Sarah Wardle Jones, Author at Neely's Accounting

Enjoy Your Summer Break but Remember: Tax Planning is a Year-Round Adventure!

Now that the April filing deadline has passed, most people are happily shifting their focus from taxes to summer vacations. However, summer is actually a great time to review your withholding and see how your warm-weather plans might affect your tax return next year.

If this feels overwhelming, don’t worry. We’re here to help! At Neely’s Accounting Services, we want you to enjoy your summer AND set yourself up for financial success. We’ve compiled some common summertime tax situations and tips to help you stay prepared stress-free.

Summer Wedding = Tax Implications

Getting married? Congratulations! Enjoy your wedded bliss while you add a few important items to your to-do list. If you have name or address changes, it’s important to report it to the appropriate entities. Alert Social Security Administration of name changes and update your address with the United States Postal Service, your employers, and the IRS. To change your address for federal tax purposes, simply complete Form 8822, Change of Address, and send it over to the IRS. This way, you’ll make sure to receive all the necessary documents for filing your taxes smoothly.

Day Camp for Kids = Possible Tax Credit

If you’re sending your kids to summer day camp, it’s good to know that unlike overnight camps, the cost of summer day camp may count towards the child and dependent care credit. That means you could potentially get a nice tax credit to help with those expenses.

Part time Work = Filing a Return

Are you working part-time during the summer? Even if you don’t earn enough to owe federal income tax, don’t forget to file a return. Filing early next year will actually allow you to get a refund for any taxes withheld from your paychecks this year. It’s like a little bonus!

Seasonal Work = W2s

Ah, the gig economy! If you’re earning some extra cash this summer by providing on-demand work, services, or goods through digital platforms like apps or websites, we’ve got some great news. You can head over to the Gig Economy Tax Center at IRS.gov to learn more about how participating in the gig economy can affect your taxes.

Employees usually receive a Form W-2, Wage and Tax Statement, from their employers to keep track of their summer work. You’ll need this form when preparing your tax return, and you should expect to receive it by January 31 next year. And remember, if you’re an independent contractor, you won’t have taxes withheld from your earnings, so you’ll be responsible for paying your own income taxes, as well as Social Security and Medicare taxes. Even if you’re no longer working for your summer employer, they should still send you the W-2 so you (or your local CPA) can prepare your taxes properly.

Tax Extension = More Time to File

For those of you who requested an extension or missed the April deadline, you still have a chance to file your return. If you’re not sure where to start, reach out to us! Our individual services are tailormade to help you fight disorganization and overwhelm and get your taxes filed correctly and on time. And we’re local, which means we’re always available to help answer questions and guide you through the process. Which leaves you more time to enjoy your summer.

Adjust Withholding = Avoid Surprises

Avoid a tax surprise next filing season by reviewing your withholding now. Life events like marriage, divorce, having a child, or changes in income can all affect your taxes, and you’ll want to be prepared before tax time next year. If you need help determining how much withholding is best for you, give us a call. Our friendly, Roanoke CPAs are standing by to help.

Let Neely’s take the stress out of preparing for tax season! Our clients have trusted us with their personal income tax needs since 2007 because we deliver big-city service with hometown values. Contact us today and let us set yourself up for tax time success.

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Is Outsourced Accounting a Good Idea (and How to Decide If it’s Right for You)

If you’re a small business owner, it’s likely you feel there aren’t enough hours in the day. Running a small business is demanding. It requires all your expertise, creativity, energy and then some! As you grow, the demands increase and tasks become more complicated, especially your accounting.

That’s why many small business owners opt for outsourced accounting services for their bookkeeping and accounting needs. Engaging an expert CPA company can feel daunting at first, which is why we’ve put together this guide to outsourced accounting. Keep reading to think through the pros and cons of outsourced accounting and feel ready to make the best decision for you.

Pros of Outsourced Accounting

There are many advantages to outsourced accounting, especially if you choose a trusted partner. Not only will you take a time-consuming task off your plate, but you’ll also gain peace of mind knowing that a critical part of your business is handled with professionalism and care.

Gain time: No more burning the midnight oil trying to reconcile your books before payday. With outsourced accounting, you’ll have more time to work on your business, not in your business.
Save money: This may seem counterintuitive, but outsourced accounting will save you money. Instead of hiring a full-time employee, you only pay for what you need, when you need it.
Increase accuracy: Speaking of full-time, when you work with a professional CPA, they’ll bring years of full-time experience to the job so they can easily keep your records pristine and your financial processes smooth.
Improve cash flow: With the right partner, you’ll always have financial data at your fingertips so you can understand your cash flow and make informed decisions.
Smooth tax season: Tax-time stress will be a thing of the past with outsourced accounting. Your CPA will handle it down to the last detail.

Cons of Outsourced Accounting

Most businesses that opt for outsourced accounting experience more growth and less stress. However, it all comes down to choosing the right partner. Here are a few things to watch out for as you consider hiring a CPA firm to handle your accounting needs.

Security concerns: You’ll share sensitive information with a third party so it’s essential to choose a trustworthy partner for your outsourced accounting needs. A firm with integrity will address your security concerns and share the measures they take to keep your data safe.
Less Control: Whenever you delegate tasks, you hand over some control in getting the task accomplished. This can be a challenge for some entrepreneurs who are used to having a hand in every aspect of their business. However, frequent, and clear communication usually resolves these issues.
Not Local: Choosing a CPA firm in a different area code or time zone from you can add communication obstacles create delays. Choosing a local CPA firm mostly closely resembles having an in-house expert where communication is timely and easy.

How to Decide if Outsourced Accounting is Right for You

Are you an entrepreneur who is ready to gain time, increase peace of mind, and grow your business? Those are all good indicators that outsourced accounting is a good choice for you! But if you’re like us, you’ll want to be thorough. Here are a few specific items to help you decide if outsourced accounting will help you reach your goals.

Consider your business needs: If your business has complex accounting needs, outsourcing is a great, cost-effective choice. Keep in mind that a good partner offers more than just task fulfillment, they also offer expert advice and business consulting.
Evaluate the costs: Compare the costs of outsourcing accounting functions to the costs of hiring in-house staff and investigate billing practices of the firm you’re considering. Do they charge per service or offer a flat-rate monthly billing system?
Research outsourcing firms: Look for outsourcing firms with a track record of success, industry experience, and strong security measures. Be sure to check references and read reviews to ensure that the firm is trustworthy and reliable.

Contact Neely’s Accounting for Expert Roanoke Accounting

If you’re ready to take the leap into outsourced accounting, consider Neely’s Accounting Services. We’ve been helping Roanoke area individuals and business since 2007 with our big-city services and a hometown feel. Thanks to our cutting-edge, secure online platform, you can collaborate with our Roanoke CPAs instantly and always have up-to-date views of your data. Plus, we’ll never surprise you with unexpected fees. Our services are bundled at a fixed monthly rate to give you an efficient, well-maintained accounting system at a fair price.

Let us help you find the best accounting solution for you. Contact us today to get started.

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What’s The Smartest Thing to Do with Your Tax Refund?

Now that tax season is over, you’re probably looking forward to receiving your tax refund. In 2022, over 96 million people were refunded with an average payment of $3,039.

That’s no small chunk of change, and the last thing you want to do is absorb it by making small purchases over time. A windfall like a refund is a great opportunity to set yourself up for a better financial future. While there’s nothing wrong with spending some on a little fun, consider using the money wisely and get ahead financially. Need some ideas? We’ve put together a list of 8 smart things you can do with your tax refund.

1. Build an Emergency Fund

As the adage says, “Anything that can go wrong will go wrong.” Build a little cushion against Murphy’s Law with an emergency fund. The money in this savings account is tucked away for the day when the unexpected happens. Having the funds to address the unexpected can make a stressful situation much easier.

How much should you save? Most financial experts recommend saving between 3-6 months’ worth of expenses. However, it’s always much better to have something rather than nothing so even socking away $500 is a great start. High-yield savings accounts are a great place to keep your money until you need it.

2. Pay Off Debt

Paying off debt can feel decidedly un-fun in the moment, but it can free you up to have more fun in the future. When you pay down debt, (especially the high interest kind) you’re freeing up more of your future income and creating greater flexibility for yourself down the road. If you’re not sure where to start, consider these two popular strategies for tackling debt:

Avalanche Method: This involves paying off your debt with the highest interest rate first, so you minimize the amount of interest you pay over time and save money in the long run.
Debt Snowball Method: This involves paying off your debts in order from smallest to largest balance, using the money you save to apply to bigger and bigger balances. This method gives you some momentum to keep paying down debt.

3. Fund Your Retirement

Opening a retirement account, or maxing out your yearly contributions, is a fantastic way to invest your refund. Depending on the type of account you have, your contributions can grow tax deferred and when it comes time to enjoy your golden years, you’ll have a healthy nest egg to rely on.

4. Invest In the Stock Market

Use your money to make more money! When you invest in the stock market, whether it’s through mutual funds, stocks, bonds, or ETFs, investing in the stock market allows you to take advantage of compound interest. A disciplined approach to investing, where you tuck away funds year after year, is a great way to achieve financial freedom.

5. Invest in Yourself

You are your greatest asset. Your education, talent, expertise, experience, and work ethic all influence your rate of return through improving your earning potential on the job market.

With more skills, you can expect bigger paychecks and greater job stability. Consider using your tax return to pay for training, tuition, or professional memberships that will yield dividends as you chart your career course.

6. Make an Extra Mortgage Payment

If you own a home, you can make an extra mortgage payment or two and get one step closer to actually owning your home. Paying an extra principal payment on your house builds equity. The more equity you have in your home, the more purchasing (or saving) power you have if you choose to sell down the road. Plus, paying down the principal on a home works like paying down debt. The sooner you pay off the loan amount, the less money you’ll spend on interest.

7. Make a Major Purchase

Maybe it’s time to upgrade your vehicle, buy more energy efficient kitchen appliances, or do some home improvements. Consider using your refund to start a savings account toward these major purchases. We recommend high-yield savings accounts to keep the savings separate from your everyday spending cash.

8. Donate To a Cause You’re Passionate About

Charitable giving makes a big impact in more ways than one. Your donation benefits those in need, improves your community, and gives you the satisfaction that you’re helping make the world a better place. Charitable giving also sets you up for a potential donation deduction on next year’s taxes. When you combine your giving with volunteer work (and maybe invite a loved one to tag along!) you’ve got a solid win-win strategy.

Contact Neely’s Accounting Services

Tax season may be over for 2023, but there’s always another one right around the corner. It’s never too early to begin preparing for tax season (including smart spending). Our Roanoke CPAs are ready to help you craft the perfect tax strategy for your personal or business taxes so you can get every deduction you deserve and make the most out of your refund every year. Contact us today to get started.

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What Documents Should I Bring to a Tax Appointment?

When it’s time to file your taxes, it can be overwhelming to figure out what documents and information you need to bring to your tax appointment. Neely’s Accounting Services has been providing businesses and individuals in the Roanoke area with trusted accounting services since 2007. We’re here to take the overwhelm out of tax season.

To help you get organized, we’ve compiled a list of the essential items to bring with you when you meet with your Roanoke CPA to file taxes.

Personal Information

Before you get into the specific tax-related documents, make sure to bring some basic personal information to your appointment. This includes your social security number, your spouse’s social security number (if filing jointly), and the social security numbers of any dependents you’re claiming. Additionally, you should bring a valid photo ID and your previous year’s tax return.

Income Documents

The most critical documents you’ll need when you file your taxes are those that show how much money you made during the most recent tax year. The type of documents you’ll need depends on what and how many income streams you have and the list can look different for everyone. Take a look at the different types of income documents and see which ones apply to you:

W-2s: This form shows your annual earnings from an employer.
1099s: These forms show income from sources other than an employer, such as freelance work or investment income. These are common for self-employed people or freelancers.
Schedule K-1: If you own a business or partnership, you’ll need to bring this document.
Rental income: If you own rental property, bring a summary of your rental income and expenses.
Social Security benefits: If you received Social Security benefits, you’ll need to bring Form SSA-1099.

Deduction Documents

If you plan on itemizing your deductions, it’s important to bring documentation to support your claims. The list below outlines some of the most common deduction documents you’ll need to gather before your tax appointment:

Mortgage interest statement: This document shows how much interest you paid on your mortgage.
Property tax statements: If you own property, you’ll need to bring statements that show how much you paid in property taxes.
Charitable donations: Bring receipts or other proof of donations you made to charities throughout the year.
Medical expenses: Bring documentation of medical expenses that you paid out of pocket, including receipts and bills.
Student loan interest: If you paid interest on a student loan, be sure to bring Form 1098-E.

Additional Information

In addition to personal, income, and deduction documents, there are a few additional items you may need to bring to your tax appointment:

Bank account information: If you’re expecting a refund, bring your bank account information so it can be deposited directly into your account.
Estimated tax payments: If you made estimated tax payments throughout the year, bring documentation that shows how much you paid.
Business expenses: If you own a business, bring documentation of your business expenses.
Capital gains and losses: If you sold stocks or other investments, bring documentation of your capital gains and losses.
Alimony payments: If you paid or received alimony, bring documentation that shows how much you paid or received.

Contact Neely’s Accounting to Schedule Your Tax Appointment

Everyone has a unique financial story. At Neely’s Accounting, our friendly Roanoke CPAs get to know you and your finances to make sure you don’t overpay. We’ll help you get the credits you’re entitled to through the individual attention you deserve. Give us a call or visit us today.

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Why Hire an Accountant for Your Small Business?

Owning a small business isn’t for the faint of heart. Being an entrepreneur takes courage, vision, and a strong work ethic. One of your primary goals is likely to make money and grow your company. But as your company grows, so do the demands on your time, attention, and energy. You might find yourself barely able to keep up with the day-to-day requirements much less have time for strategic planning and growth.

If this sounds like you, it’s time to hire an accountant. Many small business owners avoid hiring help, because they’re worried that they might not be able to afford the expense. But hiring an accountant is an investment toward the financial health of your business. Plus, you’ll add time back into your schedule so you can work on your business, not just in it.

Here are a few ways an accountant can help you reach business goals:

Provide Virtual CFO Services

You can rely on your accountant year-round, not just at tax time. Hiring an accountant means having access valuable professional advice and support. Essentially, your accountant can function as a CFO for your company, without the potentially prohibitive expense of a salary and benefits.

Depending on your needs, an accountant can track your financials and meet with you regularly to provide insight into the financial health of your business. Having expert guidance can help you prepare for tax season and make strategic decisions.

Improve Budget and Cashflow

Outsourcing the effort of tracking your income and expenditures can make a big impact on your business. Understanding trends in your cashflow can help you make informed predictions about the future financial health of your business. Having this information at your fingertips can help you make solid decisions about big purchases while saving you time.

Prepare And File Taxes

Of course, hiring an accountant can help you prepare and file your tax returns. Never worry about filing incorrectly or missing important deductions. With a professional accountant, you can have peace of mind that your taxes will be done right.

Neely’s Accounting Services provides expert tax preparation and accounting in Roanoke, VA. Our clients have trusted us with their business management, personal income tax, and outsourced accounting needs since 2007. We’re proud to offer a full range of professional products at a fair price without sacrificing the individual attention you deserve. Our friendly, dedicated advisors are always ready to help you with personalized solutions that meet your needs.

Let us take the stress out of running your business and filing income taxes. Contact us or visit today.

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How to Conquer Payroll Procrastination

If you’re a small business owner, perhaps you know the feeling: the creeping sense of dread that grows as you inch closer and closer to payroll processing time each month. Processing your payroll involves tracking and re-tracking details, keeping up with evolving compliance, and ensuring accurate payroll tax filings. You know that mistakes can be costly, as even inadvertent errors can lead to steep fines at tax time. Maybe you delay starting the task which leads to frantic late-night accounting work as you race to pay your employees on time. Talk about stressful!

Plus, each minute you’re handling payroll means a minute not spent with employees, customers, or creative work. Payroll is by nature time-consuming. As a business owner your time is precious, and it can feel like there’s not enough of it to go around. It’s no wonder that small business owners struggle with payroll procrastination and dread. If this sounds like you, consider these tips to conquer payroll procrastination once and for all.

Identify Your Primary Pain Points

Take 10 minutes to brainstorm the top three obstacles you face with payroll and write them down. Maybe it’s your manual payroll process, or perhaps it’s the endless salary calculations. Maybe you’re dreaming of having some time back in your schedule or you’d just like a professional advisor to call with questions. Getting clear about your payroll needs is the first step to making payroll more efficient.

Define Your Budget

If you’re managing payroll by yourself, it’s likely because of budget constraints. It’s a tension many small business owners manage, but don’t forget that your time is money too. Hiring a professional can seem like an extravagant expense but consider the ways your business could grow if you had more hours free in the month. Determining a workable budget will help you choose the right level of support for your needs.

Determine What Level of Support You Need

Now you have all the information you need to make a confident decision about hiring professional support. Maybe you’re not ready to hand over the reins of your payroll, but you’re interested in phone and email support from a trusted expert. Perhaps having your payroll workflow analyzed and streamlined could save you hours each month. Lastly, many accounting firms offer fully outsourced payroll services, giving you the ultimate freedom and peace of mind. Call your local accounting service to find out what’s best for you.

Let Us Help!

Need help with your payroll? Neely’s Accounting has been supporting Roanoke, VA small business with their payroll needs since 2007. Our clients love us because we offer big-city services with hometown values. Contact us or visit today.

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6 Tips to Streamline Your Business Expense Management

Tracking business expenses is time-consuming and sometimes downright painful. But it doesn’t have to be. You can fold expense tracking into your daily business processes by implementing the right tools and systems. Use our tips to streamline your expense tracking and effortlessly stay on top of your finances.

Establish a clear expense policy

The first step in managing expenses is to have a clear understanding of what your business will pay for and what it will not. Make a list of approved expenses. Then clearly and consistently communicate that information to your team.

Cultivate company-wide transparency

The best way to make sure your team is on the same page is to communicate about your expense policies often and with transparency. You’ll create an open environment that’s conducive to sharing ideas and providing constructive feedback.

Simplify expense tracking

Invest in a software program that allows employees to take pictures of their receipts, propose requests, and submit reports online. Digitizing your expense tracking makes sharing and storing information simple and stress-free.

Audit your processes consistently

Set aside time each month to audit your expenses so you’ll always have a good idea of your finances. It’s a reliable way to prevent small problems from becoming big complications. Consider using a quality accounting software to make the process even simpler and less time-consuming.

Use company credit cards

Company credit cards are a great way to track of spending, maximize cash flow, and simplify record keeping and reporting. There are many options to choose from including permanent, single-use or set dollar amount cards.

Train Best Practices

Part of clear communication is adequate training. Invest the time to properly train your employees on best accounting practices so you stay up to date on your liquidity.

Need Professional Support?

Neely’s Accounting Services is your dependable, local resource for bookkeeping. Our team of Roanoke CPAs are available in convenient locations around the Roanoke Valley and are ready to provide a full menu of services. Contact or visit us today to learn more about how you can gain time, money and peace of mind with our expert local bookkeeping services.

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Avoid these 5 business tax mistakes

If you’ve made the leap and started your own business, you deserve a pat on the back! Starting your own business is an exciting adventure—you’re free follow your creative vision and figure out how to overcome obstacles along the way. Business taxes can be an area where new business owners stumble. We want to make sure you’re set up for success, so we’ve outlined some common pitfalls to avoid when it comes to business taxes.

Selecting the wrong entity

When starting your business, you can choose to designate yourself as a C-corp or an LLC. The decision can seem easy enough but there are tax implications to each one. Choosing the wrong designation for your business can impact your tax responsibilities and personal liability so it’s essential to get it right.

Overestimating startup cost deductions

You probably know the saying, “you have to spend money to make money.” It takes funding to start a business, but luckily, business owners can defray some of the cost through tax deductions. However, many new business owners make the mistake of overestimating their deductions. The IRS only allows $10,000 in deductions for total costs $50,000 or lower.

Missing tax payment deadlines

Running business is a complex undertaking and keeping track of your tasks and finances is no small feat. It’s understandable that you might miss tax filing deadlines because you’re busy keeping all the plates spinning, but the IRS is strict. If you miss a deadline, you could incur fines and fees that you didn’t budget for.

Mistaking contractors for employees

Many small businesses hire contractors, especially when they’re first starting out. They can be a great choice for your business. Contractors tend to be less expensive and are professional and efficient. However, be careful that you’re not asking contractors to fulfill employee-like expectations otherwise you could be responsible to payroll taxes. Failure to do so could result in crippling fines.

Disorganized record keeping

Its critical to keep sterling tax and financial records. You don’t want to be caught unawares by an IRS tax audit and not have access to invoices, receipts, and other financial information. If record keeping isn’t your strong suit, then consider outsourcing the job to a dedicated professional.

Hire a Trusted Professional

Avoid these mistakes by working with an expert. Neely’s Accounting Service has been guiding Roanoke business owners through startups and tax season for over a decade. We’re your local advocate in dealing with the IRS. Feel confident about your business tax process. Contact or visit us in Roanoke.

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The Ultimate Age-Based Guide to Retirement Savings

It’s never too early to plan for retirement. No matter where you are on your journey, there are smart decisions you can make today that will pay dividends tomorrow. We’ve outlined a basic financial to-do list for every decade of your life so you can enjoy your golden years in comfort. If you haven’t accomplished everything in each decade, don’t worry! Today is the perfect time to start.

Savings Goals for Your 20s

Start an emergency fund. Open a savings account and aim to save enough money to cover 3 to 6 months of expenses. This way, if you lose your job or get sick, you’re less likely to accumulate credit card debt, default on student loans, or dip into other savings (like retirement).
In your 20s, you’ve likely aged out of your parent’s insurance coverage and now it’s time to secure some of your own. Common ways to acquire insurance are through your school, job, or through the health insurance marketplace.
Set up a retirement account and start saving. You can sign up for your employer’s 401K plan, or enroll in a Roth IRA. The important thing is to be consistent. Have a set amount automatically drafted from your account so you won’t’ be tempted to skip a month. Even as little as $5 will add up, thanks to compound interest.

Savings Goals for Your 30s

In your 30s, you’ve likely spent 5 or more years establishing your career. Now it’s time to look at any remaining student loans and create a plan to pay them off. You can use a loan payment calculator to estimate how much you can afford to pay each month and how long it will take to pay the loan in full.
If you’re currently renting, chances are you’ve dreamed about purchasing your own home. Now is the time save for a down payment. Your goal should be 10-20% of the cost so you can have immediate equity and avoid private mortgage insurance.
In addition to your health insurance, you should add life insurance and a will. Life insurance may be offered through your employer, and a simple will can cost as little as $200-300 to establish.
Revisit the amount you save for retirement each month. In your 30s, it’s likely that your income is a bit more consistent. Most experts recommend saving between 10-15% of your pretax income in your established accounts each month.

Savings Goals for Your 40s

Perhaps you’ve purchased a home and have set up your retirement funds. To increase your available savings, eliminate any non-mortgage debt like credit cards or student loans. If this feels daunting, consider using the snowball or avalanche method to tackle the task.
Give your budget a second look and see if you have any extra cash to throw toward your mortgage principal every month. Paying extra on the principal will increase your equity and shorten the life of your mortgage, saving you money on interest in the long term.
If you have children, set up a college savings account. College may seem like a long way off, especially if your little ones are still in grade school, but it will be here before you know it and having some funds tucked away can make a big difference.

Savings Goals for Your 50s

Now that you’re on the home stretch toward retirement, maxing out your retirement contributions is a great idea. Saving the maximum amount allowed each year will ensure you stay on track with your goals.
Create a living trust. A living trust directs your assets if you become ill, disabled, or impaired by the symptoms of aging. A designated trustee executes the trust to your benefit and the benefit of your family while you are living.
Research long-term care insurance and secure the option that’s best for you. Planning for retirement is all about preparing for the unknown. Long-term care insurance helps you pay for care services you may need while protecting your nest egg.

Savings Goals for Your 60s

Retirement is right around the corner — and you’ve earned it! Meet regularly with your financial advisor to refine your goals and avoid surprises so you can retire with confidence.
You’ve worked hard to set up financial stability for yourself and your family. Review your life insurance and will to make sure it’s current with your situation and wishes.

Get Help to Retire with Confidence

Whether you’re just starting out, or are approaching retirement years, Neely’s can help you stay on track. Don’t be afraid to ask for help — Neely’s has been Roanoke’s trusted source of financial expertise since 2007. Our friendly professionals are standing by! Contact us or stop by our office in Roanoke.

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Emergency Funds: Preparing for the Unexpected

It can feel hard to pay bills each month, much less save for something that may or may not occur. But If the Covid-19 pandemic has taught us anything, it’s that the unexpected can and does happen. That’s why you need an emergency fund.

Experts suggest saving 3 to 6 months of expenses in an emergency fund. This kind of savings may feel like an unattainable luxury (especially during a period of inflation) but having even $500 tucked away can make a big difference in your financial stability. No one likes to think about potential crisis, but it’s even worse to be unprepared. Read on to learn 5 ways an emergency fund could help you in the future.

Unexpected Medical Bills

In 2020, 17% of adults had major, unexpected medical bills with the median cost between $1,000-$1,999. Dealing with a health emergency is one of the top stressors in life. Adding financial strain to an already stressful situation can make your health outcomes worse. An emergency fund can give you peace of mind while you or a loved one recovers.

Personal Property Repairs

If you’re a homeowner or have ever purchased a new car, you probably remember how it felt to be handed the keys to your new property. The possibilities and the sense of accomplishment make it a thrilling experience. However, ownership often comes with maintenance costs. Perhaps you need to replace the roof, or your car needs a new set of tires. Being able to draw on an emergency fund can take some the stress out infrequent but routine upkeep.

Unemployment

An estimated 23 million people lost their jobs in April of 2020. Many wouldn’t have predicted this record number of layoffs just a year prior. Job loss can be scary but having a financial cushion can help you bridge the gap between jobs. One way to be prepared is to add all your monthly expenses like housing, food, and transportation. Then strive to save enough to cover three months, giving you time to find a new job without taking on debt.

Travel to Attend Family Emergencies

What if you had a family emergency or death that required travel? Would you be able to purchase a last-minute plane ticket or hotel? Knowing you can cover these costs can be a huge relief in a time of potential stress and grief.

Pet Health Emergency

According to the National Pet Owners Survey, conducted by the America Pet Products Association, 70% of U.S. homes owned a pet in 2021. Even the most pampered pets can have health emergencies that require surgery. It’s always a good idea to save money in case your beloved animal companion requires unexpected veterinary care.

The reasons to start an emergency fund are numerous and there are ways to make saving easy. Begin by opening a dedicated savings account and set up an automatic contribution each month. You’ll love the peace of mind you gain as your savings grows. As a trusted local provider of accounting and financial services, Neely’s Accounting is here to help. We’ve assisted countless clients in the Roanoke region. Call or contact us today to let us support you as you build your financial safety net.

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