4 Financial Tips Your Accountant Won’t Tell You

Thursday, January 14, 2021, 6:00 AM | Leave Comment

The year 2020 has been a hard financial reset for many people.

If you still have your job, you may find that you’re actually doing better financially than in years past.

However, global financial uncertainty can still be making people financially nervous.

4 Financial Tips Your Accountant Won't Tell You

  1. Go Ahead and Pick Up Freelance Work

    While it’s true that having a job that deducts taxes will make paying your taxes easier. with slight adjustments to your withholdings, you can enjoy the cash from a freelance gig and avoid tax crunch in the spring. By running the numbers through tax calculator Canada, you may find that your current deductions will protect you from a big tax hit on filing day.

    Your T4 slip or W-2 job will deduct taxes at the proposed rate that you should be paying if that’s your only income. However, any additional jobs you take on will also deduct at that same rate. That means that the deduction rate on part-time jobs will be much lower than that of your full-time work.

    If you can find freelance work from home that you can do virtually, do it. Do you have to pay taxes on it? If it qualifies as income, yes. However, the risk of having to pay taxes on it is quite low. Instead, focus on putting that extra money into real rewards. Reduce stress by reducing debt, or put it into savings to protect against worries.

  2. Credit Cards Can Work For You

    The right credit card offer at the right time can work for you.

    To make credit cards work, you will need to

    • find a card with a bonus offer that works for your life

    • have the money in the bank for the purchase before you put it on the card

    • pay off the card in full as soon as you make the purchase

    For example, if you need a new refrigerator because the old one died, find a card that’s offering the reward you need. If you need cash back, flying miles, or other benefits, get the new card with the best offer and make the purchase. When the bill comes, pay it off in full.

    If the best card for your needs has a yearly fee, put a reminder in your calendar to cancel it in eleven months and use the rewards by that time. For those who have cards that offer grocery rewards or fuel discounts, put all your household utility fees on the card, pay it off instead of paying your utility bills directly, and enjoy the freebies!

  3. Move Toward Micro Living

    Most homeowners will get a mortgage tax break in the years ahead. However, we generally don’t get a tax break on utility bills to heat and cool the space. For long-term financial benefits, consider down-sizing.

    Do you have a home office in an extra bedroom because you need it, or could you put your home office behind a screen in another room and live with one less bedroom? How about putting your office or your craft space into a closet and reducing your square footage needs even further?

    Time spent working to pay to heat and air condition a home that’s more than you need can pile up over the years. Instead, focus on experiences and treat your home as a necessary shelter, not as a function of status.

  4. Focus On Living Skills

    Do you order takeout because you’re hungry for something special or because you never learned to cook? Chances are good that anyone who can read can cook. Invest in a frying pan and a stockpot to start and teach yourself to fry burgers or make chili. Once you have chili mastered, buy a baking dish and learn to make a baked pasta dish.

    Expand your cooking courage into other life skills. Do you need new clothes because yours are worn out, or because you don’t know how to treat stains or sew on buttons? The majority of the garments we buy could actually last for years if properly cared for, but they either fall out of fashion, become too unsightly to wear, or completely fall apart. Learn to mend and do laundry.

The measures for our quality of life will change over time. COVID-19 has pushed many of us to study what exactly matters most to us. Getting your financial house in order may mean picking up a second job, reducing your footprint, or learning to cook.

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