Getting Out of Student Loan Debt: Public Service Employees in NJ

Are you working as a New Jersey firefighter, police officer, teacher, nurse, principal, or hospice care worker? Employees working these jobs, along with many others, have one major thing in common: a motivation to serve others. When people have access to services and education, even if they cannot afford them, society benefits. You’re playing a role in the well-being of society. Though it may seem like you could earn more money in another field, there are unmatched benefits to working as a public service employee.

Unbelievably, 40 million Americans have student loans to pay off; there’s a high chance that you’re one of those 40 million. The good news for you is that if you’re a public service employee, you could be eligible for student loan forgiveness. That sounds awesome, right?

In 2007, Congress formed the Public Service Loan Forgiveness Program (PSLF) to embolden individuals to enter the public service work force and to continue working as public service employees. Again, although these jobs may not be the highest paying, they are absolutely necessary, which is what Congress wanted to reinforce. To qualify for this program, your job must be in a nonprofit organization, the government, or a specific not-for profit program.

How can you qualify for student loan debt relief – is it enough to simply be a public service employee?

It’s necessary to be employed full-time by a public service program, and under certain repayment plans, it’s required that you have made at least 120 payments on the eligible federal student loans. Every payment must meet or exceed the required amount and must be paid on time, meaning no later than 15 days after the due date. October 2017 was the first month that any remaining loan balances were eligible to be eliminated. This program is not unique to New Jersey, but all New Jersey public service employees can apply to the program, as long as all stipulations are met.

In addition to the public service jobs already listed, employees in the following sectors can also benefit from the PSLF Program:

• Government organizations
• Non-profit, tax-exempt organizations (listed under 501(c)(3) of the Internal Revenue Code
• Private, non-profit organization that provides any of the following services:
• Law Enforcement
• Military Service
• Public Safety
• Public interest law services
• Early childhood education
• Public services for the elderly and disabled individuals
• Public library services
• Public education
• Public health (nurse practitioners, nurses, full-time health professionals in healthcare practitioner occupations)
• Emergency management

How do you know what loans fall under the PSLF Program?

All non-defaulted loans under the William D. Ford Federal Direct Loan Program meet the requirements. Basically all Direct Subsidized and Unsubsidized Loans as well as Direct Consolidation Loans are eligible. In addition, Direct PLUS Loans for parents and graduate or professional students fall under the PSLF Program.

To enroll in the PSLF Program, you need to print and complete the Public Service Loan Forgiveness Employment Certification Form, and Section 4 must be filled out by your employer. Once the form is completed, send it in to the U.S. Department of Education FedLoan Servicing. Each year, the form needs to be resubmitted.

If you have student loans and you meet the requirements for eligibility under the PSLF Program, don’t hesitate to enroll. You could potentially save a substantial amount of money each month – freeing up that capital to pay for your monthly expenses.

Image: “Teachers Union” by Kevin Dooley – licensed under CC 2.0

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An Entrepreneur’s Guide to Start-Up Funding

Here at Veitengruber Law, we are big fans of entrepreneurship. After all, that’s how our firm came into being! Taking the leap from a traditional job with a regular paycheck (not to mention health insurance benefits and potentially more perks) is an intimidating move, for sure. However, if you have a true entrepreneurial spirit and know you would be happier working for yourself, getting start-up capital is one of the biggest hurdles you’ll have to clear. Today, we present you with a guide to finding the right funding for your new business.

Where to start:

Be sure that you have a service or product that will be profitable, as well as funding sources.

 

How to avoid failure:

Be able to finance your product or service, in order to bridge the gap between concept and product/service.

 

Three ways in which most entrepreneurs are negatively impacted:

1) Bad concept/idea: This leads to a lack of funding from outside sources. Marketing is key.

2) Lack of plan/strategy: In this case, the idea can be superb, but the entrepreneur has not completely researched the concept and has not created a proper rationale for profitability for potential investors.

3) Not understanding the financial aspects: In this case, the entrepreneur may have created an excellent idea and strategy for the product/service; however, he or she doe not have a full grasp on locating funding.

 

There are six major strategies for locating funding options:

1) Venture capitalists: This person is an individual who invests directly with a company, while earning a stake in the shares of the company in return. This is the most typically misunderstood, yet best options of these six funding avenues.

2) Angel investors: This type of investor is similar to a venture capitalist, but he or she has a more hands-on approach. Angel investors can be located through one’s community; particularly through local investing and entrepreneur groups, as well as the Small Business Association (SBA).

3) Bank loans: This is a popular avenue for investment with local banks providing small loans to local businesses. This should be one of the primary options to either accept or exhaust, depending upon the outcome. However, keep in mind that in the past decade many of the policies for lending have become increasingly strict.

4) Private funding: This source of funding typically comes from family and friends of the entrepreneur, which makes this option one of the most feasible. Typically, family and friends will invest directly with the person they know before an angel investor or a venture capitalist would readily invest in the company/service. However, always be aware of the fact that borrowing money from close relatives and/or friends could have a major impact on your relationship.

5) Self-funding: This option involves using personal property to fund one’s company or service; for instance, liquidating assets to utilize the money directly, taking out an extra mortgage on one’s home, or utilizing credit cards. This is the highest risk option, due to the potential ramifications of investing poorly.

6) Crowd funding: This method of funding is one of the newest and most popular ways to invest in one’s company/service. The websites Kickstarter and Indiegogo, for instance, provide a platform by which entrepreneurs can showcase their product/service without having to provide the investor with equity of the company.

 

 

Do I Need a Real Estate Attorney in NJ?

Finding a new home is an intimidating adventure, but before you know it, you could be making an offer. What follows could be satisfying relief, or complete disaster. The answer: yes, you do need a real estate attorney in New Jersey, to ensure that your home purchase goes off without a hitch.

What does a real estate attorney actually do?

Most people have heard of, and potentially even worked with, a real estate agent, but a real estate agent’s job is different than an attorney’s duties. Our first suggestion is to begin your search for a NJ real estate attorney as soon as you start house hunting. The process of purchasing and selling a home includes intricate legal contracts and all paperwork involved in the transaction is extensive. An attorney will review the contracts, provide representation and closing services, and will be able to offer a third-party opinion on the process.

Barbara Casey, a past Chair of the New Jersey State Bar Association, shares that “Real estate transactions are emotional transactions.” She said, “The decisions you make can often be clouded by emotions.” Because of this, it is helpful to have outside opinions on one of the most important decisions you will make during your lifetime.

In Monmouth County, New Jersey, hiring a real estate attorney is not mandatory for a closing. Even so, it has now become normal practice in the area. Most people now recognize the critical importance of legal counsel on the matter of a home purchase or sale. There are certain services that you should expect from any experienced NJ real estate attorney.

Some of the services will naturally vary slightly, depending on the attorney, but all good attorneys will collaborate extensively with the mortgage company and seller. A real estate attorney will help their client to understand the process, serve as an advocate, and assist in making significant decisions. In addition, they will closely read the contract to make sure it’s all in your best interest as well as attend the closing with you. Generally, they will educate you about things you didn’t know you might need and explain the paperwork/contracts. One final key attribute of a superb attorney is that they will offer you options, but will still allow you to make the crucial decisions. In the end, your attorney should be there to advise while ultimately leaving the final decisions up to you.

At Veitengruber Law, we provide top-notch and comprehensive real estate transaction services. A quick overview includes:

• Negotiating sales or lease agreements
• Reviewing and drafting real estate contracts and title opinions
• Directing due diligence in title search cases
• Handling various kinds of deeds

Now that you know what we as real estate attorneys do, here are a few tips on how to find a reliable attorney to handle your upcoming real estate transaction.

Research how long they have been in practice as well as how much and what kind of experience they have had. This could include the number of closings that they complete per month. Make sure to find out if they have any complaints against them and the exact list of services that they provide. Finally, ask if they can give the name of a client that will give them a reference. If you have a special case, search for an attorney that has experience handling your specific type of case.

At Veitengruber Law, we have attorneys that want to help you and provide all the services that you will need during your NJ real estate process. Our professionals have incomparable financial acumen and experience. We strive to help our clients in the best way possible, all while remaining professional and efficient. Visit our website and give us a call or send an email to find out more about how we can meet your needs.

How Your SSDI Benefits May be Affected by Past Due Student Loans

In the past several years, there seems to be a growing trend, and one that is less than ideal. More and more recipients of Social Security are also carrying significant federal student loan debt. This obviously presents a problem since both sources of money flow from the federal government. With more student loan debt, the federal government will continue to fall deeper into debt. How exactly will your Social Security Disability Income (SSDI) benefits be influenced by past student loans?

According to a report released by the Government Accountability Office, the number of people whose Social Security benefits have been offset rose from 31,000 in 2002 to 155,000 in 2013. That’s almost a five-fold increase! The report also tells us that only about 36,000 of the 155,000 individuals are age 65 and older. We can conclude that there are many individuals whose SSDI is being affected by their student loan debt. Did you know it’s possible that your student loan debt could be forgiven? Before making any rash decisions, it’s necessary to check out how your taxes will be influenced if you were to receive a TPD discharge.

In order for an individual to have any of their loans forgiven by the Social Security Administration (SSA), the individual needs to qualify for Total and Permanent Disability (TPD) discharge. Monitored by Federal Student Aid, which is a facet of the U.S. Department of Education, TPD discharge equates to an individual not having to pay back the funds that they owe for their education.

Which loans fall under TPD discharge?

·        William D. Ford Federal Direct Loan Program loans

·        Federal Family Education Loan (FFEL) Program loans

·        Federal Perkins loans

·        Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations

Who qualifies for TPD discharge?

Unfortunately, TPD requirements are more difficult to meet than the eligibility requisites for Social Security. Just because you have been approved for SSDI benefits does not mean that you will be eligible for TPD discharge. Here are the rules, which were updated in 2010.

·        You must not be able to complete any “substantial gainful activity” that could provide an income. This activity is includes physical and intellectual activities. The inability must be due to a medically determinable physical or mental health impairment that has lasted for at least 60 months, is anticipated to last for 60 months, is expected to lead to death, or is correlated with 100% military service disability.

·        Social Security does not guarantee disability benefits for military service disability.

If an individual receives the Social Security disability award within the five to seven year review date, they will be part of a group known as “Medical Improvement Not Expected (MINE),” which should qualify them for a federal loan discharge.

To complete a TPD Discharge Application, you must have your medical doctor verify that you are disabled. Once your physician has filled out sections regarding your diagnosis, the severity of the problem, and any limitations experienced as a result, you can submit the application to your loan servicer. It’s required that you submit an application for each individual loan holder.

Please don’t hesitate to ask us if you need help with your TPD application or if you aren’t sure if you’ll qualify.

Why Beneficiary Designation Forms are so Important

Let’s imagine a quick scenario: Bob is a newlywed who starts a new job with great benefits. During the hiring process, he signs up for the life insurance policy offered through his company. As a beneficiary for this policy, he designates his spouse, Amy. Time passes, Amy and Bob get a divorce, and Bob gets remarried to Lisa. Years go by and eventually Bob dies, leaving behind his life insurance. When Lisa goes to collect on Bob’s life insurance policy, the insurance company informs her that she is not the beneficiary of his policy. Instead, the money will go to his first wife, Amy. Despite his divorce, Bob never went back to change his beneficiary designation forms. This is unfortunately a common legal issue for people who have been divorced, separated, or remarried.

These beneficiary designation forms are typically included in the paperwork you fill out the first week at a new job. As a new employee, you will have the option to fill out designation forms for your potential retirement assets, including 401(k) or IRA, your life insurance policy, and other benefits. Contrary to popular belief, these beneficiary designation forms legally override any existing will or trust, regardless of which document is most recent. It is easy to forget about beneficiary designation forms while going through the ups and downs of life. Years can pass, and despite many changes in your personal life, you may never think to go back and updated these documents. This is a huge mistake, especially because it is so easily resolved.

We at Veitengruber Law want to stress the importance of changing these documents whenever your circumstances call for it. Some states even have laws protecting insurance policy holders and their loved ones from these oversights, but the legal importance placed on beneficiary designation forms can lead to problems even in these instances. In Minnesota, for example, there is a revocation-on-divorce statue currently under review in the Supreme Court and the fate of cases affected by this statue hangs in the balance. Regardless of the laws in your state, be proactive and protect yourself and your loved ones by ensuring your assets are designated correctly.

Veitengruber Law recommends doing a periodic self-audit to assess your preparedness in these events. Do you have a 401(k), IRA, or other retirement assets? Do you have a life insurance policy? Who is listed as the beneficiary for these assets? If you find that you do have some changes to make in who is designated as the beneficiary on these forms, don’t wait to change them. Life can change abruptly and unexpectedly, so make sure you are prepared today for whatever comes tomorrow.

The last thing you want is for your loved ones to become entrenched in a legal battle after you are gone. For most of us, our loved ones are at the forefront of our thoughts as we plan for the future. If you have retirement benefits or a life insurance policy, make sure you are including updated beneficiary designation forms in your plans for the future.

What is a Business Credit Score and How Important is it?

Whether you know it or not, if your business has a business credit card, you also have a credit report. This may be completely new to you, or maybe you’re just trying to find a bit more out about what exactly a business credit score entails. Either way, you’re in the right place, so keep reading!

What is a business credit score?

It’s the key to your business’s financial success. If you’re familiar with a personal credit score, such as a FICO credit score, it’s similar to this. In most cases, it’s a number between 1 and 100 that represents your business’s creditworthiness. Your score tells institutions whether or not they should lend your business money and how much they should be lending. They can also discern how likely you are to repay them in a timely fashion. A higher number on your credit score represents a strong history of taking out loans and repaying them on time.

Why do I need a business credit score?

Most likely, if you’ve just started a business, you’re using your personal credit to get the ball rolling. Using your personal credit indefinitely may not be the best decision for your business. Here are a few examples as to why establishing a business credit score is beneficial:

• Easier to obtain financing: If you are able to establish a business credit score, it will easier to obtain a loan or line of credit in the future.
• Potentially lower insurance policy rates: Insurance rates will rise as your business flourishes, but with a superb business credit score, these rates may be lower.
• Separation of business and personal finances: By creating a credit profile for your business, you’ve added a degree of separation between personal and business finances. This makes it easier to track expenses for the purpose of taxes. Also, you won’t have to worry about personal finances, expenses, and debts intermingling with business finances.
• Increased borrowing power: Larger amounts of financing may be easier to get if you have a decent business credit profile.

Establishing and growing business credit can reap remarkable benefits and financial advantages for a company. With a notable credit profile, businesses have a better chance at leasing equipment, securing lines of credit, obtaining a company vehicle, and getting a business credit card or loan without compromising personal credit.

Finally, it’s important that you know exactly what affects your credit score.

• Payment history: Likely the most obvious factor, it’s crucial that you make payments on time and for the correct amounts. A string of late or missed payments will result in a lower credit score.
• Length of credit history: A well-established line of credit is going to create the best credit score. Even if you have a history of a few missed or late payments, this is better than a short or nonexistent credit history.
• Company size: Though this may vary, some lenders prefer not to lend to businesses of a certain size.
• Credit utilization ratio: If you max out on all lines of credit every month, this will send a signal to lenders. Essentially, you want to be aware of how much you owe on current credit lines in relation to their limits.
• Risk Factors: Some businesses possess risks simply based on their industry. For example, a business located in a town with a low population density may be considered high risk in comparison to a business in a highly populated location.
• Public Records: Filing for bankruptcy or a history of civil judgments or tax liens against a business have proven detrimental. Since these are public, anyone can view this information.

Like many financial matters, credit scores are constantly changing, some of which is in your control and some is not. By focusing on what you can control and knowing what you can’t, you will be a more effective business owner. A commitment to striving for a great credit score will provide opportunities for improved financing, increased cash flow, and better business breaks.

Reverse Mortgage Foreclosures: Can They Be Stopped?

What are reverse mortgages?

Reverse mortgages allow homeowners ages 62 and up to borrow against the equity of their primary residence to receive a loan in the form of either a revenue stream or a lump sum of money from their lender. In order to be eligible for a reverse mortgage, homeowners must first meet a few basic requirements.

The homeowner(s) have to be at least 62 years old and either own their home outright or have a very strong equity built up and owe very little on their mortgage. They must also occupy their home as their primary residence and hold the title to their home. While they typically get a bad rap, reverse mortgages oftentimes provide senior citizens with a valuable and much-needed source of funding to assist with a wide variety of needs that can occur with aging.

Some common reasons seniors seek reverse mortgages are to:

• Finance a child’s college education
• Pay for necessary medical expenses and bills
• Fund home repairs and remodels
• Supplement social security income to maintain an adequate standard of living throughout retirement.

It is worth noting that while the homeowner gets to remain living in their home and keep the title to the home as collateral, they are still required to pay all necessary taxes, property maintenance and repair costs, homeowner’s insurance payments, and interest and fees on their loan.

What happens if circumstances change?

While reverse mortgages can be a feasible and even financially sound option for certain people, there are some potential pitfalls to take into consideration before ever opting for a reverse mortgage in the first place. It is important to understand the specifics of what you are undertaking as a homeowner. For instance, a reverse mortgage is immediately owed back to the lender upon the occurrence of any of the following circumstances:

• The borrower(s) decide to transfer the title or sell the home and succeed in doing so.
• The borrower(s) reside elsewhere for over a year, thereby relinquishing the primary residence status of the home in the eyes of the lender.
• The borrower(s) fail to meet the terms and conditions of the mortgage; for instance falling delinquent in homeowner’s dues or property taxes, or allowing the condition of the property to substantially deteriorate.
• The borrower(s) pass away.

If in the near future you are considering moving, living away from your home for more than a year, or if you currently have a terminal illness, you may want to look into alternatives to a reverse mortgage so that you do not leave your loved ones in a bad financial situation upon your departure.

IMPORTANT NOTE: Once the reverse mortgage becomes due for any of the aforementioned reasons, the homeowner(s) (or their heirs) are legally liable to pay back the lender in full, including any applicable taxes and fees.

Can a reverse mortgage foreclosure really be stopped?

If you find yourself or your loved ones on the verge of a reverse mortgage foreclosure, you are not entirely without viable options. Contact a NJ real estate lawyer or foreclosure defense attorney who can help determine if you are eligible for a reputable loan modification on the reverse mortgage. There is also the option of selling the property yourself or allowing a relative or friend to pay off the remaining balance owed on your reverse mortgage.

A real estate attorney with experience in NJ reverse mortgage foreclosures will be best equipped to help answer any questions you may have and help you weigh the pros and cons of all your options. They will walk you through every step of the decision-making process with the end goal of ultimately helping you avoid a reverse mortgage foreclosure.

Facing NJ Foreclosure? Why You NEED a Foreclosure Defense Attorney

If you’re facing foreclosure proceedings, it can seem like the worst has already happened to you. In such circumstances, some New Jersey homeowners elect to represent themselves (via filing a pro se answer), skipping meeting with a foreclosure defense attorney at all. The question sometimes seems to be why someone who has already begun to lose their home would need—or choose to spend money on—a foreclosure defense attorney?

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You NEED a foreclosure defense attorney in New Jersey!

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The frank truth is that a defendant who chooses to file a pro se answer is almost certainly wasting both their time and their money at a time when both are most needed. New Jersey Court Rules that speak to mortgage foreclosure are wholly different from those governing other matters, so an individual’s or family’s attorney (who specializes in other areas of the law) may not be able to provide adequate legal advice in such cases.

Did you know that having a modified home loan isn’t a valid defense against foreclosure in New Jersey? So even if you’ve already rearranged your finances and have come to an agreement with the holder of your loan (good luck with that), the court is really only interested in the agreement you had, how much you owed, and the legal right of the plaintiff to foreclose on  you. If you’re expecting compassion and empathy when you get to court, think again.

There are even times when a homeowner HAS had valid legal ground on which they could have based a strong defense, yet due to their lack of information, they have missed this life-altering opportunity entirely. Instead of saving their homes, they have lost their opportunity to influence the foreclosure proceedings at all.

Occasionally, defendants may look through prior foreclosure case outcomes here in New Jersey and conclude that a foreclosure filed this year will follow the same trajectory, from legal hurdles that must be cleared to causes of delays. However, the cause of delays and catalysts for prior successful defense can be entirely different now than they were even five years ago. Furthermore, a competent review of such cases often reveals that mitigating factors were not at all what a lay defendant has taken them to be, thus a defense based on the factors the cases may have in common is not going to prove at all helpful.

If you’re looking for legal advice online, skip the dubious sources of information and instead connect directly to our experienced New Jersey foreclosure defense attorneys.

At the writing of this article, there are no active delays in place that would serve to restrain a foreclosure plaintiff seeking judgment.

Defendants in New Jersey foreclosure cases should not develop their own defense strategies. We absolutely recommend meeting with an experienced foreclosure defense attorney who can ensure that any actions taken are in their client’s best interest.

In particular, we must reiterate that attempting to navigate the New Jersey Court Rules and New Jersey foreclosure laws is always an error that can only consume your time, your money, and perhaps your opportunity to save your home.

By contrast, meeting with an experienced foreclosure attorney can result in you having more options, a full understanding of the impact of each of these options on your finances long-term, and the peace of mind that comes along with knowing you’ve protected yourself. The legal system is not designed to take care of you; that’s our job.

How Financial Stress Affects Your Health

Would you be surprised if someone diagnosed your change of appetite, difficulty sleeping, and incessant headaches as symptoms of financial stress? It might be a hard pill to swallow, but your financial stress can have a tremendous impact on your health.  According to a survey published by the American Psychological Association in 2017, 62% of Americans reported being stressed about finances. Unbelievably, financial stress can cause companies upwards of $520,000 per year! You’re probably asking “why?”

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Are you aware of the impact of stress on the human mind and body? You’re about to find out.

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Financial stress, and many other kinds of stress, can have a negative impact on your health. There is a positive, temporary response to stress, and that is known as the “fight-or-flight” response. Preparing to run a race, giving a presentation, performing, and being involved in a dangerous situation are all examples of when your body is going to react with the “fight-or-flight” response, or adrenaline rush. Heart rate quickens, pupils dilate, brain functions heighten, and oxygen intake increases as your body reacts to the scenario. This is helpful in the short-term, but in the long run, on the other hand, it can become extremely harmful.

If these stressors are present over a long period of time, other health issues will manifest. Have you ever heard of heart disease? That’s a rhetorical question, since it’s the leading cause of death in the United States for both men and women. Guess what? Chronic stress is one of the main contributing factors to heart disease (along with a poor diet and lack of exercise). Not only is heart disease intensified by stress, but migraines, sexual dysfunction, asthma, gastrointestinal issues, high blood pressure, diabetes, general pain, stomach ulcers and many other health complications are also correlated with stress – money worries in particular.

We know that when you’re stressed, you’re more likely to make decisions that aren’t always the best. But when you accidentally, or purposefully, make a choice that ends up being detrimental, stress will follow. For example, the fear of not being able to pay next month’s mortgage bill can initiate symptoms of depression or PTSD. In turn, this can lead to even more issues with budgeting and over-spending (like racking up your credit card balance to make yourself “feel better”), which only exacerbates symptoms.

In the same way that stress exacerbates physical issues, it can also aggravate psychological problems such as anxiety, sleep disorders, depression, anger issues, and hopelessness. About 10% of high-earning individuals experience 2 to 3 indicators of depression, in comparison with 23% of low-earning individuals. Pair together financial stress and depression, and you’ve got a crippling combination. It definitely isn’t a recipe for productive and satisfied employees. Each day it seems that employee health is worsening, so it’s crucial that employees, managers, and health care professionals work to decrease stress levels and improve coping skills.

Although many of us brush off money worries, the physiological effects actually make sense. How can your body thrive if it’s constantly being beaten down with the incessant worry of money troubles? Simply put: it can’t. The physiological response of the body to stress is so immense that physical and mental health quickly begins to suffer. The lower classes of America undoubtedly experience the effects of financial stress, but studies show that financial worries also plague middle and upper class individuals.

In the United States, approximately 75 to 90% of all doctor’s visits are stress-related medical issues according to The Journal of the American Osteopathic Association. We know that stress causes plenty of medical issues, but some of that can be attributed to unhealthy coping skills. When people are stressed, they tend to resort to unhealthy coping behaviors such as overeating, overconsumption of alcohol, etc., which only worsens other medical problems. Stress management techniques such as exercise, deep breathing, and meditation are all effective ways to lower stress levels.

The heaviness of financial stress can weigh you down, but it’s important that you and those around you find successful ways to decrease stress levels and develop helpful coping skills. Lifting such a weighty burden requires intelligent money management and more important, stress management.

Self-Employment Budgeting Tips

When you’re not working a 9-5 job with a stable, predictable salary dispensed into your bank account on a set schedule, budgeting for recurring monthly expenses can be a bit tricky. While being self-employed can afford you the freedom to work flexible hours, have a varied office location and the ability to do something you love, it does not always provide the easiest and most consistent stream of income to rely on. This is where careful, diligent budgeting comes in handy.

 

1) Always budget for the necessities first!

While you are most certainly deserving of a dreamy resort vacation this summer, that doesn’t mean it qualifies as a necessity, as your vacation can easily be delayed until you can truly afford it. Necessities solely include staples like your rent or mortgage payment; groceries, gas, medical insurance, car insurance and car payment or other required transportation costs; utilities like electricity, phone, internet, water, sewer and garbage. It is also critical that you budget for your income taxes, as they will no longer be automatically deducted from your income. Anything else not featured on the aforementioned list does not qualify as a necessity and therefore you can live without it and save up for it before purchasing it.

 

2) Establish an emergency fund.

If you haven’t done so already, creating an emergency fund that has enough money to sustain 3-6 months worth of your necessary expenses is an absolute must for the self-employed. Not only does this provide you with added financial security and stability, it also buys you time to find a new job or side gigs if your self-employment opportunity does not prove lucrative enough to afford your expenses.

 

3) Once you have your emergency fund in place and have mastered budgeting comfortably for the necessities and have some wiggle room left over in your budget each month, you can start budgeting for “little luxuries.”

When I say little luxuries, I mean just that. Not living large, but treating yourself to small and affordable indulgences in moderation but on a regular basis. This may include something as mundane as ordering a Netflix subscription and Chinese takeout once a month, or something as exhilarating as a night out at a rock climbing gym with friends depending on your tastes and interests.

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Pro tip: seek out experiential luxuries whenever possible as they don’t generate physical clutter that you’ll have to deal with down the road. The memories you’ll gain are much more valuable in the long run.

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4) Think big: now that you’re managing all your monthly expenses (including little luxuries) like a pro and have a solid emergency fund in place, it’s time to consider your long-term financial goals.

When you’re self-employed, saving for retirement is even more important than it is for your peers who participate in employer-sponsored retirement programs. Given that you don’t have the opportunity to participate in employer-based matching programs, you will need to be proactive and learn to not only save diligently toward your retirement fund, but also actively invest your money wisely to make it work for you. There are tons of great retirement-planning resources available online, but if you’re feeling overwhelmed at the prospect of managing your own retirement accounts, consider consulting with a local retirement specialist who can help get you on the right track. If you’re more concerned about meeting more immediate financial goals like purchasing a home or a new vehicle (or even that resort vacation), a financial planner will be able to help you adequately allocate funds for each important goal while still contributing to your retirement so that it can continue to grow as you meet your other major milestones.

Veitengruber Law can guide you through your NJ asset management needs as you get older; with advances in medical care extending life expectancies, you may be facing difficult choices over health care and your legacy. We also have close relationships with expert financial planners and NJ CPAs with whom we are happy to connect you.