First Financial monitoring your finances

How to Manage Cash Flow For New Businesses

man measuring cash flow with adding machine

If you watched CNBC’s Shark Tank recently, maybe you caught Mark Cuban telling a hopeful business owner that it can take a lot longer than expected to get to consistent positive cash flow. Financial instruments like the business loan and the merchant advance have helped millions of business owners keep cash flow positive long enough to get that late payment from the big client who just happened to be traveling overseas, in the hospital or just behind. As e-Healthcare Solutions founder and president RJ Lewis remarks in an Inc. article,

“I do some angel investing in new businesses and in my experience, whatever the business plan says in terms of money and time needed to get to break even, the reality is it will take twice the money and double the time.”
Just as losing weight is the delicate balance of reducing calories IN while increasing calories OUT, positive cash flow happens when business owners can delay their own payments OUT to employees and other overhead while speeding up payments coming IN. Tackle the two jobs delineated below and you’re on your way to a flush future.

Job 1: Take Time to Measure
Seat-of-your pants entrepreneurship works in the beginning months of your business, but after a year or so, you need clearer cash flow expectations and projects. Getting these figures takes measuring incomes and outflow for this moment in time (or this month).

The simplest way to start gaining cash flow control is to divide a piece of paper in half. Write down your clients along the left hand side. Draw a line down the middle. On the right of the middle line write down costs for your employees, each vendor and other expenses. These current expenses should be easy to find and track. Don’t discount this low-tech method of cash flow analysis. Even having a cash flow analysis is a step ahead of MANY entrepreneurs.

For those ready to move beyond the sheet of paper, software helps keep cash flow positive. While we could go into detail about how to document each expense in a spreadsheet, it can be more fun to download a little app to your smartphone or computer. These low-cost software tools let you upload expenses and revenues once for repeat accounting. We like Pulse ($14/month), which—made by a small business for small businesses—helps you keep a finger on the pulse of your income and expenses. It also anticipates your business expenses and cash flow management needs, taking the thinking out of it for you. Your business makes you think enough! Another app, Float ($24/month), brings you a simple, intuitive interface and backs up all your data to the cloud.

Up Your Cash Flow costs more ($395 to $795 one-time fee) because it BRINGS more. It takes the thinking out of developing a cash management plan and provides consulting services. Great for the overwhelmed business owner, Up Your Cash Flow helps you drive income and revenues up, up . . . up! For businesses that have outgrown the solopreneur stage, Up Your Cash Flow helps you make the tough decisions and get clarity on your most lucrative products and services.

computer cash register measuring cash flow
Job 2: Take Baseline and Make Projections
For those of you using the piece of paper cash flow program, your cash flow for the next month will be column one minus column two. Will that amount pay for your living expenses? More marketing? An additional employee? These baseline measurements inform your decisions going forward. Those using one of the convenient apps mentioned above get their numbers crunched for them. With these figures in hand, it’s important to look at them with clear eyes.

To nail down your cash flow, you now must project revenues over the next three months. Perhaps everything stays the same. In that case, you can relax. Cash flow plans are not absolutely accurate future forecasting. They depend on your customers’ payment habits, your ability to foresee upcoming expenditures and the time your vendors give you to pay. Make sure you include costs like: loan interest and principle payments, marketing expenditures for seasonal campaigns and one-time fees like subscriptions, insurance and parties.

A+ Rated First Financial Steps Into Cash Flow Emergencies
We are firm believers that, if set yourself up for positive cash flow and positive results will follow. The abstract plan of trying to make as much as possible does not help business owners find where they can increase revenues. Specific management and planning reliably increases revenue month after month.

First Financial is the nation’s leading provider of merchant accounts and other merchant services, particularly for the high-risk borrowers. Big banks and processors put too many reputable businesses in high-risk categories like information technology, simply because they’re new. Fill out the application in minutes. Follow First Financial on Facebook to get smart business tips online, too!

7 Easy Ways to get Your Credit Score Over 800

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Having an excellent credit score opens up so many more possibilities for you. But if you suffer from a low credit score, all hope is not lost. Here are seven ways to be one step closer to getting a credit score over 800…

1. Pay On Time

Think back to when you were in grade school, and your teacher drilled you to always turn in your homework on time, on the date it’s due, no exceptions. Credit card payments are the same. Make sure to turn in payments to your cards on time, without running a balance on them.

2. Consider Using Payment Tools

If remembering payment dates proves too difficult for you, you can always set up an automatic bill pay, or set up payment reminders. There are even some banks out there that will provide complimentary bill pay reminders via texts or emails.

3. Look for Large Limits on Credit Cards:

It is better to have a large credit limit on a card, as it doesn’t affect your rating if you spend more on that card. Conversely, if you have a lower credit limit, then it is easier to hit the limit, and that will negatively affect your credit score. Don’t fall for the temptation of thinking that just because you have a $50,000 credit, you have $50,000 to spend. To maintain a high credit score, you should use very little of that. In fact, you should keep it under 10% of the credit limit.

4. Don’t Over-Apply

Don’t be swayed by every credit card offer that arrives in the mail. Each time you apply for a new credit card, your overall credit score drops. Instead, work on getting higher limits on the cards you have.

5. Variety is the Spice of Life

Having a variety of diverse loans (including credit cards) in your overall credit collection also boosts your credit score. This can include not just credit cards, but also mortgages, automobile loans, et cetera. If you can prove that you can pay on several accounts reliably, your credit score will be higher.

6. Don’t Forget About those Under-Used Cards and Don’t Cancel Them

You need to prove that you can pay your cards on time, including those underused cards. It’s highly recommended that you not cancel those cards you don’t use regularly, because doing so will reduce the total amount of credit you’re approved to borrow. You also want to show that you indeed have a history of paying all of your cards on time, including the lesser used ones.

7. Check for Errors on your Credit Report
Yes, it is a fact that even the credit score agencies are not perfect, and sometimes have errors on their reports. Be sure to locate these mistakes and then call and have them corrected. Your credit score will benefit as a result.

8. Try Asking for a Break
It doesn’t hurt to call and ask to have late payment penalties taken off of your credit history. Sometimes if you’re polite about it, companies will remove the causes of your bad scoring, so you won’t need to wait. You have nothing to lose in asking.

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First Financial Personal Loans Provide the Savings that only Online Functionality Delivers

First Financial’s lending partners can provide low cost personal loans because of their cost-saving, online structure. Apply for an affordable personal loan here, even if your credit rating is “fair,” “poor” or even “bad.” Our comprehensive application was designed by financial professionals who understand that an applicant’s financial history can be complex. Fill out the application in minutes and learn how much you qualify for within 48 hours. Follow First Financial on Facebook to get smart budgeting and saving tips, too!

6 Savvy Ways of Paying off Credit Card Debt Without Feeling Stressed

6 Ways of Paying off Credit Card Debt Without Feeling Stressed

Credit card debt can seem like a heavy burden when you have other bills to pay as well. Here's your guide to paying off credit card debt without feeling stressed.

The average American carries approximately $6,375 in credit card debt. For many, the stress associated with trying to pay off this high level of debt is significant.

If you find yourself in the group of people stressed about how to go about paying off credit card debt, you will be happy to learn there are some tips and tricks you can use. While your debt may seem insurmountable now, with time, effort, and dedication, you can get out of debt for good.

If you’re ready to learn what steps to begin taking, keep reading.

1. Focus on One Debt At a Time

Are you carrying a balance on more than one credit card? If so, you need to make sure you are always paying the minimum required on each.

However, don’t stop there. Once the minimums are paid, you need to concentrate on paying down the balance on each card. Be sure you choose one card to focus on at a time.

You can choose the card with the highest interest rate to pay off first, or the one with the smallest balance. Both of these strategies are effective but choose the one that works for you, and then stick with it.

2. Get Rid of the Cards – For Good

If you want to get out of credit card debt and stay out of it – for good – you have to take some drastic steps. One of these is to destroy the cards.

Regardless of what you think, there is no such thing as responsible credit card use. There is no good reason to keep these cards around, especially the department store cards that would not even be helpful in an emergency situation.

While this step may sound somewhat drastic, it’s the only surefire way you won’t get right back into credit card debt once you have paid everything off.

3. Combine and Conquer

Another option is to consolidate your debt. You can combine several of the higher-interest balances into a single payment. In most cases, the transfer fee is going to be three to five percent, but you can compensate for this with the savings you are going to see from the transfer.

If you have any equity in your home, you may be able to use that to pay down your credit card debt, as well. Home equity lines of credit often provide a lower interest rate than what the typical credit card charges.

It’s important to understand that closing costs will apply. However, the benefit is that the equity interest payments are usually tax-deductible.

If you choose the consolidation path, remember, you need to control your spending. This can help you avoid accumulating new debt, along with the debt that’s just been consolidated.

4. Build Your Emergency Fund

If you are planning to pay off and destroy your credit cards, then you still need to ensure you have some type of safety net for emergency situations. This is where an emergency fund comes in.

Building an emergency fund can take some time, but it will also be valuable if you encounter an unexpected expense or some type of income disruption. All you have to do to create an emergency fund is put a little back from each of your paychecks. By doing this, you can avoid missed payments and the need to use a credit card in the future.

5. Rearrange and Reprioritize Your Budget

You need to get a handle on your budget and make sure you fully understand what it is and how you can make the most of it. For example, top priorities should be transportation, groceries, housing costs, and entertainment.

A great way to begin this reorganization process is by looking at your credit card statements, as most issuers categorize your spending.

Be sure you scrutinize this information closely. Find areas where you can cut back how much you are spending. Then take the money that you have “found” and put it toward paying down the debt you have.

6. Don’t Give Up

If you are like most people, you didn’t get into credit card debt overnight. As a result, you are aren’t going to be able to get out of it that quickly either (unless you find a windfall of some sort).

Be patient and continue on the path to living a debt free life. While this is bound to take some time, in the end, it will be well worth it, and you will be in a position to take charge of your finances and finally achieve the financial freedom that you want and need.

Paying Off Credit Card Debt: It Is Possible

There’s no question that paying off credit card debt is something that takes time. However, it’s possible when you use the right tactics and rely on the right information.

Be sure to use the tips and information found here, as they’re going to help you on your journey to financial freedom. You may also want to reach out to a financial advisor, who can provide you even more information on how to best manage your finances to remain debt free.

If you are ready to take control of your finances, rather than letting them control you, we can help. Our team can provide the information you need on any finance related topic. For example, we have a recent blog on how to take the pain out of monitoring your finances.

Stay tuned to our blog for more insights.

Take the Pain out of Monitoring Your Finance

Go from bad credit to good credit without beating yourself up

Can there be any joy in monitoring your finances? Your bank balance is disappointing more often than not. Trimming expenses doesn’t bring any joy. Reminders of irresponsibility can be a gut punch.

Still, a different mindset can help you make the changes to put you on the path to good credit.   

Begin by forgiving yourself for financial mistakes

The shame and blame we heap upon ourselves for not being where we want to be financially can make our situations worse. It leads us to avoid confronting credit spending, recurring debits from bank accounts, balances on personal loans or car loans, and important conversations with family members.

Shame springs from an idea that the individual has departed from social norms. Start dismissing your shame when you understand that one in three others you’ll meet today also have credit under 601. That’s right—one-third of Americans today have bad credit.

The individual experiencing bad credit has lots of company. And is this all their fault?  With aggressive companies relentlessly bombarding us with messages that we deserve their products and that we must keep up with our peers, it’s no wonder we overextend ourselves.

If you can grab your financial issues “by the horns” so to speak, you have made the first

 step on the path to success. Some psychologists tell us that, “a willingness to endure discomfort and capitalize on challenge is a trademark among successful, fulfilled individuals.” While it will require a little effort, put a budget in place, inform those who may impact it, stick to it. You’ll quickly find positive feelings about yourself and your financial situation multiplying. As Benjamin Franklin told the framers of our constitution, “Once begun, half done.” Those quill pens got to writing, despite their enormous task. 

Gamify Your Savings

Rather than tracking every $3 coffee, focus more on a positive indicator: your savings level. As that rises, set a reward after reaching certain amounts. The reward could be you get to buy a new piece of clothing or 10 shares of SnapChat stock. Set these levels up ahead of time and stick to these commitments. These rewards can offset the sense of loss from avoiding day-to-day overspending.

Take the pressure off when you avoid social media

First and foremost, understand that social media is simply carefully selected snippets of your friends’ and family members lives. What they choose to share is designed to elicit envy. Those of us here at First Financial are constantly surprised at friends’ life-is-so-great posts and how these compare to what we know are their real struggles.

What’s more, when you focus on others, you remove your attention from your own issues. If you have bad credit, all your attention needs paid to your spending and savings plans.

Let the social world turn without you when you use a religious tradition, mindfulness, meditation or good old smart reading to understand how pointless it is to compare yourself to friends, relatives.

Deepen Your Relationships when You Lay It All Out for Loved Ones

Serious conversations with loved ones can be intimidating, particularly when they’re about money. Strategize how to take the sting out of belt-tightening before you tackle it with those you love. In other words, have alternate plans to take the place of lavish habits so that your new financial regimen doesn’t translate as 100 percent loss.  

First, explain how it’s important now to join forces for common goals and how these efforts will unite you. Emphasize that working together for financial fitness by cooking meals together, going to resale and thrift shops and competing for better money saving strategies will get you talking and sharing more. Also, make sure you include your family members’ long- and short-term goals in your planning. Study after study reveals that children and spouses prefer experiences and time spent together over material goods anyway. Shared experiences just connect us better and for longer than shared material consumption. Use that research if you have to!

Your new financial fitness system may benefit from gratitude journals. Everyone should jot down at least one thing they’re grateful for every day. Sharing is optional, but when these grateful moments that include others are shared, it strengthens bonds. These journals, particularly effective when an individual is feeling particularly short-changed, have proven to increase happiness significantly.

5 Best Budgeting Apps for People Living Paycheck to Paycheck

Man walking using a budgeting app

These apps take a little set-up, but after that, enjoy taking the brainwork out of every spending decision. Whether you’re just trying to cut down on needless spending or saving up for a big purchase, these apps help you reach your goal quicker.

Every Dollar

Available on Android, iOS and on desktop, Every Dollar has a very simple user interface that makes budgeting simple. User can expect to take less than ten minutes setting their first budget. The service ditches spreadsheets and offers many helpful visuals so you can see where your money is going. Tracking your spending and managing your money is super convenient with the app, and it syncs across devices so whenever you open it, you’re looking at the most up to date information. Every Dollar lets you budget confidently – the app is based on a proven plan that has helped millions of people get out of debt.

Mint

Available on both iOS and Android, Mint is one of the most popular money managing apps. Users can easily view all of their bank accounts in the app and categorize all of their expenses by category, such as utilities or food. Unique to Mint is that it lets you set spending limits for each category, and will send you an alert when you are approaching the limit. Users can also get a free credit score within the app. Lastly, users should feel safe using Mint, as it was developed by Intuit and backed by their security system.

Digit

Digit it perhaps the most unique app on this list. It does the basics like connecting to your bank account and view your transaction history just like the others. What sets it apart is that it analyzes your income and spending habits over time, and by using a unique algorithm it sets aside small amounts of money into a separate “Digit savings” account that it thinks you would have spent wastefully. Many users claim it has helped them save a lot of money, but if you don’t like it you can easily transfer the money back to your checking account for no fee. Lastly, the service has a “no overdraft guarantee” and promises to not take more money than you can afford out of your account.

Level Money

Level money is a great app for people who know the importance of saving and want to do it, while also spending their hard money however they choose. Level money lets you set a savings goal for a time period and helps you plan for future expenses, like bills. The app then informs you of any money you have left over – called spendable money – and illustrates this nicely with a helpful graph. The app also has a daily spending guide to help you stay focused on your financial goals, and will alert you if you’re spending more than usual.

Spendbook

This one is only for iOS users, and will cost $1.99. Spendbook has built in expense tracking and lets you set budgets. The app is very user friendly, adding a new income stream or expense transaction can be done with just a swipe down. The app lets you take photos of receipts and items you have purchased and then categorize them. Lastly, the app gives users a daily and monthly summary of their expenses, as well as charts and infographics to help users spot trends in their spending habits and look for ways to improve.

 

5 Ways to Be Debt Free by Christmas

Family Celebrating being Debt Free

 

Most people have some debt, but if your situation has gotten out of hand, now is the time to figure out how you can pay it off before it gets even worse. By figuring out how much you owe, picking a strategy to pay it off, and making a couple sacrifices along the way, you could be debt free by Christmas.

Here’s how to get started:

Know how much money you owe

The first step to paying off the debt you owe is to figure out exactly how much debt you’re in. You may have avoided doing this because you’re scared of the number, but it essential as it will help you keep perspective and figure out a plan to pay it off. Gather all debts you owe, from credit cards to student loans to medical expenses, and calculate how much it all adds up to.

Develop a strategy

The next step is to develop a strategy to pay off the debt. This is important. Picking and being able to stick to a strategy will help you pay down the debt faster, while also knowing that the sacrifices you’re making to do so have a set end date, giving you some peace of mind. There are two main strategies to pay off debt: Debt avalanche and debt snowball. The first one is the fastest, and has you pay off the debts with the highest interest rates first. This can save you a lot of money over the long term, but you won’t feel much progress is being made at first.

If you feel as if you need to see yourself making progress to stick to a strategy, debt snowball is likely for you. This strategy takes the opposite approach. Arrange your debts from smallest to biggest (ignore the interest rate) and begin paying off the smallest ones first. This will help you see that you are making progress, but will likely cost you money over the long term due to interest.

 Commit a set amount of money to the debt

 Another excellent way to help you pay down your debt steadily is to set aside a set amount of money every month and put it towards the debt. Start out by calculating how much you need to spend per month on necessities (include building up an emergency fund) and then subtract that from your total monthly income to get an idea about how much you can put towards the debt every month. The higher the debt, the more of that money you will want to dedicate towards it.

Get a side job

Even with these strategies, paying off these debts is no easy task. It takes persistence and sacrifice for possibly years. One way to help you but a bigger dent in the amount you owe is to get a side job. Even if it’s just on the weekends doing something simple, you could easily find yourself with a couple extra hundred dollars at the end of every month to put towards the debt. It may not sound like a lot, but it could save you hundreds if not thousands over the long run, and you’ll have that debt paid down much quicker.

Happy debt-free people

Renting a room

When calculating your total monthly expenses, chances are the rent towards your apartment is what is eating up most of your budget. You could downsize to a smaller apartment, but this would involve lots of paperwork and being stuck there for a few years. An alternative solution is to rent out a room in someone’s house or apartment. There is little to no hassle, and with the money saved, you could put even more towards the debt or perhaps avoid getting that side job. Either way, if you owe a lot of money, this is certainly an option to look into.

 

How to Stop the Cash Advance Habit

saying no to a cash advance

Like any financial option, the cash advance serves consumers well when used properly. We reveal the best ways to manage the cash advance in our previous posts about when to use it and strategies to pay it off.

While a cash advance can help you keep your computer, car or apartment, some use a second cash advance to pay for the first and then get caught up in an ever increasing interest rate and fee cycle. This habit erodes your long-term financial health.

When you get your very first cash advance, to ensure you can pay it off, try to make these lifestyle changes:

  1. Check your credit card statements every month: too often, what an online service told you would cost $1, ends up having a subscriber fee of anything from $9 to $99 per month. They disguise this fact adeptly.
  1. Pay yourself automatically with automatic transfers from checking to savings or retirement IRA. Money left in checking is far easier to spend on unnecessary items.
  1. Schedule a time to take a “money minute:” monitor expenditures for the day. Check each account each day.
  1. Establish an effective spending “mantra.” This can be “I spend only on essentials” or “I treat myself with walks, books from the library or time with friends. . . not new clothes or furniture.” When we articulate our values, we feel guilty when we do not abide by them. Create a specific spending mantra to remain in control.
  1. Let a friend know about your money goals. Go an extra step and ask them to check in with you about how well you’re meeting these goals. Knowing you’re accountable will help you avoid spending.

While the cash advance does come in handy in many situations, before applying for a cash advance, make sure you can answer the following questions positively.

  1. Can you pay the money back at a designated date?
  1. Is the cash advance your best or only alternative?
  1. Do you really need what you want to buy or pay for (like cars, living arrangements, computers that keep you earning?)

Break the cash advance habit to save

A+ Rated First Financial Gets You Money without Eroding Your Credit

When considering personal loans, don’t forget that online lenders have the automation and reduced overhead to offer the best loans and terms. First Financial is the national leader in providing cash advances for borrowers of all types, even bad credit borrowers. Just fill out some forms, upload documents and get the money in your account in a matter of days. The Better Business Bureau rates First Financial A+ because we make customer service our highest priority.

 

 

Considering Freelance? Website Design Industry Outlook for 2016 & Beyond

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 Web designers are a lucky lot. Creative colleagues, new projects and ever-changing technology make for constant stimulation and growth.

Those who have been working at agencies or in a corporate setting for a while sometimes feel they need to stretch their wings as entrepreneurs. The freedom and prestige to own your own business can prove irresistible despite concerns over steady income, staying on task and finding affordable health insurance.

Pros and cons fill any career choice. Perhaps the best way to make your decision is to gauge your personality type. Entrepreneurs tend to be tenacious risk-takers, plagued by creativity and a desire to break rules and make something new. For this lot, self-employment satisfies like nothing else. Life as a corporate employee could feel stifling. Each reader has to determine whether they have the capital (typically twice as much as planned), time (typically twice as much as planned), family understanding, tenacity and willingness to work. If so, this post should allay any concerns about the future of the web design industry.


Experts Agree: Web Design, Development and SEO Has a Robust Future

If you’re a web designer, developer and/or search specialist with entrepreneurial spirit, you’ve got some trends on your side.

First, according to research from Graphic Design Degree Hub, the average freelancer makes 45% more than the individual working for an agency or corporation. The average web entrepreneur makes $68,000 where her nine-to-five colleague gets $46,800. Seventy-five percent of all freelancers make over $65,000 per year.

Secondly, the U.S. Bureau of Labor Statistics’ outlook for web designers is glowing. Where demand for the average American job will increase by 7% until the year 2024 (less than one percent per year), the American economy will call for 27% more web developers (nearly 3% increase per year).

Backing up this need for web design, IBIS world finds that the industry will grow 5% yearly. Currently a 24-billion-dollar market, web design will keep adding another one billion per year of closed business over the next decade. By 2024, web design will be a 35 billion dollar industry.

Google’s preference for mobile-friendly design poured significant revenue into the pockets of web designers who needed to upgrade websites to render on smartphones. Who knows what the next big shift will be? Entranced by technology upgrades, website owners will always need upgrades as platforms and software continue to evolve. These trends only mean more revenues for web designers and developers.

The Entrepreneur’s Two Biggest Concerns: Recession & Responsibility

Many talented employees feel intimidated about going out on their own because the future can seem so uncertain. In 2014, just one in seven web developers was self-employed. Recessions do emerge about every seven years, and they can cut back on business. An economic downturn affects both employees and the self-employed, however. Surprisingly, about half of freelancers report they aren’t impacted by recessions. Further, recessions cause employee layoffs, and in those cases, all income is cut overnight. Finally, since the downturn of 2008, the government has put controls into place to make sure instability never gets to those levels again.

Recessions tend to be beyond the entrepreneur’s control. What about the aspects of entrepreneurship that are within one’s control. These can be just as intimidating.

Budding entrepreneurs handle not only all the creative aspects of the new job, but they are
• the accounting department (handling all estimates, invoices and collections),
• the marketing department (getting new clients),
• the IT department (paying for all computer repair, paper, ink, etc.)
• and administration (handling all calls.)

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Each solopreneur must set up an accounting system, IT solutions, supplies and merchant accounts to accept client’s credit cards. As mentioned above, if wearing 17 different hats feels fun rather than overwhelming, you’re cut from entrepreneurial cloth. Whichever career path the web designer chooses, he or she will have well-paying work for life!

Top Surprise Expenses

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top surprise expenses a personal loan can help

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