How To Manage Money For San Antonio Millennials

How To Manage Money For San Antonio Millennials

I’ll tell you what…

The month of May is beginning to look a lot like December.

Definitely not because it’s cold out there, but with so much “end of school year” stuff happening these days, from graduation parties (ranging from pre-k “graduations” all the way up through college and beyond), to weddings (both royal and otherwise), to sports seasons wrapping up, to Memorial Day plans … well, I know some San Antonio parents who are longing for those “quieter” days during the winter holiday clamor.

I guess we all find ways to look ahead, and OUT of our current circumstances.

Which is why I’d like to take a moment and address my younger readers today. Specifically the recent graduates, but really anyone on the sunnier side of 30 years old.

Though, to be clear, this is advice that would behoove you to pay attention to, no matter your stage of life.

How To Manage Money For San Antonio Millennials
“Age is a very high price to pay for maturity.” -Tom Stoppard

One thing not often taught in schools is how to manage money and prepare for retirement.

Many students, whether they attend college or go straight into the workforce after high school, don’t grasp the importance of saving for later in life and are waiting too long to start stashing away money for retirement. When we start working with younger San Antonio clients, these are the sorts of things about which we have conversations…

Think about saving before a life event forces you to. 
Major life events such as the death of a family member, being laid off from a job, or a debilitating physical injury can occur before we consider the impact they could have on our financial future.

Don’t be caught off guard. Begin to build a nest egg to ensure the financial security of your (future) family.

Technology can’t replace the human touch. 
For all the conveniences that technology provides us, it still can’t replace the experience of a connection with another person.

An experienced personal financial advisor can ask the right questions, provide ongoing guidance, and be an important resource for those who want to plan for retirement. A computerized advisor or even a live advisor supporting an automated advisor service often doesn’t deliver the same depth of advice or relationship.

Don’t give up too quickly. 
Let time be your ally.

Investing in the stock market with retirement savings can feel like a roller coaster ride. There will be plenty of ups and downs, but the descent is no time to jump off, even if you do get jittery. Market history suggests that eventually things may work out, if you allow enough time.

Think about taxes before they think about you.
In the early years of your career, taxes seem more like a mere inconvenience than a tangible thing to plan around. But the reality is that you can set up your financial life NOW to prevent your future self from having to pay more taxes than you ought.

Whether that’s starting in on a Roth IRA or other tax-savings strategies, don’t be fooled that the larger standard deduction moving forward will suffice for you when your career reaches maturity. Get advice now for how you can plan ahead for whatever comes.

I wonder if you know someone who can help you with that?

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

Jimmy Boehm’s Three Tips For Resisting Financial Process Automation

Jimmy Boehm’s Three Tips For Resisting Financial Process Automation

Did you see Google’s demonstration of their new virtual assistant technology, Duplex, last week?

If you did, like me, probably you were both amazed … and a little bit terrified of the implications. Essentially, Google is close to figuring out how to make it so that machines and robots can engage in regular human interaction — with the human being oblivious of the fact that they are engaging with a machine.

 (And apparently, I wasn’t the only one troubled by that concept, as Google quickly appended their policy by stating that their robots would indeed self-identify as such.)

 The fact is that we are barreling down the road towards ever-increasing automation, and only recently have people begun to pull off to the side for a moment and ask themselves: is all of this automation, speed and convenience a good thing?

 These are questions worth pondering as a society, as families in San Antonio, and even for the sake of our own souls.

 And, as I will posit to you today, for the sake of our wallets.

 But before I get there, and speaking of wallets, just Monday of this week, the Supreme Court struck down a 1992 law that outlawed sports gambling at the federal level. Which means that state and federal treasuries are about to salivate over all of the new tax revenue that legalized sports gambling might bring.

 It was a 7-2 decision. So, if you were on it at -4.5, you’re a winner.

 

<Groan>

 Sorry, couldn’t resist.

 And speaking of groan-worthy segues, it might prove to be a very good thing for you to resist the steady snowball of robot automation within your personal finances.

 

Here’s what I mean…

 Jimmy Boehm’s Three Tips For Resisting Financial Process Automation

“As our circle of knowledge expands, so does the circumference of darkness surrounding it.” – Albert Einstein

 What if we thought differently about autopay?

 What if we were to take a moment to consider the consequences of so much convenience, not just with scary robots intersecting our daily lives, but for the sake of what it might be doing to our pocketbooks?

 Small business owners in San Antonio and those with more complicated incomes know what it is to write checks for quarterly taxes, and, I believe, they tend to have a deeper sense for what they are paying, as a result.

 In fact, I think our country would be a different place if everyone had to write a personal check and send in their taxes like this. If people really saw what they pay (or don’t pay) I think they would feel differently about their tax burden.

This is a common refrain among certain political observers — but it has me thinking about what it might mean for YOUR family …

 In fact, this is part of the genius of financial guru Dave Ramsey’s “envelope system” for family budgeting (whereby you place cash into specified envelopes, and pay only as much cash as remains in the envelope for different budget categories). “Automating away” our obligations can lull us into financial slumber.

 Which is why I now propose that you REMOVE financial process automation from certain checks that you write each month. (Again, this is aside from automated savings, as I’ve previously discussed.)

 Now, allow me to interject a word of caution: The only danger to this approach is that you run the risk of focusing too much on scrimping pennies. I certainly advocate wise budgeting, but it’s important to remember that thinking overmuch about saving money can constrict your mind away from important “risks”, which can often be worth taking — like starting that business, making a new investment, etc. Don’t let this technique keep you from expanding your financial mindset.

 

So, here are a few suggestions for what you might DE-automate, for the sake of personal clarity:

 1) Just once, receive your paycheck in cash (instead of ACH’d), or cash the full amount when you receive it. Because, have you ever HELD one paycheck’s worth of money before?  It’s really hard to fully comprehend how much you’re bringing in until you physically feel those stacks of $20s in your hand. I can guarantee you it’s a lot harder to spend it when you’re seeing it in person rather than online.  And it hurts frittering it away more, too.

 2) Pay your mortgage manually. Feel the burn of this large check, every time you write it. It will trickle into how you think about the other bills which you pay such that even if this is the only bill you take off of “auto-pay”, you’ll be wiser with your remaining funds each month.

 3) Only purchase vehicles for cash. If you had to pay outright, wouldn’t you end up with a cheaper car? Probably. Just because many are used to setting up loans and payments for vehicles, does NOT mean it’s wise — in fact, this is one of the primary markers for the “quiet millionaires” (those who are getting ahead financially, even on relatively smaller salaries). Yes, your pride might suffer when you’re not rolling around in a 2018 Audi through San Antonio … but considering the real cost of that vehicular pride-booster does wonders for calming your egoistic tendencies.

 

In short, paying in cash (or with a manual check) helps you to consider the following questions:

 * Is this ____ still WORTH it?

* Is there a way I can cut it down a bit?

* What’s the best way to pay for it right now? (c/c, check, cash?)

 

Again, some of this could literally take seconds, but the point of it all is that you STOP to think about it. With automation, you don’t get the “ping” every month because it’s already doing the thinking for you.

 You’ll learn a LOT more about the financial “you” this way than you would otherwise, I’m certain.

 It’s really about paying closer attention.

 And we could all use more of that in our lives.

 

Warmly,

Jimmy Boehm

(210) 824-9691

Boehm & Boehm, CPA 

 

A 12-Point Financial Health Check For San Antonio Families And Individuals

A 12-Point Financial Health Check For San Antonio Families And Individuals

We are now fully engaged in our tax “off season” here in San Antonio.

But interestingly, this is where the real difference that we can make on behalf of our tax preparation clients is actually made. We’re diving into the new tax legislation, and attending classes (online and in person) to get clarity, even as the IRS releases various new guidances for how to implement the new legislation for our San Antonio tax and accounting clients.

As for our actual tax work, we’re focusing on extended returns, amendments, and working with San Antonio business owners and families with year-round concerns. If you are interested in finding out more about what we can do for you NOW — like proactive tax planning to reduce your future taxes (especially in light of the new tax law), feel free to shoot me an email through the link at the top of the page.

As I’ve already communicated, we are so grateful for our clients for making this tax season our best ever. Seems that many of our current clients’ friends needed a “port in the storm” this year.

Now, this week, I have an idea I’d like to propose to you. I believe it could help you in multiple ways: with your family’s monthly bottom line, your taxes … and even your mental health.

Let me know what you think.

A 12-Point Financial Health Check For San Antonio Families And Individuals
“You can accomplish much if you don’t care who gets the credit.” -Ronald Reagan

If you’re like most people in San Antonio, I bet that when you get your house insurance renewal notice, you quickly glance at the price — and renew it. You renew it simply because you don’t have the time to search around for better prices.

In my experience, working with family finances for YEARS, I’ve learned that most people in San Antonio have a good sense of what needs to be done to improve their finances but they simply cannot find the time.

So here’s my proposed solution for you:  Take a day off work.

In fact, many financial tasks simply cannot be completed in the evening or on the weekend. By taking a day off work, you can contact people who may only be available at regular business hours.

On top of the true bottom line impact a day like this could create, there is, of course, the “mental health” aspect of it all. HR professionals often recommend taking a mental health day, from time to time. Well — call this your “Fiscal Health” Day.

Possible tasks to consider accomplishing on your day off:

1. Dump your savings account with a puny interest rate and open a high yield savings account.

2. Get quotes for cheaper insurance: health, life, auto, house, and any other insurance. And you can even do a little calculating to determine how much you could save by changing your deductible. Even better —  a good broker can do all of this shopping for you.

3. Complete the most important (but not obviously-pressing) financial tasks like making a will. Best done with a professional in San Antonio, by the way. 

4. If you’re carrying credit card debt, call the companies and ask them to reduce your credit card interest rates. Believe it or not — they’ll often say yes. Take time to develop and formulate a good plan to get out of credit card debt. Find or prepare a debt reduction plan.

5. Get more organized with your finances by shopping around for and using a good personal finance software program. Mint, YNAB, and Quicken are all good options. There are many more.

6. Review your budget, get caught up on your budget, or learn how to budget.

7. Shop around for the best online financial broker. Be sure you’re getting the best price for your stock trades.

8. Make energy efficient changes to your home and lifestyle.

9. Find a quality second-hand store to shop at, as an alternative to the local department store.

10. Set up automatic payments for your bills, to be sure you avoid late payments.

11. Sell your junk on eBay. Look for junk lying around the house and list it. Or use a service like 1-800-GOT-JUNK, and have them come to your house. You just point at the stuff you want to get rid of (warning: this is a little costly, but it can be gratifying).

12. Make sure that your taxes were handled properly.
Undoubtedly, there are more things which can go on this list, if you’re industrious about it. But simply put, I’m hoping to give you “permission” to see your financial health in a similar light as you see your mental health.

Warmly,

Jimmy Boehm
(210) 824-9691
Boehm & Boehm, CPA

Four Tips For San Antonio Couples To Make Money and Marriage Work Together

Four Tips For San Antonio Couples To Make Money and Marriage Work Together

It seems like crooks these days keep finding new ways to trick people here in San Antonio into giving them more money.

And no, I’m not talking about Congress.

Last week, for those of us in the tax professional world in San Antonio who are paying attention (because let’s be honest — many of our colleagues are still on vacation), we got bombarded by the official IRS channels and other such voices that there is a new scam afoot. Essentially, the thieves are now “spoofing” the numbers they are calling from so that the incoming call seems as if it is originating from an actual IRS Taxpayer Assistance Center. And then, if the taxpayer questions them, they direct you to IRS.gov to look up the local TAC office phone number to verify. They then hang up, and call back a second time — now armed with the taxpayer’s trust.

Allow me to remind you: IRS employees at TAC offices do not make calls to taxpayers to demand payment of overdue tax bills. There are certain instances when the IRS does call a taxpayer, but never before sending multiple notices in the mail.

Don’t give in to threats, and don’t fall for this one.

Now then … May is here. And the season is definitely shifting.

In fact, I do believe we are headed into wedding season here in San Antonio.

And the fact is, an overwhelming number of failed marriages from San Antonio cite financial troubles as a major factor in their breakup. As sad as this is, it really shouldn’t be too much of a surprise, because the way we use our time and money reflects our values.

And, of course, without a strong set of shared values around money and marriage, marriages drift apart. But I’ve seen how dealing with finances together can actually bring a couple closer — not farther apart.

But it matters how you approach it. Here are some thoughts, heading into this wedding season. Perhaps they would be useful for a young couple in your life… (or maybe you!)

Four Tips For San Antonio Couples To Make Money and Marriage Work Together
“The only way to have a friend is to be one.” -Ralph Waldo Emerson

Many young couples start out married life without a clear idea of how to handle their finances — leading to stress, arguments, and long-term marital problems.

And correspondingly, there are some couples for whom finances have become a painful wedge. So, though I don’t fashion myself to be a “marriage expert”, I have seen many financial partnerships work well … and more than I’d like, of those that didn’t.

Here are some ideas for you, as well as a little gift idea at the end.

1. Don’t avoid the hard stuff.
Whether you are in a pre-marriage stage, or are already working through your partnership, it’s crucially important to learn the skill of conversation about finances. There can be so much mental anguish over shame, fear, and past pain that unhealthy communication patterns begin to emerge.

So give yourselves the gift of honesty, and make a list of hard topics that you can tackle over time.

As an example, many couples from San Antonio are afraid to talk about the three D’s: debt, death, and disability. Take time to discuss these fears instead of avoiding them. Planning will help you both feel better.

2. Talk through your different money backgrounds.
How we were raised has an enormous effect on how we deal with money. Depending on what your home was like as a child, you likely heard many different attitudes expressed around the dinner table, and they have undoubtedly shaped your financial paradigm as an adult. Whether from poverty, or from abundance, your background is extremely powerful.

So, if your money attitude differs from your spouse’s, talk about how you were raised  and work toward a compromise where you can strengthen each other’s weaknesses.

3. Put yourself in each other’s shoes.
If one of you usually pays all the bills, switch for a couple of months. You or your partner may get a crash course on how much running the household actually costs. Keep track of all spending for at least one billing cycle (usually one month) to actually see where your money is going, and decide which expenditures can be decreased or eliminated. You might even find opportunities to give.

4. Maintain (small) independence.
A joint checking account is useful, but maintain some kind of separate amount of money as a “slush fund” of sorts, whereby you can each make purchases without mutual consent. Keep these amounts small (you always want partnership in the big amounts), but a sense of independence (however symbolic) will help both of you feel you have equal footing in the relationship, even if you have a big difference in salaries.

5. Work together to build something financial.
Find a way to work together on a small, money-related project, whether playing the stock market or saving towards some small goal. Pick something that doesn’t carry emotional weight, and see it as an exercise. You’ll find that working together in a small way will help you in a BIG way, as your decisions become more significant.

6. Agree together that you won’t lose on your taxes.
Obviously, this is what we are here for, and perhaps one of the best gifts you can give yourselves is a workable plan as it relates to a tax strategy.

And maybe the best place to start is to make sure that your taxes were handled properly.

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

3+ Reasons Why San Antonio Taxpayers Might Need to File an Amended Return

3+ Reasons Why San Antonio Taxpayers Might Need to File an Amended Return

Well, we did it. You did it. We made it through the tax busy season.

Every year, when I shut our San Antonio office door on April 15th (the 17th this year — er, the 18th, because of the IRS “issues”), I feel a huge weight lift off of my shoulders. Going home that day is very nice. We work hard around here to help you keep more of your money in YOUR pocket. But it’s nice to be able to finally have more family time.

But then the next day comes — and I realize that “breaks” in business (and in LIFE) are, frankly, short-lived.

And so the “offseason” in our business begins. But this is where the real difference is made for our clients.

You see, while some of our competition is out there taking their weeks and months off, living off of the “fat” of tax season, we’re attending conferences, developing our proficiencies in managing our business (and yours), and publishing this money-smart tax blog for our local San Antonio community.

All of it to serve you BETTER than “Joe Down The Street” who can slap together some paperwork and make it look official for the IRS — and then sips margaritas by the pool all summer when they should be working to improve.

Goodness, I hate to be so blunt — but San Antonio deserves better.

And speaking of deserving better … lost in the shuffle of last week’s many (moving) deadlines, was the quiet passage of  “Tax Freedom Day“. This is the date when the nation as a whole* has earned enough money to pay its total tax bill for the year.

(*It should be noted that this is only a collective average and does not accurately reflect the number for you, or for your neighbors — it is the average tax burden for the overall economy, rather than for specific subgroups of taxpayers.)

This year’s magic date was Thursday, April 19, 2018 (which is three days earlier than last year, for what it’s worth). 3.5+ months into the year. And, as in years past, Americans will collectively spend more on taxes in 2018 than they will on food, clothing, and housing combined.

Now, it’s part of our job to keep your tax bill down, but we can’t do much about the nation’s tax burden, aside from casting ballots. But we can help your friends, family and neighbors here in San Antonio. (Or maybe even YOU, if you for some reason didn’t use our services this year!)

Here’s what we can do to help …

3+ Reasons Why San Antonio Taxpayers Might Need to File an Amended Return
“You can never solve a problem on the level on which it was created.” -Albert Einstein

Our local San Antonio clients who filed with us this year already feel the peace-of-mind that they were able to claim every possible deduction which is legally allowed in the tax code for 2017. After all, we put each return through an extensive review process to ensure you keep as much of your hard-earned income as the IRS allows , and to minimize the need for an amended return as much as humanly possible.

But what about your friends? And what about your previous years?

Well, since the filing deadline has already passed, they (and you) might think that the proverbial “fat lady” has sung on 2017 returns (and 2016 and 2015)Not so.

Because according to the most recent report on the matter, issued by the Government Accountability Office, taxpayers overpay the IRS over $1 billion every year due to incorrect itemization and preparation.

What’s worse is that those who prepared their own taxes (with a software or on their own) are the most vulnerable, according to the report. But did you also know that taxpayers who used one of the “big chain” preparers are almost as bad off?

Read below for the 3+ reasons why you might need to consider an amended return:

An excerpt from an additional report from the GAO: In a Limited Study, Chain Preparers Made Serious Errors

In GAO (United States “Government Accountability Office”) visits to chain preparers, paid preparers often prepared returns that were incorrect, with tax consequences that were sometimes significant. Some of the most serious problems involved these preparers…

1.  Not reporting business income in 10 of 19 cases;
2.  Failing to take the most advantageous post-secondary education tax benefit in 3 out of the 9 applicable cases; and
3. Failing to itemize deductions at all or failing to claim all available deductions in 7 out of the 9 applicable cases.

More clippings from the report:
* The 19 paid preparers we visited arrived at the correct refund amount only twice. On 5 returns, all for the plumber, they understated our refund amount by a total of $3,465.

* All 19 of our visits to tax return preparers affiliated with chains showed problems. Nearly all of the returns prepared for us were incorrect to some degree, and several of the preparers gave us very bad tax advice, particularly when it came to reporting non-W-2 business income. Only 2 of 19 tax returns showed the correct refund amount, and in both of those visits the paid preparer made mistakes that did not affect the final refund amount.

So what can your friends do about this? And what could YOU do about it, if you didn’t have us handle your taxes in prior years? Simple: file an “Amended” Return.

Many tax businesses don’t provide this service, but even though we’ve completed our existing clients’ returns, we WILL review any NEW clients’ returns — at no charge.

See the below special message, for more details…

+++++++++++++++++
“No Charge” Return Review
Special Gift Certificate

As a complimentary service this year, we will provide a
Return Review To Any Non-Client.
We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return.
Email our office (using the above email button)
or call (210) 824-9691 to set up this complimentary service

Deadline: Friday, May 11th, 2018
+++++++++++++++++

Warmly,

Jimmy Boehm
(210) 824-9691
Boehm & Boehm, CPA

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