I work for a small company that just won a cruise trip for all the employees. The prize covers just the cruise tickets, and we have to pay for everything else. The problem is that my wife and I currently have more than $50,000 in debt, not counting our home, and about $10,000 of that is in collections. We’re trying to fix our finances and start saving money, but we just don’t feel like we should take a trip right now. How do I tell my boss?
— Ricky
Dear Ricky,
First, let me say how proud I am of you and your wife. Most people would be really irresponsible in a position like this and simply borrow more money to take the trip. The fact that you’re behaving like mature adults tells me you’re on your way to getting out of debt and solving your financial problems.
I’ve got to wonder, is there a lot of pressure from your company to go on this trip? I understand the benefits of team building and socializing with colleagues, but when you have no savings and are that deep in debt — and a chunk of that includes some in collections — it’s no lie to say you can’t afford to go. A decent company will understand.
Just sit down with your boss or owner, and explain why you can’t make it happen right now. You don’t have to unload all the details, but let them know that you can’t do something like this in good conscience when you’re trying to get your finances under control and already owe a lot of money.
That’s one heck of a temptation you’re standing up to, Ricky. I love that you and your wife are on the same page and have made the decision to take control of your finances together.
—Dave
Wednesday, November 9, 2016
Monday, November 7, 2016
Young man laid off and steps from financial ruin
Dear Dave: I'm 23, and I lost a good job a few days ago due to layoffs. My wife has been a stay-at-home mom with our 10-month-old daughter, and we have very little in the way of savings. What can we do to keep our heads above water? — Seth
Dear Seth: I'm really sorry you're going through this. I've been there, so I know this is a scary time for you. There are some short- and long-term goals to think about in a situation such as this, but let's look at the immediate future.
Go crazy about finding some kind of income. I don't care if it's delivering pizza during the week and working at the mall on weekends. Even if it doesn't completely replace your previous income, it will give you some cash to pay bills and stay afloat. On your off days, and before and after work, you can line up and do interviews for a more stable, full-time job. You may even have to trade off baby-sitting duties with your wife so she can earn some money, too.
While all this is going on, have a garage sale and sell anything you don't need or want anymore. Just about anything that can be turned into income should be turned into income. In the process, prioritize your bills and other financial responsibilities. Take care of food first, then utilities, the mortgage or rent, then transportation. You guys don't need to see the inside of a restaurant for a while unless you're working there, and if things don't get better by Christmas, any gifts you give should be handmade crafts.
This is doable if you two work hard, pull together and focus. God bless you guys.
Dear Seth: I'm really sorry you're going through this. I've been there, so I know this is a scary time for you. There are some short- and long-term goals to think about in a situation such as this, but let's look at the immediate future.
Go crazy about finding some kind of income. I don't care if it's delivering pizza during the week and working at the mall on weekends. Even if it doesn't completely replace your previous income, it will give you some cash to pay bills and stay afloat. On your off days, and before and after work, you can line up and do interviews for a more stable, full-time job. You may even have to trade off baby-sitting duties with your wife so she can earn some money, too.
While all this is going on, have a garage sale and sell anything you don't need or want anymore. Just about anything that can be turned into income should be turned into income. In the process, prioritize your bills and other financial responsibilities. Take care of food first, then utilities, the mortgage or rent, then transportation. You guys don't need to see the inside of a restaurant for a while unless you're working there, and if things don't get better by Christmas, any gifts you give should be handmade crafts.
This is doable if you two work hard, pull together and focus. God bless you guys.
Thursday, November 3, 2016
Small business tip: Keep a separate bank account for your business
Dear Dave: I've just started my own small business. As the owner and only employee, how do I determine my profits? — Brittany
Dear Brittany: Here's a basic Accounting 101 definition for you, regardless of how many employees you have or how big your business may be. What you take in, minus expenses — in other words, your revenues minus your expenses — equal profit. Believe it or not, it really is that simple.
Since you're just starting out, I'd strongly advise you to set up a separate checking account for your business. That's the only way to accurately tell exactly what's going on within the business. When you co-mingle business money with grocery money and things like that in your personal account, you'll never have an accurate picture of what's really happening with your business.
Good luck, Brittany!
Dear Brittany: Here's a basic Accounting 101 definition for you, regardless of how many employees you have or how big your business may be. What you take in, minus expenses — in other words, your revenues minus your expenses — equal profit. Believe it or not, it really is that simple.
Since you're just starting out, I'd strongly advise you to set up a separate checking account for your business. That's the only way to accurately tell exactly what's going on within the business. When you co-mingle business money with grocery money and things like that in your personal account, you'll never have an accurate picture of what's really happening with your business.
Good luck, Brittany!
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