Wealth

How to Save Money when Going Out

How to Save Money when Going Out

The economic recession has come with its set of hardships and lessons that will stay with us for a while now. Those who lost their jobs realized the importance of savings. So whether it is your proactive nature or tough financial situation that is forcing you to spend wisely, the following tips will prove to be helpful.

Coupons

Gone are the days when coupon cutting was considered cheap. So cut coupons from newspapers and hunt for them online too. The rise of major coupon selling websites such as GroupOn, Living Social and Retail Me Not have made people even more aware of the phenomenon and given them easy access to lower priced options. The trick to use coupons in a beneficial way is to plan ahead. Yes, today coupons are available for almost every product and service category so note down your needs in advance and search for coupons. Use them when required and you’ll end up saving up to 90%!

Dine ‘Out’

When eating out, what is that you restaurants, cafes and other eateries for? Food and? Ambiance is the answer. Yes, it is that need for a change in your daily mundane lifestyle that drives you to go to restaurants. Save money by preparing something different to eat and go out for a picnic with family or friends to a location such as a park. If there is a convenient location near your office, go there twice or thrice a week with your lunch pack and feel the difference.

Carry Less Cash and no Plastic Money at all

Some people have a very freehand. The more cash they have in their wallets, the more they end up spending on a trip. If you are one of them, admit it and stop carrying cash around that you think will get spent up unnecessarily. And don’t forget to forget your plastic money at home!

Monitor Transportation

Transportation is one of the things that have a lot of room for saving. There are a lot of factors that can help you save on transportation. If you do want to save up on conveyance consider the mode you adopt to travel. If you have two vehicles at home, prefer the one that consumes less fuel even if it is your spouse’s. If you travel to a certain location on a daily basis, consider opting public transportation instead. If you drive to nearby locations such as your college every day, consider walking to them instead. Not only will you save up on fuel, you might even be able to replace the walk by tread-milling at the gym, which means saying bye to another cost.

Travel Smart

When visiting new places such as a city or even a country, keep your back pack stuffed with all the things that you think you could possibly need. Certain locations such as airports and other tourist populated areas charge higher than usual prices. So it is better to keep in stock items that you know you’ll need such as camera cells and mineral water.

Allan has been writing about personal finance for a couple of years. His favourite topics include savings strategies, term deposits and savings accounts. When he is not blogging, Allan loves spending time with his family.

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Further Damage To US Pension Funds

Further Damage To US Pension Funds

While relatively few countries’ pension funds have escaped unscathed from the current financial crisis the US seems to have taken the biggest hit over the last couple of years.

It’s not a huge surprise, given that pension plans in the US make up more than 60% of global pension assets. The ongoing financial crisis has left corporate pension funds hugely underfunded and many workers are seriously reconsidering their retirement plans, some more drastically than others. A number of people have already stopped paying in to their IRS pension plans, while a not insignificant minority have completely shelved their retirement plans and are exploring other options. Those who have opted out entirely have had to rethink not only their lifestyle after retirement but their retirement age as well.

Making matters worse is the job market, with high unemployment levels plunging thousands of people in to deeper financial difficulty and slowly eroding any security they might have built up over the years.

Many private companies have attempted to offset some of the financial strain by reducing their contributions to pension funds, with some of the most severely affected completely abolishing schemes. Sadly this looks like a trend which is set to continue for the foreseeable future.

California

California is a typical example of how states are being affected. The largest public pension fund in the country, the California Public Employees Retirement System (CalPERS), has reduced its forecast for investment returns for the first time in 10 years. They have also requested that local school districts and local government increase their contributions, a move that could have a significant impact on the standard of services offered to residents in a time where cost cutting is already a top priority.

This means that around 4% of the state’s annual budget is allocated to CalPERS, at a time when almost every department is looking to make budget cuts wherever they can. Public sector pensions have already come under fire due to the substantial benefits they offer over those provided to those in the private sector. Many taxpayers are starting to question the feasibility of the public pension fund given the current state of the economy.

The state budget deficit stands at around $9.2bn and reductions to public sector pension benefits have already been proposed by Governor Jerry Brown, alongside increased contributions from workers and an increase in the state retirement age. The proposals, which have yet to be implemented, also support a plan for new employees to participate in a hybrid plan in which a 401(k) style system would be used to make the pension schemes more comparable to those in the private sector.

It highlights the significant steps governments have to take to deal with this huge issue, which will have an impact on millions over the next couple of decades.

Stuart produces content on behalf of cbonline.co.uk and contributes to a number of financial blogs

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The Tax Efficient Way To Save For Your Children.

The Tax Efficient Way To Save For Your Children.

All children could benefit from the lump sum that a Junior ISA (a savings account launched just last November) with help from their parents in future. Only children who were born before 1 September, 2002 or after 2 January 2011 are able to qualify for this scheme, as anyone born between these dates was able to get a Child Trust Fund (CTF) instead.

CTFs were axed under the initial round of government spending cuts after Gordon Brown left office, leaving millions of children without the option of saving. Parents and savings experts alike are lobbying the government for a change in policies that would allow CTF babies into the generally higher-paying Junior ISA market, but lawmakers have thus far not rallied to the cause.

Specifics

The main difference between the Junior ISA and CTF is that the latter came with a government voucher to kick start savings, while the Junior ISA relies completely on parents, grandparents, other family members to top-up children’s accounts.

The children are able to have £3,600 saved in their name each year, though the limit is set to increase in line with the consumer price index for inflation in the 2013-2014 financial tax year. This £3,600 can be invested into a stocks and shares, or cash deposit account, or any mixture of the two. The option to hold both types of accounts is particularly good for parents who want to take advantage of the historically higher returns that a stocks and shares Junior ISA account offers, but want to mitigate risk to their child’s nest egg by saving partially in a potentially safer cash Junior ISA.

Over the course of 18 years, equity investments typically have a higher performance than cash, but this is a decision that parents should consider carefully.

Tax Efficiency

One of the main draws of the Junior ISA is that all money saved for the child is free of capital gains tax, and the child can withdraw it free from any further tax when they turn 18. Parents can circumvent the ‘pound;100 rule’ this way, as in normal taxable accounts children are taxed on any income over £100 that their investments earn, if the money was a gift from their parents.

The tax-free nature of the Junior ISA is also an attractive aspect for grandparents who are looking to transfer their wealth to future generations. A Junior ISA for each grandchild may not exclude them from paying inheritance tax entirely, but saving the maximum yearly amount for 18 years could shelter a huge slice of wealth from the taxman, completely legally.

Eva Schmiz of www.comparejuniorisa.com explains the best way to deal with taxes and Junior ISAs in order to save for your childrens.


Investment Ideas for a Down Economy

Investment Ideas for a Down Economy

Despite the struggling economy, many entrepreneurs and individuals are investing lucratively. During times of economic crisis, it can be difficult to know where your money is safe. Investing as a practice can feel almost like a gamble. However, those who take chances with their investments often see a high return both during the economic difficulties and after the economic outlook improves.

  1. Property. Even though the housing market is bad for many right now, if you can afford to buy property, especially in the areas where property prices have plummeted, you should take your chance. If you don’t need to live there yourself, you can always use it as a rental property, and help others live while making money.
  2. The internet. Internet start-ups are happening all over the world, and many require an investment for the salaries of employees. Investing early in a promising internet website company or internet marketing company can help you see vast returns later on. This type of investment also offers a somewhat low risk to start off with, especially since website creation is not very expensive. Don’t let the “tech bubble” of the turn of the century scare you off; many of today’s players are profitable.
  3. Innovations that will help people. If you are going to invest in new inventions that will improve society, there is no better time to do it than in a bad economy. Innovation is always needed and appreciated, but it is crucial for re-building economies. With the government investing in job creation. Finding the innovations that will come to fruition can be no small task, but a bit of research often uncovers a gem.
  4. Small businesses. During times of economic hardship, many small businesses need extra help. It can be a smart investment to help out a great small business in your area if you believe in their business model, since there is usually a shift towards local and personal when things get tough. You will be investing in your local economy, and the payoffs could be very high if you negotiate the arrangement appropriately.
  5. Inexpensive entertainment devices. This may seem like an obvious one, but investing in new inventions and stock from old ones that will offer people new ways of enjoying themselves on a budget can help you and others during an economic crisis. The more stressed and taxed people become, the more they will need to laugh, play, and blow off steam as well.
  6. Coins. Believe it or not, investing in coins is not only inexpensive, but the metal value of pennies and nickels is increasing to the point where the metal in the coinage is more valuable than the monetary value. Because precious metals are becoming more and more rare, buying up and collecting mass amounts of coinage may pay off.
  7. Sustainable food products. If you have ever thought of investing in food, there is probably no time more optimum than in a hard economy. Food is perhaps the most important resource available on the market, and will likely never suffer as much from a bad economy as other products. In fact, when people get nervous that they may not have financial security, they tend to start stockpiling certain foods. Local foods and sustainable growing models are becoming especially popular in this economy. Avoid investing in luxury food items, but research what people start buying more of, like soup mixes.

Investing can really help you improve your financial outlook, and so much is changing during periods of economic hardship that the economy is just flexible enough to allow for change. Even if you do not have very much to invest, it can be a smart idea to invest wisely during a tough economy. With all investments, it is wise to check the current markets before you dish out the cash.

A down economy can do more than just delay retirement. It can destroy your portfolio, lead to unemployment and send you into a downward spiral that is difficult to pull out of. If you’ve found yourself beset by more than just financial difficulties and need a misdemeanor expungement, the team at clearyournamefast.com is there to assist.


Is the Low Cost of Fast Food Worth the Price?

Is the Low Cost of Fast Food Worth the Price?

The eternal debate over whether it’s cheaper to stay at home and prepare your own food versus going out to a restaurant does not appear to have lost any ground. In fact, the rise of online social networking usage among Americans has only managed to propagate the flames of discussion. Food and money are two of the most talked-about topics in the social media realm. People love to share their thoughts about the intersection of culinary and monetary topics.

General wisdom has always championed the art of saving money by staying home. The rationale behind this belief mostly applies to Western nations where free market philosophies and capitalism have taken root. It makes sense to think this way since it can be assumed that, as a business enterprise, a restaurant solely exists to make money by luring hungry people out of their homes. A family of four can stay home and enjoy a lovingly prepared pasta dinner instead of heading out to Luigi’s. In this case, Luigi has clearly not made any money from that family, but it doesn’t mean the family has not spent any money at all.

A tenet shared by many restaurateurs is that, in order to break even, a menu must price its meals items at least 300 percent higher than the cost of acquiring the recipe ingredients. That means that if a pasta dinner for four at Luigi’s is priced at $32, Chef Luigi must have spent less than $10 on ingredients if he stands to make any profit. We know that Chef Luigi buys bulk ingredients from distributors, therefore, he gets much better prices than a family shopping for groceries at a supermarket.

Surely a family can buy enough ingredients to prepare pasta for four under $32, thus tilting the scale of the argument in favor of staying home, but this doesn’t take into account several aspects of cooking at home. Just like Chef Luigi has overhead expenses to worry about, so does the family cooking at home. There are energy costs to consider, like driving to the grocery store and powering the electric or gas stove. Then there is the cost of maintaining the kitchen, which is basically tantamount to maintaining an adequate roof over the head of the family. Is it then really cheaper to stay at home and cook?

A large social media contingent likes to point out that major fast-food chains are able to keep some of their menu items on sale for less than one dollar, while there aren’t too many items that can be purchased at the supermarket for under a dollar. This contingent explains that mindset: Instead of staying home or going to Luigi’s, a family could save a lot by going to their local fast-food franchise. Unfortunately, fast foods are rarely healthy alternatives, however.

High food and energy prices tend to affect families more than established businesses like Luigi’s. Giant fast-food chains are more adept at doing business than Chef Luigi. But for all the corporate moxie that fast-food conglomerates practice, they can’t beat the cheerful experience of sitting down with family to enjoy a home-cooked dinner.


5 Big Money Mistakes of Wealthy People

5 Big Money Mistakes of Wealthy People

You’d think they would know better, or at least hire people to know better for them. But the truth is, when it comes to handling their money, wealthy people often make boneheaded mistakes. That’s right. They’re just like the rest of us. The only difference is that their mistakes involve a lot more zero’s after the decimal point. Should you find yourself in the world of the wealthy, through inheritance, a smart stock tip, a lucky Lottery number or hard work and determination, here are 7 money mistakes and misconceptions to avoid at all costs.

1. Money won’t change me or the people around me:

The notion that wealth, especially sudden wealth, won’t have a behavioral effect on you or those around you may seem noble, but it is just plain foolish. It’s a fact of human nature that money changes people on both sides of the coin, so to speak. The trick is to be aware that certain changes are inevitable and prepare yourself to deal with them. A good example of this would be the sudden appearance of friends, people you didn’t really know or were mere acquaintances before your windfall. Although this may seem fun and flattering at first, it’s important to ask yourself these fundamental questions, Why me? and Why now? Not asking these questions can leave you vulnerable to the users, people who are only hanging out with you because they’re looking for a handout. The problem is made worse if you choose to flaunt your newfound fortune by making lavish purchases that attract attention to the fact that you have money. This doesn’t mean that you can’t enjoy being wealthy. It simply means that you need to exercise caution and resist the urge to adopt a whole new lifestyle. A common effect of the new friends syndrome is that the person with wealth withdraws from social interactions, no longer being sure who is a genuine friend or just an opportunist.

2. I don’t need to budget anymore:

In a song from the popular musical Evita, the character of Eva Peron sings some telling lines:

When the money keeps rolling out you don’t keep books
You can tell you’ve done well by the happy grateful looks
Accountants only slow things down, figures get in the way

Regardless of your income, unless you keep track of what is coming in and going out, there’s a very good chance that what is going out will be more than what is coming in. In other words, you have to keep a budget, or hire a professional you trust to keep the books for you. One of the characteristics of wealthy people who know how to handle money is that they are aware of how every dollar that comes in is either spent, invested, or saved. The rags to riches rock star mindset that the money will just keep rolling in more abundantly than it goes out and that there will always be enough to go around is a sure way to end up in bankruptcy court.

3. I can afford financial risks:

Another pitfall wealthy people can fall into is the notion that having more money allows them to take big financial risks. After all, it takes money to make money, is the reasoning here, along with the greed driven idea that you can never really have too much money. With an expanded circle of friends the wealthy are much more likely to be taken in by skillfully pitched get rich schemes that are always a sure thing

4. I don’t need a game plan:

Right up there with failing to keep a budget and taking unnecessary risks is the failure to have a financial game plan with goals and investments that can be tracked and evaluated in terms of meeting those goals. Buying too much stuff on credit can also be a major problem, as it can lead to runaway spending, whereas paying cash can often make even the very wealthy think twice about what they’re purchasing. Another critical mistake often made from not having a game plan is failing to update Wills and Trusts to keep up to date with current assets and the people they should be directed to.

5. I’m above being frugal:

Just because you no longer need to clip coupons to get by doesn’t mean you shouldn’t. You’d be surprised to know how many people who are considered very wealthy still live well within or below their means. Chances are, being frugal is how they acquired their money in the first place. They buy used cars and pay cash, they eat in, and they refrain from spending a lot of time and money at the casino or the track. Face it, if you could choose to be rich or smart, wouldn’t you rather be both? When it comes to handling wealth you can’t afford not to.


Personal Finances Checklist for Saving Money

Personal Finances Checklist for Saving Money

A personal finances checklist essentially provides two major benefits: it helps you remember items that may easily be overlooked and provides a detailed step-by-step guide to reaching your end goal, which is saving money. With a checklist in place, most people find that it establishes a higher standard of performance centered around clear goals.

Regardless of what you have been told or have read about saving money and general financial matters, money is a complicated affair. Every individual has different financial situations, goals, income patterns and saving methods. The options available for investment and saving are too numerous to count. This is where a personal finance checklist for saving comes in handy, to review finances on a regular basis and make appropriate changes, so you end up saving money in the long run.

Pay Yourself First

My father made himself a millionaire with a 7th grade education. What he taught me was to take 10% from your paycheck before you pay your bills. He had a saying, “If you make a dime, save a penny.” He taught me this when I was nine years old!

Teach Your Children When They Are Young

So that brings us to the next important step. Teach your children as soon as they are able understand the value of money. When my children was 3 years old I took them to the bank and helped them to open a savings account. Every week we would go to the bank and they would deposit their savings.

Where did the money come from you may be wondering. It came from they getting ten cents every time they put their toys. I paid them in pennies so that they could figure out what they made and take some for a treat, like an ice cream cone.

Credit Card Debt

Debt is a vicious cycle and credit card debt is probably the worst debt trap of all. Numerous frustrated consumers cannot understand why their debt does not lessen even after 10 years of making payments. There is no use saving when in debt; it is advisable to get rid of the debt first. Check on the following:

  • Clearing the credit card debt before using money to pursue other goals saving is pointless when the interest earned on savings is nowhere near what is paid out toward credit card loans.
  • Putting a plan in place to pay off the debt and adhering to the plan
  • Making use of credit card rewards and interest free periods for personal financial benefit

Saving

Acquire knowledge about various saving plans available to be able to make informed decisions about what saving options to choose. Consider the following:

  • Make a sizeable contribution to your employer’s 401k retirement plan
  • Contribute to an alternate saving plan to supplement retirement income
  • Based on eligibility, making a contribution to a Roth IRA
  • Automatic saving account into which a direct deposit is automatically made on a weekly or monthly basis

Investment

Formulate a personal investment strategy and stick to it even when money is in short supply.

  • Invest idle cash
  • Take advantage of tax advantaged accounts such as IRAs

Is investing in property a good idea in the current climate?

Is investing in property a good idea in the current climate?

In a climate of volatile stock markets and low rates of return offered on many savings and investment options, investing in property through a buy-to-let mortgage arrangement may look like an enticing prospect to the investor.

Investing in propertyFor those able to raise a large enough deposit, a buy-to-let property can have the potential to generate a good rate of return, especially while mortgage interest rates remain relatively low. Nevertheless, there may be significant risks involved in property investment and there are a number of things that you should consider before you leap in head first.

Many lenders now require a minimum of 25% as a deposit before you will be considered for a buy-to-let mortgage, and rates will often be above those offered on conventional domestic mortgage arrangements. While this can make it seem a relatively expensive investment opportunity from the outset, it’s important to remember that the higher the deposit you are able to pay, the less interest you will pay, so raising that extra bit of capital may prove cost-effective in the long run.

Number-crunching is vitally important if you are considering investing in a buy-to-let property, particularly in today’s market where ready cash is not often in easy supply. It’s a good idea to start by developing a careful financial strategy and asking yourself questions such as:

  • Will the rent you are likely to receive cover the mortgage repayments?
  • How would you manage financially if the property stood empty for a month or more?
  • Though mortgage interest rates are currently at a relatively low level, would you be able to cope if they were to rise?
  • Have you taken into consideration all the costs involved in acquiring and owning a buy-to-let property, including taxes, lenders fees, and other costs associated with being a landlord such as property maintenance and insurance?
  • Will you engage an agency to deal with the practicalities of letting your property, or will you be able to invest the time and energy required to take on responsibilities such as viewings?
  • Is your chosen property in a desirable location? Choosing a location where people would be likely to want to live does not necessarily mean looking for the cheapest or most expensive possible area, but it is worth thinking about the quality of local transport links, and schools in the area.

You may want to speak to an impartial mortgage advisor who can help guide you through your options when it comes to obtaining a suitable mortgage.

Property prices can drop, and you may not get back everything that you put in so you should consider all of your options carefully and compare the risks and benefits with those associated with other types of investment. A detailed financial plan can help you decide whether investing in property is the right choice for you according to your individual circumstances.

Investing in property can be both exciting and challenging; by doing the groundwork early on you can improve your chances of building a successful investment even in today’s uncertain climate.

This post was written by John Hughes who is the resident blogger at www.bestbonds.co.uk , a UK based site that provides access to market leading investment and savings bonds.

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Things to Avoid When Strapped for Cash

Things to Avoid When Strapped for Cash

If you’ve hit rock bottom financially your thoughts will most likely turn to finding ways to get quick cash. But when stressed with mounting bills, creditors’ calls and a continual sinking feeling you may not make the wisest choices on how to stem the tide of debt. Life’s troubles naturally ebb and flow, so if you’re in a down spot – no matter how dire it seems – there are some things you should really think twice about before doing. Here are a few…

DON’T:

Sell or Pawn Things You Love

No matter what the item, from your grandma’s furniture to that cheesy beer lamp that makes you smile, do not get rid of the things you really love unless it’s a life or death situation. That doesn’t mean you should avoid streamlining your life and simplifying. But it does mean that pawning or selling something that has great sentimental value will most likely never get you as much money as the item is worth, or that you need. Plus once the tide turns in your favor you will greatly miss those things that resonate with you. Before ever thinking of selling family heirlooms or the like first consider getting a part-time job or reeling in some of the other expenses you incur.

DON’T:

Keep Borrowing Money

Being in debt can be a very slippery slope that soon sinks you into a very dark hole. In addition to the psychological turmoil it causes it’s also just plain bad business because of exorbitant fees and interest rates. It’s especially bad news when one borrows from one source to then pay toward another (unless you are consolidating a loan and possibly getting a better rate on paying back on it all). Stop the cycle of borrowing and instead find ways to limit expenses and make more money. It’s like a financial diet where you eat more wisely and work out more the decision to stop the cycle of borrowing money is crucial if you hope to free yourself from debt.

DON’T:

Resort to Stealing

You may think that this is a given, but when people are strapped for cash they sometimes do crazy, desperate things. No matter how bad things get do not compound your problems by taking things that don’t belong to you. And yes that includes supplies from your place of business. Adversity of any kind will show you what you’re made of so don’t squander this opportunity to take the high road, because when things eventually look up (and they will) you can look back and be proud of keeping your integrity intact.

DON’T:

Keep Living Large

When you find that you just can’t make the bills in a consistent and timely manner then you know your life needs to change. Is your paycheck spent before you’ve even received it? Do you continue to charge dinners and nights out on the town, even when your bills aren’t getting paid? If so, you need to stop and take a candid look at your spending habits.

Remember that life is like a series of waves, where you’ll experience numerous peaks and dips over time; it’s the natural order of things. And while you can work to safeguard yourself from future financial troubles try not to add to your problems by doing things you’ll regret down the road.

Written by Erin Nolan. Ready to speak out against payday loans? Look here: www.doomsdayloans.co.uk


Financial Tips for Nannies and Other Self-Employed Workers

Financial Tips for Nannies and Other Self-Employed Workers

Nannying is a rewarding and fulfilling career for many kid-loving people with nurturing personalities, but the job can be more complicated than that of an aid at a school or day-care facility. Most nannies are independent contractors; they pay their own taxes, purchase their own health care benefits, and manage their working lives as business owners, unlike regular employees. If you feel called to become a nanny, here are a few factors you should consider and prepare for.

Taxes
If you have ever worked at a regular job, you know that income and Social Security taxes are taken out of your check before you even see it. When you work as an independent contractor, you are responsible for paying your own income taxes and the full amount of your Social Security tax, including the portaion an employer would pay. The IRS will likely require you to make quarterly payments on your tax obligations. The good news is that if you overpay, you are refunded the overage, and you won’t be stuck with a huge tax bill once per year. The IRS website will give you a good head start on figuring out how much you need to save from each paycheck to cover your taxes. Hiring an accountant is a good idea too.
Health Insurance and Other Benefits
Unlike employees, independent contractors are responsible for the full cost of their health insurance and any vacation time or sick days. You should look for health coverage that is as generous as you can comfortably afford. Skimping on your health insurance can be devastating in the case of a major accident or illness. If your employer offers you vacation time, you will need to cover the cost of your missed pay on your own. This also applies if you have to take a sick day or time off for an emergency. It is a good idea to save a small amount of each check to cover those days when you are not paid. That way you can comfortably manage time off without worrying about money.

Managing Fees and Expenses
Many nannies try to undercut the competition and gain advantage by charging very low rates, but a good employer knows that a good nanny is worth the price. You are caring for their precious children after all. Charge enough so you can cover expenses, such as health insurance, taxes and time off, without negatively impacting your other financial obligations. If a family balks at giving you a living wage, you should look elsewhere. Nannies are in high demand, and families will pay to have the best caregivers. Your fees will also need to encompass any business services and supplies you will provide.
The key to enjoying nanny jobs and other self-employment work opportunities is maintaining a working relationship with your employer is to treat yourself like a commodity and a business. You need to keep in mind the expenses that come along with working as an independent contractor. Adjust your fees accordingly so that you are earning what you are worth and not losing your whole paycheck to taxes and other obligations.

Being a nanny requires you to be more of a money manager than a traditional employee of a company. Staying on top of your business means being smart about all financial aspects of it. To keep up to date with tips and ideas related to being a nanny, go to NannyJobs.org for more information.


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