Monday, October 29, 2012

Simple Ways I Save on Office Supplies

As a freelance writer, office supplies can play a big part of my regular expenses. From the cost of paper and ink cartridges, to bigger ticket costs like printers and laptops, the amounts and costs of such supplies can vary from year to year. However, I tend to look at these expenses as just the cost of doing business, and in all honesty, as a self-employed individual, I can’t complain too much, since some small business owners experience much higher supply costs.

Still, that doesn’t mean that I have to resign myself to paying full price for such items and that I can’t look for ways to save. And over the years, I’ve found some pretty simple ways to cut back significantly on my office supply costs.

Ink Cartridges
For several years, I thought that I was doing well by using ink cartridge refills that I could get at office supply stores and that allowed me to cut my costs by more than half. I was typically able to get cartridges that would cost me about $25 brand new, refilled for about $10.

Eventually though, I saw one of those self-refill kits at a local convenience store. I wasn’t sure about the success of such refills, but I decided to take a chance and give them a shot. By doing so, I found that I could quickly and easily do my own refills for about a quarter of what I was paying before, being able to get four self-refills for around $17, which left me stretching my office supply dollar in this area even further.

Beyond ink cartridges, paper is probably the second greatest regular cost on my office supply list. As a freelance writer, you can only imagine how much paper I go through at times. Therefore, there are several things that I do to cut costs. First off, when doing things like printing for re-reading and editing purposes, I often use both sides of the paper, which allows me to cut my paper consumption in half. Then, I will often shrink the font, change to “landscape” page layout, and set each side of the paper to contain two pages, therefore adding even more words and additional pages to each side of the paper and allowing me to cut my usage -- and therefore, my costs -- in this office supply area even further.

Tracking for Tax Purposes
As a self-employed individual, I track and save receipts for all my work-related office supplies. This means that when tax season roles around, I’m better prepared for doing my own taxes and have the necessary documentation to give an accurate accounting of my business-related tax deductions in this area. Then I can use this amount on Schedule C of my taxes to help me determine my net profit after deductions from my work and in turn lower the amount of taxes I owe in this area.

Clips Rather than Staples
I rarely use staples any more. While they might not be super expensive items on my office supply list, staples are items that I still have to pay for and that I can’t reuse. Therefore, I’ve attempted to get away from using staples in preference of paper clips and binder clips instead. While it might only add a few bucks here and there to my office supply savings, as a self-employed individual, every little bit counts.

Wednesday, October 24, 2012

Our Halloween Planning Guide

For as long as I can remember, I’ve gotten excited for Halloween. I usually start getting into the decorating mood around late September, which means that our home is prepped and ready come October 1st. Our planning for Halloween comes with a bit more than just the standard picking out of a costume for our son and making sure it fits. Of course those are integral parts to our Halloween preparations, but there are often other steps involved in our planning process, especially now that we have a five-year-old and our candy routes are extremely important.

When it comes to our pre-preparations for Halloween, there are a few key activities to which we attempt to stick. First off, there is the matter of the candy bucket. While a plastic bag or a one-gallon ice cream bucket would work, would that really be getting into the true Halloween spirit of things? Therefore, we tend to get one of those plastic pumpkin or ghost Halloween candy buckets. If we don’t have one left over from last year, the local resale shop nearby typically has a slew of them for a quarter or 50 cents a piece.

And while we might have our costume already picked out, here in the Chicagoland area, Halloween time can be accompanied by some pretty chilly temperatures. Therefore, we have to make sure that if the costume is not warm enough on its own, we have some cold weather undergarments available to keep our son from getting cold while out collecting his candy.

A Candy Plan
We start off our candy plan by having a conversation with our son about limits and candy intake amounts before we head out. This leaves no confusion when it comes to how much he is allowed to eat either on Halloween or the following days and weeks to come since I know what a temptation it can be…even for mommy and daddy.
I’ve learned that with our son, such treats are often best kept out of sight and out of mind. If we keep a big bowl of Halloween candy out on the kitchen counter or dining room table, it’s a constant reminder and temptation. Therefore, we usually put such items up high on the refrigerator or in a cabinet and out of reach to keep temptation to a minimum.

Schedules and Routes
We get our Halloween schedule organized well in advance to actually heading out. For us, as I’m sure it is for many families, we have multiple Halloween events in multiple locations and times. We have grandma and grandpa who want to see their grandson in his costume, and the customary trick-or-treating in their neighborhood. There is of course trick-or-treating in our own neighborhood. Then, our town does a candy walk in the business district with many local stores, restaurants, and other businesses participating. Therefore, by checking online for looking for fliers posted around town, we tend to get a head-start on planning our routes, dates, and times well in advance to make sure we accommodate all the necessary Halloween obligations.

Monday, October 22, 2012

Easy to Become a Freelancer, Harder to Stay One

I found it super simple to fall into my freelance work role. Quitting my job was a snap. Sure, I gave plenty of notice, trained my replacement, and had some qualms about leaving the only career I’d ever known in an attempt to try my hand at something with which I had no experience, but hey, I’d rather take a chance than to be left wondering if I’d been able to do it or not.

The problem with this scenario was that while I was willing to train the guy who was replacing me at my previous job…there was no one to train me as a freelancer. And as I was about to find out, it was certainly easier to become a freelancer than stay one.

Short-term Issues
There were numerous hurdles that I began to encounter as soon as I left my regular work role. There was a significant cut in pay -- not to mention benefits -- with no clear path to replace that lost income. There was however, very little drop in my expenses, meaning that I had to bridge the gap between income and expenses with work that I had not expected to do. Building up these income streams took time, and in the meantime, I had to cut expenses to the bare minimum.

But there were also other issues that I began to realize came with my move that I hadn’t fully considered the effects of before I left my previous work role. The loss of perks like free lunches, free dry-cleaning, free downtown parking, and even just the loss of regular social interaction with co-workers started to settle in upon me. There were no longer employer-sponsored health care or retirement plans. And I quickly began to lose many of the network contacts I once had, which became a concern as I began to contemplate whether it would be as easy as I thought to reenter the field I left should it become necessary.

Longer-term Issues
But I was soon to find that those initial hurdles would be nothing compared to the issues and questions that I’d be facing about my career choice over the next five years.

First off, there was the question of Social Security. No, it wasn’t the fact that I had to pay both sides of the employment tax for this aspect of my retirement (although that was certainly a factor); rather, it was that my greatly reduced income was cutting into my potential future income from this retirement benefit. Add to this that not only was I not getting the employer’s contribution to a sponsored retirement account, but due to my miniscule gap between income and expenses as a self-employed individual, I was no longer able to contribute to such a fund. My decision to become a freelancer was significantly impacting my retirement future.

Next up, there was the uncertainty that came with the role. Sure, income levels fluctuated, but it was more than that. There was the career future uncertainty as well. In my previous role, there were clearly defined roles, career paths, annual evaluations, bonuses with set goals, etc. In my new role as a freelancer though, very few things were set. Answers to questions about whether I should stick it out in my freelance career or go back to a more stable job, whether I should try new lines of work and income relating to my current role or stick with what was working at the moment, and similar questions were only to be answered by time, hard work, belief in myself, and perseverance.

Therefore, if you’re thinking about moving into a freelance or self-employed role, I’d say think hard. Don’t just consider the freedom that comes with such a role, but think about all the other things that may come -- or not come -- with being self employed. And don’t just consider the immediate effects, but the long-term effects that can come with the move into the world of freelancing.

Thursday, October 18, 2012

Finding Happiness Saves Me Money

The game of life can be one continuous learning experience filled with plenty of self-growth. Part of life’s education for me has come in the form of learning what makes me happy when it comes to my life, lifestyle and personal finances. While certain people might find that happiness costs money, in some cases, it might actually help save money. Understanding what makes me happy, actually helps keep my costs relatively low and makes me a stronger and more financially independent person, which in turn, makes me even happier.

Home Life
I’ll admit, I’m pretty happy being a homebody. I work from home. I take care of the kids from home. And while I like a good dinner or night out with the wife occasionally, it’s not something I have to have on a consistent or nightly basis.

This positive outlook of spending time at home saves us money in a number of areas. First off, we save on the cost of a second vehicle since I can work from home. Without even factoring in the cost of car payments, the initial outlay for the vehicle or depreciation, we likely save between $1,500 and $2,000 a year on insurance, parking, gas, oil changes, and regular upkeep and repairs.

Similarly, since I’m at home, I’m also able to care for the kids, which adds significantly to our savings. With child care costs often running between $10,000 and $14,000 a year -- not to mention the costs of transporting the children between home and outside care providers -- you can see how this saves us huge amount of money on two kids.

While my income took a significant hit when I moved from hotel finance into a self-employed role, I love my job and the freedom it provides, and I’ve made up for this income loss in other ways. I’ve already mentioned one of them, childcare. And then there are other savings on things like meals out when at work, and costs related to working outside the home like work attire, transportation costs, and similar expenses that likely add up to thousands in savings each year.

On transportation alone, I save about 10 gallons of gas a week compared to my previous commute -- or at today’s prices in the Chicagoland area, about $2,000 a year -- and about $1,450 from when I used to take the commuter train.

Downsized Living
I really don’t like the accumulation of stuff. It makes me feel good to live a downsized lifestyle in which I control possessions rather than the other way around. From resale options to reducing the size of our home, finding what makes us happy by way of reducing the stuff around us has ended up saving us money.

For example, our previous home was costing us nearly $2,700 a month to maintain (including utilities). However, the time effort and money that was going into maintaining this home was not something that made us happy. Therefore, we sold; downsizing considerably to a much smaller condo in an area that we love and in a home is averaging about $900 a month to maintain (also including utilities).

And by doing things like having regular garage sales, taking things we no longer want or need to resale or consignment shops, and donating other goods to charitable organizations, we often recognize hundreds of dollars in extra income and/or savings each year.

Thursday, October 11, 2012

Self-employment is a lot like Gambling

The desire to gamble runs in my family. Personally, I enjoy gambling as well; however, I hate losing money, so I tend to restrain my tendencies toward the habit. However, I realize that as much as I stay away from gambling in its purest form, I manage to let it slip into my life in other ways.

I recently came to the realization that in my chosen career as a self-employed individual, many of the characteristics of gambling are present. This made me ponder just how much self-employment can in many ways be a lot like gambling and how I’ve done my best to minimize risk in my career and avoid that “losing money” aspect of gambling that I dislike so much.

Putting My Bankroll on the Line
I put quite a bit of time and effort into saving up enough money to bankroll my self-employment dreams. Just having such a fund though didn’t mean I had to move into self-employment. I could have saved that money for retirement, put it into buying a home or just gone on a nice long vacation. Instead, I put my bankroll on the line, risking it in an effort to make a success of my self-employment dreams.

Even a career that was relatively easy to move into such as freelance writing still came with expenses. There was the cost of giving up my regular income, yet still having to cover regular living expenses. There were office supply costs, mailing costs, technology-related costs for things like a printer, laptop, software, and similar expenses. And there was no guarantee of getting this money back unless I succeeded in my chosen role, so it really was a gamble.

The Daily Scratch off
Once I was assured of making it in my career transition, the gambling aspects of my self-employed career -- while still there -- weren’t as dangerous to my financial situation. Instead, they became somewhat enjoyable. As I grew into my role, I began to form multiple income streams through various customers and employers to hedge against failure in any one or two individual income streams.

As these streams became viable sources of regular income, I began to look at them kind of like low or no-risk scratch off lottery cards. Each day, I could log into my email or employment site for which I did work to discover my “winnings” or earning totals. There was -- and still is -- an expectant excitement that came with finding out just what I’d earned that day from income sources such as my blog, my e-books, and various websites for which I freelanced.

Knowing When to Hold Them and When to Fold Them
Maybe the most difficult gambling-related aspect of my self-employment work -- since I’m my own boss and make all the decisions regarding the future course of my career -- is knowing when to fold my hand and call it quits on certain income steams. Tracking my individual income streams and sources over time so that I can gauge their success -- or lack thereof -- helps me know whether or not to continue plugging away at them or pack it in and call it a day.

There are only so many hours in the day for a self-employed individual. And seeing as how I have other duties as CEO, CFO, tax accountant, marketing exec., at-home dad, and all the rest when running my own show, I have to make informed decisions regarding where and how to allot my time. I do this by using my experience and knowledge of past performance to decide whether certain sites, lines of work, and income streams are viable and worth continuing or if I should fold my hand and wait for a better one on the next deal.

The Difference is…Control
Control is the big difference between gambling of the casino sort and that found in my self-employment experience. When I go to the casino, I can determine how much I gamble, which games I play, and how much I spend at each; but when it comes to the actual odds of success at each game -- since I’m not a professional gambler -- I have, in most instances, very little control over the outcome.

With self-employment though, I can better affect my chances of a successful outcome in my work through my marketing, relationship building with clients, continuing my work-related education, branching out into related income sources (blogging, e-books), etc. So while my self-employment does share characteristics with gambling, it’s a form of gambling in which I can minimize risk through my actions and better control the outcomes of my “bets” through my efforts and the decision-making abilities.

Monday, October 8, 2012

Knowledge that Helps Me Do My Own Taxes

I’ve been doing my own taxes for nearly 20 years now, so my tax related knowledge has been given time to grow and evolve slowly over those two decades. I have added to and built this knowledge a little bit at a time, moving from a 1040EZ form in my teen years, to a regular 1040 with multiple schedules and attachments these days.

While I’m not claiming to be a tax professional by any means, I’ve found that having knowledge regarding certain aspects of my personal finances, helps to do my own taxes each year.

The Ability to Follow Directions
Sure, following direction sounds simple right? But for many people (especially some men I know) it’s not that easy. They’d prefer to just jump into a project without reading the instructions, and doing that with one’s taxes could lead to some major issues.

I methodically read the directions for most steps involved in our state and federal taxes each and every year. Just because I assume the steps will be the same as last year, doesn’t mean they will be, and even if they’re similar, even a slight variation could throw my numbers off or cost me a valuable deduction if I’m not paying attention and aware of the instructions.

Introspective Finances
Knowing our family’s own financial situation also helps me do my own taxes. Again, this might sound like common sense; however, having a good grasp upon things like our overall combined income, investment returns, and possible deductions we might be eligible for such as mortgage interest, student loan interest, child credit, self-employed health insurance premiums, and similar items, makes it easier when tax time comes to gather all such information together and ensure that I have everything ready and prepared before I begin.

Financial Tracking
Not having to scramble at the last minute to collect all of our tax information and documentation certainly makes things a little easier come tax time. By keeping up with tracking and retaining information related to income (since I’m self-employed), taxes owed, deductions related to charitable donations, business expenses, and similar items, and keeping such information in an easily located and reviewable file, I make my tax life come year’s end, just a little easier to handle.

Keeping Up with Changes to the Tax Code
While I don’t spend hours studying the U.S. tax code each year, I do pay attention when I read about adjustments to certain items that may affect the taxes we pay. For example, the payroll tax reduction has paid off by boosting our income, and it will make a difference in the amount I withhold as a self-employed individual. Also, there was an increase in the Illinois income tax rate from 3 percent to 5 percent this past year, which might not seem like a lot, but it’s a 66 percent increase over the previous year, so it could mean a big bump up in how much we pay.

Having a grasp upon such changes as they occur takes some of the surprise out of tax time when I suddenly realize that certain things may have changed -- either for the better or worse -- compared to last year.

Having a Tax Background
No, I don’t have an education related specifically to taxes or tax law, but by doing my own taxes since I was a teenager, over time I’ve evolved my tax education as my tax needs and situation evolved.

Starting doing my taxes at a young age -- when my tax situation was much simpler to understand and handle -- built confidence in being able to complete the task of doing my own taxes each year and took some of that fear that many people encounter with completing such a task, out of the equation. Every year, I’ve had to learn something new relating to my taxes, which was nice in a way since it didn’t come as a shock having to learn it all at once. As my tax requirements grew and evolved, so did my tax background, which allowed me to build my knowledge regarding a variety of tax issues over the years.

I’ve already helped one of my brother-in-laws start to learn how to do his taxes, and I plan to start my own son on a similar path to mine early on so that he’s competent to do his own taxes as well.


The author is not a licensed financial or tax professional. The information provided in this article is for informational purposes only and does not constitute legal, financial or tax advice. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.