Tips

Whether or not we’re in a recession or a recession is on the horizon is a debate for pundits and economists. But you don’t have to be a fortune teller to know that a future recession will eventually come. The economy undulates like waves in the sea; sometimes it’s up and sometimes it’s down. Given this, it’s always a good idea to be prepared for the worst and to learn from the past.

Here are some lessons to be learned from past recessions for both individuals and business owners.

Build a Strong Financial Foundation

Having a strong financial foundation is crucial in weathering economic downturns. This means building an emergency fund, paying off debt and saving for retirement. By having a solid financial footing, individuals and businesses can be better prepared to handle unexpected challenges that may arise during a recession.

The Great Recession of 2008 is a prime example of a recession where having a strong financial foundation would have helped individuals and businesses. For example, people who had an emergency fund, low debt and savings were able to sustain themselves during the downturn. They were able to pay their bills, continue their job search or start their own business. On the other hand, those who were living paycheck to paycheck or had high levels of debt found it much harder to survive.

Diversify Your Income Streams

During a recession, certain industries and job types may be hit harder than others. Diversifying your sources of income can help mitigate the impact of a recession. This can include exploring side businesses or freelance work. By having multiple streams of income, both you and/or your business can be better positioned to withstand any economic turbulence.

During the 1981-82 recession, the unemployment rate rose to over 10%, and many industries, such as manufacturing and construction, experienced significant job losses. Workers in these industries who were unable to find employment could have benefited from diversifying their income streams. One option could have been to explore opportunities to start their own small businesses, such as a home-based baking or crafting business, which could be operated with relatively low start-up costs.

Cut Costs and Prioritize Expenses

During a recession, it's important to focus on reducing expenses and prioritizing spending on essential items. This means identifying areas where costs can be cut and allocating resources to the most important items. By conserving cash and being mindful of spending, you can rest easier knowing that you have a safety net and are not wasting the cash that you do have

Starbucks weathered the 2008 recession partly because they implemented a comprehensive cost-cutting program, which included closing underperforming stores, reducing employee benefits, and streamlining operations. Starbucks had other internal problems, and had to make many other changes, but cutting costs certainly played a big part in helping them to emerge from that recession in a stronger financial position.

Focus on Innovation and Adaptation

Recessions can create new opportunities for innovation and adaptation. Businesses that are able to pivot their products or services to meet changing consumer needs may be able to thrive during a recession. By staying nimble and adapting, businesses can position themselves for success both during and after a recession.

During the 1970s recession time, the United States faced economic challenges, including high inflation, high unemployment, and an energy crisis. However, one company that was able to thrive during this time was Xerox. One of its most successful innovations was the laser printer, which it introduced in the late 1970s. By focusing on innovation and investing in new products, Xerox was able to adapt to changing market conditions and turn a profit when other companies were flailing.

Don’t Panic and Stay the Course

During a recession, it's important to stay calm and not make rash decisions based on fear or panic. This means staying invested in the stock market if that’s something you do, and not selling investments during a downturn out of fear. By maintaining a long-term perspective and avoiding knee-jerk reactions, you can increase your chances of riding out a recession in reasonable financial shape.

Prioritize Communication and Transparency

Maintaining open communication with customers, employees and stakeholders is crucial during a recession. This means being transparent about any changes in business operations, such as layoffs or reduced services and providing regular updates on the business's financial health. By prioritizing communication and transparency, businesses can build trust and maintain positive relationships that translate into more loyal customers.

Invest in Your Education and Skills

During a recession, investing in education and skills can help you increase your employability and adapt to changes in the job market. This means taking courses, pursuing additional certifications, or acquiring new skills that are in high demand. Note that this doesn’t necessarily mean spending lots of money on courses. There are many free courses available online, and ways to self-educate with books, videos and podcasts.

Plan for the Long-Term

While it's important to take immediate actions to weather a recession, it's also important to plan for the long-term. This can include developing a long-term financial plan and investing in initiatives that will help the business remain successful in the future. By looking at things from a forward-looking perspective and making investments that will pay off in the long run, it’s possible to bank on sunny days ahead.

If an official recession does arrive in the coming weeks or months, remember that your CPA is a valuable ally. From making budget changes to improving cash flow, to starting a side hustle, your CPA has lots of ideas and strategies that can help.

When the nation's economy starts to slow down, you as a small business owner cannot help but worry about what lies ahead. As the COVID-19 pandemic demonstrated, uncertain economic times can emerge from nowhere in a hurry. When this occurs, having a plan in place can mean the difference between your business staying afloat after the crisis is over, or instead closing the doors to a business you worked so hard at for years to make a success. To help navigate the rough economic waters, here is how a CPA can help your small business.

Emphasizing Your Balance Sheet

When economic times get tough, you will probably still be focusing primarily on how your business is doing in terms of sales. While this is certainly important, your CPA will also have you focusing more and more on your company's balance sheet. This will be critical for your business, since the balance sheet emphasizes cash flow. As the economy sours, your CPA knows putting aside as much cash as possible may help you survive and outlast other competitors who may have to close their businesses.

Analyzing Your Accounts Receivables

In uncertain economic times, you will need to work closely with your CPA to do a careful analysis of your existing accounts receivables. Remember that since these are people who owe your business money that can help keep your cash flow at acceptable levels, it is vital that you make sure you get paid as quickly as possible. Should the folks who owe you money go out of business and you fail to get the money you were counting on, the consequences could be dire for your business.

Advice With Negotiating with Your Suppliers

As you and your CPA are taking a closer look at your accounts receivables, don't be surprised if your CPA also recommends that you perhaps try to renegotiate your own payment terms with various suppliers. For example, if the economic forecast is gloomy, renegotiating beforehand can give you more leverage. If all goes well, you may be able to strike new agreements with suppliers that will have you going from having to pay within 30 days to perhaps 45 days, which can have a big impact on how much cash you can keep on hand for your business.

Decreasing Your Debt

Your CPA can help you learn about the best strategies you can use to decrease the existing debt you have for your business. Again, this comes down to negotiating while you still have some leverage with your bank. By examining your current level of debt, how much credit you currently possess, and how that debt is impacting your cash flow and expenses, your CPA can help you learn how to enter negotiations with your lender from a position of power.

Finding Tax Breaks

If there is one thing your CPA is very good at doing, it is finding those elusive tax breaks that can save your business plenty of money come tax time. Since the IRS is seemingly always changing tax laws, there is no way you as a small business owner can keep up with the changes and how they will impact your business. However, this is the job of your CPA, and they do it very well. By sitting down with your CPA and looking over prior tax returns and how any new laws may change things for your business, you may find yourself having to pay fewer taxes during times when cash is tighter than ever for your business.

Reviewing Discretionary Spending

Even if you think you have trimmed everything possible from your company's budget, chances are your CPA knows better. Thus, it is always wise for you to have your CPA meet with you to analyze your discretionary spending and see if there are areas where additional cuts can be made. As an example, your CPA may recommend that you make more effective use of the internet to help decrease your company's administrative and operational costs. Should you still want your employees to get the latest training in various areas of your business, you may find this can be achieved through virtual training sessions online, rather than traveling in-person to various locations. Before you know it, you and your CPA may find more cuts to your budget than you ever thought possible.

Advice on Diversification and Expansion

While you may think uncertain economic times means you cannot possibly expand your business or launch new products or services, the fact is it may be an excellent time to consider these ideas. In these situations, your CPA can advise you to take a step back from where your business is at the moment, which will allow you to rethink your current strategies, review what is and is not working for your business to generate cash flow and profits, and consider the possibilities that may lie ahead. In many cases, your competitors will be doing the exact opposite of this. Thus, if you go on the offensive while everyone else is playing defense, you can use the advice of your CPA to capitalize on numerous opportunities other small businesses are overlooking.

Remind You to Not Panic

Perhaps most importantly of all, your CPA will be there to remind you that even though times are tough, now is not the time to panic and make critical mistakes that will hurt your business now and in the years ahead. Remember that since your CPA has years of experience, they have dealt with other tough economic times before, and have helped other small businesses navigate and emerge on the other side. By speaking candidly with your CPA and trusting the advice you are given, you can position your business for success once things begin to improve.

Keeping these tips in mind during an economic downturn will help your small business in numerous ways. As you continue to work with your CPA, you'll find many problems you thought doomed your business may simply be new opportunities to move ahead of your competitors.

Regardless of whether you’re traveling on business or to a vacation spot, there are some smart money moves you can make while on the go. Those moves include pre-authorized transactions, automating payments, and exchanging U.S. dollars for foreign currency. In addition, you can also avoid overdraft charges and hire an accountant.

Be Familiar With Pre-authorized Transactions

Whether you're traveling by car or plane, many businesses require you to have a pre-authorized transaction. This is done to make sure you have funds available for damages or losses. Essentially, a pre-authorization is a security deposit for the merchant. In the travel industry, tour operators, hotels, gas stations, and rental car companies commonly use them.

If the pre-authorization is for a larger amount than the customer expected, it may be declined. This can result in non-sufficient funds fees or even a negative balance on your account.
In some cases, a bank will file a chargeback for the pre-authorization. If the chargeback is successful, you may have to pay a fee. Alternatively, your card issuer can recharge the pre-authorization funds to your account, but this can take a couple of days.

You can prevent this from happening by setting up overdraft protection on your account. This will automatically move money from one account to another account, ensuring that you have funds available for these deposits.

Automate Bill Pay

When traveling for business or pleasure, time is valuable. Most travelers don’t enjoy spending time paying bills while away from home. In addition, logging into your online bank account frequently can be risky when you’re staying in hotels, Airbnbs and resorts. Using automatic payments when traveling is a great way to simplify your banking while you travel, but it can also leave you vulnerable to overdraft fees. A credit card or checking account can be used to automate payments, but another option is to have automated payments be taken off of a prepaid Visa debit card. That way, you control the amount, and your actual bank account is kept separate—and safe—from potential issues such as overdrafts.

Alert Your Financial Institution About Your Travel Plans

Nothing is more disappointing—or frightening—then having your card declined for a purchase while traveling abroad. Not only is this scenario inconvenient, it can also be embarrassing to try to explain to a merchant if there is also a language barrier. To avoid this, contact your financial institutions and let them know when and where you are traveling. Many online financial platforms have a section where you can post this notification on your dashboard. Other times you may have to call your bank or credit card issuer. If you do this before you leave, you can be more assured that your cards will be honored while you’re away from home.

Be Smart About Exchanging Currency

Getting the best exchange rate is essential when you travel is up to when and where you exchange your money. The rate you get is also dependent on the time of currency exchange rates, which fluctuate by the day and sometimes the hour. In general, the best rates are available from major banks in the U.S. and abroad.
If you live near a big city, you may be able to walk into a large bank and get foreign currency in hand. Other times, the bank will need to order the currency and you’ll need to pick it up in a week or two.

If you don’t want to bother with that, you can wait until you arrive to change your currency. Most large airports have currency exchange booths in the arrivals terminal. However, it’s recommended that you don’t use these, as the exchange rates are famously against your favor. Instead, use your credit card to get transportation into town and go to a local bank or currency exchange company in town. You’ll almost certainly get a better exchange rate this way.

Also, in some places, the exchange rates vary greatly from day to day. As you go about your sightseeing, try to pay attention to the posted exchange rates for your home currency. That way, if there’s suddenly a great rate in your favor, you can take advantage of it and exchange more of your cash into local currency.

Avoid Credit Card Use For Incidentals While Abroad

Both banks and credit card companies typically charge a foreign transaction fee whenever you make a charge while traveling abroad. These fees can range from a flat fee or a percentage of your purchase. Not only that, but banks and credit card companies aren’t known for giving great currency exchange rates. So, not only are you paying a transaction fee to use the card abroad, but you’re getting a bad rate on the exchange. Try to only use cards for major purchases, like tours and hotels. For incidentals, it’s best to use foreign currency.

Tuck Away Hidden Money

No matter where you travel in the world, whether it’s a big city in the U.S. or a tourist destination in Europe, you’re going to be subject to pickpockets and others who will try to separate you from your cash. Don’t increase your chances of getting stranded somewhere after suffering from one of these incidents. Tuck extra cash away somewhere on your person where it’s unlikely to be found. Many people put money in their shoe, but if a thief asks you to remove your shoes, your stash will be found. Instead, tuck the money inside your sock, beneath the sole of your foot. Other options include stashing some money inside the lining of your overcoat or in the hem of your dress. Hopefully, you’ll never have to rely on your hidden money to get back home, but if something does happen, you’ll be glad it’s there.

More and more people are traveling these days, after recovering from the travel restrictions during the pandemic. If you like to travel, you should certainly do so. Just keep these money tips in mind so your finances are just as healthy when you return as when you left.

When it comes to your parents, you’ve probably always been able to talk to them about anything. Yet, as you find yourself wanting to have a conversation about estate planning, you may be finding it to be harder than you anticipated. A topic often put off far too long, estate planning is a critical component of any family's financial strategy. If you need some tips on how to talk to your parents about estate planning, here are some details to keep in mind.

Don't Put Off the Conversation

Unfortunately, many families put off having an estate planning conversation until it's too late. While you don't want to think about it, the fact is the unexpected can always happen. Should your parents pass away prior to having an estate plan in place, this can leave you and members of your family with tremendous amounts of uncertainty, not to mention set the stage for legal battles that could tear at the very fabric of your family. In short, now is the best time to have an estate planning conversation with your parents.

Plan the Conversation

By planning the conversation beforehand, you can be sure you and your parents cover the most important topics associated with estate planning. One topic that should be discussed early on will be your parent's finances and who will be in charge of them should they die or become incapacitated. Since you and your parents will have plenty of questions that need to be answered, it may be best for you to schedule a meeting with a trusted and knowledgeable professional who has experience in estate planning matters.

Seek Their Input

When parents start having estate planning conversations, they sometimes feel as if their children or other family members are trying to take total control over their lives. To avoid this scenario, always seek out as much input from your parents from the very beginning of your conversations. By doing so, you can reassure your parents that your goal is to make sure their final wishes will be carried out in the manner they prefer. Whether it is writing a will, deciding who will make healthcare decisions, or working out the details associated with Power of Attorney, letting your parents tell you what they have in mind will make talking about estate planning much easier for everyone.

Involve the Whole Family

Any conversations you have with your parents about estate planning should always involve any and all family members who will be involved in the process. This will help to avoid any misunderstandings, let everyone have a say in various matters, and give your parents the chance to express their ideas to everyone at once. If possible, you may want to have your CPA included in this meeting, since this will let everyone have the chance to get their questions answered immediately.

Help Your Parents Find an Estate Planner

Chances are when you begin talking to your parents about estate planning, they will tell you they have given little thought to the matter, much less made arrangements to work with an estate planner. If this is the case with your parents, offer to help them find an estate planner they can completely trust to help them make the best decisions each step of the way. Remember that when doing estate planning, you will need not only an attorney who has experience in this area, but also a CPA who helps clients with managing tax responsibilities on a regular basis. By helping your parents get connected with an estate planner they can trust, you will make the process much less daunting to them and your other family members.

Don't Catch Your Parents Off-Guard

Always pick a good time to initiate your estate planning conversation with your parents. For example, try to do so at a time when everyone is relaxed and has the time needed to discuss such an important matter. If you want, you can even bring up a recent article you read in a magazine, online, or in a newspaper as a way of beginning the conversation. In some cases, your parents may have read the same article, which will be a great springboard into having a serious talk about their own estate plans. Should you try to bring up the subject abruptly or make your parents feel as if you are forcing them to talk about this sensitive topic when they are not ready or prepared to do so, it will only make arriving at a solution that much more difficult.

Be a Good Listener

As you begin a conversation with your parents about estate planning, you may have a tendency to talk too much and dominate the conversation. If this happens, your parents may assume you want to handle each and every detail, and may in fact already have things planned out in your own mind. Instead of letting this happen, take time to be an active listener while your parents are expressing their thoughts and feelings about the topic. If you do this, your parents will be put at ease and made to feel as if they still have control over their estate plan, which is exactly how it should be as this process moves forward.

Be Patient

Finally, you may need to be patient with your parents as you move through the estate planning process. In fact, don't be surprised if you wind up having multiple conversations about the topic before all the details are finally in place, which will include meeting with a CPA, attorney and other professionals as well. Since you know your parents want only the best for you and your other family members, a little bit of patience during these talks will go a long way in making this process much easier.

If you keep these tips in mind when talking to your parents about estate planning, your family will be able to arrive at an estate plan that meets everyone’s needs.

As you say goodbye to December and hello to January, one thing you can take advantage of is seasonal discounts. Each and every new year, retailers put various things on sale in January that you can get for very low prices. If you're ready to be a smart shopper and pick up certain products and services to get your year off to a great start, here are just a few of the best things to buy in January.

Christmas Decorations

Yes, even if you have just put away your Christmas decorations, January is a great time to stock up on items you’ll need next Christmas. Since retailers are always anxious to start moving in new inventory for the spring and summer, January is a perfect month to buy Christmas wrapping supplies and decorations for pennies on the dollar.

Exercise Equipment

Year after year, you and many other people out there make resolutions to exercise more and get in better shape. Thanks to all these resolutions, exercise equipment is always on sale during January. Whether you have your eye on a treadmill, exercise bike, set of weights, or other types of exercise equipment, you can enjoy great savings if you buy your stuff in January.

Gym Memberships

Along with the exercise equipment that is always offered at steep discounts during January, so too are gym memberships. If you would prefer to do your workout at a gym where you can have the latest equipment and maybe make a few new friends as well, take advantage of seasonal discounts and purchase a gym membership in January. Since gyms are always eager to increase their memberships, you should be able to enjoy numerous benefits by purchasing a January membership.

CPA Services

The beginning of a new year is always the best time to take a hard look at your finances to see where improvements can be made. Thus, one of the best things you can buy for yourself in January is the services of a CPA. Whether you are wanting to plan for retirement, do some estate planning, or learn more about how you can pay less taxes, utilizing the services of a CPA may result in you being able to save more money in 2023 than you ever imagined.

Toys

While toys may be on sale throughout the year, they are always offered at very low prices in January. Very often, retailers order more toys than they need for the Christmas season, meaning they are left with an overflow of inventory once the holidays are over. If you've got kids or grandkids who will be having birthdays later in the year, buying some toys in January will enable you to save plenty of money by buying ahead.

Winter Clothing

Though it may sound strange, you can actually save lots of money by purchasing winter clothing in January. Although it's usually still the middle of winter in January in most places, retailers are eager to get rid of their winter clothing so that they can start making room for the bathing suits and other clothes for summer. If you can hold out until after the holidays, you can pick up great deals on winter coats, boots and much more.

Carpeting and Flooring

Along with making resolutions to get themselves in better shape, many people also plan to give their homes a makeover once the new year begins. If this sounds like you, take advantage of the season. January is a great month to get excellent deals on various types of flooring and carpeting. Along with discounts on the flooring and carpeting, many stores will also toss in free installation and other bonuses as well, helping you save even more money.

Cars

Though many car dealers will offer plenty of deals leading up to the holidays, January is also a great month to buy a new or pre-owned ride. Once dealers are done with the holidays and see how many of last year's models they still have on their lots, they are always eager to cut you a great deal on whatever type of vehicle you want to purchase. Whether you want a new car or one that's slightly used, you'll find great deals in January.

Suits

If you are getting ready to start a new job in January or are simply in need of some new suits to wear, the first month of the year is a great time to make a purchase. For whatever reason, January has traditionally always been a very slow month for suit sales, meaning retailers will be more than happy to see you walk through the door. Whether you want a new suit to help impress your boss or to take your significant other out for a night on the town, buying in January will be a smart decision.

What Not to Buy in January

Now that you know more about plenty of things you should look to purchase in January, it's also good to know what you should avoid buying in January. Don’t spend on things that you don’t really need, simply for the sake of saving a few bucks on discounted prices. It’s not worth it to blow your budget for upgrades on cell phones, TVS, or other items you want, but don’t need. Buying small appliances should also be avoided until at least February, since these are usually on sale for President's Day. In fact, it's best to carefully go over your financial goals. You can give serious thought to how your spending fits into your overall financial goals for 2023.

As prices continue to rise on more and more things, it’s vital you do all you can to be a smart shopper. If you purchase the services of a CPA in January and use these meetings to your advantage, you can go confidently through the upcoming year as a person who spends wisely and saves frugally.

Most people make New Year's resolutions centered around self-improvement. While you may decide you want to lose a few pounds or perhaps take up a new hobby, you might want to also make some resolutions regarding your finances. If you're ready to make 2023 your best year ever from a financial standpoint, here are some ideas you should consider adding to your list of resolutions.

1. Create an Emergency Fund

Unfortunately, many people don’t have an emergency financial fund they can tap into if they have an unexpected financial crisis, such as a car repair, medical bill or perhaps even the loss of a job. If you are among the many in this situation, 2023 is the year to change this for the better. If you can't save much money per month for this fund, start out with a goal of creating a fund that's equal to one month of living expenses. Once you do this, try to grow it for three months. Before you know it, you may have a six-month emergency fund built up that will give you extraordinary peace of mind.

2. Pay Off Your Debt

In the U.S., it’s estimated that people owe nearly $17 billion in credit card debt. If you really want to make a major difference in your 2023 finances, make a resolution to pay down as much of your debt as possible over the coming year. Once you start looking over your monthly budget, you’ll likely find ways you can apply extra money toward paying off your debt. One recommended strategy is to start by paying off the credit card with the smallest balance, then work your way up to those with larger balances.

3. Use an Accountant

No matter where you are financially, having some meetings with a CPA can help make your resolutions a reality in 2023. This can be especially useful when it comes to your taxes, since most people often fail to take advantage of various tax credits and other financial benefits to which they are entitled. If you work with a CPA, you can discuss your financial goals, how to best structure your finances and much more.

4. Open a Retirement Account

When it comes to retirement, you can never start saving too soon. On average, many experts say that a person needs to have saved at least 10 times their annual salary by the time they retire. Whether or not you need that much is up to you, but taking small steps now can pay off big in the long-term. For example, if you have a 401(k) plan through your employer, make the maximum contribution each payday if possible. Since employers often match employee contributions in these plans, you can build up quite a nest egg in a short time. You might also consider opening an IRA, since this retirement account usually comes with numerous tax benefits. Your CPA may have other ideas that you can consider.

5. Invest Regularly

In today's world, there are online platforms that will let you invest in stocks, real estate, and other assets. Contrary to what you may think, you won't need hundreds or thousands of dollars to invest. In fact, there are some investment options that let you get started with only about five dollars per week. Even if you are trying to pay down debt or build up your emergency fund, you can probably find a way to invest five dollars a week.

6. Look Over Your Loans

If you have some loan payments that are eating away at your budget month after month, a great resolution to make for 2023 is to take a closer look at your loan options. For example, if you have a student loan that looks like it will never go away, consider applying for student loan debt relief offered by the federal government. If you have a mortgage or auto loan, look into refinancing options to see if you can get a better deal. Finally, if you have a large amount of credit card debt, you may want to look into getting a balance transfer card to avoid paying interest while you chisel down your debt.

7. Create or Review Your Budget

If you happen to be one of those people who goes through life without sticking to a regular budget each month, that could explain at least part of the reason why you are dealing with some financial issues. To make 2023 much easier from a financial standpoint, it's time to sit down and create a realistic budget that you can stick to month after month. If you already have a budget, the beginning of 2023 will be a perfect time to take a closer look at it to see if it's still working for you. As you create or review your budget, you will be amazed at how much you spend on certain things, like going out to eat or spending on electronics. If you decide to perhaps eat at home a bit more often, the money you save can play a big role in helping you achieve other financial goals.

8. Avoid Impulse Buying

Whether it’s something you see when shopping in a store, on a website or even in one of those late-night infomercials, do all you can in 2023 to resist the temptation of impulse buying. If you give in to this temptation, it will almost certainly be a budget-killer. If there’s something you are considering purchasing, always try to give yourself at least 24 hours to think it over. By doing so, chances are you'll avoid buying things that you didn’t truly need.

If you keep these eight New Year's resolutions in mind when the clock strikes midnight in 2023, you and your CPA can work together to create financial goals that will have you breathing much easier about your financial situation.

Negative items on your credit report can stay there up to seven years. That’s a long time to pay for a financial mistake, especially if you’ve since improved your financial habits. Your credit report directly impacts your credit score. This helps creditors to determine if you are a good risk. But negative items could keep you from getting the best interest rates on loans and credit cards. They can even count against you when you’re trying to rent a house or get a job. Sometimes it’s possible to remove negative items from your credit report before the seven years have elapsed.

Subscribe to MyFico

MyFico is a subscription service that provides you with free access to all three credit bureau reporting agencies. Since the pandemic, credit reports are free to access, and there is a great benefit in that. However, MyFico offers additional benefits that you might not get otherwise. When you subscribe to their monthly service, you get all of your scores from all three agencies. You can log in anytime to see how your scores change in reaction to your bill paying habits and your charging habits. With MyFico, you’ll get real insight into the behind-the-scenes of how your credit changes according to new reports of payments that have been made on your various accounts. You’ll also be able to access a calculator that lets you see how your score might go up or down based on how much you can pay off debt over various lengths of time.

Examine Your Credit Report

Once you have access to your credit report, filter the results for negative accounts. These are the ones you want to focus on in order to remove negative items from your credit report. They will be marked in red. Carefully examine every detail of these flagged entries. Any mistake, no matter how small, may be sufficient grounds to have the negative entry taken off of your report. For example, if the name, address or telephone number of a creditor is listed incorrectly, you could use that to try and get that entry removed. Another detail to review is your payment history. Are the dates and amounts correct? Is the account number that’s associated with the negative entry correct? Go through and do this with all of the negative entries on your report and make a list of any mistakes you find.

Submit a Dispute Ticket

Next, take that list of mistakes (if you found any) and, for each separate credit bureau, open up a dispute ticket. You can do this online. They will ask you for information about why you think the negative entry is incorrect. You will also have the chance to upload supporting documents that help to verify the mistake, such as confirmation codes of payments, canceled checks, bank statements, etc. The more supporting documents you have, the better the chance you have of a possible removal. The creditor will have 30 days to respond to the dispute and prove their “side of the story.” If they fail to do so within 30 days, or if they cannot prove that the entry is correct, then the negative entry will be removed and you will have won.

Ask For a Removal

In some cases, a creditor may be willing to remove a negative entry from your credit report in exchange for payment of a past debt. This is commonly called a “pay for delete offer.” Be forewarned that not many creditors will do this. It is worth a shot, though, because you have nothing to lose by asking. First, call the creditor and ask to speak to an account manager. Explain the situation and ask if you can get a “pay for delete deal.” The manager may automatically say no, but you can ask them to escalate the ticket and have it considered by a higher level department. Another option is to write an email to the creditor and ask if a pay for delete is possible. Pay for deletes typically will only work if you are willing to pay in full for the overdue debt on the spot. It also helps if, since the overdue debt occurred, you’ve kept your account in good standing by paying on time for many months or years.

Focus on Negative Collection Debts

Your best chance to have a negative entry removed is if it is listed on your credit report by a collection agency. When this is the case, the collection agency may automatically remove the negative entry as soon as your debt is paid in full. Before you pay the debt, ask the collection agency if they will be removing the negative entry after payment. Many collection agencies will be able to confirm that the negative entry will come off within 30 days after payment is confirmed.

Avoid Adding a Statement

There is an option available for you to have a statement added to your credit report regarding any entry you wish. The credit agencies offer this as a way to let people explain any extenuating circumstances about why that negative item is on the report. However, be aware that if you add a statement, the creditor then also has a right to respond to your statement. So for example, if you make a statement saying that you actually did make a payment on time, the creditor can come back and post proof that your payment was late. In other words you won’t have the last word; your creditor will. In the end, this tactic can just make you look worse in the eyes of any new creditor who might be considering your risk factor.

It’s terrible to see negative items on your credit report from years ago, especially when you’ve been financially responsible for the past five or six years. But if the strategies above don’t work, you’ll just have to wait seven years for it to drop off automatically. In the meantime, just make sure you never miss a payment so you don’t get any more negative entries added to your report.

In the wake of the pandemic, more employees are returning to the workplace. Although we may be in for more as far as new virus variants, it’s looking like the swell of returning to the office environment isn’t going to withdraw any time soon. Making the workplace safer for returning employees isn’t just a courtesy; it’s the best way of doing business. A safer workplace offers numerous benefits to both employers and employees, such as:

• Protection against legal action

• Ability to boast better safety to potential job candidates

• Reduce employee sick days

• Keep entire staff safe

Protection Against Virus

Even though the worst of the pandemic appears to be over, it’s worth it to take steps to protect against viral transmission. Consider the following tips to keep your staff virus-free:

• Install multiple sterile wipe stands throughout the workplace for staff and customers to use.

• Rearrange desks so that employees can socially distance while they work.

• Hang posters with information about safety precautions around Coronavirus.

• Hire cleaning staff to come in on a daily basis to sterilize the office.

• Offer extended sick leave for staff who present with symptoms.

• Create work at home schemes for staff with sick family members.

Perimeter Safety

The last thing you want when trying to keep employees safe inside is to have them get harmed after they leave the office.  There are several things you can do to ensure safety once your staff gets off duty:

• Have a policy that no employee walks to their car alone. 

• Monitor correct operation of parking lot lights and install more lights as needed.

Interior Safety

As employees navigate around the office, they should have a guarantee of a modicum of safety.

• Make sure that hallways and stairwells are brightly lit.

• Consider installing hallway cameras.

• Don’t allow stacking of boxes over five feet high on shelves or standalone.

• Post hazardous materials warnings where appropriate.

Work Environment Safety

While physical safety is essential for your employees, it’s just as important to nurture a safe work environment in terms of expectations. 

Written HR Policies

It’s essential to provide HR policies to all staff, including management level employees. This proffers two benefits; one for you as the boss and another for the employee. 

You benefit because these written policies provide backup if any action is necessary, such as firings. The staff benefits because this lets them know exactly what is expected as a member of your organization. Be sure that your HR policies don’t go against state or federal regulations. It’s a good idea to have these created by a professional, and then customize them to suit the needs of your business.

Create a Penalty Warning System

A penalty warning system is a great way to curb employees who might be falling into a path where loss of employment is over the horizon. This gives you a path forward to keeping your investment—your employee—on track while reminding them about the HR policies that are in place. This kind of warning system isn’t meant to be a punishment; rather, it’s a way for an employee to evaluate their performance and make necessary changes to keep their job.

Another positive benefit of a penalty warning system is that it gives employers a record of policy breaches. In the event that a firing is necessary, this record will serve to protect the employers from potential legal action.

Finally, a penalty warning system makes the workplace safer by giving wayward employees an opportunity to alter their workplace practices before things become dire.

Ensure Privacy

Cubicles are fine as mini workstations, but they don’t meet the mark when privacy is needed. Employees shouldn’t have to worry that their private conversation with a boss or with HR will be overheard by colleagues. Offices where management holds private conversations should have a level of insulation that ensures that passersby can’t overhear anything, even accidentally. 

Lock up Sensitive Files

In the same vein, sensitive employee data should be locked away in secure filing cabinets or behind firewalls. This includes especially payroll information, such as wage garnishments from the IRS, sensitive information about health insurance claims and more. Not only does this ensure workplace safety, but it’s your responsibility as a business owner to protect this data.

Have an Employee Suggestion Box

As hokey as it may sound, an employee suggestion box is a great way to get feedback about working conditions. If you allow employees to leave comments and suggestions anonymously, you’ll get a better sense of what they appreciate as well as what they might feel lacking in the workplace. 

An even better idea is to have a weekly “theme,” where employees give feedback on the theme. If you make one week’s theme workplace safety, you’ll get honest feedback about what can be done to help make your employees feel safer at work. 

Provide Adequate Training

Employee training goes a long way toward workplace safety. For instance, employees with little experience might not know how to safely operate a paper shredder, or other heavy machinery that your business uses. Employee training time is an investment in your employee and your company.

Label Everything

It’s helpful to label information about office equipment, such as warnings regarding proper use. Although nothing replaces the need for adequate training, having labels on complicated equipment does help to remind employees not to rush and to be careful.

Vet New Employees

Your employees should also be safe from other employees. Be sure to vet all new hires to make sure you aren’t bringing in someone whom your other employees will ultimately be susceptible to in any way.

You and your employees deserve to work in an environment free from safe concerns. These tips should help to add extra layers of security to your workplace. Your CPA may be able to offer you some additional tips on how to make your workplace safer in terms of Covid-19, and in other ways.

Firing an employee is never a pleasant task. No matter what the history is, it’s challenging to make sure you’re firing the employee the right way. Doing so will help to ensure that there is no aftermath to the firing beyond the need to replace that employee. The U.S. Chamber of Commerce has established guidelines as to the legal way to fire an employee, but there are also personal concerns about letting an employee go that need to be considered. Firing an employee the right way will address all the different aspects. 

Aspects of Firing an Employee

Arguably, the most important aspect of firing an employee is the legal aspect. You don’t want to be blamed or even sued for acting in a manner that is out of compliance with state and federal regulations. For that, you can rely on online guidelines. 

Another aspect of firing an employee is security and safety. You want the interaction to go as smoothly as possible without creating a scene. Leave the dramatic, blustery, “You’re fired!” antics to the movie industry. After the interaction, you don’t want the employee coming back to the premises to seek revenge, either. 

A third aspect of firing an employee is even more personal and has to do with your responsibility as an employer for the livelihood of another person. It doesn’t feel good to send a person home abruptly with no way to put food on the table or pay their rent, no matter whose “fault” it is. Even if that employee was caught stealing, your heart may go out to their family members who have to suffer on account of it.

Addressing the Legal Aspects of Firing Someone

Staying in compliance when you fire someone is easier when you put a contract in place when you hire them. The hiring contract should include one or more clauses that deal with the firing process. This is the best way to protect yourself and your company from a wrongful termination lawsuit. And, even if the employee files a suit anyway, they’re not likely to win if you’ve followed the terms of your own hiring contract. 

Employee manuals are another document that protect employers as well as employees. When an employee is performing sub-par, you can reference the employee manual for proof of expectations. This is also valuable for use during the actual firing interaction. It enables you as the employer to direct attention to specific breaches of the employee manual. 

Most states in the U.S. have a stipulation that employees are hired “at-will.” This means that, technically, an employer has a right to fire at-will, for any reason, at any time. However, note that an employment contract trumps the at-will basis.

To protect against wrongful termination claims, such as discrimination, pregnancy, or supposedly unwarranted accusations, you should ensure that you have just cause for termination. Just cause would include items that are in direct violation of the employment contract. Note that it’s illegal to fire a person for something if they have a public right to behave as they did. 

Legally, the U.S. Chamber of Commerce recommends taking these important steps for firing a person:

1. Review the employee manual for the correct firing process and follow it to the letter.

2. Record violations. Keep employee records and note dates and times of “fireable offenses.” 

3. Gather evidence to support your decision. The more proof you have that you are in the right to fire a person, the better protection you have. 

4. Provide benefit information. Employers are required to educate terminated workers about their benefits, including how to get their final paycheck, COBRA, unemployment agency alternatives, and the transfer of any relevant insurance policies or retirement accounts. 

Addressing the Safety and Security Aspects of Firing Someone

When you fire a person, you need to ensure there won’t be negative backlash. This requires pre-planning on your part. To make the transition as smooth as possible, have the entire process planned out. Consider:

• Retaining employee key cards, id cards, keys, membership cards, etc. in the firing interview, before the former employee leaves your office. 

• Having security escort the employee while they clean out their desk/cubicle/office.

• Acquiring a list of passwords used by the employee and having your IT department remove/change those passwords before the employee leaves the firing interview. 

• Retaining any files on laptops used by the employee that have previously left the office. 

• Retaining any company-owned mobile devices, such as phones, laptops, tablets, etc.

• Distributing a memo to the rest of the staff that the employee has been terminated and is not to be granted any access to company information/files, etc. 

Finally, and most importantly, the firing interview should not be done in an overly negative manner. Remain as calm and objective as possible in the circumstances. Remember, the person is getting fired; they don’t need a lecture from you on top of it. They already feel bad. Just keep it completely professional. It’s often helpful to write down a few key phrases and repeat them if the employee asks questions that you can’t answer, for instance, if they keep pleading not to be fired. 

Addressing the Personal Aspects of Firing Someone

Unless the employee has been a super disappointment, it usually feels terrible to fire someone. But right now, you need to make the conversation about them, not about you. It’s fine to express your feelings that you wish things had gone differently. But it’s better to ask if they understand what is happening. It’s also better to ask if they understand how to apply for unemployment, or how to get access to their remaining benefits.  

You can help someone who you’ve just hired by supplying them with as much information as you can for them to get by until they find another job. 

Lastly, make sure if you fire someone from your company that you let your CPA know before your next tax filing.

Like many people, you may be facing credit card bills that have overwhelmed you, medical bills that are simply too high to pay, or other debt that continues to accumulate. Unfortunately, when unpaid debt accumulates long enough, creditors may take the step of suing you in an attempt to collect their money. When this occurs, don't panic. Instead, consult with your CPA and keep the following things in mind.

Lawsuits are Common

As more people have found themselves heavily in debt, remember that you are not the only person in the world being sued by a creditor. In fact, it happens quite frequently, with almost half of all civil judgements being linked to unpaid debts. Once a creditor decides to sue you, they will file a complaint in a state civil court, then notify you of the lawsuit by sending you a copy of the complaint or court summons. Many times, these will come from a collection agency or law firm, which can be intimidating. If you receive such a notice, show it to your CPA and discuss your various options.

Default Judgements

In many of these situations, the people being sued never show up for their court hearing. As a result, the judge will deliver a default judgment in favor of the creditor. If this happens, the creditor will then have the legal authority to place a lien against your property, garnish your wages, and possibly freeze your bank account in an effort to collect.

Not the Original Creditor

By the time you are actually being sued for bad debt, the debt itself is more than a few years old. Actually, the creditor who is suing you is probably not even the original creditor, since it is common for old debts to be sold multiple times over along the way. In many instances, even if the statute of limitations has expired for a debt, some creditors may attempt to revive the debt, hoping you'll be intimidated enough to hand them some money. This is a violation of your consumer rights, meaning it is no longer legal for you to be sued. However, the old debt will continue to damage your credit.

Gather Your Information

Once you know you are being sued, start gathering pertinent information related to the debt in question. Along with the letter you received from the debt collector, closely examine your own records about the debt. Since old debts find their way into the hands of many collection agencies and others, mistakes are common. Thus, you may find you have already paid the debt, or it was a debt you never incurred. Since you usually have 30 days to respond to the creditor, review your records and meet with your CPA as soon as possible.

Respond or Ignore the Lawsuit?

Generally, it is always better if you respond to the lawsuit against you, even if you know the statute of limitations has expired or that the whole thing is one big mistake. By ignoring the lawsuit, you will lose your ability to dispute the debt, plus put your property, bank account, and wages at risk. Along with meeting with your CPA, you should also talk to an attorney who specializes in such cases, since they usually offer free consultations. During your consultation, an attorney can point out various defenses you could use, help you draft a response to the creditor, and even agree to represent you in court if necessary. Once a creditor knows you have legal representation, they may back off completely or suddenly become much more willing to discuss a settlement.

Paying the Debt

While you may be thinking your case will inevitably find its way to court, that is actually rarely the case. Even if you hire an attorney, a deal can likely be reached before a court hearing that will allow you to settle the debt for less than you owe, and to also set up a payment plan with affordable payments you make each month until the debt is paid. If you do reach a deal with a creditor, always make sure you get the agreement in writing. The agreement should state the creditor will consider the debt to be paid in full, and will report it to credit bureaus as such. If you don't have this in writing, it becomes your word versus theirs, which could get complicated very quickly, especially if you are dealing with a creditor who is less than stellar in terms of their business practices.

Affirmative Defenses

Should you believe you don't owe a debt for whatever reason, your attorney may advise you to use what is known as an affirmative defense. The most common of these is having a debt contract that was illegal or unable to be properly enforced, which could occur if you can prove you signed it while under duress or based on falsehoods given you by the original creditor.

Identity Theft

Finally, you may be sued for a debt you absolutely know is not connected to you in any way, shape, or form. When this happens, identity theft may be to blame. If you suspect this to be the case, your CPA and attorney will advise you to make the creditor show absolute proof you owe the debt. In most cases, they won't be able to do so, especially if you have plenty of documentation to the contrary. If the creditor is unable to prove that you do indeed owe the debt, the judge will likely dismiss the case and let you walk out of court a winner.

While it can be stressful to be sued for unpaid debt, always remember that you will have numerous options from which you can choose. By working with your CPA during this process and relying on the advice of an experienced attorney, you may find it possible to emerge from this situation with your credit score still intact, no liens against your property, and your bank account and wages still under your complete control.