Tag Archives: budget

Dirty Little Secrets

Saving money is at the top of plenty to-do lists these days. But what’s truly amazing is how low some of us are willing to go to get a free meal, pinch a few pennies at a yard sale or keep our fridge stocked with free condiment packets from McDonald’s. Phil Villareal knows. His new book, Secrets of a Stingy Scoundrel: 100 Dirty Little Money-Grubbing Secrets, is a primer on how to do just that. Don’t get me wrong; some of his tips are handy. But others give “shameless” a whole new meaning. Like when he suggests keeping empty cups from Wendy’s, McDonald’s and Burger King in the back seat of your car, so you can stop for free refills whenever the mood strikes you. (Apparently they’re good for 10 refills before the paper finally disintegrates.) You can decide for yourself which tricks to file away – or not. Here are a few, both worthy and…well…too gross to contemplate.

Tips worth considering

Don’t pay for website subscriptions. If you have any paid website subscriptions, cancel them – there are probably several dozen or a hundred websites that offer the same information for free. In fact, Villareal points out that “the only sites worth paying for are those that give you an embarrassment of essential material and occasionally ask for donations in return.” And just because someone asks, who says you have to answer?

Get yourself bumped off a flight. Villareal offers a mother lode of information on how to get yourself bumped off a flight – and get a ticket in exchange for the inconvenience. Among the many tips he offers are these: Show up late, avoid Internet check-in, buy the cheap ticket, and opt out of frequent-flier programs because being a member practically ensures that you’ll be the last person they want to bump. Those with more flexible schedules could rake in the free plane tickets, as he points out, by getting bumped off lots of flights. His fantasy? To never pay for another ticket again.

Don’t diss coupons. Sure, there are coupons in the Sunday newspaper, and that’s a good place to start, but there’s also a whole world of coupons out there in cyberspace. Villareal suggests visiting the home page of businesses and manufacturers to look for online bargains. Those bargains might come in coupon form (just print it out) or as a link to an online coupon clearinghouse like Coupons.com.

Get rid of your landline. Really. Just go all-cellular, all the time. For Internet access, you can either get DSL or, if you have cable TV (unless the rising prices have finally proven too high), then go with cable. But a landline is just another $30-$50-per-month drain on your checking account. And you really don’t need it. Really.

Tips that make you say “Oooh, gross.”

Dumpster diving. Is he serious? Hard to tell. But he does point out that discarded dorm furniture could outfit his entire house, from living room to kitchen. All you have to do is position yourself near a university dumpster and wait for your future goodies to get tossed out. Or in.

Skipping out on a potluck dinner contribution. This suggestion is truly skeevy, especially when you consider how many schools and companies host potlucks. Villareal’s ideas include: Conveniently avoiding the sign-up sheet and then showing up anyway, claiming forgetfulness; signing up but for something cheap and lowbrow like dinner rolls; or signing up for napkins, plastic forks and spoons, and then grabbing them by the handful at a few fast-food joints. Can you say, oooh gross?

A cheap white wedding. In this pearl of masculine wisdom, Villareal suggests that once a couple has decided to tie the knot, the guy should present her with a cubic zirconium engagement ring. Blech! Then he should hold out as long as possible on wedding plans – basically until he has driven the poor woman so bananas that she’ll agree to be married in the Chapel of Love in Las Vegas. Or in City Hall. Or in the back yard. Cheap ring, cheap white wedding. (Note: The author admits that he didn’t present his wife with cubic zirconium. Instead, he let her parents pay for the wedding…)

Icky ideas notwithstanding, this book is a fun and witty – if occasionally off-color – read. And if you look really hard between the lines, you’ll see that Villareal advocates some sensible behavior, too, like eliminating your credit card debt, taking advantage of coupons, walking out on a deal if it’s not exactly what you want and more. Even so, you may never look at a dumpster the same way again.

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Keep Business & Personal Finances Separate

You know you’re growing up as an entrepreneur when you realize that it’s time to for your business finances to fly on their own. No more commingling of accounts, no more grey area, no more personal checks for business expenses. There’s business, and there’s personal. And there comes a day when the two have to go their separate ways.

When you’re first starting out, it doesn’t make sense to go overboard with new accounts or a dedicated credit card. Who knows if anyone will buy what you’re selling? You hope they will, and you’re willing to sacrifice your weekly latte to make sure they do. Then you hit paydirt. Calls start coming in, clients multiply, costs increase. Suddenly, you need a website, an accountant, business cards, supplies, even a few ads.  Maybe it’s time to separate your business finances from your personal accounts.

Yelena McManaman, social media marketing specialist and founder of 1Click VA http://www.oneclickva.com, knew it was time to make her move when she and her husband were buying an apartment. Her business was already generating steady income, but she hadn’t yet set up a separate business account – all her earnings went into the family account and expenses were charged to her personal credit card. So when the agent asked McManaman to verify her income, she couldn’t. There was no proof of cash flow. Whoops. “That’s when I realized that having a separate business account was not only good for my business, but essential for getting any type of financing deals in the future,” she says.

Clearly, at some point it pays to separate your personal finances from your business finances. But how do you know what to do and when to do it?

You know it’s time when…

  • You’re not sure how much money is going in or out.  Budgeting is overwhelming. Costs are rising, and you’re losing track of receivables.
  • In theory, you “should” be earning more; in practice, you still can’t make ends meet and you never seem to have enough in the bank.
  • You wish you could run reports (expenses, income), but you can’t easily access the data.

A few ideas on what to do…

  • Incorporate as a limited liability company (LLC). Be sure to speak with a lawyer because every situation is different!
  • Set up a separate checking account. Make it your business bank account.
  • Get a separate credit card. Concerned about running up more debt? You should be. If you’re really sweating it, get a debit or prepaid card instead. Remember: A credit card is free as long as you pay off the balance every month, and there are plenty of cards out there with no annual membership fees.
  • Deposit all income from your business into your business account. Technically ALL profits are your earnings, and you’ll have to pay taxes on the profits. So put yourself on a fixed “draw,” make sure there are operating funds in the account, and budget accordingly.
  • Set a goal to hire a bookkeeper with Quickbooks expertise. (Don’t learn it yourself — it will take valuable time away from your business). Request monthly profit-and-loss statements. You need real data to understand which areas of your business are performing well – and which aren’t.

For Kate Lister, founder of Undress4Success.com and author of Undress For Success: The Naked Truth About Making Money at Home, the defining moment came when she was line-item audited by the IRS. Among the issues were credit card membership fees, if the card was used for both business and personal expenses. “In the end, they owed me money,” Lister says. “But it wasn’t enough to pay the $2,500 it cost me to defend my innocence.” Since then, she has started three successful businesses – and become religious about keeping separate accounts.

By separating your accounts, your personal financial choices (good or bad) can’t affect your business – and vice versa. And that’s something to think about. So keep them separate.

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