Sunday, December 28, 2008

Getting the Recognition you Deserve at Work

Don't worry when you are not recognized, but strive to be worthy of recognition. ~Abraham Lincoln

The onset of a recession has caused many people to have to worry about their job security. Keeping your job is enough to worry about in itself, but at the end of the year is the time that you most are evaluated based on the work that they completed for the year. Now, many employees do not want to seem to burden their employers by asking for an increase in pay during times where jobs are scarce and money for companies is hard to come by. However, companies want to retain their good talent, especially those who produce results and will usually try to work with employees to increase their compensation.

Employers can easily be compared to the average consumer. Most consumers typically like to get the best bang for the buck, and if they are going to pay premium price for a product, they want to make sure that it will last and continue to be worth the price.

Below are some of the principles I follow to try to get recognition at work:
  1. Think outside the box to fix a problem.
    • Always try to come up with three solutions to a problem.
    • After determining a solution for a problem presented to you, think about whether or not it is the most efficient way to solve the problem.
  2. Do the work no one else wants to do.
    • Oftentimes, my management likes to request a volunteer to do an extra project before assigning it out to an employee. I volunteer for those requests frequently.
    • Shows initiative and willingness to work.
    • Increases your net value to the company.
  3. Document the value of your accomplishments (as they happen).
    • Many times people document what they do instead of how what they did positively impacted the company.
    • Document the results of what you did and have it improved a process to the company.
    • Use a format that is similar to listing your accomplishments on a resume
    • Example: Provided great customer service to walk customer through initial setup of product resulting in less call volume for initial setup of product.
    • Each time you complete a project or receive a kudos for a job that you had involvement in, archive the email under an "Accomplishments 2009" folder and write it down in a notebook. I use "Google Notebooks" for this.
  4. Expand your network at work.
    • Companies want employees that help create a comfortable work environment.
    • Always try to be nice to your colleagues as well as help out those who are struggling.
    • It may even be worth it to hang out with colleagues outside of your job to create trust as well as receive help from your colleagues when you are in a bind.
  5. Increase your net worth
    • In terms of accounting, you are either going to be a net asset or a net liability to your company.
    • The company can make this judgement by determining the amount of assets you bring to the table versus the amount of liabilities caused by the company.
    • Examples of Assets of an Employee:
      • Employee Productivity
      • Employee customer relations
      • Employee skills
    • Examples of Liabilities of an Employee:
      • Paycheck paid to the employee
      • Benefits provided to the employee
    • It is always a good recommendation to make sure that your employer sees good value from your performance at work by your contribution to the company being worth more than what they pay you for it.
  6. Less complaining/More resolutions
    • Unfortunately, most work environments are not perfect. There will always be something to complain about. Rather than complaining to your boss over things that cannot change, try to deal with them.
    • If there is something that needs to be changed, instead of just complaining alone, present a solution to resolve the problem.
By following these principles, you can increase your overall value (net worth) at work and give your employer more reason to provide you a pay increase after your evaluation at the end of the year. Even if you get turned down for a pay increase this year, you can start following these principles in the new year to request an increase at the end of 2009.

What are some of the other recommendations you have to get the recognition you deserve at work? Leave them in the comments below.

Stay Disciplined!

Monday, December 15, 2008

Cash Rebates for Shopping...Microsoft Live Search Cashback

Special thanks to Nate Lee who inspired this article. Thanks for the heads up for the readers to get a quick money rebate during the holiday season!

I am deciding to break away from my normal blogging schedule and share with you a quick and awesome program going on with Microsoft right now. Currently, Microsoft has created live search for products that you can purchase online. Now, while many search engines currently have this capability, the kicker with Microsoft is that they pay you instant cash back for certain qualifying items.

For instance, I just searched on the Microsoft Live Search site for "Dell 6000 AC" and purchased a Dell AC adapter for my brother on Ebay. I clicked on the link that had the little Microsoft Cashback symbol and received 8% cash back on my purchase. Not only did I pay less than retail for the adapter but I received a rebate also that will be deposited into my paypal account, that's too sweet of a deal to that I felt compelled to share. I have spoken with my friend who gave me the heads up about this program and he stated that his friends confirmed that it is legit as Microsoft has cut checks to people who have purchased through this program.

Ok, I'm convinced, sign me up!

To enroll in the program, you have to meet the following requirements (taken directly from their FAQ Page):

Who is eligible for Live Search cashback?

You are, as long as you:
  • Provide us with a valid email address and password for account access.
  • Are at least 18 years of age and reside in the U.S.
  • Have a valid U.S. mailing address (a P.O. Box won't work).
  • Create or have an active Windows Live ID and cashback account.
  • Adhere to the Microsoft Service Agreement.
To use the program with Ebay, you will need a paypal account and ebay account that are both in "good" standing. Other points to mention is that it is required that you have at least $5.00 in your cashback account before the send you a check and there's a waiting period of at least 60 days in most cases before you can receive your rebate.

For more information about this program, refer to the Microsoft Cashback FAQ page.

Do you have any tips or secret gems you know about for getting the best deal online? Please share them in the comments below!

Stay Disciplined!

Sunday, December 14, 2008

Accounting 102...Using the Double Entry System

To every action there is an equal and opposite reaction. - Newton

*To better prepare for the concepts explained in this article, please read the previous article "Personal Accounting 101...Understanding the Basics to Accounting"*

As mentioned in the previous article, I am planning on taking on my personal finances from a different perspective in 2009. I want to become my own personal accountant and understand my finances at a higher level to track each and every dollar that I spend. In order to do this, there are some accounting principles that must be understood to ensure proper accounting of my money.

The latest principle that I have learned about is the "Principle of Balance" in accounting. This principle seems necessary to me because I want to know where each dollar comes from and goes to in my personal finances. Knowing this information will help with identifying any kind of holes that my money seems to disappear into. In addition to that, it will help identify my spending trends and adjust finances according to the previous trend so that I can better eliminate unexpected expenditures.

The "Principle of Balance" is implemented in a accounting method called Double Entry Accounting. Below is a definition of what exactly this is:

Double Entry Accounting: A standard accounting method that involves each transaction being recorded in at least two accounts, resulting in a debit to one or more accounts and a credit to one or more accounts.

Although this seems like a lot of overhead for tracking your personal finances, it offers several benefits:
  1. Accounting Trail
    • Using Double Entry accounting allows you to track where the money originates from as well as where it ends up at. This way each dollar can be tracked and it is easier to identify when money is being wasted.
  2. Automatic System of Checks
    • Since every transaction is being recorded twice, it provides an automatic system of mathematical checks to make sure that all money is being accounted for. With this method, all credits have to match all debits in a transaction.
For further clarification, let's take real world example of this scenario. For instance, if an employee has their paycheck deposited directly into their checking account from an employer, then the money has been withdrew from the employer's account in the form of a paycheck and deposited in the employee's checking account in the form of increased funds. Using the double entry method of accounting, the journals that record this entry would look to be the following:

Income: Paycheck (-$500) -> Asset: Employee's Checking (+$500)

To make this a little more complicated, let's look at the terms debit and credit to understand this in more formal accounting terminology.

A quick explanation of how debit and credit works is listed below:

Debit
Money is recorded in the debit column, which is always the left column, when it is being transferred to an account. Also referred to as depositing into an account. (Citation)

Credit
Money is recorded in the credit column, which is always the right column, when it is being transferred from an account. Also referred to as withdrawing from an account. (Citation)

Applying this new terminology to our current real world example, you get the following:

Debit:Employee's Checking - 500
Credit: Income Paycheck - 500

*I know this seems a little backwards and is a bit to wrap your head around due to the nature of Credit and Debit cards, and how they work, but once you start thinking in terms of deposits and withdrawals, it will be easier to understand*

Now the previously referred to benefits of this method are obvious because all debits (deposits) have to equal all credits (withdrawals). However, recording each transaction and then performing calculations seems to be a complicated and tedious task. This would be true if we did not have computers, however there is free software that handles most of this for us. All that is required from the user is to save receipts and enter them into the software.

Doing a quick Google search for "Accounting Software" can turn up many choices, however I plan on using GNUCash. Not only is it free, but it is very feature rich allowing the user to create charts, graphs and reports.

What are some of the financial resolutions you are going to make for 2009? Do you have better ways for money management? Let us know!

Stay Disciplined!

Sunday, December 7, 2008

Personal Accounting 101...Understanding the Basics to Accounting

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. -Thomas Jefferson (1743 - 1826), Letter to the Secretary of the Treasury Albert Gallatin (1802)

With the new year right around the corner, I have decided that one of my resolutions this year will be to track every dollar earned as well as every dollar spent in my personal finances. I am going to start up a new pseudo-company called "Jonathan Torian Inc." and become my own personal accountant. In order prevent failure and ensure a promising financial future, I am going to begin learning the basics in accounting and apply it to my every day life.

Two Types of Accounting

Cash Basis of Accounting
An accounting method wherein revenues are recognized when cash is received and expenses are recognized when paid. This method is inferior to the accrual basis of accounting where revenues are recognized when they are earned and expenses are matched to revenues or the accounting period when they are incurred (rather than paid). The cash basis of accounting is usually followed by individuals and small companies, but is not in compliance with accounting's matching principle. (Citation)
Accrual basis of accounting

The accounting method under which revenues are recognized on the income statement when they are earned (rather than when the cash is received). The balance sheet is also affected at the time of the revenues by either an increase in Cash (if the service or sale was for cash), an increase in Accounts Receivable (if the service was performed on credit), or a decrease in Unearned Revenues (if the service was performed after the customer had paid in advance for the service). (Citation)

Cash Basis Accounting is the most applicable to the individual consumer.

Main Financial Statements
  1. Income Statement
  2. Balance Sheet
  3. Statement of Cash Flows
Income statements

Show how profitable you are during the time interval. Profits will be measured in the amount able to be saved after a given time period. This can be used to show what time of the year money is more likely to come in or go out. Profitability involves two things, amount of money earned (revenue) and expenses.

Revenues

The amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the "top line" or "gross income" figure from which costs are subtracted to determine net income. (Citation)

Expenses

The economic costs that a business incurs through its operations to earn revenue. (Citation)

Matching Principle

The principle that requires a company to match expenses with related revenues in order to report a company's profitability during a specified time interval. Ideally, the matching is based on a cause and effect relationship: sales causes the cost of goods sold expense and the sales commissions expense. If no cause and effect relationship exists, accountants will show an expense in the accounting period when a cost is used up or has expired. Lastly, if a cost cannot be linked to revenues or to an accounting period, the expense will be recorded immediately. An example of this is Advertising Expense and Research and Development Expense. (Citation)

Balance Sheet

A financial statement that reports the amount of a company's assets, liabilities. (Citation)

A "snapshot" of a individual's financial position at a given moment in time.

Previous Article about using Financial Snapshots

Assets

Assets are things that an individual owns and are sometimes referred to as the resources of the individual. (i.e. Personal vehicle(s), its cash in the bank, home, etc.)

cost principle

The accounting guideline requiring amounts in the accounts and on the financial statements to be the actual cost rather than the current value. (Citation)

Depreciation

Depreciation is required by the basic accounting principle known as the matching principle. Depreciation is used for assets whose life is not indefinite—equipment wears out, vehicles become too old and costly to maintain, buildings age, and some assets (like computers) become obsolete.

In accounting, an expense recorded to allocate a tangible asset's cost over its useful life. (Citation)

Liabilities

Obligations of the company; they are amounts owed to others as of the balance sheet date. (i.e. Loans, credit cards, etc.) (Citation)

Statement of Cash Flows

Shows how Direct Delivery's cash amount has changed during the time interval shown in the heading of the statement. Good for helping to determine your financial circumstance and whether or not things need to be adjusted.

The goal of these articles will be to get a basic understanding of accounting principles then determine ways to integrate them into my personal finance. I am hopeful in being able to become the Chief Financial Officer of my finances for 2009.

Too often we rely on others' book keeping to determine if our finances are balanced. How many times do you check your bank account after you receive a bill to make sure that the power company debited the correct amount? How many times have you been overcharged by a department store or did not receive a store credit for returning an item. Unfortunately, I believe we can attribute much of the economic woes today due to not tracking expenses correctly and understanding the underlying debt trap that many Americans laid out.

By tracking my expenses, I hope to avoid this trap and being in less debt than what I owe today.

What are some of the financial resolutions you plan on doing for 2009?

Stay Disciplined!