When all your family members are busy managing their own lives, it can be hard to keep track of the money coming in and going out. This can create a lot of stress for you as the head of the household.
Here are some of the best ways to manage your family’s budget, as well tips on how to stay out of debt:
Step 1: Get Organized With A Budget Planner
With a budget planner, it’s easy to keep track of your spending and set goals for the future. You can use an app, a spreadsheet, or even a notebook to create a budget. Budget planners can help with financial security. Whether you are looking for ways to lower your monthly expenses or saving up for that big purchase, a budget planner will help you stay on track. Initially, your budget will not be accurate because of many variable expenses, but after a few months, your ability to predict expenses based on averaging your costs will improve.
Some tips for saving money with a budget planner include:
* Saving on groceries by using coupons and store sales.
* Selling used clothes, books, and toys online and then using the proceeds to buy other items.
* Planning out your meals beforehand, so you only buy what you need when going to the supermarket.
Step 2: Designate a Money Manager in the Family
Money management is vital for all members of the family. One way to make it easier to manage all everyday household expenses is to have a family budget managed by one of the parents. This “money manager” will then collect money from the earning members of the family and spend it on household expenses.
Step 3: Automate Your Savings and Investing
Amassing savings is not always the easiest thing to do, but it will force you to think twice about everything you buy, especially if you tend to use credit cards to spend more than you earn. Automation can be used to make saving money easier. You can use an app that will automatically put away a set amount of money each month. The app will take care of all the complicated calculations for you.
Step 4: Make Better Decisions For Your Finances
To make better decisions for your finances, it is crucial to be aware of the pros and cons of each financial decision. There are many ways to do this, but one way would be to start with the most expensive option and work your way down until you find something that is most sensible. This method considers not only what you want in a specific financial decision but also how much money you have and what decisions will be the most beneficial in the future.
Step 5: Check Your Credit Score Regularly To Keep It In Good Condition.
It’s easy to keep an eye on your credit score. There are many ways to do this, such as with an app or by logging onto the website for your credit card company. To ensure that you have a good credit score, make sure that you always pay off your credit card balance, avoid maxing out the card, and make sure that you do not spend more than 20% of the limit on any one card.
Summary
Although it might seem a little awkward in the beginning to use a budget planner, designate a family money manager, and automate savings and investments, you will soon get into the habit of doing it.
These three habits will then push you to start making better financial decisions based on the consequences you will experience in the future and become more vigilant about your credit score.
There are several leasing structures available to those seeking to rent commercial space. However, a triple net lease offers unique benefits to both landlords and tenants. If you are considering this type of agreement here are some pros, cons, and formulas to help you calculate a triple net lease.
What is A Triple Net Lease?
Calculations for renting commercial properties are much different than when renting residential ones. Oftentimes, spaces are divided, combined, or shared. Not only does it affect how much usable space you have access to, but also how much you pay each month. Therefore, most landlords determine rental fees with pricing by square footage.
While there are different leasing options for commercial space, many people utilize NNN leases or triple net leases. In this type of property lease agreement, the tenant/renter assumes responsibility for the additional costs to own and operate the property. These expenses include real estate taxes, insurance, and maintenance costs. Since the tenant is taking on more financial risk, they also receive lower rental rates.
How Do You Calculate A Triple Net Lease?
When you calculate a triple net lease, you must determine both the base rental rate and the expected operational costs. These formulas and figures can become confusing, especially if there are multiple renters. Using a commercial lease calculator can be very helpful. But, you can also do the math for yourself using the basic format of base rent + additional assumed costs.
Determining Base Rent
To calculate the annual base rent, simply multiply the rate by the area. For example, let’s say the annual rate is $30 per foot for a space that is 2,500 square feet. So your formula would look like this:
$30/sq. ft. x 2,500 sq. ft. = $75,000 annual per year
Then, divide the total by 12 months. With these figures, that would give you a monthly rental rate of $6,250.
Calculating Additional Costs
In order to find the total for the additional costs, start by adding the annual fees for taxes, insurance, and expected maintenance expenses. Then, divide the sum by the total square footage of the space.
Although it seems simple enough, here is where calculations get tricky. The formula is much simpler if you rent the entire space to a single tenant. However, if there are several renters, your quote may be in Rentable Square Footage (RSF). In this equation, you must also account for shared financial responsibility to upkeep common areas such as lobbies, hallways, restrooms, and courtyards.
Another thing to consider when you calculate a triple net lease is the property value and associated taxes. While most owners use the previous year’s valuation on property taxes, large increases can severely impact the additional costs. It’s a good idea to review these figures and assess rental agreements on a regular basis since these expenses fluctuate from year to year.
What are the Pros and Cons of A Triple Net Lease?
A triple net lease offers several advantages to both the landlord and tenant. However, many people avoid them because it does require more knowledge of commercial real estate laws and regulations. Here are a few important advantages and limitations to consider before you sign a triple net lease agreement.
Pros
Many people who rent out commercial real estate prefer a triple net lease agreement. It provides a secure investment vehicle with minimal risks. The owner continues to build equity due to capital appreciation of the property over time. Yet, the owner has more freedom since they do not play an active role in the property’s management. It also removes the financial obligations and risks of owning real estate since tenants assume the operational and management costs. Furthermore, it guarantees long-term occupancy since most state terms lasting 10-15 years. This gives the owner a stable source of income and reduces losses due to the property sitting vacant. Best of all, the leases are transferrable so you do not need to make investment decisions based on the duration of existing terms.
Although these leases may seem to favor landlords, it also provides many benefits for tenants as well. Since they assume more financial risk, it means they have lower rental fees. There is more room for negotiation as well since taxes and maintenance fees tend to fluctuate. With the landlord playing a less active role, tenants also enjoy more flexibility. A triple net lease grants tenants more freedom to customize the space to their specific needs. And, with longer leasing terms, it provides a stable location to operate their business.
Cons
While a triple net lease is attractive to both landlords and investors, there are some drawbacks to keep in mind. First, they are limited to commercial real estate. There are also net worth requirements for those wanting to invest in a property under a triple net lease. You must have a minimum net worth of $1 million, not including their primary residence and income. If you don’t meet this requirement, you can also enter a lease if you have an annual income of over $200,000. However, smaller investors must go through real estate investment trusts (REITs).
As the owner, you are also capping your earning potential. Most agreements specify fixed long-term rent for tenants since they assume the financial risks of the property. Therefore, there are limited opportunities to add value with updates or earn more from building if property values rise until the end of the lease.
Of course, you can’t overlook the financial risks the tenant assumes for the property. Although it may be a good deal when maintenance and operating costs are low, it can quickly turn against you. Increased operational costs, higher taxes, insurance deductibles, and damages can undermine your profit margin. On the other side of the coin, a tenant may not perform maintenance and repairs that meet the landlord’s standards. If you do not conduct regular checks on the building’s condition, the owner could be left with a huge list of repairs at the end of the term agreement.
The Fine Print of Triple Net Lease Agreements
The bottom line is that you should never enter into a contract unless you fully understand the terms you are agreeing to. While a triple net lease may be beneficial for both parties, do your research before you make a decision you regret. You can begin by finding information online, but it is best to seek legal counsel to review any rental or triple net lease agreements before you commit.
Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.
When you become an expat and choose to live abroad, you begin to question certain cultural norms. Growing up in America, tipping is an ingrained custom that is often questioned by outsiders. In fact, some cultures consider tipping offensive. It implies that you assume the server doesn’t earn enough to support themselves. However, for American servers, this is a reality. Since restaurants can pay their staff below minimum wage, servers depend on their customers to supplement their income. Unfortunately, this leaves people in a vulnerable position and susceptible to discriminatory practices. Here are just a few reasons why we need to end tipping culture in America.
Working for Less than Minimum Wage
As a former server, let me tell you what it’s like to work for less than minimum wage. In my state, the minimum wage is $9.00 an hour. But, restaurants only pay you $2.13 an hour. Because we rely on tipping culture, they expect your tips to cover the difference between the actual minimum wage and the pittance they pay you.
In most cases, servers and front house staff will usually make much more than this because of tips. When I worked as a server and bartender, there were some nights I would walk out with over $200 from a six hour shift. Other nights, I would have to work doubles and maintain grueling hours just to break the minimum wage threshold. It depended on several factors such as the kind of restaurant, day of the week, major events in the city, and your customers. With this kind of inconsistency, it made it difficult to budget, and some months, to pay the bills.
Tipping Culture Undercuts Livable and Fair Wages
Although we typically associate tipping culture with the restaurant and food service industry, it has become expected for nearly every service imaginable. Not only do we tip wait staff, but also our hair dressers, taxi drivers, baby sitters, dog walkers, landscapers, and doormen, just to name a few. Tipping no longer reflects the quality of service. Instead, it shows that employers place the burden on their customers rather than pay their staff fair wages.
Standard tipping culture requires 15-20% gratuity. However, the amount servers earn is completely subjective to the customer’s mood. So, if you are serving someone who already has a bias toward you, it will negatively impact your livelihood. Since those in the service industry must rely on tips, it leaves them more vulnerable to discrimination and harassment. Unfortunately, we are still facing biases based on race, sex, age, and other social factors.
When their salaries depend on compensation from customers, it can facilitate an environment where serving staff must choose between their ethics and their paychecks. I can recall dozens of times in which I was told to ‘brush off’ unwanted advances or else be punished by not receiving a tip. Asking someone to violate their principles shows how little we value them as people or care how it affects them personally or financially. Every human being deserves to be treated with dignity. And that begins by paying them fair wages.
End Tipping Culture to Hold Employers Accountable
Recently, there has been some momentum to end tipping culture. Spurred on by restaurants like Joe’s Crab Shack, some eateries have attempted to eliminate it by automatically including gratuity and service fees. However, tipping is deeply ingrained in the American mindset. People would rather put that extra dollar towards a tip than increased menu prices. In fact, they abandoned this model and returned to tipping because their online ratings dropped. Even though the final cost for their meal was approximately the same, people feel they have more control if they can determine how much they leave for their servers.
While tips have been enough to sustain servers in the past, COVID-19 has revealed several fatal flaws in the system. It has impacted food service workers more than any other industry because people stopped dining in and leaving tips. In some areas of the country, foot traffic is down 60% which in turn directly affects food service workers’ ability to support themselves. Although they are still required to perform the same work, their primary source of income no longer sees the need to leave a tip unless there is a face-to-face interaction.
Instead of complaining that people should return to work and be happy to receive any wages, it is time to hold employers accountable to their staff. If the restaurant and bar industry want to see their workers return, they need some guarantee that they will receive a steady salary to cover their cost of living.
Adopting More Sustainable Models
A few states, like California and Washington have already eliminated tip credit. But, many restaurants that tried to transition away from tipping culture have reverted back to this model. Since it is a cultural norm that doesn’t appear to be going away, we need to normalize sustainable models that ensure livable wages.
Some restaurants have implemented new models that show promise. First, restaurants could offer the best of both worlds. They could pay servers full minimum wage with tips on top. Another option is to keep menu prices the same, but include an automatic and separate service charge for their staff. One of the most progressive models I came across was a salary based on sales. Servers earn a percentage of individual sales and kitchen staff earned a percentage of the total shift sales. Owners who adopted this pay scale said their employees were more incentivized to provide better and faster service. Since the idea is based on the fact that if you sell more, then you can earn more, everyone is more motivated to work more efficiently. Finally, the federal and state governments could offer tax breaks or incentives to business owners who adopt no-tipping models.
If we want to change the public’s perception of tipping, we need to have everyone on board. It starts by having a reason for people to change. Because at the end of the day, the high earning days can’t justify the lows. Everyone deserves the ability to make a fair and steady wage. But, there will never be change until people see that the system is broken and demand better.
Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.
