Let Me Hear Your Money Talk

When I filed taxes for the first time as a teenager I remember not understanding what the fuss was about. You get some paperwork in the mail, you fill out the form and then you get money BACK. Seemed like a pretty sweet deal to me! Ah, so young, so naive. I did have a vague notion that it was probably more complicated for actual adults who had more factors at play beyond my basic wages as a swimming lessons instructor.

How little did I know then! It wasn’t until I started this business that I understood how complicated indeed. That most self-employed people or business owners almost never get a refund back and beyond the normal percentage of income taxes that everyone pays, the self-employed also have to pay a steep self-employment tax and our own social security. These are things that if you’re on payroll with a company, they pay *for* you.

It’s also a common misconception that having an accountant means everything is handled behind closed doors. They manage all the books, paperwork, and you send them a hefty check for their efforts none the wiser. While large businesses DO have accountants and bookkeepers on staff for this, most small business accountants require us to manage our own bookkeeping which is actually super smart. It helps understand spending habits and controls costs for both parties. At one point I also experimented with hiring a bookkeeper to manage my expenses for me and I ultimately decided it’s not for me. Not worth the cost & time, because I still had to do just as much admin as I was before.

Only you can know best how you spend your money and what things are a write-off and what things aren’t. But it still requires quite a bit of footwork to keep track of and manage, even with the best tools. So when people like me say we’re working on taxes, it really means going through the last several months of expenses and organizing them. Also means scanning many 1099 forms from various clients, proof of health insurance form (1095A), student loan interest forms, and any other documents from large purchases or investments if applicable. I go into more detail about my bookkeeping habits here in my Skillshare class if you want more! Or ask any specific questions in the comments.

Recently, I’ve found two new-to-me apps that have been making saving money, like, fun actually. Did you just roll your eyes? I did too, but believe it, comrade this is the real deal. The first app is called Digit (iPhone only, for now, Android coming soon) and it’s a delight to use. I mean, they text you animated .gifs like this:

IMG_6798Beyond that, it works by deducting a small percentage out of your account every time you make a transaction. It uses an algorithm that deducts a negligible amount based on your spending habits. Could be a few cents or a few dollars, but no more than $50. This money goes into a dedicated Digit account and sits there until you are ready to use it. It’s great for saving up for upgrades, treats, trips, or other medium level purchase. Did I mention it’s free?

Click here to sign up and get yourself $5.

Acorns

The other app is called Acorns, available for both iPhone and Android, is a slightly more traditional investment tool. Send them a lump sum, or set up a recurring deposit, and their “smart portfolios” invest for you based on how quickly and how much you want to save. Good for helping with longer term savings goals, so you won’t want to withdraw from here if you can avoid it. It’s free for students, 1$/mo for accounts with balances under $5k, and if you have more than $5k, the fee is yearly at 0.25% of your balance.

Get Acorn here!

I should note that while both of these are legit FDIC insured and secure platforms, neither of them will take the place of a financial planner and a retirement fund, but are really great for those with limited means, or who are just starting out and want to get a bit more control on spending. Also, none of this is intended to be a set it and forget it plan. No trustworthy, reasonable financial advice would make that claim. It’s a tempting ideas especially at the beginning to dream of a system we don’t have to think about and just let it do its thing. Ideally, these tools fight that instinct and teach a more empowering way to handle money. Best of luck out there and tell me if you make use of either of these!

{Ps – This post is entirely unsponsored, the links I’ve provided will give us both a slight kickback should you choose to use them. That’s your call!}

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