Keep Spending Under Control By Using Cash
<p>If you're like most people, you probably use plastic for many of your daily purchases. Since more places take credit or debit cards and many of these cards offer rewards or cash back, it is no wonder they are so easy to use. But this convenience can come at a cost. If you don't keep detailed records of your spending, using the card can lead to spending more than you normally would.</p> <p>When you use cash for your regular daily purchases, you have a physical connection to your available money, and you can visually see how much you have and how much you spend. With a card, it's all digital and you may not review your purchases until the end of the day, week, or even month. By then, the money has long been spent. But with cash, you open your wallet or purse and immediately know how much you have available to spend, and it may keep you from buying something you don't need. So, if you have trouble keeping your spending under control, <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/budgetingyourmoney/a/usecash.htm">you may want to consider giving cash a try</a>.</p><p style="background:#f5f3ef;border:1px solid #d5d0bf;clear:both;padding:.5em;"><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/31/keep-spending-under-control-by-using-cash.htm">Keep Spending Under Control By Using Cash</a> originally appeared on <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/">About.com Financial Planning</a> on Tuesday, January 31st, 2012 at 20:42:52.</p><p><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/31/keep-spending-under-control-by-using-cash.htm">Permalink</a> | <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/31/keep-spending-under-control-by-using-cash.htm#gB3">Comment</a> | <a href="http://financialplan.about.com/gi/pages/shareurl.htm?PG=http://financialplan.about.com/b/2012/01/31/keep-spending-under-control-by-using-cash.htm&#038;zItl=Keep Spending Under Control By Using Cash">Email this</a></p>
Ready to Buy a Home?
<p>With the housing market still in the dumps and mortgage rates at record lows, a lot of people are considering buying a home for the first time. Taking advantage of depressed real estate prices and cheap lending does indeed make this a buyer's market. But buying a home is no simple decision. In fact, it may be one of the largest financial decisions many people make in their lifetime. So rather than jump in head first it pays to make sure owning a home is really the right decision. Here's how to determine <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/realestatemortgages/a/Are-You-Ready-To-Buy-A-Home.htm">if you are ready to buy a home</a>.</p><p style="background:#f5f3ef;border:1px solid #d5d0bf;clear:both;padding:.5em;"><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/24/ready-to-buy-a-home.htm">Ready to Buy a Home?</a> originally appeared on <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/">About.com Financial Planning</a> on Tuesday, January 24th, 2012 at 11:44:57.</p><p><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/24/ready-to-buy-a-home.htm">Permalink</a> | <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/24/ready-to-buy-a-home.htm#gB3">Comment</a> | <a href="http://financialplan.about.com/gi/pages/shareurl.htm?PG=http://financialplan.about.com/b/2012/01/24/ready-to-buy-a-home.htm&#038;zItl=Ready to Buy a Home?">Email this</a></p>
Pick The Right Mortgage
<p>People love the idea of owning a home, and sometimes that allure makes people do the wrong thing. That's where risky mortgages come in. For decades, the 30-year fixed-rate mortgage was the gold standard. You put 20 percent down, you got a 30-year loan, and that was all she wrote. But in recent years the types of mortgages offered have made a mess of the marketplace, as can be seen with the current financial crisis. Now you can get interest-only loans, 40-year loans, adjustable rate mortgages, and so on. All of these new loans make it easier to make payments on a house, but the problem is they usually put you in a worse financial situation. Here's what you need to know to avoid some of the more <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/realestatemortgages/a/Risky-Mortgage-Rundown.htm">risky home loans</a> out there.</p><p style="background:#f5f3ef;border:1px solid #d5d0bf;clear:both;padding:.5em;"><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/22/pick-the-right-mortgage.htm">Pick The Right Mortgage</a> originally appeared on <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/">About.com Financial Planning</a> on Sunday, January 22nd, 2012 at 20:02:50.</p><p><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/22/pick-the-right-mortgage.htm">Permalink</a> | <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/22/pick-the-right-mortgage.htm#gB3">Comment</a> | <a href="http://financialplan.about.com/gi/pages/shareurl.htm?PG=http://financialplan.about.com/b/2012/01/22/pick-the-right-mortgage.htm&#038;zItl=Pick The Right Mortgage">Email this</a></p>
Saving Money in a Tough Economy
<p>Gas prices are relatively high and the cost of groceries are increasing faster than inflation. People everywhere are feeling the financial pressures of today's economy, and for most, the thought of saving money is a distant one. When times are tough, saving money can be difficult. Even if you're living paycheck to paycheck, there are ways you can save if you follow a few simple rules</p> <h3>Start Small</h3> <p>Saving money is a marathon, not a sprint. If you want to save up $1,000, it is much easier to accomplish that goal in a year compared to two months. In order to <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/savingmoney/a/wheretokeepsave.htm">put your savings plan to work</a>, the key is to start small. Can you find a way to save $5 each week? Think about it--five dollars a week is less than a lot of fast food value meals or even a few fancy coffees. Five dollars could be shaved off of each weekly grocery bill by buying a few things on sale or buying store brands. When you start with a small amount, you can find ways to save, and it adds up over time.</p> <p>So, saving five dollars a week doesn't sound like much, but that's okay. If you saved just the five dollars a week for a year, you'd have $260, less any interest. If you're married and your spouse does the same, you will have amassed over $500 painlessly. But the idea isn't to start small and stay small. You may start at five dollars a week, but once a few weeks or a month goes by and you're used to saving that money, bump it up to $7 or even $10 each week. If you could live without five extra dollars, you could probably find you can get by without seven dollars just as easily.</p> <p>These small incremental weekly increases will gradually change your spending habits so that you become accustomed to how much money you have available, and before you know it, you're stashing away a nice amount of money.</p> <h3>Make Saving Automatic</h3> <p>You've heard it before, but to make saving work, you need to pay yourself first. If you wait until all the bills are paid, groceries bought, and money otherwise spent before seeing what is left over at the end of the week, you'll always come up empty. The key to saving is to treat your savings as a bill. You find a way to pay the phone bill each month, don't you? Well, think of your weekly or monthly savings as a bill that has to be paid, and pay it before it gets spent on frivolous things.</p> <p>To make sure you pay yourself first, you need to <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/savingmoney/a/automaticsave.htm">create an automatic savings plan</a>. This is best accomplished by setting up direct deposit with your paychecks so that a little bit goes into savings on the day you get paid. That way, on payday you don't have to worry about making a deposit yourself, and you have already put that savings out of sight and out of mind.</p> <p>If you don't have direct deposit set up, you can always create an automatic transfer between accounts with your bank. You can schedule a weekly, bi-weekly, or monthly automatic transfer that moves money from your checking to savings. If you don't have to think about it, it's much more likely to get done.</p><p style="background:#f5f3ef;border:1px solid #d5d0bf;clear:both;padding:.5em;"><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/15/saving-money-in-a-tough-economy.htm">Saving Money in a Tough Economy</a> originally appeared on <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/">About.com Financial Planning</a> on Sunday, January 15th, 2012 at 18:46:50.</p><p><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/15/saving-money-in-a-tough-economy.htm">Permalink</a> | <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/15/saving-money-in-a-tough-economy.htm#gB3">Comment</a> | <a href="http://financialplan.about.com/gi/pages/shareurl.htm?PG=http://financialplan.about.com/b/2012/01/15/saving-money-in-a-tough-economy.htm&#038;zItl=Saving Money in a Tough Economy">Email this</a></p>
Dealing With Low Interest Rates
<p>For a few years now interest rates as a whole have generally been falling or remain very low. Of course you may have some instances where rates are increasing, for the most part when it comes to savings accounts, CDs, and even mortgage rates, they are down sharply compared to a few years ago.</p> <h3>Good for Debt, Bad for Savings</h3> <p>Lower interest rates are good for borrowing money since it means you will be paying less in interest. The bad news is that the Fed rate cuts don't directly translate into lower rates for consumers. These cuts can take many months before the effects are felt on your bottom line, but you can begin shopping for lower rates now. Once you can begin to benefit from the lower rates, you'll have more money in your pocket as less is being spent on interest payments.</p> <p>While lower interest rates saves you money when borrowing, the opposite is true when you are saving money at the bank. As interest rates fall, the rate of return on your checking, savings and CD accounts will likely follow suit. If you enjoyed the comfortable savings rates during most of 2007, you're probably not very excited as many rates have now dropped below the rate of inflation. If you can, make sure you're getting the best rate possible and explore other banks to ensure you're getting as much interest on your savings as possible.</p> <p><strong>Learn more about interest rates:</strong></p> <ul> <li><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/od/savingmoney/a/lowerinterest.htm">How to Plan for Lower Interest Rates</a> </li> <li><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://economics.about.com/cs/studentresources/f/interest_rate.htm">What Are Interest Rates?</a> </li> <li><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://beginnersinvest.about.com/od/banking/a/aa062405.htm">The Federal Reserve and Interest Rates</a> </li> </ul><p style="background:#f5f3ef;border:1px solid #d5d0bf;clear:both;padding:.5em;"><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/08/dealing-with-low-interest-rates.htm">Dealing With Low Interest Rates</a> originally appeared on <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/">About.com Financial Planning</a> on Sunday, January 8th, 2012 at 18:56:10.</p><p><a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/08/dealing-with-low-interest-rates.htm">Permalink</a> | <a href="http://clk.about.com/?zi=1/1hc&#038;zu=http://financialplan.about.com/b/2012/01/08/dealing-with-low-interest-rates.htm#gB3">Comment</a> | <a href="http://financialplan.about.com/gi/pages/shareurl.htm?PG=http://financialplan.about.com/b/2012/01/08/dealing-with-low-interest-rates.htm&#038;zItl=Dealing With Low Interest Rates">Email this</a></p>


contrast, a self employed person ("sole trader") is taxed atincome tax rates on the profits from his business, which areadded to his other sources of income. As it has already beenmentioned, income tax rates are overall higher than corporationtax rates. On top of income tax, national insurancecontributions class 4 are payable on the business profits withina specified band (7% on profits between œ4,615andœ30,420). National insurance contributions Class 2 are alsopaid by self-employed people, although those are lower thanthose payable by company directors on their salaries.

To illustrate the above, let's take a simple example. We have alimited company and a sole trader. They both make œ60,000profits each in the tax year 2002/03. We assume that the companydirector takes a salary equal to the amount of his personalallowances (untaxed income) of œ4,615 and the balance asdividends. The company will pay corporation tax at 19% equal toœ10,523 and nothing else. The sole trader will pay incometax œ16,542, National insurance Class 2 œ104 andNational insurance Class 4 œ1,806. Total œ18,452. Thebottom line is that the person that has incorporated hisbusiness into a limited company will make a tax saving ofœ7,929 compared to a sole trader! Isn't that fantastic?

Somebody might be wondering: why is this entire happening? Theofficial explanation is that, this government, to help theeconomy grow, encourages people to leave as much profits withintheir businesses to be reinvested, instead of being taken outand spent.

The "unofficial line" is that, as a matter of fact, for yearsthe Inland Revenue has tried to reclassify the self-employed.The 1% in NIC hike on staff salaries above the NIC thresholdfrom next April adds to both the employees' and employers' taxburden and may more than offset the saving from the corporationtax zero rate on the first œ10,000 of profits.

Aren't there any other matters to consider in deciding whetherto incorporate or not?

Higher administration costs to comply with company law, payrolland bookkeeping is one factor. Another issue is pensionplanning. Extracting profits out of the company as dividendsrather than salary means that there will be no "net relevantearnings" and therefore pension contributions can't be made. Butthe advent of stakeholder pension plans has meant thatcontributions up to œ3,600 per year can be made without theneed for any earnings. If a person does not wish to transferfunds in existing plans into stakeholder because of highcharges, there is a way out: the best net relevant earnings(i.e. salary) in five consecutive years can be used for makingcontributions for the next five years, even if there were nosalaries in the remainder four years. It is comforting to knowthat entitlement to basic state pension is not affected bytaking a salary from the company at the level of a person'spersonal allowances i.e. œ4,615.

Furthermore, an individual may decide not to bother with pensionplans and instead invest in ISA. Often, these can be moreefficient than pensions but that's beside the scope of thisarticle. If that option is taken, no salary is necessary.

Another factor is business motoring. It might be taxadvantageous for an unincorporated business that owns many carsnot to incorporate because if these cars have some private usethere will be benefits in kind taxed on the users. These aregenerally higher than the straight apportionment between privateand business for all car running costs in the case of soletraders.

The conclusion is that there can be considerable tax savingswaiting the sole trader who decides to go down the road toincorporation. But, one needs to proceed with caution andcareful planning. And don't forget the biggest advantage ofincorporation, which is Protection from Personal Liability.Incorporating is one of the best ways to protect a businessowner from personal liability. Shareholders of a company aregenerally not liable for the obligations of the company.Creditors of a company may seek payment from its assets, but notthe assets of the shareholders. This means that business ownersmay engage in business without risking their homes or otherpersonal property.

Thank you for taking the time to read this Article. I hopeyou've found it useful. If you have, please drop me an email andlet me know what you think.

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Alternatively, you can visit our website athttp://www.tax-accounting-london.info and read a series of otherfull length articles that present the complete picture on avariety of interesting topics.

If you would like to know how to save tax and make sure thatmore of your hard earned cash stays with you to expand yourbusiness and increase your profits, we have a Free SpecialReport addressed to small businesses either starting up oralready in business. This Exclusive Free Special Report isavailable automatically when you subscribe to our regular seriesof Free Newsletters on finance advice and tax planning byvisiting our subscription area on our websitewww.tax-accounting- london.info. It is complied from real lifesituations dealing with small business tax affairs for over 10years and it is loaded with down-to-earth advice and practical,understandable examples.

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