction” towards money. Made popular by self-help books, Law of Attraction is the belief that we receive the energy that we emit to the world. Cultivating positive thoughts brings positive experiences. While, focusing on negative thoughts brings negative experiences. The effect of our thoughts is apparent when it comes to money or the lack of it. Re-frame your thoughts to resemble your financial behavior.

“Money will respond to the instructions I give it.”

Compared to other areas in our lives, our believes surrounding money is probably more limiting. Realizing that you are in control of your finances will enable you to be accountable for your actions. Although the beautiful Prada bag is tempting, your money follows your instructions. It does not have its own intelligence!

Image Credits: pixabay.com

The first step that you must take is to set your financial goals. These goals will help guide and motivate you when things get though.

GIVE THESE UP

After knowing about Dr. James’ prosperous beliefs, let us turn the spotlight to the irrational financial beliefs. Following irrational or wrongful beliefs on money might jeopardize your financial health. Awareness is the first step! Expand your knowledge about these three:

“There is an optimum way to becoming successful.”

Say your expat co-worker spent his entire savings on gold investments (i.e., Gold Exchange-Traded Fund). He used his gains to build his own enterprise. He was onto something and so must you. If you believe that one size fits all, you are mistaken. Generalizing is a cognitive bias that you must overcome.

Stick to employing a strategy that will suit your spending habits, financial goals, and current situation!

“Money can buy me people’s attention and love.”

You cannot please everybody, even if you are the shiniest coin in the purse. Having money does not guarantee that you will gain genuine affection and attention from others. It is better to focus on the things that you can directly influence (e.g., loving yourself, seeing your friends, or donating to charity).

“Earning money is a competition.”

Most of us will agree that Singapore unintentionally cultivates a competitive atmosphere from school to working years. For people who treat money as a scorecard, losing money can be immensely difficult. Imagine what will happen to those individuals when unforeseen circumstances (such as layoff and recession) occur! Their self-worth may shrink once their wealth depletes.

Image Credits: pixabay.com

Instead of placing money as your top priority, put greater value to your family and friends.

Sources: 1 & 2

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