Your Financial Year-End Checklist

2020 is over, and for many of you, it can’t end soon enough. There will be plenty of time to celebrate the end of one year and to hope for better days in the one ahead. But before we get to that, take these steps to get financially ready for 2021.

1) Review your goals: The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2021. How did you do this year? Is there anything you’re proud of accomplishing? I like to start with bright spots because they can guide you toward success as you set new goals. But let’s be realistic, too; 2020 threw us a lot of curveballs.

Was there anything you wish you could have done better? You can also learn from any potential stumbling blocks and figure out how to use them as stepping-stones next year. You may also want to take time now to review your net worth. That’s one way to gauge the progress you’ve made in your financial health this year.

2) Update your budget: Did you save the money that you wanted to? Pay off the debt that you needed to? The end of the year gives you a solid end point to assess whether met the goals you set at the outset of 2020. What if you didn’t have a budget or financial goals? You’ve got a blank slate ahead. Why not create a budget that works? 

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3) Create a holiday bucket: Holidays can be budget breakers, so why not incorporate them into your spending goals right from the start? Christmas may look a lot different this year. But you can still create a separate bucket for holiday spending and when that money is gone, stop spending. You’ll thank yourself in January when you don’t have an unusually large credit card bill.

4) Use it or lose it: Some of your benefits—like vacation days or a medical or dependent care flexible spending account (FSA)—expire at the end of the year. Take stock of what you have left and use these benefits to your advantage. MORE FOR YOUPPP Loan Forgiveness Application Guidance For The Self-Employed, Freelancers And ContractorsSBA Approving Economic Injury Disaster Loans (EIDLs): What You Need To KnowWhat You Can Do Now To Maximize Paycheck Protection Loan Forgiveness

5) Make any last charitable contributions: December 31st is the last day your charitable contributions can be deducted on your 2020 tax return. If giving to charity is a part of your spending plan, you can use these questions to help make the most of your charitable giving.

6) Pump up your 529: Just like charitable contributions, contributions to your 529 college savings plan must be made by December 31st to count for this tax year. Find out if your state is one of over 30 that allow you to deduct your contribution. You can find the specific deduction here. If your state is one of the four that allow an unlimited deduction, keep in mind the yearly gift-tax and super-funding rules.

7) Max out your 401k: While you have until April to make contributions to your traditional IRA, Roth IRA and HSA, you can only contribute to your 401k through December 31st. So, if you have extra cash and are looking to boost your savings, consider contributing your last couple of checks entirely to your 401k. Business owners can do the same with the employee portion of your Solo 401k contributions.

8) Find your tax return: You’ll be doing your taxes before you know it, so use this time to get prepared. Review last year’s return and make a mental list of records you’ll need to assemble. Year-end is also a good time to decide whether a Roth conversion makes sense for you.

9) Review your business structure: Evaluate your business structure and the QBI deduction to identify any changes you need to make to your business. You might want to set up a solo 401k, for instance, and if so, you’ll have to act before December 31st (although you can make employer/profit sharing contributions up to the business tax filing deadline).

10) Defer income and incur expenses: If you’re a business owner, you may also want to look at ways to defer income into 2021 or pay for business expenses you anticipate for early next year. This is any easy way to reduce your tax liability for 2020. However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction. Spending a $1 to save 24 cents still costs you 76 cents.

 11) Will and trust review: The end of the year is a good time to take stock of changes in your life—like getting married or divorced, having children, starting a business or retiring.  Your estate plan should reflect these changes. Get out your will, documentation for trusts you’ve established and powers of attorney and make sure they match your current situation.

12) Insurance documents: Insurance documents also need to cover your current situation. Take a look at your life and disability insurance policies to make sure they protect your current income and those dependent on it. Your renters or homeowners insurance should cover any additional big purchases you made during the year. And lastly, you should review your health insurance policy for any upcoming changes for 2020. For those of you enrolling in the Market Place, you have until December 15th to pick your plan.

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My last bonus task is to enjoy this holiday season. I love the holidays because you can reflect and appreciate what you have. We’ve been tested a lot this year, living our lives through a pandemic, racial unrest and a contentious election. I hope the end of the year brings you comfort and peace. Follow me on Twitter or LinkedIn. Check out my website

Brian Thompson

Brian Thompson

As both a tax attorney and a CERTIFIED FINANCIAL PLANNER™, I provide comprehensive financial planning to LGBTQ entrepreneurs who run mission-driven businesses. I hold a special place in my heart for small-business owners. I spent a decade defending them against the IRS as a tax attorney and have become one as a financial advisor. It’s a position filled with hope and opportunity. It gives you the most flexibility to create the life that you want. I also understand the added stresses of running a business while being a person of color and a part of the LGBTQ community. You may feel like you don’t have access to the knowledge that others do. I’m here to help lift some of that weight from your shoulders.

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Critics:

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

Contents

How To Budget In Uncertain Times

It’s that time of the year again… time to create next year’s budget. Budgeting in the best of times is difficult, and now it’s even more tricky with the uncertainty of the pandemic, and more. It’s time to take a new approach. 

So before you dive too deeply into the budget tar pit, here are my key takeaways from discussions with my executive coaching clients: 

1.Rethink Budgeting To Focus On Outcomes. Why do we budget? The same reason we do any type of planning—it’s an attempt to control, predict, effectively allocate resources, maximize growth, profits and earnings per share, ensure stability and certainty. Yet in today’s world of relentless and rapid change, we must be nimble, a collective (no more silo-ing departments and then punishing poor performers that usually have performance problems due to failed dependencies/contingencies with other departments!) And have you noticed that things always change? And then, the vast majority of the time, the plan does too. But in today’s new world are we measuring the most impactful outcomes? Here’s what our most financially and culturally effective clients are considering as updated outcomes they want to see in a healthy business:   

a.Customer experience and engagement 

b.Employee experience and engagement (this include cross-functional, inter-departmental effectiveness and collaboration) 

c. Ecosystem experience and engagement (your strategic partners, resellers, other partnerships are here) 

d. Sustained profitable growth (we’re ensuring we don’t rest on our laurels here) 

e. Sustained profitable operational effectiveness (we’re watching expenses here) 

f. Sustained innovation (we’re keeping our competitive edge here) 

g. Departmental and organizational Key Performance Indicators (KPIs) to keep everyone focused 

… all of which help us to predict the ultimately unpredictable, because people are creating the results anyway. That’s why we measure their outcomes first. 

2. Set Strategic Guidelines For Financial Focus. Like Core Values, which help us make behavioral decisions in the heat of battle, Strategic Guidelines help us make effective decisions when the grenades are flying, when the rug has been pulled out from under us, when supply chains have dried up, when currencies have crashed, when competitors have blindsided us, when the calamity of the day has occurred. When we focus on Strategic Guidelines (which you’ll draw from the bulleted list in item #1 above), we will be better equipped to allocate financial resources in line with what we need to achieve as an organization. Then we’ll be more likely to consider cross-functional dependencies and contingencies and create effective (and not siloed) departmental budgets.

Doing an outcome frame for each objective in item #1 above will help you ask the most appropriate questions to uncover what the priorities are, the appropriate allocation, what the business needs versus what is sexy/compelling/a bright shiny object, and more. Here are the outcome frame questions: 

· What would we like? (tangible outcome we can create and maintain) 

What will having that do for us? (specific benefits and how we’ll feel, how our key constituents will benefit) 

·  How will we know when we have it? (specific measurable proof) 

·   What of value might we risk/lose in order to get it? (what is the “cost” of getting the outcome we want? What side effects may occur?) 

·      When, where, with whom would we like this outcome? (time, context, key players) 

·      What are our next steps? (key planning steps here) 

The Outcome Frame sheds light on what will truly move the needle  for our business. It helps my clients see into their pet projects, their assumptions, the costs, and they make much better decisions  and avoid caving to unconscious bias too. For example a few years ago I was helping a client with their annual planning. They had a distribution partnership with an enormous Big Box retailer that, although impressive on their web site, was high maintenance and very low profit. It was clear that the business would be better off without this partnership, so after some agonizing they terminated it. This led to my client having the time/energy to secure 2 new partnerships that were far less work and far more profitable. The Outcome Frame exposed this. 

The Net-Net 

·      Create budgets based on the outcomes you want—they’ll be more likely to be achieved 

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·      Ensure all departments are aligned with the overall strategic guidelines so everyone is “in it together”—it’s “our” overall budget, not coveted by a certain department 

·      Learn to love change and to zoom out to track how the business is doing at a high level, then zoom in to the details 

How’s your budgeting going? Follow me on Twitter. Check out my website.

Christine Comaford

I’ve lived many lives: serial entrepreneur, technology and CEO advisor, venture capitalist, engineer in the early days of Microsoft. Today I help CEOs in rapid growth and turnaround scenarios to achieve previously unheard of results through seeing into their blind spots, aligning their team and board, changing challenging behaviors, increasing team accountability and execution. Some call me a business strategist, some call me an executive coach.

 Christine Comaford

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Critics: 

Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.
Performance Based Budgeting  attempts to solve decision making problems based on a programs ability  to convert inputs to outputs and/or use inputs to affect certain  outcomes. whatever Performance may be judged by a certain program's  ability to meet certain objectives that contribute to a more abstract  goal as calculated by that program's ability to use resources (or  inputs) efficiently—by linking inputs to outputs—and/or effectively—by  linking inputs to outcomes. A decision making—or allocation of scarce  resources—problem is solved by determining which project maximizes  efficiency and efficacy.

 Zero-based budgeting  is a response to an incremental decision making process whereby the  budget of a given fiscal year (FY) is largely decided upon by the  existing budget of FY-1. In contrast to incrementalism,  the allocation of scarce resources—funding—is determined from a  zero-sum accounting method. In government, each function of a  department's section proposes certain objectives that relate to some  goal the section could achieve if allocated x dollars.
 Flexible Freeze is a budgeting approach pioneered by  President George H. W. Bush as a means to cut government spending. Under  this approach, certain programs would be affected by changes in  population growth and inflation.

 Program Assessment Rating Tool (P.A.R.T.)  is an instrument developed by the United States OMB to measure and  assess the effectiveness of federal programs that review the program’s  purpose and design, strategic planning, program management, and program  results and accountability. The scores are rated from effective (ranging  between 85 and 100 points), moderately affective (70-84 points),  adequate (50-69 points), and ineffective (0-49 points).

 Priority Based Budgeting is a response to poor economic  conditions.  As opposed to incremental budgeting, where resource  allocation is determined based on marginal shifts in costs, priority  based budgeting fixes the amount of governmental resources and then  allocates resources across the various programs.  The programs receive  their allocation based on their priority; priorities may include safe  and secure communities, health, education, and community development  among others.  Outcome assessment then determines the efficacy of the  programs.  Although this approach is pro-democratic, critics suggest the  administration of this process is extremely difficult.
See also
Budget
 Budget process
 Budget theory
 Constitutional economics
 Political economy
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By Raising Productivity, Agtech Boosts Value Of Farmland

Against the backdrop of the partial shutdown of the federal government, U.S. farmers and ranchers are no doubt looking for a happier new year in 2019. The burgeoning agtech sector could brighten things up by continuing to boost productivity and reverse the market setbacks of 2018. Not since the 1980 embargo on U.S. grain exports to Russia have farmers been so pressured by the vagaries of global trade policy. The statistics are telling. According to the USDA’s World Outlook Board, soybean exports hit by the retaliatory tariffs put in place by top importer China dropped in 2018 by about 11%.

 

Source: By Raising Productivity, Agtech Boosts Value Of Farmland

The Paradox of Crypto In China

Skirting the Great Wall, Part Three: The Paradox of Cryptocurrencies in China https://www.pivot.one/share/post/5be97852cd5ee726e14c46d4?uid=5bd49f297d5fe7538e6111b6&invite_code=JTOJYV

Enterprises, Emotion & the Rise of The ‘Empathy Economy – Mike Elgan

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Big business is getting emotional.

User interfaces and other aspects of enterprise computing are being increasingly designed to detect the emotional states or moods of users, and also to simulate emotion when they communicate back to the users.

A Gartner report published in January said that within four years, your devices will “know more about your emotional state than your own family.”

Deep learning has advanced emotion detection from basic emotions such as happiness, surprise, anger, sadness, fear and disgust to more than 20 more subtle emotions that include awe, happy surprise and hate.

Source: https://www.computerworld.com/article/3287092/artificial-intelligence/enterprises-emotion-and-the-rise-of-the-empathy-economy.html

 

 

 

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