Jeffrey Campbell CPA - January 2022

Jeffrey Campbell CPA - January 2022

www.MayfieldHeightsCPA.com (440) 720-0959

January 2022

Budget Better in 2022 3 New Money-Saving Strategies to Explore

Stocks, cryptocurrency, and real estate are definitely the “sexiest” parts of the finance industry. They make headlines and open people’s minds to the world of investing. You know what isn’t sexy? Budgeting. But it’s an essential part of money management that way too many folks overlook. According to the Schwab 2019 Modern Wealth Index, only 25% of Americans have a written financial plan. I’m bringing this up now because January is the perfect time to budget your household expenses for the new year. You can do it right along with your resolutions. And don’t tell me that you can never stick to your budget! If you’ve attempted to budget and failed, this is your sign to try out a new budget strategy. There are hundreds of budget styles out there, and they cycle in and out of fashion, just like crop tops and skinny jeans. If you’re not satisfied with your old standby, give one of these three a spin with the help of a budgeting app like Simplifi, Mint, or PocketGuard.

Then, you shift or limit your spending until you can cover needs with 50% of your income, wants with 30%, and goals with 20%. This isn’t a perfect solution — if you live in a high-cost area, for example, you may need to spend more than 50% of your income on needs when housing is factored in — but it can help put your current spending into perspective and give you an adjustable framework for 2022.

THE ZERO-BASED BUDGET If the first two budgets I mentioned encourage freedom, this one (a favorite of finance guru Dave Ramsey) is the opposite. It asks you to track every cent! As NerdWallet puts it, “The goal is that your income minus your expenditures equals zero by the end of the month.” To put together a budget like this, you need to track all of your income and expenditures for a few months to see exactly how much money you have coming in and what you’re spending on. Then, you can break your budget down into categories like rent, groceries, gas, and clothes. Get as specific as you’d like. If you have money left over, stick it in the savings or emergency fund categories so you’re not tempted to spend it. The beauty of this budget is that you can customize it every month (e.g., to accommodate holidays) so it will always be tight and never go out of date. The downside is that it requires a hefty time commitment. “Ultimately, the only ‘wrong’ way to budget is not to budget at all.”

THE GUILT-FREE BUDGET This “new” budget has a classic

approach at its core: Pay yourself first. The idea is that instead of micromanaging all of your money, you simply divide your income into “essentials” and “nonessentials.” First, you tally up the amount needed for things like your rent or

mortgage, your cellphone bill, and your student loans. Then, you set funds aside for them as soon as you’re paid. Finally, you’re

free to spend whatever is left guilt-free! You can divide that amount however you choose, whether it’s over the four weeks of the month or not. This budgeting strategy guarantees you’ll make your savings goals, and it lowers decision fatigue. THE 50-30-20 BUDGET In this budgeting method, instead of breaking down your income into two categories, you divide it up into three: needs, wants, and goals.

Ultimately, the only “wrong” way to budget is not to budget at all. To learn more about the importance of budgeting before you dive in, pick up a copy of “Spend Well, Live Rich: How to Get What You Want With the Money You Have” by Michelle Singletary or “You Need a Budget” by Jesse Mecham.

Please call us at (440) 720-0959 to find out how we can help you!

-Jeffrey Campbell

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3 Facts Most People Don’t Know About 401(k)s We’re Not at Work Anymore, Toto

Go Brandless! It’s Back and Better Than Ever Companies like Warby Parker have built a powerful customer following for creating direct-to-consumer products that slash prices by cutting out the middleman. Now, Brandless is doing the same thing for small, everyday purchases. When you buy peanut butter, you’re not just buying the product — you’re also buying the brand attached to it, along with its costs of distributing and warehousing, plus retail space. By eliminating what cofounder and CEO Tina Sharkey calls a “brand tax,” she realized Brandless could significantly cut down the costs for small products that people bought every day. When Sharkey and veteran entrepreneur Ido Leffler came up with the concept of Brandless, it immediately caught fire. They raised over $16 million in November 2016, and at launch, received over $50 million in venture capital from New Enterprise Associates, Google Ventures, and others. However, their business model didn’t sustain itself forever — Sharkey stepped down as CEO in May 2019 after friction between her and lead investor SoftBank Vision Fund. By February 2020, Brandless had shut down and laid off 90% of its workforce, leaving only a few to manage open orders. When the tornado of a busy career finally slows down, and you’re on the yellow brick road heading toward retirement, the last thing you want to feel is lost — and that’s where 401(k)s come in. You must begin withdrawing from your 401(k) when you hit the age of 72, with some exceptions. Here are a few important facts about 401(k)s to keep in mind as you start preparing for your retirement. ROTH OPTIONS Like traditional 401(k)s, Roth 401(k)s also take contributions. But Roth contributions are made with after-tax dollars instead of pre-tax dollars. Since you are using after-tax dollars for your contribution, you can withdraw money in retirement tax-free. Unfortunately, only half of employers offer Roth 401(k)s. Even if you opt in for the Roth 401(k), your company match will be made pre-tax. If your employer doesn’t offer 401(k) plans, you can open a Roth IRA on your own. STABLE VALUE FUNDS When you are close to retiring, you may want your retirement money to be in a safe investment option. Many 401(k)s offer

stable value plans you can choose from. Stable value plans are beneficial because they pay higher interest rates than bank savings. They won’t fluctuate like stocks, and they shouldn’t go down in value if interest rates rise. How much you keep in a safe investment depends on how close you are to retirement and how much you will withdraw.

AGES 55–59 PENALTY EXEMPTION Most people think there will be a 10% early withdrawal penalty tax if you withdraw from your retirement account before the age of 59. But there are some exceptions to the rule. Provisions in 401(k) plans exist for those who leave their employer after they reach the age of 55 but before the age of 59. This allows you to take withdrawals that are exempt from penalty taxes. Keep these facts in mind as you prepare for retirement, and if you are beginning your career at a new business, see what types of 401(k) plans your company or preferred investment fund offer.

BRANDLESS IS THRIVING AGAIN, NEVERTHELESS.

When Brandless shut down, they cited their struggle with fierce competition and business model inviability in the direct-

to-consumer market. Part of the problem was that Brandless simply wasn’t sustainable in the way Sharkey and Leffler originally hoped.

That’s when Utah-based digital marketing exec Ryan Treft entered the picture. He’s the new CEO, and his vision has, thus far, helped make the consumer’s “quality to price valued product” daydream a reality. “It’s not about racing other brands to the bottom of being the cheapest, because that’s where people compromise on the quality, the ingredients,” Treft said. His new leadership promises to uphold Brandless’ previous commitments to keep all its products free from 400 potentially harmful ingredients, including parabens, sulfates, and synthetic dyes. For a new “brand” that attracted a lot of attention back when it was in its early stages, Brandless is certainly back to the top with its newer product lines in personal care. They’ve received great reviews and attention across platforms. Congrats for fighting your way back, Brandless!

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Take a Break

CHICKEN WITH LEMON HERB SAUCE Inspired by FoodNetwork.com

INGREDIENTS

• 1/3 cup and 2 tbsp olive oil, divided

• 4 boneless chicken breasts

• 1 clove of garlic, minced

• 1/4 tsp salt

• 1/2 cup parsley, chopped

GLADIATORS: THE ORIGINAL CELEBRITY ATHLETES?

• 1/3 cup mint, chopped

• 1 1/2 tsp pepper

January is a busy month for sports, which includes football playoffs and the NBA and NHL seasons. Stars from each of these leagues have cultivated a global fan base and become celebrities, but this is nothing new. Thousands of years ago, many gladiators reached untold levels of fame, too. For the most part, gladiators were not born into nor did they receive much wealth. In most cases, they were originally slaves who became so indebted they had to sell their bodies. Many slaves were chosen and sent to gladiatorial schools, where they trained to become the best, too. For their fights, the Colosseum in Rome was built almost 2,000 years ago and could seat up to 75,000 people. For comparison, the largest U.S. stadiums hold a little over 100,000 people. Back then, there were no Jumbotrons or screens to see from far away. Tens of thousands of people would happily watch gladiator fights with nothing but eyes.

• 1 lemon, for juice and zest

DIRECTIONS

1. Preheat oven to 450 F.

2. In a large ovenproof skillet, heat 2 tbsp olive oil.

3. Season chicken with salt and pepper if desired and sear it in the skillet for 3 minutes on each side. Bake chicken until its internal temperature is 165 F. 4. In a blender, add 1/3 cup olive oil, garlic, salt, parsley, mint, pepper, and lemon zest and juice and blend ingredients until coarsely mixed.

The story of gladiators prove athletes are and always have been influential.

5. Top chicken with sauce and serve!

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6110 Mayfield Road Mayfield Heights, OH 44124 www.MayfieldHeightsCPA.com (440) 720-0959 INSIDE THIS ISSUE

3 Budget Plans You Won’t Cheat On

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Contributions, Value Plans, and Withdrawals, Oh My! Go Brandless —Their Unique Comeback Story

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The Original ‘Celebrity’ Athletes Chicken With Lemon Herb Sauce

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The Street Vet

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THE STREET VET Saving the Lives of Homeless Individuals’ Pets

Veterinarian and animal advocate Dr. Kwane Stewart, known in his docuseries as “The Street Vet,” has his own veterinary practice in Modesto, California, but still makes a point to help the pets of the homeless population in town for free. He began this selfless act of heroism in 2011 after the Great Recession hit and has since helped well over 400 animals, even tending to a Burmese python at one point!

About 25% of Modesto’s homeless population own a pet, and back in 2011, Dr. Stewart noticed that many needed medical attention. This tugged at his heart strings. Knowing that many would come for free pet medical attention if he set up a table near a soup kitchen, Dr. Stewart jumped at the opportunity. What he thought would be a one-time event eventually turned into a regular act of heroism. Now, Dr. Stewart has the ability to step in and save the day for both the pet and owner at no cost. Dr. Stewart has found that the bond between homeless individuals and their pets is unlike any that he sees in his office. “Keep in mind that they are with their pet every minute of every day,” he says. “That’s not the case with most of us.” He notes that seeing these special pet patients makes him feel

as if he has a superpower. Dr. Stewart recalls that growing up, he wanted to be either a vet or Batman, and now, he gets the best of both worlds! Dr. Stewart often spends his spare time wandering the streets in search of pets that need his help, offering free vaccinations and medical care. He notes that the homeless population is just like us, but they have fallen on hard times, and their pets are their companions and lifelines. In helping the pets, Dr. Stewart builds a special bond with their owners. To be able to make a difference in the lives of sweet, innocent animals and their owners is the most rewarding type of work — the dream job Dr. Stewart could have never even conjured up before he selflessly started living it.

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