What Is a Quarter (Q1, Q2, Q3, Q4)?
A quarter is a three-month period on a company's financial calendar that acts as a basis for periodic financial reports and the paying of dividends. A quarter refers to one-fourth of a year and is typically expressed as Q1 for the first quarter, Q2 for the second quarter, and so forth. They Look something like this:
January, February, and March (Q1)
April, May, and June (Q2)
July, August, and September (Q3)
October, November, and December (Q4)
Who Monitors Quarters and Why?
Companies, investors, and analysts use data from different quarters to make comparisons and evaluate trends. The quarterly earnings report often includes forward-looking “guidance” for what management expects from the next few quarters or through the end of the year. These estimates are used by analysts and investors to develop their expectations for performance over the next few quarters.
How Does This Help Me?
As a consumer, paying attention to quarter and quarter trends will help with preparing budgets for your household and making the necessary changes when costs and income fluctuate. Like the expression goes "Run your household like a business."
For example, when a business has low sales, they will review the budget to see where they can costs by reducing consumption, negotiating the price of materials, find a new supplier with cheaper rates, reduce labor hours, etc. So, you as a consumer should do likewise with your cost of living when you begin to have income fluctuations. you would consider:
canceling cable and other subscriptions not essential for livelihood
using coupons
walking or biking shorter distances instead of driving
refinancing car or mortgage loans to get a lower interest rate
put of vacation travel and consider stay cations until finances stabilize
divorce the notion that name brand labels make a person
eat out less
reduce social media time to find a side hustle to supplement income
Monitoring quarterly financial news will also help you take precaution to prepare for economic downfall. ProActive not ReActive is always a good motto to live by. It can also help you prepare for economic come up.
For Example, if the FED is announcing low interest rates, that normally means the economy is hurting and the adjustment has to be made to help consumers spend using credit and loans. Savers will earn less interest on their money in the different types of savings accounts. If you are in a financial good spot, that will a good time to take advantage of debt leverage (using debt to acquire assets that will generate income).
Shopping Trends
Since businesses do a lot of their monitoring by quarters, guess what? That means their sales and pricing methods will follow suit. Some of the monitored shopping trends are:
Tax season- Most retailers mark up their prices because they anticipate low income shoppers using their tax refund to purchase the things they couldn't purchase during the previous year. Also, it is less likely that creditors will negotiate debts owed by a significant amount because now they feel you may have the funds to pay your bills.
Christmas- The illusion of sales. Black Friday starts the the season with devices and products with reduced features giving the illusions that you are getting a good deal . Most consumers don't look at the specs when they are buying tbs, washing machines, etc.
Vehicles sales- Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. the best time of the year October-December. Best day of the Week, Monday. Holidays: 4th of July, Memorial Day, Labor Day, President's Day, Black Friday, New Year's Eve.
There are so many other breakdowns to name them all. That's why it is good to do your research before shopping.
High Income Earners and Self Employed
You would want to keep up with your quarterly income because you may be obligated to pay QUARTERLY TAXES. This is how you avoid a big tax bill at the end of the year.
Bottom Line
At the end of the day, the key is to take an active stance in monitoring your income and expenses. Doing so also helps with goal setting and monitoring progress. It also helps you take accountability for your spending habits and financial responsibilities.
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