What The Griswolds Can Teach Us About Our Finances

What The Griswolds Can Teach Us About Our Finances

The holidays can be an exciting and joyous occasion or stressful depending on how you prepare for them. But, using the Griswold’s situation in National Lampoon’s Christmas Vacation as a learning experience, you can take some steps to make the holidays more bright. So, grab some eggnog and your moose mug, and consider the following as you prepare for the year ahead: Don’t write a check you can’t cash – Or, as the saying goes, “don’t count your chickens before they hatch.” By relying on a source of income that you haven’t yet received, you put yourself at risk of financial catastrophe. For example, if you decide to put in a pool, make sure to wait until you receive your bonus check. Make sure you have an emergency reserve – Should the unexpected occur (for example, getting fired after your crazy cousin kidnaps your boss), it is important to have a liquid source of funds available to meet your monthly expenses until you can recover. This account is normally recommended to cover approximately 3 – 6 months’ worth of expenses. Save some of your year-end bonus – While bonuses can be a nice surprise and should be enjoyed, we recommend saving at least a small portion. This could mean padding your emergency reserve, depositing money into a brokerage account, or contributing to an IRA. Consider pet insurance – Should your feline companion chew on a cord and get electrocuted, chances are the vet bill will be fairly high. Much like human health insurance, pet insurance allows you to set deductibles and coinsurance based on an agreed-upon monthly premium. While...
Year-End Tax Tip: Deducting Meals & Entertainment Expenses

Year-End Tax Tip: Deducting Meals & Entertainment Expenses

A taxpayer may deduct business-related meals and entertainment expenses incurred for entertaining a client, customer, or employee. Entertainment expenses are deductible only if they are both ordinary and necessary and meet one of the following tests: Directly-related test – The taxpayer must show all of the following: The main purpose of the combined business and entertainment is the active conduct of business The taxpayer did engage in business with the person during the entertainment period There is more than a general expectation of getting income or some other specific business benefit at some future time Associated test – Even if the taxpayer’s expenses do not meet the directly-related test, they may meet the associated test. Taxpayer must show that the entertainment is: Associated with the active conduct of the business, and Directly before or after a substantial business discussion Generally a taxpayer may deduct 50% of unreimbursed entertainment...
Should You Invest in Cryptocurrency? Dunston Financial Group Featured in CNBC

Should You Invest in Cryptocurrency? Dunston Financial Group Featured in CNBC

“Last spring, a man walked in to Dunston Financial Group in a jubilant mood. He told the firm’s founder, Lynn Dunston, that he’d put all of his savings and retirement funds into cryptocurrency, the digital tokens that can be traded from person-to-person anywhere in the world. ‘It’s a real concern when you hear about anyone putting all of their money into highly speculative investments,’ Dunston said.” Read the rest of the story and our thoughts on bitcoin and other...
4 Tips for Achieving Long-Term Financial Success

4 Tips for Achieving Long-Term Financial Success

As I was working on a client’s financial plan today, I thought one of the recommendations might be helpful for others. Here is the redacted text that made up one recommendation in the cash flow and budgeting section of a client’s financial plan: Our final recommendation vis-à-vis your cash flow and budget is the hardest to implement and the hardest for us to recommend. Successful financial planning ultimately comes down to cash flow planning. Over the years, our most successful clients have developed financial habits that allow them to live below their means. Living below one’s means can mean different things to different people, but it essentially comes down to a lifestyle decision whereby one embraces frugality and eschews the temptation to spend at one’s income level. Given various societal pressures, such habits are incredibly difficult to adopt. Some best practices to aid you in developing these habits are as follows:   Live on a set salary. For example, you could consider setting up your household budget so that you only live on your base salary, and you work toward saving all of your additional household income.  As income increases, avoid the temptation to commensurately increase your standard of living. Save heavily and regularly. One strategy here is to save raises and salary adjustments, and to continue living at your previous income level. Save 20% of gross income, and maintain this savings rate as your income increases over time. One mistake people make is that they often max out retirement plans and think they’re saving enough. However, if maxing out a retirement plan only results in a 10% savings...
7 Things to Consider before Improving Your Rental Property

7 Things to Consider before Improving Your Rental Property

In the context of comprehensive financial planning, our clients often want to know if it makes sense for them to improve their rental property. This is a really good question, and we think there at least 7 things to consider before making such decisions: Obtain comparisons. Before making improvements, it makes sense to obtain comparisons from other rental units that have similar upgrades so that you can find out how much more you might be able to obtain in rent for making improvements. These comparisons can be obtained on Craigslist and other rental websites. Get local advice. Have a local real estate professional who is familiar with the area come take a look at your property and provide you with her/his perspective on what improvements/repairs might result in higher rents. A local professional is often very familiar with surrounding properties and can be an invaluable resource. If the agent thinks there’s a possibility of gaining you as a client at some point, then you can often obtain their feedback at no cost. Be careful not to make upgrades that your local market won’t support. Some people make the mistake, for example, of making high-end improvements in a rental market where those improvements won’t increase their ability to obtain higher rents or increase the value of the property. Personal knowledge and judgment is paramount here; some landlords maintain a strategy whereby they aim to keep repairs and improvements to a minimum, and they’re still able to attract enough in rents to make a profit. Others landlords, however, need to make improvements in order to get their rents to a place of profitability....