Philip Taylor knows money on both a personal and professional level. As a father, husband, CPA and personal finance blogger at PT Money, he talks about personal finance and balancing income and needs.
He took a moment to talk with us about making, and saving, money.
What has being a CPA taught you about your own finances?
Having my CPA has allowed me to work in a variety of financial areas, but my tax preparation work was probably the most instructive to my own life. I got to see what strategies people use to minimize their tax burden. I also learned that entrepreneurs can really make a lot of money, and that I wanted to be my own boss one day. It was fun seeing what business ideas were working.
If you could go back in time and give your younger self a piece of financial advice, what would it be?
I would tell myself to put a bunch of money in Google stock. Haha. In general, though, I would tell myself to take more risks and think outside of the traditional path more. College and career are great, but I wish I'd of been more open to outside opportunities to travel and start businesses at a younger age.
What can we be doing to increase our income?
Certainly if you're in a career, look for ways to improve your standing with your employer: strive for raises, promotions and keep looking for new employers willing to pay more.
If that isn't appealing to you, then consider starting a business - solve people's problems. Start with a small idea, work freelance and test it quickly. If you see potential, invest more time and energy into growing it. I built my two businesses using my free time at night and on the weekends.
I would also add that you should be maxing out your retirement savings deductions. Tax savings is earned money in my book.
How do you balance credit card debt and the rewards points that have some value?
You don't. There is no balancing. If you use credit cards, you should be paying the card off in full each month, avoiding all interest and fees. Anything less than this is a waste of your hard-earned money and rewards, and it's a sign you aren't living within your means. If you can commit to 100% full balance payoff each month, then credit card rewards, especially the upfront bonuses, can be a great way to reduce the cost of travel.
When budgeting, how do you evaluate expenses? What's going to stay, and what will be hitting the chopping block?
I treat my saving and giving like an expense. I pay it right off the top, automatically. Then comes mandatory living expenses. The leftover money I just spend freely. I stop spending when that's gone. Every three months or so, I review my spending to make sure there aren't any recurring bills/subscriptions that I'm not using. I cut those.
What tips do you have for new couples combining their finances?
Start with your hopes and dreams. Some may be shared. Some individual. That's okay. Give them each a priority and put those in your budget. Give each other some grace on small splurges and maybe set up small individual "no questions asked" funds. Set a rule that for splurges over a certain amount, say $250, you have to tell your spouse. Lastly, no one should "check out" and become unaware of the financial situation. Even if one person manages everything themself, you should be meeting regularly to get on the same page.