Finance Gym Weekly Workout - Should You Do Your Own Taxes or Hire an Accountant?

Hi, welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell and if you're ready to not just know better but do better with your money then you've come to the right place. 
Lately we've been talking about the grown up stuff around our money. Today's grown up stuff? Taxes... Sorry, we all have to like what's that saying? Death and taxes. We all have to do it! So today I'm going to teach you a little bit about how to choose how to get your taxes done. I get asked that question all the time.. Should I do it myself? Who should I hire? Where should I go? And for me, it's about how complicated are your finances? How complicated is your world? If you're not married, you don't have kids, you don't have a house yet, you don't have anything unusual going on then you absolutely should do your own taxes. And here's why.. Simply by doing them, by buying Turbo Tax or whatever tax software product it is out there, letting it walk you through the questions, seeing where it puts the answer and really kind of paying attention, hitting the little help button, the little question, googling things you don't understand, you're gonna learn, you're gonna get a little tiny tax class and have a more comprehensive understanding and that's good for you and then as you add complications on, have a kid, well you've learned then you're gonna be able to learn what that means. Get married, you're gonna be able to learn that. Buy a house? Maybe you're gonna be able to learn it. Then it starts to get a little complicated. Did you get stock options at work? Did you have to like sell back some stock options? Then it starts to get super complicated. Did you become a business owner? Then it really starts to get super complicated and that's the point. The point at which you kind of start going, maybe I should really seek the advice of someone who is experienced. You'll know when it's time I think. And then who do you hire when it's time? Do you go to one of the big box tax places? Maybe. Um.. Well.. Maybe but I'm often hesitant to send people there because, not always but often the people there they're well trained, they're well supervised they are often not very experienced. So I'm always hesitate to send people to a big box place. That's not to say there aren't some good ones, there are. Shockingly enough, they aren't that less expensive than a good tax accountant. I have for years sent a number of my clients to just a few people, I like to talk about Mike. I send people to Mike because when I send people to mike, theres a couple of things I know, one I trust the man personally, two I know he's going to teach people about their money. Not simply hand them a 50 page questionnaire, have one his staff people enter it into their tax software and spit a tax return back out without actually talking to you about it. I think that's what it really comes down to, is that when you're hiring somebody, you want to hire somebody who's going teach you a little bit. Somebody who has been doing this for a while and is trustworthy and is going to get your stuff done. You don't want to hire the person who just has the best tax strategies in the world. Unless you're in a unique situation there are very few best tax loopholes in the world. If you have the kind of money that can afford you that, you're not watching this video and there are very few tax strategies for you. It's simple, we earn money, we pay taxes, that's the truth of the matter and any reasonable tax account will tell you the same thing. 
Hopefully I've taught you a little bit about how to get your taxes done. If you would like to ask me some more questions, come on over to our FB group Team Do Better and you're welcome to ask questions in that forum. You can sign up for our newsletter at www.TheFinanceGym.com and subscribe to our video series below. Now go have fun doing your taxes!

Today's Second BIG Announcement!

We told you today would be BIG and we meant it! We're thrilled to be hitting the road for a 36-city Piggybanks in the Park tour, a grassroots campaign where we'll talk about the REAL stuff of money, teach how to have a better life with money, and leave you with some serious "ah-ha's about the next thing you can do right to be better with your money.

Visit www.thefinancegym.com for tour dates and information.

The Emotional Side of Savings

One of my favorite banking industry slogans is “We, The Savers.” Launched in 2008 by the cutting edge online bank ING Direct (now owned by Capital One), it pokes fun at our nation of non-savers. Three out of every four people in the United States don’t have the recommended six months of expenses saved. One out of every four don’t even have one month of reserves. 

Let me say that one more time. 1 out of 4 don't even have one month of reserves. We know we should, but few of us do.

When we hear these statistics barked from the media, most of us hear them as just that: statistics. We don’t stop to think about how it impacts our lives. Our car breaks down, and we have no personal safety net to get it repaired. That sounds so matter of fact, but if that has ever happened to you, you know that underlying the fact is a deluge of emotion, frustration, shame, annoyance or fear. And the impact comes not just from when we let it happen to ourselves, but we also have to feel some of the brunt of it when it happens to our children, coworkers, and other family and friends. There’s no faster way to a bad day than a sudden expense you were unprepared for.

When I was first tackling my financial issues with my own money mentor, every time I had a “my car broke down” issue (or whatever the issue of the day was), he wouldn't spend a minute talking with me about how to resolve the problem that I didn't have money in savings, and I didn't want to use my credit card. He would only talk about what I was saving, was it enough and how I could save more. Frustrating! I walked away from so many conversations with him completely annoyed, and ashamed because once again, I was in a financial bind.

But then, finally, came the first time that my car suddenly needed a major repair and I had enough in my savings account. It was a revelation. A relief. A moment of "feeling adult." I finally not just logically understood the importance of my savings, but more importantly, I understood the importance from a deep emotional place.

If not having enough causes frustration, shame, annoyance and fear, having enough brings a sense of ease, pride, and safety. What's your emotional experience of your money“

- Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups.

Reach your financial goals. Get motivated. Get support. Get results. Are you ready?”

Telling the Truth: Is It an Emergency?

Or is it a predictable expense? Have you ever pulled out a credit card to pay for a brake job on your car and thought “this is an emergency?” Or called your parents to borrow money because your plumbing went out and you couldn’t pay for it? Or considered borrowing money from your 401k to attend the “destination wedding” of your best friend from college because it was an “emergency?”

Can we all agree? None of those things are emergencies! They are all predictable expenses. 

If you own a car, it will need brakes. If you own a home, you will have to hire a plumber. If you have friends, they’ll get married. (In fact, if you’re of “that age range” you might as well weave $500/month into your budget.) When we save for those things that we can predict, we can limit the emotional and financial upset that happens in our lives from “emergencies” to those things that are true emergencies.

And then there’s the life events we didn’t predict: you lost your job, you discover your plumbing problem wasn’t just a pipe, but your entire plumbing system needs to be replaced, your mom that lives alone across the country falls and breaks her hip and you have to go help, or you’re on vacation when a hurricane hits and you have to stay in a high-priced hotel for an extra 3 days. Those are all examples of true emergencies. They are all things that aren’t expected or predictable. And they are all things that could cost a significant amount of money.

What over the past 5 years have you unexpectedly had to pay more than 25% of your monthly income on? Was it an expense you could have predicted? Or was it truly an emergency? When we begin telling ourselves the truth about the difference between emergencies and all of those other “little” expenses that pop up and annoy us, but we know we’ll have, we can do a much better job of building our financial foundation.

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

Are you ready to reach your financial goals? Get motivated. Get support. Get results!