Anna N’Jie-Konte, CFP® Dare to Dream Financial Planning
About Anna N’Jie-Konte, CFP®
Anna is a passionate believer in the empowerment of women and minorities in America. She is the founder of Dare to Dream Financial Planning: a fee-only, virtual financial planning firm that serves the needs of 30/40 something women of color and business owners who want to live boldly and make a lasting impact on their family tree.
She is also the host of the “First-Gen Realness” podcast. There, she engages in conversations with her fellow first-generation Americans in order to reinforce their value and immense contributions to the fabric of America. By fostering a sense of community, she hopes to remind her peers that they matter, their stories are important and they are not alone in attempting to navigate multiple cultures with grace.
Anna is a native New Yorker; lover of everything related to food, the Gambia, Latino history, West African culture, and literature. When she doesn’t have her head buried in a spreadsheet, you can find her working out, re-reading literary classics, hanging with her husband and three daughters, or dreaming about her next adventure.
I’m going to let you in on a little secret about money— making more is not the only key to financial security, building wealth, etc. Like Notorious BIG said, “mo’ money, mo’ problems.” The hottest stock tip is also not going to save you.
Do you want to know what WILL make a difference in your finances?
Working on your money mindset, honing in on your priorities and following through on those goals you’ve outlined. Now I know this is going to feel very anticlimactic, but it really is the key to unlocking why you’ve been making the financial decisions you have been, why you haven’t been making the traction you want, and why your net worth is not climbing.
Without having concrete direction, clarity on what you want to achieve, and the right perspective around your money you will find you aren’t hitting your goals and are likely in a similar financial position that you were 1, 3, 5 years ago.
This is not to say that making more money won’t help you achieve and even accelerate your financial goals. However, if you find yourself constantly saying “If I get that raise, then I’ll be able to save for retirement or my kids’ education” or “there just isn’t enough money to save for retirement” then you are likely suffering from a missing perspective and could use a re-focus.
Here are a few tips you can use to refocus your finances and begin to make real progress towards your goals:
Examine your attitude towards money: How have you been handling your finances? How do you feel about money? Where have you been hitting goals or not in your financial life? Do you see any negative financial habits that are impeding your financial success?
Understanding what your relationship to money is like and what your money triggers are can really go a long way to helping you overcome any self-sabotage that might be happening. Awareness really is the first step towards making a positive change.
Sit down and write out your life goals: What do you want to achieve in your life? How much would it actually cost? When do you want it to happen?
By making your goals as clear and concrete as possible, you make it possible to make and track your progress towards attaining them.
Figure out a concrete plan to achieve them: How much do you need to save or pay on your debt in order to achieve your goal? Now break those amounts out into monthly targets and set up automated payments to make it happen.
I will be hosting a webinar on January 9th at 11 am EST entitled “How to Actually Achieve your Financial Goals.” Please register if you want to expand on these tips further!
I bet you’re wondering what a photo of Christmas presents has to do with savings for your kids? Basically, it’s my attempt at subliminal messaging to not spend a whole bunch on Christmas this year, scale back and instead redirect those funds towards creating some wealth for your little ones.
Perhaps you can even sock away what you would normally spend on holiday travel or ask grandparents not to send you a bunch of plastic toys your kids don’t even want. and instead to contribute to these accounts. I promise you, the kids will barely remember the extra Lego set but absolutely WILL remember that they graduated with minimal student loan debt or their parents handed over a five-figure account balance once they graduated.
Without further ado, here are some ways to consider saving and investing for your kids’ futures:
A regular savings account
I really don’t recommend these for most people due to the very low interest rate most savings accounts will give you. However, it may be an appropriate option if you have an older child or think there will be a more immediate need for the funds(less than 5 years).
If you do go this route, you should look into opening a high-yield savings account instead of a savings account with a traditional bank so you can at least earn a bit more interest on your hard-earned money.
This might be for you if: you want the funds to be highly liquid with very little tax impact. You anticipate a short-term need for the funds.
We all know that education costs are some of the biggest costs you will incur as a parent (or your child in the form of debt upon graduating college). Student loans are an albatross on the neck of many millennials, but it doesn’t need to be for our children. By saving for our kids' education in a tax-advantaged 529 account we can have the benefit of investing a small amount, allowing it to grow over time if invested appropriately and never have to pay taxes on the earnings if they’re used for qualifying education expenses. Your state may also give you a tax break when you make contributions which really makes this a win-win for you and your kids. A little bit goes a long way here, so don’t feel as if you need a whole lot of money. Even $25/month for a newborn baby can really add up!!
This might be for you: if you want to reduce taxable income, have a longer investment time-horizon, want the benefit of tax-deferred growth, feel strongly that your child will attend private school for elementary of high school education or will attend college.
A Custodial UTMA or UGMA account
These accounts are really the most flexible option for those of you who want the money you’re saving for your children to grow, but don’t want to dedicate them specifically for education-related expenses.
Essentially an UTMA or UGMA account is an investment account for children. Since they are not able to own properly directly as minors, this allows you to invest for their future even while they are young. The age your kid will be able to access the funds really depends upon your state, but they are generally 18 or 21 years old.
One of the biggest concerns I hear from parents is of handing their children large sums of money at an immature age, which I totally understand. After all, we know how unsavvy we were with finances at that age. However, I view it as an amazing opportunity to prepare them for adulthood and managing money well. Engaging in ongoing discussions with them from a young age on how to handle money are so crucial for long-term financial success and breaking generational cycles. I personally think UTMA/UGMA accounts are really a great opportunity to do so since you will be forced to make the funds available to them at the “age of majority” — whether you like it or not!
The accounts are taxable to their parents, however they are tax-free or taxed at a low “kiddie” rate for the first $2,200 of earnings(in 2020).
This might be for you if: you want the funds to be invested because you have a longer time horizon or you don’t want to lock your money up in a dedicated education-focused account.
I think one of the most universal sentiments amongst parents is wanting better for their children. I know Suleyman and I really endeavor to not only provide a better home life for our children, but also to give them as many financial advantages as we can without sacrificing our current lifestyle or future goals. I hope this inspires you to set up an account to help you save for your childrens’ futures.
If you need more help on determining which account might be right for you, please schedule a time to connect with me!
Here we are on DAY FOUR of my 10 days of tips on business owner finances. Today, we’ll be discussing everyone’s favorite topic- tax time!!
Tax season is a monster for accountants, but also their clients. There is apprehension, dread, stress, and pressure all mixed with a dabble of “dang, I should have done this months ago like I said I would!!”
In an effort to serve you and make 4/15/2021 a day you are actually excited for, I’ve put together three tips for ways you can better prepare yourself for tax time as an entrepreneur.
Update your bookkeeping software & categorize your expenses
If there’s one system I know everyone needs, it’s a bookkeeping software. This helps you categorize and track your expenditures in your business, run reports to assess your business’ financial health, and keep track of historical data. You already know we love data around here!
Having bookkeeping software such as Quickbooks allows you to automate a bunch of your expense categorization. That means you don’t always have to go in and painstakingly select individual transactions and tell the software what type of expense this was. Doing this on a consistent basis or hiring a bookkeeper (even better!) will allow you to keep up with expenses. After all, do you really want to spend March coming through last July’s bank statements? I think not!
Gather any receipts that might have passed outside business accounts
You guys already know how important it is to keep personal and business finances separate. However, life happens and sometimes you have a business expense that is paid from a personal account. Be sure to keep track of these in some way or at least gather those receipts to give your accountant. The sooner you do this, the better because you will likely forget if you wait too long. The other risk is that your tax preparer might assume everything you needed to claim was inputted into your bookkeeping software and not ask you for any other expenditures. Do yourself a favor and notate it ASAP to avoid any potential oversight.
Ensure you have the cash to pay any potential tax bill.
I must sound like a broken record at this point, right?
Seriously, one of the most frequent mistakes I see entrepreneurs make is not putting aside money to pay taxes. Although it is tempting to take an “out of sight, out of mind!” approach to paying taxes, Uncle Sam will come for you no matter what you do!
I recommend asking your tax preparer your approximate tax rate (15%, 25%, etc.) and putting aside that percentage of your gross income every single month. It’s an imperfect science, but can be a practical and useful tool to ensure we’re in the right ballpark. The worst-case scenario, if you don’t need the money, is you have some money to use strategically. If you still need to pay, you’ll be so glad that you at lest had some of the money you owed.
I hope this was helpful for you entrepreneur’s out there. If you want to get your finances all the way together before tax time, I am preparing an exclusive 2 day workshop to help! Please reach out and secure your seat before they all go!