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How an Income Account Can Help You Make More Money

For the past year, I’ve been using an income account as a part of my weekly accounting process.

Accounting process sounds fancy, but it’s just a workflow process that I use every week. The reason I started using an income account was because I wanted to have a better understanding of how much I truly needed to earn. I also wanted to see if I could run my business with less money each month by only giving my business a certain amount of money to work with.

Paco’s Law: Expenses expand to reach the limits of what's available to spend

I’m sure you’ve heard of Murphy’s law; an old adage that states "anything that can go wrong, will go wrong.” And then there is Parkinson's law that basically boils down to: work expands to fill the time available for its completion.

Now, I’d like to introduce you to Paco’s law.

How To Map Out Your Monthly Income Goals

Photo by Simon Migaj

Photo by Simon Migaj

My wife is a woman of many, many talents, but cooking is not one of them. I marvel that the same woman who is militant about being creative everyday is somehow baffled by the challenge of a freestyle kitchen session.

Besides her lack of interest in preparing food, I think the fact that she doesn’t spend time strategizing and coming up with a plan is a huge factor in her adversity to cooking. And we all know once you’re hungry, you’re no longer a rational person. You’re a shell of a human, hijacked by your emotions and panicked because your tiny brain thinks you aren’t going to survive.

This exact approach, or lack thereof, is how a frightening number of freelancers and small business owners approach the income side of their economic equation. If this is you, know that I’m not judging you nor am I throwing shade. Just realize that if you don’t spend the time strategizing and coming up with a game plan for your monthly income, you may find yourself becoming irrational, taking on weird jobs or working with less-than-ideal clients because you fly into a panic-induced survival mode.

This can set off a chain reaction of problems. For example, let’s say you agree to work for less than you should because you have no clue how much money you’re earning, you just know you need to earn money. And if you’re earning less, you’ll need to work more. And if you work more, you have less time to for the things that bring you joy. And with less joy in your life, you’re a bummer to be around. If you’re a bummer to be around, you don’t attract your ideal clients who can actually afford what you’re selling. And you’re trapped in this cycle.

When you allow yourself the time to project your income for the month (or months) ahead, you’re allowing yourself to have insights, to make plans for future growth or plans to slow down to keep a manageable pace. After you make the projections, you can observe the results. Which allows you to realize what’s working, what isn’t working, what predictions were right and which ones need to be refined. In other words, it’s a way more chill way to be, dudes. And yes, this is the method I use to make sure I’m on track with my business goals.

 

How Much Do You Need to Earn Each Month?

This is the first step; it’s the prequel. You have to first calculate how much you need to earn each month. A good place to start is to look at your expenses. How much does it cost you to stay alive on this lovely planet? And what are the other things you’d like to spend on each month? How many box subscriptions does one need to attain happiness and enlightenment? If you still to figure out how much you need to earn, here are some methods to go about doing so.

 

Make Time to Map It Out

Once you know your monthly income goal, you have to make time to see how close or far you are from that goal, given the information you have at the moment. For the sake of example, let’s say you need $4,000/month to live your best damn life. Here’s what you’ll do during your mapping session.

Pick Your Method. You can go analog with a pen and paper. You can use a fancy calendar app or a quick-and-dirty spreadsheet. Choose a method for mapping out that resonates with you. It’s helpful if it’s a method you feel comfortable using so you’ll keep using it. Set yourself up for success; don’t create barriers to doing the work you need to do.

Do The Math. Once you choose your method, make a list of how much money you know you’ll be earning for the month. List how you’ll be earning it. For example, you have 5 clients who committed to one-hour breakdance lessons at $100/hour. So, 5 hours x $100 = $500. And let’s also say your beautiful face is getting paid $2,500 to be a model for vegan, artisanal, shaving cream or something weird like that.

As of this mapping session, you expect to earn $3,000 ($500+ $2,500), which means you’re short of your monthly income goal by $1,000. If this is where you’re at, I can understand why you have avoided mapping out your revenue. It sucks to have a goal and not achieve it. So process those feels and let’s get on with figuring out a strategy.

Strategize. I think there might be a few options if you’re short of your goal.

Option 1. Learn to live on less. This is a totally viable and reasonable option. It’s all about living with the compromises and understanding the tradeoffs.

Option 2. Do nothing and have good luck and/or good timing. Possible, but maybe not probable?

Option 3. Do things that may help you earn more money. The following is a list of things you can do: Reach out to potential customers who might have previously expressed interest in working with you, try a new marketing channel, try a marketing campaign that makes you stand out, send out an email blast, change your pricing, change or repackage your offering, ask customers for referrals, put a product on sale, sell something you haven’t sold before, ask your friend who runs a popular website to feature you in an article, etc. There is a universe of possibilities here. Go on, get creative.

As an added incentive, knowing your deficit means you need to be specific about the amount of money you need to earn to close the gap. And being specific is perfect because it helps you discern what opportunities to say yes to. And oddly enough, sometimes when you aren’t specific, you fail to see opportunities.

And if you’re reaching your monthly income goal, that side of the coin has plenty of options to weigh as well. Should you keep things the status quo or scale back or raise your prices? Should you take a nap? The possibilities are endless.


 

Track Your Progress

It’s really easy to make predictions and forget about tracking or revisiting them, especially if you’re worried about not reaching your goal.

 

At Least Monthly

You should track your progress at least monthly, if not more frequently. Twice a month or once a week are both great time tables for assessment. Daily might be a little too crazy - unless you’re running a restaurant, in an specific industry or in a critical time where meeting daily goals can have a dramatic impact on the long-term survival of your company.

 

Know When To Change

If you’re consistently not meeting your goals, then think about changing something. The trouble is not just knowing when to change, but also what to change. Are your goals too lofty or are you not hanging on long enough to see true results? Can you move the needle in a meaningful way with small tweaks to your copy or do you need a new marketing strategy? Does one thing need to change or does everything need to change?


 

Listen, Reflect, Be Open

Remember fifth grade science when you learned the Scientific Method? Here’s a refresher: Make an observation, form a question, form a hypothesis, then conduct your experiment, observe the data, analyze and interpret it and come to a conclusion about your hypothesis. That is basically what I’m telling you to do, just through the lens of earning income.

So much of being a freelancer or running business is about experimenting. We have an idea about a problem that we can solve, we start figuring out how to solve it, how to speak to the people who will buy our solution, how to make adjustments to refine our offerings and reach our targets. Make sure to listen to the market and your customers and to be open that the answers are all around you.
 

What Do You Need to File Your Taxes? Your Tax Prep Checklist

What Do You Need to File Your Taxes? Your Tax Prep Checklist.jpg

It’s the most wonderful time of the year, friends. Yes, welcome to the joys of tax season!

The tax checklist below can be used to help you find and organize the tax documents that you’ll need to prepare and file your taxes.

 

Personal Information

  • Your social security number or tax ID number
  • Your spouse's full name and social security number or tax ID number

I f you have a dependent or dependents, here’s what you’ll need to gather:

  • Dates of birth and social security numbers or tax ID numbers of your dependents
  • Childcare records (including the provider's tax ID number) if applicable
  • Income of other adults in your home
  • Form 8332 showing that the child’s custodial parent is releasing their right to claim a child to you, the noncustodial parent (this may or may not be applicable to you)

 

Records of Your Income

If you were employed during the year:

  • Forms W-2

If you received any unemployment benefits:

  • Unemployment, state tax refund (1099-G)

If you received income from being self-employed:

  • Forms 1099-MISC that you receive for work you or your business performed.
  • Schedules K-1 (usually your business’ accountant will prepare these)
  • Records of all expenses — check registers or credit card statements, and receipts. If you have been keeping track of these things through bookkeeping, your expenses should get reported to your annual profit and loss statement.
  • Business-use asset information (cost, date placed in service, etc.) for depreciation. If you have been keeping track of these things through bookkeeping, some of this data will show up on a balance sheet and some of the data your accountant will help you figure out.
  • Office in home information, if applicable. What’s the square footage of the space you use for business only? How much is your monthly rent or mortgage?
  • Record of estimated tax payments (Form 1040ES), if you made any.

If you earn Rental Income from renting a property:

  • Records of income and expenses
  • Rental asset information (cost, date placed in service, etc.) for depreciation
  • Record of estimated tax payments made (Form 1040ES)

If you’re retired and you have Retirement Income from your retirement assets/accounts:

  • Pension/IRA/annuity income (1099-R) - You can usually find this online.
  • Traditional IRA basis - The amounts you contributed to the IRA that were already taxed
  • Social security/RRB income (1099-SSA, RRB-1099)

If you earned interest or dividends from your Savings & Investments  

  • Interest, dividend income (1099-INT, 1099-OID, 1099-DIV) - You can usually find these online.
  • If you sold stocks or other assets/property, how much income did you earn from these sales. This information is usually reported on a 1099-B, 1099-S
  • If form 1099-B doesn’t have the price you paid of the assets you sold, you’ll need to track that down.
  • If you have reimbursements from a Health Savings Account or long-term care reimbursements (1099-SA or 1099-LTC)
  • Expenses related to your investments - What fees do you pay for the privilege of investing your money?
  • Record of estimated tax payments made (Form 1040ES), if you made any

Other Income & Losses. These may or may not be applicable to you:

  • Gambling income (W-2G or records showing income, as well as expense records)
  • Any income from jury duty records
  • Hobby income and expenses
  • Prizes and awards
  • Trusts
  • Royalty Income 1099 Misc.
  • Any other 1099s received
  • Re cord of alimony paid/received with Ex-spouse’s name and SSN

 

Deductions

If you own a Home:

  • Forms 1098 or other mortgage interest statements
  • Real estate and personal property tax records
  • Receipts for energy-saving home improvements
  • All other 1098 series forms

If you made any Charitable Donations:

  • Cash amounts donated to houses of worship, schools, other charitable organizations. Usually the 501c(3) you donated to will provide you with receipt or letter that reflects the amount you donated.
  • Records of non-cash charitable donations
  • Amounts of mi les driven for charitable or medical purposes

Medical Expenses

  • Amounts paid to doctors, dentists, hospitals

Health Insurance - The forms and certificates will be automatically sent to you, so just make sure to keep them with all your tax docs.

  • Form 1095-A if you enrolled in an insurance plan through the Marketplace (Exchange)
  • Form 1095-B and/or 1095-C if you had insurance coverage through any other source (i.e . an employer, insurance company, government health plan such as Medicare, Medicaid, CHIP, TRICARE, VA, etc.)
  • Marketplace exemption certificate (ECN) if you applied for and received an exemption from the Marketplace (Exchange)

If you had any Childcare Expenses:

  • Fees paid to a licensed day care center or family day care for care of an infant or preschooler.
  • Wages paid to a baby-sitter.
  • Don't  include expenses paid through a flexible spending account at work.

If you had any Educational Expenses:

  • Forms 1098-T from educational institutions
  • Form1098-E if you paid student loan interest
  • Receipts that itemize qualified educational expenses
  • Records of any scholarships or fellowships you received

State & Local Taxes or Sales Tax

  • Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
  • Invoice showing amount of vehicle sales tax paid

If you made any contributions to a Retirement Account & Other Savings

  • Form 5498-SA showing HSA contributions
  • Form 5498 showing IRA contributions
  • All other 5498 series forms (5498-QA, 5498-ESA)

Job Expenses & Tax Prep Fees

  • Employment related vehicle expenses (tolls, mileage, gas, maintenance, license, property tax, interest expense, parking)
  • For educators in grades K-12, receipts for classroom expenses
  • Employment-related expenses (dues, publications, tools, uniform cost and cleaning, travel)
  • Job-hunting expenses
  • Record of moving expenses not reimbursed by employer
  • Amount paid for preparation of last year’s tax return

If you suffered a Federally Declared Disaster

  • City/county you lived/worked/had property in
  • Records to support property losses (appraisal, clean up costs, etc.)
  • Records of rebuilding/repair costs
  • Insurance reimbursements/claims to be paid
  • FEMA assistance information
  • Check FEMA site to see if my your has been declared a federal disaster area

 

How To Do Your Taxes (The Freelancer Edition)

Photo by Pana Vasquez

Photo by Pana Vasquez

Freelancing can have it's perks: choosing who you want to work with, having the freedom to take a midday nap and, of course, the joys and challenge of taxes.

If you've made pretty good scratch as a freelancer, then you've probably worried about the tax bill that may come due on April 15.

It's not uncommon for new freelancers to do well only to discover their profits get wiped out by taxes.

Here's a list of the best things you can to do prevent taxes from harshing your mellow. 

 

1. Work with a tax professional

Doing your own taxes might seem virtuous, but it has risks. If you aren’t familiar with the tax code, it’s possible to misinterpret it. Who knows the potential impact of your limited knowledge? You might take deductions that don’t apply to you or miss ones that do apply to you.

Humans still do it better than robots. And although it might be more expensive to hire a tax pro, a great one is definitely worth it.

 

2. Work with someone who understands your business

It's important to work with tax pro who is familiar with how your business runs. If they've never worked with anyone in your industry before, make sure to explain how things work. 

This information will impact the deductions you take or the tax advice they give. For example, let's say a graphic designer has contractors working for her. But after explaining to her accountant that the contractors work out the designer's office, on the designer's  computers and they're expected to be at the office at specific times, the accountant advises that the contractors should actually be classified as employees.  

 

3. Get a basic understanding of what you need to pay and how much.

Yes, it’s fucked up that as freelancers and small business owners, all of the responsibility falls on your shoulders to understand your tax situation. You don’t have to be able to reference tax code, but you should at least have a very basic understanding of what taxes you need to pay and how much.

A common tax for all freelancers is the concept of the self-employment tax. I say concept because the self-employment tax is a bit of a misnomer. Here in the states, all employees and employers pay social security and medicare taxes. Employees have these taxes deducted from their paycheck and employers pay them each time they pay their employees.

In 2017, the social security tax was 12.4% on up to $127,200 of income and the medicare tax was 2.9% on all income. A self-employed person must pay the employee and employer’s share of taxes, while an employee only pays for half the social security taxes (6.2%) and half of the medicare taxes (1.45%). If it sounds like a shit deal, that’s why as a freelancer, you often charge more than you would as an employee and the silver lining is that the employer portion is deductible.

 

4. Keep your business and personal separate

Make sure your business has its own checking accounts, savings accounts and credit card that are separate from your personal accounts and cards. Make sure to only use the business accounts for business expenses. Make sure that your business income is going into your business checking account.

Yes, even if you don’t have a formal entity formed, like an LLC or S-corp. Run your sole proprietorship like a goddamn business.  

Having things separate makes it easier for you, your accountant and/or your bookkeeper to understand what’s happening in your business. It’s easier to sort and organize all the information, which should make it easier to file taxes and make financial decisions within your company.

 

5. Save for taxes

As an employee, your taxes are automatically deducted from your paycheck; when you’re self-employed, you are the responsible party. If you have an S-corp, you can set yourself up on a payroll, just like an employee is setup. Using a payroll service will ensure your taxes being withheld and paid.

If payroll isn’t an appropriate option, setting up an income tax savings account is a solid way to make sure you’re saving for taxes. Talk to your account about how much they think you should be saving and each time you pay yourself, set aside a percentage for taxes in your tax savings account. 

It's generally accepted that if you save 30% of your income, you should have enough for taxes. But make sure to chat with your tax pro in case 30% is too much or too little. 

 

6. Pay quarterly taxes

Legally, you’re supposed to pay taxes as you earn them. If you don’t, you’ll owe a penalty.

So make sure to pay your taxes quarterly. You'll avoid paying a penalty and you can avoid having a high tax bill (assuming, of course, the reality lines up with the projection). You want to have your tax pro help you figure out what you should be paying each quarter.

They may do a projection up front and give you all the details like how much you owe and when it’s due. They might even prep little vouchers for you that have who to write the check to, how much to write it for and when it’s due. (Or, you can sign up on the IRS’s Electronic Federal Tax Payment System to have the payments automatically withdrawn from your account.)

Alliteratively, your accountant might want to review your books every quarter and let you know what to pay after examining the financials. 

Here’s a pro tip: Make sure you put the payment due dates in your calendar. Here are the due dates for quarterly tax payments in 2018:

  • April 16, 2018 for income earned in quarter 1 (Jan 1, 2018 - March 31, 2018)

  • Friday, June 15, 2018 for income earned in quarter 2 (April 1 through May 31)

  • Monday, September 17, 2018 for income earned in quarter 3 (June 1 through August 31), and

  • Tuesday, January 15, 2019 for for income earned in quarter 4 (September 1 through December 31). 

 

7. Know what expenses are deductible

The IRS states that you can deduct business expenses that are “ordinary and necessary” in your industry. For example, a musician may be able to write off her Spotify monthly subscription because it’s part of her job to stay current with music. Whereas, a freelance business consultant might have a harder time arguing that her Spotify subscription is both ordinary and necessary in her industry.

Your accountant will most definitely be able to give you a breakdown of the things you are able to write off and pay for through your business.

 

8. Keep track of your income and expenses

The most sophisticated way to keep track of your income and expenses is through a bookkeeping software like Xero or QuickBooks.

If you’re just starting out, you can’t afford to outsource bookkeeping and the thought of bookkeeping makes you want to scratch out your own eyeballs, that’s ok. You can totally create a hodgepodge system using a spreadsheet, photos of receipts and a server, like Dropbox or Google Drive.

If you’re going to do that, here’s a pro tip: use each month as a reference point. Keep each month’s invoices, income, receipts and expenses grouped together so you can easily reference it while not being too overwhelmed with too much data. 

If you can’t pay all the taxes that you owe, you should still file and pay what you can so you can reduce the penalties and interest you’ll owe. Talk to your tax pro about calling the IRS to figure out your payment plan options are

There's plenty of scary shit in the world and taxes doesn't have to be. It's all about working with a great tax pro, being consistent and staying engaged. 

A Totally Not-Boring Guide to Getting Your Financial Shit Together

Photo by Verne Ho

Photo by Verne Ho

This is a beast of a checklist. It’s pretty high-level overview of the things you need to do, questions you need to answer and math problems you need to solve to feel like you've got control over your finances.

It’s going to take time. You might get stuck on the budget step for a while or on the figuring out how to make enough money to live your life step for a while.

You can do some of the steps concurrently, but you’ll see that it’s hard to jump around the list and make headway.

The contents of this checklist comes from an amalgamation of my formal education (s/o to everyone with a degree in finance) and my work experience in the years I was a financial planner, a small business consultant and how I work with folks currently.

Please realize that this is all total and absolutely nonsense, but it can help you feel a small sense of control in a universe of uncertainty; It can help you exist in the world we live in today, one that is governed so profoundly by economics and money.

1. What the hell do you want to do with your damn life? And how much will that cost you?

Figure out what the hell you want your life to be like. Am I asking you to create goals for yourself? Yes. Am I asking you to take a hard look at your life and to figure out what you want out of it? Yes.

Here are the questions you should ask yourself to help you figure out what the hell you should be doing to get your damn life together.

  • What are your personal values?

  • What are your personal goals?

  • Map out your goals in terms of timeframe: short-term, intermediate, long-term.

  • What are your business values?

  • What are your business goals?

  • Map out your goals in terms of timeframe: short-term, intermediate, long-term.

Not only am I asking you to explore the inner terrain of your damn self, I’m also going to make you turn that shit into a math equation.

  • For your personal goals: breakdown your goals into dollar amounts. How much money does each goal need? Use the time frame to help you understand how much money you should save over time. For example, if you want to save $10,000 and you can save $500/month, that means you can reach your goal in 20 months. These figures might be arbitrary right now because you still don’t have a clear picture or other important aspects.

  • For your business goals: breakdown your goals into dollar amounts. How much money does each goal need?

This breakdown will help you prioritize your goals and figure out which ones you can start moving towards. For example, maybe you think buying a house is a short-term goal, but the fact that you need to save $120,000 for a fucking downpayment might make you push it further to a long-term goal or maybe you’ll realize you ultimately value flexibility and you will decide to build equity and wealth in other ways.

2. Get Good At Earning Money

Now that you know what your goals are going to cost you, you may need to earn the money to make it happen.

Here are some questions you should ask and answer that will help you on your journey to stacking the cheese:

  • What problem does your business/freelance work help solve? (If you work for an employer, what problems can you solve for your employer?)

  • Who are you solving it for?

  • Will those people pay you to solve their problem?

  • Can your potential customers/actual customers afford to pay for what you’re offering?

  • Is the price you’re charging a reflection of the value they’re getting? Is it too cheap?

3. Know Your Numbers

As you’re getting good at earning money, you should figure out how much you need to earn to live day-to-day, week-to-week, plus additional cash you need to stack for your silly goals. Here are the questions you need to ask yourself and answer to find out how much cash you need to be bringing in.

First, figure out how much do you personally need to live?

  • Add up all your bills, monthly obligations, cash for spending on having a good life.

  • Don’t forget to include savings and debt payments.

  • Express that amount in terms of your business model. How many hours do you need to work, projects do you need to sign or milestones do you need to reach each month to fund your life?

Next, figure out how much your side hustle/business needs to earn to run.

  • Add up all your business expenses. Don’t forget to include expenses that might happen in lump sum like insurance.

  • Add in the amount you need to pay yourself (the first part of this exercise).

  • Express that amount in terms of your business model. How many hours do you need to work, projects do you need to sign or milestones do you need to reach each month to fund your business?

  • Taxes are also a variable. Talk to your accountant to help plan for this.

Figure out how you’ll keep your budget. Will you actively manage your budget or passively set up systems to protect you from overspending?

Finally, do a Reality Check: Can you realistically earn what you need to support the numbers? You might need to rework the numbers if it’s not realistic. Maybe you need to adjust savings goals for a longer term. Or maybe you need to do some Tony Robbins, voodoo magic shit to make your wild dreams come true.

4. Setup Your Savings

  • First, fund your emergency fund. The general rule of thumb for an emergency fund is 3-6 months of your expenses. Make sure you’ve budgeted for this.

  • Set up a high-yield savings account the bank you don’t have your checking account at (to protect yourself from yourself).

  • If you can set up an automatic transfer each month or twice a month, do that. Get out of your own way. If not, then do it manually, but beware that robots are better at savings than you are.

  • Figure out how much of a cash cushion you need in your business. The exact amount depends on the business, but 3-6 months of expenses is a good rule of thumb.

  • Come up with a savings plan to reach your goal. You can set up your savings with the bank your business checking is at. Try to fund it regularly with an automatic deposit.

  • NOTE: It’s uber important to save even if you’re in debt. So you might have to cut expenses to make this happen.

  • Start saving for other goals in your life the way you do for your emergency fund: What’s the goal amount? What’s the deadline? How much will you save each month?

 

5. Get Your Shit Together (Get Organized)

The following checklist will help you tidy up your finances. You’ll feel great and you’ll great.  

  • Make sure your checking accounts are only for spending and not for saving. Set up your emergency fund as a separate account from other savings like wedding or retirement or travel savings.

  • Assuming you have the cash, pay your bills on time. Try setting aside time to look at your finances or making it a ritual, get booze involved, or just stop being a baby and handle your shit.

  • Don’t forget about old 401(k)’s. Call HR and ask them where your damn money is. If you have money in an old 401(k), don’t forget about it and maybe even roll it over into a different retirement account.

  • Keep your business and personal separate. Please, for the love of cute dogs, separate your side hustle from your personal accounts. Only business expenses and business income and paying yourself will happen with your business accounts. And everything you spend for personal stuff should be in the personal accounts.

  • Start scoping out your business team: attorney, accountant, bookkeeper.

  • Hire a great accountant.

  • Understand when it makes sense to set up a proper entity so when you get there you know to set it up.

  • Will using technology help you or make you less organized?

 

6. Make a Plan to Get Out of (High Interest) Debt

First ask yourself, how and why did you get into debt?

Next ask yourself, can you fundamentally alter the circumstances that got you into debt so you won’t get into debt again? Meaning, if it’s something like medical debt that you couldn’t foresee, then can you put systems in place to help you prepare in case something similar happens again?

Examine the options for getting out of debt and determine your plan. Options can include a loan from a rich friend or family member. Warning: there may be psychic or other types of non-monetary interest that you pay when you borrow money from someone you love.

Other options include a personal loan, negotiating with the credit card companies or starting a side hustle for extra income.

7. How to Care About the Long Run

You have to care about your future self because nobody else will. It’s sad, but it’s true. Here’s what you need to do.

  • Understand that investing is magic and that cash can lose value over the long run, which is why we’ve been taught it’s important to invest. Then start actually investing.

  • Your accountant can help you determine what type of retirement account you can and should open up.

  • Learn about wealth and how you can build it, if you’re into that sort of thing.

  • Make projections for how much money you’ll need in the future.

  • First you might need a good cry when you see how much you need to save. The, start implementing a plan for your old self. Some examples include the following: getting a boring job selling insurance so you can earn money and save for retirement, planning to eat cat food in retirement, marrying someone rich. The options are endless, really.

  • Stop not having a will and an advanced medical directive.

 

8. Love Thy Accountant

Get an accountant whose job is to learn the new tax code and help you navigate it when it comes to your unique tax situation. Here’s what your accountant might help with you:

9. Manage Your Risk

  • Figure out what kinds of risks you’re exposed to and determine what risks you’ll outsource to insurance. For example, driving a car has a lot of risk, but you can outsource the risk by getting auto insurance.

  • Understand what’s out there. In general there is health, auto, renters, homeowners, general liability, professional liability, disability and life.

  • Determine what kind of insurance you need personally and professionally.

  • Determine how much insurance you need.

  • Gather quotes.

  • Choose the insurance, buy the insurance, make sure the insurance policy covers what you need it to cover.

There you have it. The definitive guide to help you get your finances in order so you can live your damn life. If you’re more overwhelmed after reading the list, I’m sorry for the momentary discomfort. And you’re welcome for lighting the fire under your ass. Here are some pro tips to get through the list:

 

Pro Tip No. 1

Realize it might take time. Sometimes it takes years to master earning money or reaching a big savings goal. I feel you. I’m an impatient idiot about everything.

Pro Tip No. 2

Don’t beat yourself up. Control what you can, but realize there is a lot you can’t. What a fun ride life is, huh?

Accounting 101: A Primer for Small Business Owners

Accounting is a process of sorting financial data. Through sorting the data, the accounting process creates products. The products are reports. These reports are useful to the  management team, business owners and shareholders or investors. The reports also play a pretty vital role in helping your accountant file your taxes.

The Freelancers Guide to Predictable + Consistent Income

How awesome would it be to be able to predict how much money you think your small business or freelance practice will earn each month, quarter or year? Pretty awesome, right? You're thinking, "But Paco, my business is totally seasonal. There is no way I can predict it." And my response is, "You can. But have to be willing to look at other data points you might not have been looking at before and change your ways." In other words, if what you've been doing hasn't been working, you should change your methods.