Buying a car can be stressful for many people because there are different factors to consider. Some people assume buying a new car is the best option, while others prefer to purchase a used car. While each person might be correct according to their needs, determining the advantages of new vs. used is relatively easy and can assist in decision-making.
Before reviewing the advantages of each type of car, it is essential to understand how “new” and “used” are defined.
Used Car and New Car Defined
Many people have doubts about the distinction between new and used, but a car is no longer considered new if it:
Has had its structure affected by accidents
Has changed its engine or fuel type
Has downgraded or included accessories other than the original ones
For example, consider two different cars. One car has a maximum of 3 years of use, only one owner, bodywork in good condition, and none of its mechanical parts are defective. A second car has signs of rust on the bodywork and defects in the engine, clutch, gearbox, or suspension. The changes to the second car caused its status to change from new to used, while the first car is still considered new.
Comparing Advantages
Consider the following benefits of a used and new car before finalizing the purchase. Make sure they meet all your requirements and budget.
New Cars
Financing options – There will be fewer limitations on loan acquisition. The majority of owners and manufacturers offer specific incentives like cashback and low Annual Percentage Rates (APRs).
Manufacturer deals – Car dealerships often lower the price to move older models off the lot. There may be a good deal available for a new car.
Latest technology – Whenever people go to buy a new car, they look for the latest features or a car with modern technology. However, these features will increase the cost of the car, so it is important to compare models with basic and premium packages.
Used Cars
Lower registration prices – This registration fee depends upon your current location. The expense of registering a new car is higher than the registration cost of used cars.
Small upfront price – Once you get a new car from its showroom, its value depreciates. A used car in prime condition may be more cost-efficient than a new model car. This is often the case for a used luxury car.
Reliability – Significant car maintenance and repairs are not needed until you reach at least 100,000 miles. Typically, a new car warranty does not cover any repairs after the first 36,000 miles.
While there are advantages to both new and used cars, also consider:
Price
This is the main advantage of buying used cars. Vehicles have a high depreciation rate, so the value of a zero-mile car drops substantially by at least 10%.
Therefore, the amount used to purchase a new car could also be used to buy a used model with more mileage but better features.
Safety
The amount of used car insurance is less than the amount charged in the case of a new car. Since it is charged annually, this difference can be quite significant over time.
Documentation
Buying a used or new car is not just about the vehicle’s value and the insurance. The cost to register a new car is greater than the amount needed for a used one. Registration documents usually exceed $1,000, while the used transfer fee costs less than half that amount.
Taxes
The Tax on Property of Motor Vehicles (IPVA) is paid annually, but the rates used to calculate this tax are different.
In this case, the IPVA is:
3% for flex-fuel vehicles
4% of the value of the vehicle with one type of fuel
As it focuses on the value of the good, the used car naturally has a lower value. In that case, the tax rate will also be lower than that charged for a new car.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Get Your Finances in Order: Simple Steps to Organize Effectively
To organize your finances, gather all account information in one place, create a practical budget, track every expense, set automatic savings, and use simple tools for staying on top of bills and future goals. By implementing these foundational steps, anyone can quickly gain clarity, control, and confidence in managing personal or business finances.
As the founder of Complete Controller, I’ve helped hundreds of clients who thought financial organization was out of reach—until they saw what simple steps could do. Over 20 years as CEO, I’ve had the privilege of working with businesses across all sectors, and I’ve pretty much seen it all when it comes to SME business strategy and bookkeeping services. The transformation that happens when you streamline financial routines is remarkable: stress melts away, decisions become clearer, and opportunities become visible. This article will walk you through proven strategies for gathering financial information, creating sustainable budgets, automating critical tasks, and leveraging technology that actually works. You’ll discover how to build an emergency fund that protects your future and implement tracking systems that keep you accountable without feeling restrictive.
What does it take to organize your finances, and why does it matter?
To organize your finances: bring all account data together, make a realistic budget, automate savings, and routinely review spending and bills
First, gather all financial info (accounts, loans, investments) in one spot for full visibility
Next, set up a workable budget that accounts for every expense, income source, and savings goal
Automate critical tasks like saving and bill payments for consistency
Finally, track progress using easy-to-use tools to spot problems and opportunities early
Master the Basics: Gather, Track, and Plan
Bringing order starts with inventorying your financial life. According to Duke University research, 71% of Americans identify money as a significant stress source, with 76% living paycheck-to-paycheck. This stress has real consequences: 53% report lying awake at night with financial worry. Organization directly addresses these pain points.
Start by listing every account: checking, savings, credit cards, loans, and investments. Use worksheets, apps, or spreadsheets to centralize your information with personal finance tools. This overview highlights gaps, duplicate fees, and overlooked assets that drain your resources without providing value.
Personal finance tools for everyday organization
Apps like Mint, YNAB (“You Need a Budget”), and Google Sheets make tracking manageable. Digital vaults help manage documents: statements, insurance policies, and receipts. Choose tools that sync automatically with your accounts for real-time visibility.
The Consumer Financial Protection Bureau recommends starting with a simple notebook if technology feels overwhelming. What matters is consistency, not complexity.
Create a Budget You’ll Actually Use
Effective budgeting isn’t restrictive—it’s empowering. Research from Savology shows that 72% of American households lack a written financial plan, yet households with documented plans are 2.5 times more likely to save enough for retirement. This proves that taking time to organize pays measurable dividends.
Start with your net income (after taxes and deductions). List fixed expenses (rent, utilities) and variable expenses (food, entertainment). Choose a method that fits your lifestyle:
Envelope system: Cash allocated to specific categories
Zero-based budgeting: Every dollar assigned a purpose
App-based tracking: Automated categorization and alerts
Set clear goals: emergency fund targets, debt payment deadlines, retirement milestones. Write these down and review monthly.
Budgeting techniques for real results
The Money Guy Financial Order of Operations provides a nine-step framework for prioritizing financial decisions. Start with covering insurance deductibles, then maximize employer retirement matches before tackling high-interest debt. This systematic approach removes guesswork from budgeting decisions.
Apply percentage-based rules to simplify tracking. Housing should consume no more than 28% of gross income, while total debt payments should stay under 36%. These guidelines create guardrails for sustainable spending.
Automate Your Saving and Bill Paying
Automation is the secret to consistency—set it and never miss payments. According to Bankrate’s 2025 Emergency Savings Report, only 46% of U.S. adults have three months of expenses saved. More alarming, 24% have zero emergency savings. Automation directly combats this trend.
Use online banking to schedule transfers and bill payments. Set up:
Automatic transfers to savings on payday
Recurring bill payments for utilities and loans
Investment contributions to retirement accounts
Quarterly tax payments for self-employed individuals
Savings strategies that work
Pay yourself first using automated transfers to savings or investment accounts. Start with 5% of income if higher amounts feel impossible. Increase by 1% every six months until reaching 20%.
Schedule periodic reviews to boost savings when income rises. Many banks offer “round-up” features that automatically save spare change from purchases. These micro-savings add up significantly over time without feeling burdensome.
Put Every Dollar to Work: Case Study
Annie, a self-employed digital marketer, felt organized in her business finances but completely lost with personal money. She hesitated to transfer earnings from her business account because she feared irresponsible spending. Working with financial coach Cole for 18 months, Annie created a simple shared spreadsheet categorizing all expenses.
By understanding actual monthly spending patterns, she discovered she could safely increase her salary from the business. She set up automated recurring transfers: $500 each to life events savings, abundance fund, investments, and retirement, plus $100 to travel.
Results: Annie doubled her salary, doubled her emergency savings, built a $10,000 emergency fund, and hit all financial goals—without earning significantly more in her business. She simply learned to manage what she already had through systematic organization.
Real-world outcomes of systematic organization
Annie’s transformation demonstrates that organization beats optimization. You don’t need perfect investments or maximum income to achieve financial security. You need visibility, systems, and consistency.
Prioritizing each step clarified goals and reduced uncertainty. Automation eliminated missed payments and improved savings rates by 40% within six months.
Leverage Technology: Tools for Modern Money Management
The right tools save time, eliminate errors, and increase visibility. Pew Research found that only 59% of Americans feel confident creating monthly budgets, but confidence jumps dramatically when using structured tools.
Consider solutions for organizing business and personal finances:
Personal tools: Quicken, Mint, Personal Capital
Small business options: QuickBooks, FreshBooks, Wave
Enterprise solutions: NetSuite, SAP, Xero
These platforms synchronize accounts, automate reporting, and streamline expense tracking. Choose based on your current complexity and growth plans.
Choosing financial management software
Compare features systematically. Essential capabilities include:
Expense tracking: Automatic categorization and receipt capture
Reporting: Customizable dashboards and trend analysis
Integration: Bank syncing and tax software compatibility
Security: Bank-level encryption and two-factor authentication
The IRS recordkeeping guidelines recommend maintaining three years of financial records. Digital tools make compliance effortless while providing audit trails for tax purposes.
The Overlooked Essentials: Estate Planning, Insurance, and Compliance
True financial order means protecting your future. Most people focus on daily budgeting while ignoring long-term protection. This creates vulnerability despite careful planning.
Review and update insurance annually:
Health insurance: Verify coverage meets current needs
Life insurance: Adjust for major life changes
Property insurance: Update for home improvements
Liability coverage: Protect against lawsuits
Complete basic estate planning documents. A will, healthcare proxy, and financial power of attorney cost less than $500 but provide immeasurable peace of mind.
Managing risk and legal protection
Store all documents digitally using encrypted cloud storage. Organize folders by year and category for easy access during emergencies. Share access with trusted family members or advisors.
Schedule annual checkups on coverage and legal status. Set calendar reminders for insurance renewal dates, beneficiary updates, and document reviews. The U.S. Small Business Administration provides free templates for business continuity planning.
Jennifer’s Final Thoughts
I follow these exact steps and rely on technology plus scheduled monthly reviews to stay ahead. Getting organized doesn’t mean perfection—it means progress and having the support you need. The data shows that financial stress affects most Americans, but systematic organization provides a clear path forward.
Over two decades of helping businesses transform their financial management, I’ve learned that success comes from simple, repeatable systems rather than complex strategies. Start with one area, master it, then expand. Your future self will thank you for taking action today.
Ready to take control of your financial future? Visit Complete Controller for cloud-based bookkeeping solutions and personalized advice from our expert team. We’ve helped thousands of businesses organize their finances and achieve their goals—let us help you do the same.
Frequently Asked Questions About organize your finances
How can I organize my finances quickly?
Start by gathering all account statements in one place, then create a simple budget listing income and expenses. Set up automated transfers to savings and use budgeting apps like Mint or YNAB to track spending. Focus on one area at a time rather than trying to overhaul everything at once.
What are the best apps for organizing finances?
Mint, YNAB (You Need a Budget), Personal Capital, and Quicken are top-rated for personal finance management. For simple tracking, Google Sheets offers free customizable templates. Choose based on your comfort with technology and specific needs like investment tracking or debt payoff.
Should I use spreadsheets or software for budgeting?
Both work effectively. Software offers automation, bank syncing, and mobile access, making it ideal for busy professionals. Spreadsheets provide complete customization and work well for those who prefer manual control. Start with whichever feels more comfortable and switch if needed.
How do I make sure I don’t miss bill payments?
Set up automated payments through your bank for all fixed bills like utilities, rent, and loans. Use calendar reminders for variable expenses. Many banks offer bill pay services that send checks automatically. Keep one month’s expenses in your checking account as a buffer.
What’s the first step to getting finances under control?
List all income sources and expenses to create a complete financial picture. This visibility alone often reveals quick wins like forgotten subscriptions or high-fee accounts. From there, you can make informed decisions about budgeting, saving, and debt reduction.
Washington Trust. “7 Easy Ways to Organize Your Finances.”
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Small engines with power-boosting turbocharging are currently popular. With so-called “downsizing,” more car and motor manufacturers want to meet the customer’s needs for reduced fuel consumption while maintaining driving satisfaction.
“Downsizing refers to replacing large gasoline engines with engines with smaller displacement,” says Joachim Theisen of Opel-Dell. The engines are combined with turbochargers or compressors to compensate for the lost horsepower due to the reduced displacement. Downsizing combines the consumption of smaller engines with the performance of larger engines and means environmental sensitivity, fuel economy, and driving pleasure. Reducing the size of the engine may also reduce weight.
For engine manufacturers, downsizing means expanding the product range with fewer basic engines. Because of variants, few models can be offered in several performance levels. Depending on requirements, an engine can be provided with one, two, or no charge.
As a result, smaller engines are becoming increasingly important in the global car market. In 2020, 52% of annually produced passenger car engines should have a displacement of 1.0-1.9 liters, according to the information service provider, “Ward’s Auto.” Previously, their share was 49%, corresponding to around 31 million engines. The study suggests that all other capacity classes will lose market share dramatically over the coming years. An increase is otherwise recorded only in electric drives. In Germany, the average volume of new passenger car registrations last stood at 1.76 liters. Europe-wide, it is even smaller, with 1.64 liters.
From the technical departments, it is to be heard that each performance level below 150HP (horsepower) is reproducible by a three-cylinder turbo. It is proudly announced that fuel consumption also falls in the standard cycle. The future has already begun under the bonnet of the compact van BMW Active Tourer.
There is a power plant with only three cylinders, just like the plug-in hybrid sports car i8. A BMW manager who wants to remain anonymous reveals that the developers are already ahead, “It may take a while, but we can imagine the three-cylinder in three or five.”
Even Michael Kramer, responsible for the Mercedes C-Class, does not want to exclude a three-cylinder in its series, and concrete plans do not exist yet. Even Jaguar’s formerly large-caliber engines are trimmed to be efficient. They shrink from eight or six mid-range cylinders to four cylinders. The Bentley Flying Spur, formerly powered by a V12, gets more than 500HP from just eight cylinders.
A Lively Three-Cylinder for the Opel Corsa
The trend holds great danger for premium brands because they lose essential differentiators. When car enthusiasts awaken a twelve-cylinder, they experience deep satisfaction at the pump when they can undercut their low personal consumption. Others enjoy the speed curve and the singing noise of turbulent running culture. Still, others have fallen for the torque and can enjoy the grumbling eight-cylinder while waiting at the traffic light.
Monoculture can fade the glow of a brand when a Ford Fiesta has the same engine specifications as a car with four rings in the radiator grille or a star on the hood. Recently, Peugeot Citroën has presented a new three-cylinder turbocharged petrol engine with 1.2liter displacement and 130HP, capable of 160HP, and would push into the middle-class area. Also, Opel will give the next Corsa a lively three-cylinder.
Automotive industries pay tariffs due to protracted slowdown. That is why large auto manufacturers reduce the workforce around the crucial markets of countries like America, India, and China to increase efficiency as they prepare for future mobility. The annual driving score of most Americans is around 3 trillion. However, the beginning of the global pandemic’s lockdown and enforced social distancing minimized the American driving rate. That result severely affected the employee sector and compelled them to work from home.
E-commerce and global shifts will continue and help the automobile industry, including American drivers, to use automobiles easily. It will solve related issues such as decreased gasoline extraction and gas taxes, automobile sales, the lockdown of assembly plants, and aftermarket sales.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
International Financial Reporting Standards (IFRS) is a framework of rules and formats to guide companies in reporting their financial information. It was derived following the development of the International Accounting Standards Board (IASB). It has been adopted on a mass level, with 120 countries following its framework. It helps users detect fraudulent activity by making it easier for them to read it through the familiarity factor.
IFRS is utilized principally by organizations detailing their money-related outcomes, except for those in the United States of America.
Generally Accepted Accounting Principles (GAAP) is the bookkeeping structure utilized in the United States and has considerably more guidelines than IFRS. IFRS concentrates more on general standards than GAAP, making the IFRS group of work a lot smaller, transparent, and easier to comprehend than GAAP.
One of the most awaited standards in IFRS is IFRS 9 (financial instruments), which is expected to change dealings in the banking sectors and was introduced and implemented effective January 1, 2018. Companies should follow it after 2018 and implement it in three stages.
Financial Instruments
It is the classification done in financial instruments and how they are measured regularly. IFRS 9 presents a legitimate methodology for grouping monetary resources driven by cash flows and the plan of action in which an asset is held. This single, rule-based methodology replaces principle-based necessities that are considered excessively confusing and hard to apply. The new model additionally results in a solitary impairment connected to every monetary instrument, consequently expelling a wellspring related to past bookkeeping necessities.
Impairment of Financial Assets
When the financial crisis occurred, delays in recognition of financial loss was identified as one of the biggest weakness of the accounting standards and might have been a reason for the downfall. IFRS 9 requires companies to recognize credit losses as soon as the instruments are used.
Hedge Accounting
Hedge Accounting is a strategy for bookkeeping where passages for security and the restricting fence are treated as one. Hedge Accounting endeavors to lessen the unpredictability made by the rehashed alteration of a money-related instrument’s esteem, known as stamping to advertise
This portion of IFRS 9 revolves around risk management and hedge accounting. It helps financial statement users realize the related risks and explains the hedge accounting process.
Hence, IFRS 9 has proved itself to be revolutionary in the banking sector, and the problems that were caused while following IAS 39 have been removed. It was the biggest contribution after the effects of 2008’s financial crisis. It has helped banks in more effective risk modeling. It has provided them with a powerful technology system. However, there are certain challenges that banks are going to face while following this accounting standard.
IFRS 9 details classifying an entity and measuring financial liabilities, non-financial items, assets, and sales contracts. This way, companies need to identify financial liability and assets in the financial position’s statement. It happens when a connection builds with the instrument’s contractual provisions. Plus or minus the fair of your financial asset, that entity evaluates it further at the beginning of recognition.
The entity’s business architecture manages its assets and contractual cash flow qualities. If your business model handles contractual cash flow or there is a rise in cash flow, companies will measure their financial assets at an amortized price. Reclassify all your affected financial properties by making certain changes in your business model that manage your financial assets.
There are two simple ways to manage fair value. First, through different comprehensive income, and second, by evaluating the correct percentage of profit or loss. You and your team must have full command using IRFS 9 as a company owner.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Many minority investors perform a passive management of their investment where the objective is to place savings in financial products, such as shares or fixed-income products. This investment provides an annual income with the objective of minimizing risk without taking control as detailed or exhaustive as an active investment.
Motivation for Passive Investment Management
Most minority investors do not have adequate financial training to manage their portfolios. If they do, they cannot devote the time required for this type of investment since the number of variables and factors to consider seems almost endless. However, any minority investor knows that large securities and fixed-income products are safe investments that have virtually no risk despite not maximizing the return on investment.
On the side of fixed income, the most important financial products are fixed-term deposits. Banks immobilize customer money by offering an interest rate for capital in exchange. Often, a fixed-term deposit is the star product of most banks. Additionally, there are other products, such as public debt or corporate debt, in which savings clients act as lenders of public and private entities, respectively.
On the equity side, passive investment is based on the purchase of shares of large corporations, such as Santander, Telefonica, BBVA, or Iberdrola, which usually have generous profit-sharing policies among shareholders. That is, the saver buys shares of these companies to obtain the dividend that provides an inevitable return on their investment in addition to the revaluation of share value.
Recently, the scrip dividend strategy has been extended, which is based on capitalizing the dividend or converting this income into shares. In this sense, many investors have seen how the number of their shares increases, thereby increasing the dividend to be received and seeing their portfolio grow almost automatically.
Investment Funds
There are almost as many financial products as investment strategies, either active or passive investment. Within the first group, for example, variable investment funds or pension plans are included, whose results depend on the decisions of a manager that modifies their composition based on expected results.
Within the second group, there are investment funds, such as Exchange Traded Funds (ETFs), which replicate the evolution of the stock index like the IBEX. The fund will be composed of the same values as the index with a similar weight, making its evolution similar to the index’s evolution.
In the case of ETFs, the manager’s job is to change the composition of the portfolio based on the changes introduced within the index. For example, if a value leaves the index and another value enters, the manager would be in charge of liquidating the positions of the value that leaves the index and, subsequently, acquiring new shares of the value that is incorporated.
Conclusion
A mixed strategy may be appropriate depending on the profitability you want to achieve and the risk you want to assume. In any case, the question to ask should be: When can I carry out a passive management of my investment?
Obviously, the risk and investment attention to buying shares is not the same between a large and emerging company with growth potential but volatility. When investing in smaller, riskier companies, it is necessary to have more exhaustive investment control to avoid significant losses. In these cases, passive management can be counterproductive.
This decision to engage in active or passive investment is personal to each investor or saver. There is no better or worse strategy because each strategy will vary depending on the needs and goals of the investor. Each situation is different, so it is important not to put all your eggs in one basket but to diversify.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Debit or credit is a mandatory part of beginning any small business. A bank loan, line of credit, and professional credit card will help you hire employees, purchase equipment, and finance business growth.
While most entrepreneurs consider debt healthy, too much debt is undoubtedly adverse for a small business. It acts as a chain around your ankle, holding you back from accomplishing your business’s permanent financial stability and goals. Severe debt is a trauma that creeps up on many entrepreneurs during the initial years of their business venture.
Digging a small business out of serious debt is no different than pulling you out of personal debt. You’ll have to generate more revenue than the total expenditures and put the remaining profitability towards the business debts until they are fully paid off.
As an entrepreneur, you must always distinguish the simplicity of debt repayment with effortless execution. Avoiding serious debt requires hard work, so roll up your sleeves and get started.
Examine The Credit Report
Primarily, you’ll have to examine every little detail of the business issues, including debt. With accurate facts, you will be able to tackle any existing problem. Most specifically, an entrepreneur must inspect the credit reports and scores. Even the tiniest errors influence a credit score, and you clearly understand current happenings.
While your credit score is an instant analysis of where you stand on an unvaried scale, a credit report represents the nature of your current accounts. Therefore, you can determine the debt situation and plan remedial strategies for tackling it.
Prioritize Debt Payments
Paying off debts is physiologically as crucial as any other business operation. If you get aggressive when the time comes for the debt repayment, you’re more likely to fall into dangerous loops. On the contrary, if you start to pay the debts timely, you’ll notice the creation of momentum. Many financial advisors suggest repaying the debt payments before the due date.
Another great idea is to list down all the debt payments you owe to different creditors and begin paying more minor to more significant amounts. In this way, your debt will start shrinking away in order.
Negotiate With The Lenders
Often, it’s feasible to consider the debt from the lenders’ perspective. If you have ever had a customer owe you money for an extended period, you must know what it feels like. To some extent, you assume that you’ll never get your amount back. Therefore, if that customer contacted you after months and offered you to settle for a lower amount, you’d accept.
Similar is the case with your business debt. If you have uncontrollable debts that might be unaffordable to pay in full, ask the creditor to settle for a percentage of the total debt amount. Most will agree with your terms to get you off their books.
Seek Out Late-Paying Customers
You might have late-paying customers who owe you debts. Now is an excellent time to seek out for them and ask for unpaid debts. However, you might be willing to settle for less if you are sure about not getting the amount in full. You can turn around and utilize this money to pay off your debts, and it will be a win-win condition for everyone involved.
Cut Down Expenses
Ideally, generating sales brings enough revenue to handle your debts, but if your expenses are getting out of hand, you might need to reduce them. You can sell out the excess equipment and machinery you don’t need or consider getting into a less expensive workplace.
As an entrepreneur or business owner, it’s the right time to shift the mentality regarding business debt. You must exclude the concept that large purchases require more considerable debt. Debt is not evil, but too much debt can be a lot more stressful, and it’s better to get out of it as quickly as possible, especially for small businesses.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Burger Economics has become a more significant concern from an economist’s point of view and consumer perception. It was introduced back in 1986 by Pam Woodall to understand the concept of Purchasing Power Parity (PPP) while explaining the idea of the Big Mac Index. Because the idea was more appealing, it started to be published by The Economist annually.
The Big Mac PPP
Burger Economics, or more precisely Burgeromics, is the outcome of something that was once illustrated humorously but later took on a new meaning since that day. The Economist magazine explained burgeromics with the help of purchasing power parity theory, keeping an account of Big Mac sales and purchases under observation. It resulted in the factual formation of Burger Economics, where the Big Mac Index could be compared to place a well-presented foreign exchange account.
According to Economists, the Big Mac PPP has an exchange rate that can be compared using the currency of two countries. For example, take the price of a Big Mac in one country and the price of the same Big Mac in another country with different currencies. Now, divide the prices of the first country to that of the second country. If this value is lower than the actual exchange rate, the first currency is undervalued, or the second country’s currency is overvalued.
The Difference in the Currency Exchange Rate
The Big Mac PPP is more likely to determine the exchange rate of MacDonald’s’ hamburger. The Big Mac Index is a friendly guide that determines the rates of hamburgers at places with different currencies, which are similar despite the currency difference. It means that the price of a Big Mac in the United States is almost the same as in other places globally, irrespective of the currency exchange. Purchasing power parity equalizes or adjusts the price of goods and services across different states.
Economists have thoroughly researched this exchange rate index of Big Mac, describing the variants in consumer purchases. For example, Michael Pakko and Patricia Pollard explain that countries that prefer something other than beef, like India, are not included in the Big Mac survey. Similarly, due to consumption differences, Islamic countries that prefer halal food or Israel’s kosher diet are also excluded from the survey of McDonald’s consumers and the Big Mac Index.
Effects of Big Mac on Fast Food Consumers
Even though the Big Mac Index is a global standard, it is not wise to confuse Burgeromics with currency misalignment. It is merely a tool that makes the exchange rate theory easily understandable. It is now included in several economics studies for a better understanding. For those who lean on fast food for most of their lives, there is a more authenticated gourmet version of the index in nearly 48 countries.
According to keynote speaker Dan Ariely, people purchase burgers at a lower price in a fast-food restaurant while they are happy paying more for the same product in a food carnival. This difference is because of the will and decision-making process. Therefore, this occasional price exchange is not included in the Burgeromics survey.
Consumers who buy Big Mac burgers might be interested in Burgeromics. Most people crave burgers at different times of the day, which can be eased by knowing Burger Economics as a better deal for everyday burger yearning. Street food or fast food is the most common American purchase that helps their economy and creates fierce competition in the food industry.
Using the cost-effective benchmark and its comparison expresses how a country’s economic power is increasing due to the popularity of one sector. It also affects foreign trade that exchanges different currencies. In this way, burgeromics provides a taste of international economics.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
One of the most critical questions one faces while charting his career is whether to find a job in a company or start his own business. Both choices have their benefits and drawbacks, and one must consider the tradeoff of each before making the decision. Below are the advantages and disadvantages of working as an employee in an organization and running a business.
Liability
Working as an employee in someone’s company means the liability on his shoulder is limited. Although he will lose his job if the performance continuously declines, he does not have to suffer financial burdens due to the decreasing profitability of the company. Assume the company is struggling with a supplier and cannot make considerable profits; the employee’s monthly wage is unaffected. All he must do is continue working hard, giving the best of his efforts.
However, the liability of an entrepreneur is unlimited. Every loss and expense incurred directly impacts the entrepreneur; therefore, there is constant pressure to generate profits and ensure the venture’s sustainability. Similarly, an increase in profitability is hardly enjoyed by an employee because the salary remains the same with specific bonuses. Hence, the motivation to perform above and beyond expectations is often lacking. Conversely, an entrepreneur enjoys company profits, which motivate him to work tirelessly every day.
Shared Success
An employee works to help the company enhance its profitability, foster customer loyalty, and take the organization to new heights of success. An employee’s focus is to help the company prosper, while an entrepreneur does the same for himself and his company. An entrepreneur can stand out in the crowd with his work and identity, but an employee cannot claim the company’s success as it is credited to the company, not to a team or an individual. An employee is one of the several reasons behind the success, but an entrepreneur is often the sole face of the venture’s success.
Interest and Motivation
Often, people suffer from work stress because they spend their entire day at work trying their best to perform and make ends meet. Unfortunately, many people work in different organizations they cannot relate to or are interested in. For example, think of a creative marketer who must sell a product he does not find interesting. His skills, abilities, and creativity are wasted as he must work with products he dislikes. Therefore, his frustration and stress are not a surprise. If this situation is like yours, you can start a business and work creatively with your desired products. For example, starting a small café or restaurant would be a wonderful choice if someone loves food. If someone is a painter or interested in art, having an art gallery would be a viable option. Entrepreneurship allows one to practice his interests and enjoy the work.
Authority
An entrepreneur is his boss and does not have to report to a superior authority. Hence, entrepreneurship allows one to work freely and under one’s authority. If you cannot wake up early and struggle to follow the rules, chances are you will have a tough time working within the confines of a traditional working structure. But, if you are an entrepreneur, you enjoy the freedom of working whenever and however you like. Similarly, an employee must abide by the company’s values, policies, traditions, and rules, which may contradict his personal beliefs and values. It leads to conflicts and often demotivates the employee. However, entrepreneurship lets one choose the vision, values, and policies he wants to live and work by.
Finances
Employees do not have to worry about the finances required to fund a project. The company provides all the necessary resources to implement an idea efficiently, but an entrepreneur must look after all the aspects, which is stressful and demands tireless effort. Also, entrepreneurship is about risk-taking, while employment is about security and safety.
When determining which option is best, one must look at both options and choose the one that complements his goals and personality.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
A recession is less than a 10% decrease in a country’s Gross Domestic Product (GDP). The decrease must last more than a consecutive quarter of a year. GDP is the sum of private and public spending on goods, services, labor, and investment.
The terms recession and depression are often confused. It can be said that a recession is generally not as severe as a depression, and a recession tends to resolve quicker than a depression.
Only some people agree on a specific definition for determining an economic recession. Still, most can point to several factors that can cause a recession:
Either a significant fall in prices or a substantial increase in prices may occur
A decline indicates that people can spend less money, so the GDP is reduced
An increase in price can also reduce private and public spending and, therefore, lower GDP
In a way, it is natural that countries experience mild recessions. It is a built-in or endogenous factor of society. Spending and consumption will increase or decrease, as will prices. However, another factor is needed in addition to these occasional drops in expenses to create a recession. Often, something changes rapidly and causes sharp increases or decreases in prices.
A recent recession in early 2000 was due to the sudden decline in dot.com industry activity. In the 1990s, the telecommunications industry made vast amounts of money. It began to exceed expectations regarding future demand. Suddenly, the previously sought-after demand was much smaller than expected, leading to massive layoffs, decreased production, and therefore decreased expenses.
The dot.com fall is considered a “shock” in GDP, which can greatly decrease if the product or industry falls in production. Although the recession resulting from the dot.com bust was considered during 2003, it has far-reaching consequences that are still felt.
Those who initially made excessive amounts of money can still find themselves without work. Telecommunications companies significantly reduced jobs, and employment rates in the industry have never been fully restored. Telecommunications companies also reduced costs by outsourcing production to foreign countries. While this outsourcing has allowed some companies to continue operations, it left many with training for specific jobs they could no longer utilize.
However, other industries have expanded since then and raised GDP. So, the recession is deemed “over,” even though many still feel its effects on a personal level. Rating a recession as “over” does not necessarily account for positive economic changes for the individual.
For example, a recession is sometimes evaluated regarding the country’s unemployment rate. When this is the case, and people find work, the failure to assess changes in income can make the economy seem more productive than it is. A former telecommunications employee who now works at Wal-Mart may have a job. Still, this work is not equivalent to the previous work in compensation. Thus, the analysis of only one aspect of a recession should not be used to indicate economic recovery.
Getting a job during a recession can be difficult.
A fall in GDP for two consecutive quarters is a recession.
Consumers are less likely to make superficial purchases during a recession.
Consumer spending decreased during the recession.
More people tend to stay at home instead of leaving to save money during a recession.
The recession is sometimes evaluated regarding a country’s unemployment rate.
The core effects of the recession are;
For two consecutive quarters, economies faced a decline in the actual gross product of the country.
Real Gross National Product (GNP) decreases by 1.5%
There is more than a 75% decrease in company vacancies for six or more months.
Around a 6% increase in the level of unemployment occurred due to the recession.
The recession can also be beneficial as you can cure inflation by the recession. As the Federal Reserve does, you can overcome inflation without causing recession by slowing the economy with balance. It does this without using any financial policy.
Politicians are responsible for setting, managing, and controlling the country’s budget well. They strive to stimulate the country’s economy by reducing the social program’s taxes and overlooking the national budget deficit. In this way, American debt increased up to $10.5 trillion. It happened when the United States government didn’t spend on the Economic Stimulus Package of 2009. People call it the American Reinvestment and Recovery Act.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
When the economy is in a growth cycle, the improvement of domestic economies leads to an increase in the consumption of goods and services, which translates into an increase in prices. The basic rule of economics says that the higher the demand, the higher the price.
National monetary base
When countries are not experiencing economic growth, governments make and issue money to pay their debt or deficit, which has increased the country’s monetary base. In these cases, more money is in circulation than the economy needs.
Consider if each of us were given a million dollars, our final position would be the same since the demand for goods and services would go up so much that prices would counter-balance the available money. It could cause typical household items to skyrocket; for example, a loaf of bread would be worth $1,000.
Interest rates
Inflation may also vary depending on the behavior of interest rates. If inflation rises because of a good economic situation, this is considered an overheated economy. The way to cool down the economy is to raise interest rates, which will reduce the number of loans granted. It will consequently reduce consumption so that prices will fall. In the same way, lower interest rates will favor economic growth and, therefore, inflation.
Increased energy prices
The rise in energy prices also produces widespread inflation, as it is present in manufacturing or transporting almost all products. The most difficult thing for a government to maintain is a good rate of sustained economic growth and low inflation.
Measuring inflation
Many indexes measure the variation in the price of goods and services in an economy. These indexes include the Index of Prices of Investment Goods, the Wholesale Price Index, the Producer Price Index, and the Consumer Price Index. The Price Index is particularly interesting since it directly affects family economies.
Consumer price index
The Consumer Price Index (CPI) measures the price variation of goods and services necessary for the daily life of households and families. In particular, the prices of a series of products called basic baskets are measured monthly. In that basket, products are excluded and included as the uses and customs of consumers vary. For example, 20 years ago, the price of a mobile telephone was not counted but is included in today’s basic basket.
How does the CPI affect us?
The importance of the CPI is that it measures the variation of our purchasing power. If prices rise, we can buy less goods and services with our income, so it is said that we lose purchasing power. We are poorer, even if we earn the same income.
Many companies and the State offer their employees or pensioners at the beginning of the year a salary increase in relation to what the CPI of the previous year has risen.
Many people mistakenly think they have a larger salary when the increase is equal to the CPI increase. However, they are maintaining their purchasing power because they can buy the same as the previous year. If the wage increase exceeds the CPI, we gain purchasing power. Similarly, if the wage increase is lower than the rise in the CPI, then there is a wage freeze and loss in purchasing power.
Price increases and purchasing power
The price increase affects us if our salaries do not increase to accommodate them. Even so, as prices rise steadily and wage increases are made at the beginning of the year, to maintain our purchasing power, a low or moderate rate of inflation that does not cause the speed of price rises to cancel wage increases will be necessary. If not, we will permanently lose purchasing power.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
