How to Set Up a Home Office on a Tight Budget

Working from a home office is many people’s dream. The idea of waking up and walking mere footsteps, instead of driving miles and miles, and being able to work in your pajamas, represents the height of living and working flexibly.

And while working from home offers many benefits, there are quite a few changes you’ll to which you’ll need to adapt. Specifically, you will be responsible for setting up your home office. This means not only finding the right equipment, but paying for it all, which can get expensive quickly.
But building a good home office doesn’t necessarily need to mean spending thousands on a high-end desk and premium computer equipment. You can set up a home office that can be a bastion of productivity even if you’re on a tight budget. And here’s how

Make It Separate

This is a way to save on your home office that might not be felt right away but that will still help lessen the burden on your pocketbook. Essentially, by making sure your office is completely separate from the rest of your home, and designating it as strictly an office, you will be able to claim this space on you tax returns, helping put money in your pocket at the end of each year.

However, before you get too excited, know that there are some stipulations involved with this deduction, especially after the new tax reform law that went into action in 2018. Essentially, you can only claim a home office if it’s your primary or sole place of business. So if you work for a company and they let you split between working from the office and working from home, then you might not be able to take this deduction. But if you run your own business, or work full-time as a freelancer, then you probably can.

Consider enlisting the services of tax accountant, as they can help you figure out if you qualify and also how much you can deduct. Typically, it will depend on how big the office is in comparison to the rest of your home. So if you have an 800 sq. foot home, and your office is 80 sq. feet, you should be able to claim 10 percent of your living expenses as business expenses, and these can be deducted from your taxes. However, it’s not always this black and white, so make sure to consult a professional before signing your name to any legally binding documents, i.e. your tax returns.

Find Used Equipment

A more immediate way to save when setting up your home office is to opt for second-hand or used equipment. While it might look nice to have brand new mahogany furniture, this will set you back quite a bit, and it might be best to wait for these luxuries until you’ve had the chance to save some cash.

But this also goes for computers and A/V equipment. It’s often nice for those working from home to have a separate monitor so that you can keep track of all the tabs and programs you have open, and these can usually be found second hand for rather cheap. A quick Google search for “used” or “second-hand office equipment” will reveal countless places where you can get what you need at great prices.

And if you’re in need of a new computer, ask yourself if you really need a brand new, $2,000 Macbook. For most of us, the answer is probably no, especially since you can find other options for much more cheaply. For example, shop around on manufacturer’s refurbished catalogues. These devices come with full manufacturer’s warranties, and they are often better buys than something brand new, as any issue they might have has already been detected and addressed.

Choose the Right Room

Working from a home office will require you to use more utilities than normal. For example, if you live in a colder climate, many of us are used to turning the heat way down during the day; it doesn’t make sense to heat an empty house. But when working from home, this might change. You may need to run heat or A/C all day, and you may start using more electricity. And while in the beginning this might not seem like a big deal, these expenses can add up quickly.

To work around this, spend some time to choose the right room in your house. Try to find a place that receives a good amount of natural light, as this will not only help reduce your need for lamps and lighting, but it can also help enhance your mood and productivity.

If you live in a warm climate, try to pick a room, though, that doesn’t get blasted by direct sunlight, as this will make it hotter and increase your need for A/C. But if you’re in a cold climate, this can help heat things up and reduce your need to turn on the furnace or baseboards. Rooms that face north tend to be a good happy medium as they will get light from outside but will not severely alter the room temperature of your office.

Opt for Free Services

There are countless services out there all claiming to help you manage your home business much better than you can on your own. And while this may be true, the expense of these services can add up quickly. So don’t discount free services. Google Drive can do everything and more than Microsoft Word, and it’s getting better every day. Trello can help you manage projects, Skype can work as a phone, and PayPal allows you to send and pay invoices for free.

Of course, there may come a time when it makes sense to pay for a service, such as when you want to make use of marketing automation or CRM software. But the key is to save elsewhere so that when you do need to incur these expenses it’s not as dramatic.

Set Your Home Office Up Today

While setting a home office up on a budget might make it look a little less glamorous, it will not affect its functionality. And by working to save wherever you can, you’re going to increase the margins on whatever you’re using the office for, boosting your income and turning you into a savvy remote worker.

About the Author: Kevin Conner is the founder of Broadband Search, a service dedicated to helping people find the right internet package for them. As an entrepreneur and a long-time home office worker, he’s always looking for ways to help others raise margins and boost productivity.

How to Organize Your Small Business Finances

Having a brilliant business idea and developing a killer product is not enough for you to succeed. Research shows that financial problems are one of the major reasons small businesses fail. To keep your business afloat, you need to take your money management seriously, reduce operational costs and generate more cash flow and have a solid budget plan to back you up.

Here are a few vital steps to take.

Never Mix your Business’ Expenses with Personal Ones

One of the most common misconceptions among inexperienced business owners is that using the same bank account for their personal and business’ costs will save them time and hassle. There is a long list of reasons why you should separate your personal and business finances.

First off, using your personal accounts may make your business look unprofessional and hurt your brand image. Your target customers want to work with a legitimate business and not the individuals behind t.

Second, managing your private and professional finances simultaneously is tedious. It would take your bookkeeper hours to separate your personal expenditures from your business’ ones and pay taxes on time.

Finally, it would be difficult to take out a bank loan or apply for a government grant for your business when the need arises.

These are just some of the numerous examples why you should separate your expenses strictly. Don’t use your personal funds for your company’s purposes and vice versa and you’re golden.

Secure Funds on Time

If bootstrapping was enough for you to get off the ground,that is great. Unfortunately, it’s usually not enough to maintain a spotless financial health. Namely, your business is constantly growing and, with them,your expenses will be bigger, too. Your priority should be to estimate these costs and secure the right funding options on time.

For example, one of the most common options small business owners choose is taking out a bank loan. Yes, it’s safe, but it’s far from being perfect. First, you will probably have to wait for weeks before your application gets approved. Then, there are huge monthly interest rates which will hurt your small business’ bottom line. Not to mention that it takes at least 10 years to pay off a larger business loan. There is a wide range of simpler, alternative funding options you should consider, such as crowdfunding, finding an investor, teaming up with another entrepreneur in your niche, or even applying for government grants.

Build a Solid Billing Plan

Billing is one of the most significant business operations. Precisely because of that, you need to take it seriously and have a solid billing strategy. Your main goal is to get your customers to pay you regularly and, at the same time, maintain strong relationships with them. Here is what you need to do:

  • Create a clear payment policy that ensures that your visions align with the ones of your clients. This is where you should state when you want to be paid, what payment methods you accept, how you will deal with canceled projects, or what the fees will be for late payments.
  • Ensure your invoices are always sent out on time. Otherwise, your clients may get the impression that you don’t care about punctuality and deadlines.
  • Inform your customers of any late or failed payments.
  • Automate your rebilling strategy. The billing processes mentioned above require investing lots of time and effort. Luckily, you can invest in direct debit services and automate your payment processing and management. No matter if your customer has forgotten to pay you or their transaction failed for some reason, the app will inform them of the problem and help them solve it automatically. Additionally, you will be able to track your cash flow and invoices on one platform, in real time.
  • Reward your customers for making payments ahead of time by offering great discounts, free products, or free shipping.

Learn more about Managing Money

Just because you’re a business owner doesn’t mean you are an accounting wizard. No matter if you’re working with an accountant or using automated software, you need to learn the basics of accounting. Understanding how your business’ cash flow works, you will be able to make wiser money management decisions, predict potential financial challenges and take the immediate steps to prevent them ahead of time. There are numerous online accounting courses for beginners, such as Fundamentals of Accounting, Financing Options for Small Businesses, or Udemy’s Introduction to Small Business Accounting Training Tutorial that will teach you about the different types of accounts, accounting terminology, payroll, and so on.

Pay your Bills on Time

Just like with your personal finances, it’s paramount that you pay your business bills regularly. Loan payment and credit card late fees are massive. The same goes for your utility bills, vendor costs, and taxes that may result in numerous penalties and even serious legal issues. To keep track of your costs and manage them effectively, you should set up monthly reminders or leverage automated bill payments.

Over to You

To survive in this highly competitive business world, you need to manage your money wisely. Do market research regularly to secure funds, learn the basics of accounting, encourage customers to pay you on time, and pay your business’ bills diligently. Above all, you should keep track of the market trends and your business’ performance regularly to predict major cash flow problems and solve them effectively.

How do you manage your small business’ money?

Guest author, David Webb, is a Sydney-based business consultant,online marketing analyst and a writer. With six years of experience and a degree in business management, he continuously informs the public about the latest trends in the industry. He is a regular author at BizzmarkBlog. You can reach him on Twitter or Facebook.

Starting a Business 101: 4 Steps to Managing Your Company’s Finances

Starting a new business is an exciting endeavor. You may have been planning for years and look forward to utilizing your skills and experience in new ways. Some skills are unique to entrepreneurs, who must be visionary, conservative and strategic, often all at the same time. Managing your business’s money is one of the most important skills, and investing, with the help of someone like RMR Wealth Builders, Inc., should be a part of your financial planning. These four financial tips will help to get a good start.

– Borrow Strategically

Getting capital to start your business can be difficult in the early period. You must demonstrate a good understanding of your own needs, as well as the needs of the marketplace. When borrowing money, shop around for a good interest rate and never borrow more than you will need in the short term. Pay off loans as quickly as possible to ensure that financial institutions will be willing to extend more money when you need them to expand your business.

– Grow Manageably

Learning to plan for the ebb and flow of your business is one of the most critical skills an entrepreneur can develop, and good planning can help to weather financial storms and reach for new business opportunities that come your way. Managing your finances carefully will help you to achieve your goals, regardless of economic changes.

– Review Your Expenses Regularly

During busy periods, you can experience runaway expenses, with a growing need for supplies, equipment, and payroll. Savvy entrepreneurs keep a close watch on expenses, reviewing supply contracts and seeking out better pricing at regular intervals. They may keep payroll expense in line by hiring part-time or temporary help, instead of paying full-time employees that require the additional cost of benefits.

– Invest Carefully

As your business grows and with a little luck, your business will begin to produce high-profit margins that will be significantly in excess of your immediate needs. This is time to carefully consider options for investment to fund your retirement, pay for children’s’ college costs or other goals. A reliable investment firm with fiduciary review program in NJ will have the knowledge and experience to advise you on the best ways to grow your money for the future, while still providing funds for today.

Starting a business can be an all-consuming endeavor, with hidden surprises, both good and bad, along the way. You will be better prepared for the ups and downs of economic cycles if you manage your business in a strategic way that allows for unexpected needs. With these four tips, you will be in a good position to make the most of your business opportunities.

Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.

Expect The Unexpected With Your Business Expenses

When you look at your small business, you probably do so with pride. It’s something that you’ve worked hard for, paid for, grafted for and are caring for as gently as you would a baby. Your business IS your baby, in fact, and when it comes to having children, you learn very quickly how expensive they can be. You don’t have to be financially minded to know how much it costs to keep your small business running smoothly. Increasing your profits isn’t always the easiest thing to do, especially when costs are always shifting, decreasing and increasing without much warning.

Typical expenses for your business are a long list. Inventory, supplies, utilities, rent if you’ve got office space; all of these are for you to keep up with every month and this can be fairly stressful! You don’t have to be in charge of the finances to know about the expenses that your business has, but you should be able to keep up with the unexpected ones as they crop up. There are some less obvious business expenses, and here some of them are below:

  • Building a business takes some time and protecting it as it grows is important. Insurance provides a shield for your business against legal issues and financial scares. As a business, you need to have liability insurance at the very least because you need to safeguard your business as much as possible. If you have drivers on your team, then you will need to insure their business vehicles, too.
  • Most businesses need to think about their permits with the state that their business resides. There are many different permits that a business could need, and you can read about those here.
  • Okay, this shouldn’t be a hidden expense; taxes are a given with a business. However, it is possible that if you’re not on top of your expenses you will need to be visiting alexanderlawfirmllc.com to discuss paying an IRS debt. No one wants their business to owe money, least of all to the IRS.
  • When you’re gathering in supplies for your products to make them, you need to consider the costs of every element and account for the additional business equipment that you’ll be buying. Equipment can also add maintenance costs to your business as you ensure that they are kept up with.
  • Sending out invoices in a timely manner doesn’t always mean that they will be paid in the same way. Within your business, you have to ensure that you plan for invoices to remain unpaid for some time. Your cash flow will depend on customers paying invoices on time and if you don’t consider that they may not pay for service on time, then you could be missing out.

Your business is going to take more than a financial advisor on board to tell you all about the expenses that you will incur. It’s about doing your own research; don’t forget to do so.

 

 

Saving on Expenses Your First Year in College

While colleges and universities nationwide are winding down the 2013-14 school year, it should not come as a surprise that many students (and parents for that matter too) are already looking to next fall as sons and daughters take their first steps on college campuses.

With the cost of tuition increasing by the semester, it’s important for freshmen and their parents to save money anywhere they can.

Interest & Risk Resize

Luckily, there are ways to cut college costs while learning efficient spending and saving habits without resorting to a ramen noodle diet. Besides, a penny saved while in college results in a penny earned at graduation.

So, with collegiate capital in mind, here are just a few ways you can save on expenses your first year of college:

Create an Achievable Budget

Putting together a budget doesn’t take a degree in finance, but it is important to know the difference between a budget that’s attainable and one that isn’t. So, when arranging your budget, try to keep reality in mind when it comes to expenditures.

In other words, if you’re allotting $200 month for entertainment and only $50 for groceries and school supplies, you’ll definitely come up short in one department. Balancing a budget does take time to master, but making common sense budgeting decisions is half the battle.

In addition, there are hundreds of apps available that can help you balance your budget, control your spending, and even send you alerts when you’re over-budget. And, the best part is, many of the apps are free – a freshman’s favorite word.

Buy Used Books

As long as the text is still legible, a used book is just as good as new, so try going the used route when buying textbooks. Although the college bookstore probably won’t give you as much when it comes to a buyback price, the lower initial cost is definitely worth it.

Likewise, before buying a textbook, first check to see if it comes in a digital version.

Digital books, also known as eBooks, are growing in popularity in the academic world and offer price flexibility depending on whether you need the book for the entire semester, a week, or even a day.

Student Credit Cards

Building a line of credit is an important aspect of living on your own and there’s no better time to start doing so than during your first few years of college. And, as long as you don’t abuse the privilege of having one, credit cards are effective credit builders.

But, before you go out and apply for every credit card you can find, try to keep in mind interest rates as well as spending limits.

For first-year students that are also first-time credit card holders, only use the card for essentials like gas and groceries, pay it off in full each month, keep the limit low, and never have more than one credit card at a time. Whether you are using cash, checks, credit cards or mobile payments, make sure you account for each of your purchases, noting why you needed the product or service.

College and Computers

Pretty much every college in the world requires its students have a computer and, considering the portability factor, laptops are usually the computer of choice.

But, before you pay the going rate for that shiny new laptop, first see how your enrollment can help.

Many computer manufacturers offer student discounts and rebates on computers and electronics of all kinds. Likewise, many state scholarships and grants include a stipend for computers, so it’s always wise to find out what your student aid covers.

Start college off on the right foot by following the tips above, spending frugally, and keeping an eye on your budget.

About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including saving money and social media.