5 Tips to Managing Credit Card Debt

Using credit cards can be a good thing when they’re not over-used, and if they’re managed wisely. However, relying on credit to maintain a beyond-your-means lifestyle or even as a way of making ends meet can be a slippery slope. Why? Because if you lose sight of how much credit you’re carrying, rack up large credit balances or pay lots in finance charges each month, you’re actually doing your finances more harm than good. Let’s take a look at five things you can do to be sure you’re managing your credit card debt wisely.

Track Your Debt

Especially if you have more than two credit cards, make sure you know how many accounts you have open that you’re paying on each month, the total balance of each credit card account and the due dates and payment due each month. Simply seeing these totals may not only make you aware of how much credit card debt you’re carrying but also provide you with an incentive to pay it off.

Pay off Small Balances First

Some experts say that the smartest way to manage your monthly credit card payments is by targeting the smallest balances first. The reasoning is that by eliminating the smallest balances first, you will quickly free up more cash monthly to pay on the larger balances, which are probably costing you more in finance charges.

Lower Your Finance Charges

Monthly finance charges on credit card debt usually consist of an interest rate which is multiplied against your balance. These charges may start out low but usually increase over time or when your balance reaches a certain level. Knowing which of your credit cards costs you the most in finance charges will tell you two things: 1) Which card to use least, and 2) Which card company you should negotiate with for a lower rate. Some credit card companies will lower their interest rate if you simply call and ask for – or negotiate – a lower rate.

Use Credit Cards Sparingly

The best way to eliminate monthly finance charges is to pay cash and don’t use your credit cards. When you do use credit, however, keep the amount you spend small (less than $500 per month) and pay off the balance immediately when it comes due. Following this tip will not only stop you from drowning in credit card debt but also help to build your credit score.

Raise Your Credit Score

Your level of credit card debt and your on-time payments have a significant impact on your credit score. Your credit score is the main factor used by banks and other lending institutions to make decisions about lending for home and auto purchases. By keeping your level of credit card debt low – or even at zero – your credit score will show banks and mortgage companies that you are responsibly using your credit cards and wisely managing your debt.

An excellent resource to help you manage your credit card debt is an experienced accountant like those at Donohoo Accounting Service. Schedule your credit card debt consultation with Donohoo by calling 513-528-3982 or email us today.

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4 Common Money Concerns And How To Fix Them

The people who worry the most about money are … most people. Whether you have a lot, a little or you’re somewhere in between, concerns often linger about such money issues as having enough income for retirement, being able to cover emergency expenses, staying afloat following a job loss and making wise decisions about using the income and savings you have. To help ease your mind about your money concerns, the following tips will help you address some of your top financial stressors.

Make Wise Financial Decisions

If you’re lacking skills and experience in making good financial decisions, there is a fix for that. Online you will find a number of money management courses that can train you in how to budget, manage your money, control spending, invest and make wise financial decisions. As well, many local investment firms offer free courses in money management and investing, as do some banks and community organizations that are devoted to financial literacy.

Prepare for Loss of Employment

Fluctuations in business markets and in the economy overall can turn what once seemed like permanent employment into sudden job loss. When this happens, what can you do to stay afloat and sustain your lifestyle until you find a new job? Start by paying yourself first by saving 10 percent of your income – until you have six months’ worth of income saved. This is a standard rule for having money to live on in case of sudden job loss.

Set Aside Emergency Funds

The next important thing to plan for financially is the next emergency. An emergency expense may be suddenly needing a new car or replacing a major appliance that breaks down. Because these concerns make such a big impact on your budget, it’s important to have at least $2,000 saved at any given time to accommodate an emergency. Pay yourself first out of your current income or trim your spending as you would to save for any other important goal.

Save Enough for Retirement

Because some of your living expenses actually go down during retirement, you should plan on needing about 80 percent of your current income level to maintain your lifestyle. After considering all of your various retirement income sources such as Social Security, 401K, investments and pension, meet with a retirement planner or use an online tool to determine how much more income you’ll need. Then, make sure you’re taking advantage of retirement benefits offered by your employer (such as matching contributions), and save and invest small amounts on your own over time to meet your goal.

Additionally, if credit card debt is a major concern for you in managing your money, be sure to read our blog about the Top Five Things to Know about Credit Card Debt. As well, the professionals at Donohoo Accounting Service are here to help you manage your finances. We have been helping people like you to wisely manage their finances for more than 20 years. For a free consultation, call us today at 513-528-3982.

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6 Habits Of Successful People

Classic American poet and author Ralph Waldo Emerson once wrote that we should seek to imitate people better than ourselves. Since we all have areas in which we can improve, that’s not bad advice, especially if we seek to imitate successful people. In fact, researchers have found that successful people have certain routines or habits they carry out daily that help to make them successful. Check out these six habits to see which ones you’re already doing and which ones you might seek to imitate!

Schedule, Don’t List

When you have something specific to accomplish, such as returning a call, writing it down is a good idea. However, putting it on a to-do list is not as helpful as you think. The better choice of successful people is to schedule that return phone call on your calendar for a specific time and date. Then, it won’t be brushed to the wayside in favor of something else. It becomes a commitment.

Plan Your Communications

How often throughout the day do you check your email or social media accounts? If you’re like most people, you check or reply each time you hear a ding or a buzz. The problem is, those interruptions keep you from finishing what’s most important. The habit of successful people is to have a particular time to read and respond to communications, such as in the morning or before bed. 

Let Go of Control

Many people who’ve worked just about any kind of job have encountered micro-managers: those who not only give an assignment but also provide specific instructions on how to do the job and then supervise — and slow down — your work. Micro-management leads to wasted time and energy. However, giving up control over details will free you to go on to the next thing with vim and vigor. That’s why successful people don’t micro-manage.

Deal With It

When a document comes to you for your signature or for your review, taking care of it at the moment saves you future time. That’s why successful people have the habit of dealing with important things right away. They know that time is a commodity that can’t be replaced, so they create time in the future by dealing with the key items first.

Do It Again

Successful people have routines, especially related to how they start their day. Why? Because when you know what to expect, you’re free of anxiety, which is a time-waster. Also, having a morning routine sets you up for success by eliminating anything that would throw you off course and give you an excuse for getting up on the wrong side of the bed.

Keep Your Values

Among the many activities and events that successful people plan, they don’t forget their values or what’s most important to them. That’s why successful people plan according to their values, making what’s most important the highest priority each day.

What’s most important to you? If it’s being successful, you can count on the experts at Donohoo Accounting to support your success. We’ll keep your personal and business finances on track just as we have for other successful people during the past 20 years. Call us today for a free consultation at 513-528-3982.

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7 Tips To Be A Successful Entrepreneur

While hard work accomplishes much, it’s not the primary key to success in business. On the other hand, applying smart management practices tends to sustain businesses over the long run. Because these seven smart management practices have helped lead to success for other entrepreneurs, see if they will do the same for you.

Gain Requires Pain

To become successful in business, you will be required to make sacrifices. In fact, you may have to give up a number of activities, habits and/or relationships that don’t promote success because they’re wasteful, distracting, inefficient or unrelated to your goals. As hard as it may be to give these up, successful entrepreneurs keep their focus by making sacrifices.

Who You Know Outweighs What You Know

Having successful people around to work, advise you, or just make suggestions provides opportunities to learn from them and apply their lessons to your business operations. While your education, background and experience lend something important to your business’s success, the people you spend the most time with will have even more influence.

People Don’t Sell, People Buy

To buy or not to buy? While it sounds like Shakespeare, it’s the question consumers ask themselves when faced with a decision to part with their money and become the owner of goods or the user of services. The deciding factor, however, lies in the weight the customer puts into the “buy” or “not buy” basket based on the information they have about the product or service and their personal needs. Thus, people buy goods or services, they are not sold.

Practice, Practice, Practice!

Is there some skill you wish you could be great at performing? To move from wish to reality, spend some time practicing that skill. The more time and effort you put into practicing, the more naturally the skill will occur. And so it is in business, the more you practice the skills that promote success, the more success your business will experience!

Later Never Comes

In business today, customers’ needs must be met faster than ever before. And while patience is a virtue, it’s also too much to ask of most customers who are used to getting what they need immediately or almost immediately. On the other hand, making updates quickly in business technology and in process improvements often leads to success by securing your place in the market or outpacing your competitors.

Time Is Money

Whether it’s how an employee spends his time or how long it takes her to produce a widget, that time is costing your business money. That’s why efficient processes and well-trained employees are essential parts of the equation for successful business owners, saving your business time — and therefore — money.

Money Is Money

Finally, and perhaps most importantly, the wise management of your company’s resources is integral to its overall success. Keeping accurate financial records, filing and paying taxes on time, and responsibly accounting for the revenue that flows in sustains your business for the sake of your customers, employees, management and shareholders or investors.

Here to help your business manage its financials are the professionals at Donohoo Accounting, where we’ve been helping small businesses wisely manage their finances for more than 20 years. For a free consultation, call us today at 513-528-3982.

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