You know there's a lot of things that one could talk about as far as the things that you need to know to excel in business and in life, but what I want to talk about today is by far, number one and that is the concept of investing in yourself. Now the first time I was advised by someone to invest in myself, my thinking was, "Yeah, right. What do you have to sell me?" But what I've learned over time is that that really is a critical component of your success for one reason and one reason only- you are your best investment.
There is no company that you can invest in. No business. There's nothing else that you could put your money into that will bring you better returns than what you learn yourself. What you put up here that can pay you over and over and over and over. I know that for years at a personal level I lived way below my means working a corporate job simply because every time I got a commission check or got a little bit of a bonus for anything, it always went into investing into me because you know a lot of people put their future into things outside of them.
I'm not saying that you shouldn't invest in companies that have a portfolio. That's not what I'm saying at all because I have those things, however at the same time, when you look at a situation like Enron, you have people that had invested in that company for their entire lives. Almost everything of value that they had outside of probably the home that they owned was invested in that company but they could not control what that company did. Well, once again as I always said, you can always control what you do.
The biggest lesson that I got on investing in yourself; a couple of them actually came from a few friends of mine that I actually talk about on The Multi-Million Dollar Mindset website. One of which is Craig Valentine, a good friend of mine, a mentor of mine. He is probably the number one role model that I have for going into speaking. He told me about spending $4,000 a couple of times for some training sessions that have made him hundreds of thousands of dollars in bookings over the years since then.
Another good friend of mine, Craig Duswalt from the Rock Star System of Success, I watched this guy build a business that went almost from nothing to seven figures in like a year or less than a year. I was very candid with him and I was asking him, "What allowed you to move so fast?"
He said that, "I just simply increased the rate that I invested in myself in finding the right mentors." Then lastly, a very close friend of mine, Kim, we've masterminded in business for years.
She does very well, she's very modest about it, but she's been very successful in business and she is a person who has invested somewhere between $80,000-$100,000 in herself. Recently I was talking to a good buddy of mine, Tom Haut and we were going back and critiquing each other's websites and some things in the other person's businesses.
He was giving me some compliments on some copy that I had written and he asked me, "How many weeks did it take you to write this?" I told him actually it took me a couple of days but I was only able to say that because I spent the money and the time investing in myself over the years. So, always know that no matter what anyone tells you, a company, a person, your advisor, your financial planner, investing outside of yourself is good. It's smart to do that in organizations that you believe in. I do it.
But you can never make a single, solitary investment that will give you more dividends than investing in yourself because whatever you invest in yourself, no one can ever take away from you and only you can disappoint yourself if you don't follow through with it and apply it to your life. So, take every opportunity that you can to invest in yourself and learn as much as humanly possible because it will add to your life in more ways than you could ever imagine.
Lawrence Cole is the creator of the Multi-Million Dollar Mindset, which can be visited at http://www.multimilliondollarmindset.com
Article Source: http://EzineArticles.com/?expert=Lawrence_Cole
Tuesday, June 29, 2010
Friday, June 25, 2010
Beginning Investing- Without Much to Invest!
Is your list of things you wish you could do, but can't afford to do, growing longer? Many people understand the value of investing, and the importance of investing in order to secure their futures, but they don't have much available money that can be used for investing. These people might believe that they are not able to start investing and instead, continue to struggle with the daily living expenses and no plan for their financial future.
There are actually numerous ways that people who don't necessarily have a lot of cash available can begin investing, and every penny saved can help over the longer term. The only proven way to improve your financial situation is to reduce your expenses and increase your income, while saving for the future.
7 Ways to Invest Even if You're Broke
1. Save all of your change. Use cash to make as many purchases as possible, rather than writing a check or swiping your debit card, and put the change into a bucket at home each day. At the end of every month or two, deposit the change into a high interest savings account and watch it grow! If you've never actually saved your change before, you will be quite surprised at how fast change can accumulate. If you saved $25 in change each month, you'd have $300 at the end of the year- and more if you save it in a high interest savings account!
2. Enroll in a direct stock purchase plan that allows you to start investing with as little as $25. Direct stock purchase plans allow investors to purchase fractions of stocks based on the dollar amount you invest.
3. Reinvest your dividends to increase the number of shares of stock you own. This can help result in higher income levels in later years, and while you would probably enjoy receiving those mini-dividend checks now, it's better to reinvest them so they can grow into larger checks in a few years!
4. Enroll in your company's 401K plan, if offered. Some companies even provide a matching contribution- where they match a percentage or all of your deposits. If you have this available to you and you aren't taking advantage of it, you're throwing away free money. You may miss the $15 you have automatically deducted from your pay and put into your 401K each week at first, but after a few weeks you won't even notice it's gone and it will be going to a far greater cause than using it to buy lunch at your favorite fast food joint!
5. Join an investment club, and pool your money with the members of the club to help build a more comprehensive portfolio for small investments. When you invest on your own with small amounts of money, it can be difficult to build a diverse portfolio. By pooling your money with a group of like-minded people, you can build a diverse and comprehensive portfolio that will perform much better financially.
6. Take advantage of compound interest and start investing as early as possible. If you invest $2,000 at the age of 25, you will actually end up with more at retirement than a 30 year old who invests $5,000 on the same date!
7. If you receive money from an unexpected source, or you get a tax refund, you should consider it money you didn't get and immediately invest it instead of spending it. When you invest the money, you get a deduction on your taxes, also.
This article has been provided courtesy of DestroyDebt.com, your source for debt help online.
http://www.destroydebt.com/
www.computerpuppy.com
Article Source: http://EzineArticles.com/?expert=Debbie_Dragon
There are actually numerous ways that people who don't necessarily have a lot of cash available can begin investing, and every penny saved can help over the longer term. The only proven way to improve your financial situation is to reduce your expenses and increase your income, while saving for the future.
7 Ways to Invest Even if You're Broke
1. Save all of your change. Use cash to make as many purchases as possible, rather than writing a check or swiping your debit card, and put the change into a bucket at home each day. At the end of every month or two, deposit the change into a high interest savings account and watch it grow! If you've never actually saved your change before, you will be quite surprised at how fast change can accumulate. If you saved $25 in change each month, you'd have $300 at the end of the year- and more if you save it in a high interest savings account!
2. Enroll in a direct stock purchase plan that allows you to start investing with as little as $25. Direct stock purchase plans allow investors to purchase fractions of stocks based on the dollar amount you invest.
3. Reinvest your dividends to increase the number of shares of stock you own. This can help result in higher income levels in later years, and while you would probably enjoy receiving those mini-dividend checks now, it's better to reinvest them so they can grow into larger checks in a few years!
4. Enroll in your company's 401K plan, if offered. Some companies even provide a matching contribution- where they match a percentage or all of your deposits. If you have this available to you and you aren't taking advantage of it, you're throwing away free money. You may miss the $15 you have automatically deducted from your pay and put into your 401K each week at first, but after a few weeks you won't even notice it's gone and it will be going to a far greater cause than using it to buy lunch at your favorite fast food joint!
5. Join an investment club, and pool your money with the members of the club to help build a more comprehensive portfolio for small investments. When you invest on your own with small amounts of money, it can be difficult to build a diverse portfolio. By pooling your money with a group of like-minded people, you can build a diverse and comprehensive portfolio that will perform much better financially.
6. Take advantage of compound interest and start investing as early as possible. If you invest $2,000 at the age of 25, you will actually end up with more at retirement than a 30 year old who invests $5,000 on the same date!
7. If you receive money from an unexpected source, or you get a tax refund, you should consider it money you didn't get and immediately invest it instead of spending it. When you invest the money, you get a deduction on your taxes, also.
This article has been provided courtesy of DestroyDebt.com, your source for debt help online.
http://www.destroydebt.com/
www.computerpuppy.com
Article Source: http://EzineArticles.com/?expert=Debbie_Dragon
Sunday, June 20, 2010
Treat Yourself Like a Business and Budget
Treat yourself like a business
When it comes to creating your budget, this is a task that no one enjoys as it is mundane and boring right? Creating a budget is the only way to stay on top of your finances. The next part is actually sticking to it.
Sticking to a family budget is as difficult as exercising regularly and eating less of the fatty foods. We all know that exercise and eating correctly are important for maintaining good health just as we know that creating and sticking to a budget is good for our financial health, so why do so few actually do it?
Exercising, eating correctly and budgeting are always found on our new years resolution lists that we promise ourselves we will actually follow this new year, and promises that we always break. There is always an excuse as to why these promises are broken and the tales are interesting and endless.
The four steps to creating a workable budget are,
· Arm your self with all the information you require
· Work out where you are now,
· Decide on the goal you are trying to achieve,
· Determine how you are going to get there.
Arming your self with all the information is a process that is slow and painful, you will be glad that you took the time to do so, as nothing is more effective than sitting down with your shoe box full of receipts, credit card and bank statements and going over them for the last 12 months researching and determining your spending habits. As you go through this exercise break your spending into one of four categories,
- You can do it less often
- You can choose a cheaper option,
- You don't do it at all, or
- You choose not to change your behavior.
You shouldn't make your budget too strict because. if you do the chances of not sticking to it grow considerably.
Tip, as you go through your receipts, bank and credit card statements use different colour highlighters to create a colour coded system to identify where you are spending your money. This will help you plug those leaks. You could use a coded system as below.
· RED = Entertainment,
· BLUE= Mortgage payments
· YELLOW= Household groceries and expenses,
· GREEN=Utilities
· BROWN=Dinners out and coffees
Get the idea? This system works as it lets you identify with a glance where the money is leaking and on what specifically. A small note pad in your pocket is also a great idea so that you can jot down the items you bought that day with its relevant cost so that at the end of the week you can collate the notes and see if you have stayed within your budget. A simple system which works.
Americans and Australians are spending more than they earn, and in Australia alone spending on credit cards has blown out to a massive 40billion dollar debt, that is 40 Billion owed on credit cards alone now that is a very scary figure.
Research shows that the reason people give for getting a credit card is firstly for an emergency and secondly to get a good credit score. Wow there must be compounded emergencies to have a 40 Billion dollar credit card debt in Australia alone!
Before you race off and cut up your current credit cards here is a suggestion. Place your credit card in a jug of water and freeze it, so that now when you get tempted to go to the bargain sale or get something that you are convincing your self that you just must have, you will have to wait till the card thaws out and in that time the urge should have dissipated. Interestingly very few people actually use their credit cards for emergencies.
Resist the urge to pluck a figure out of the air when you are preparing your budget. Go back to the information you have dissected and look at your historical spending and to make it even more simple break it down into two categories,
· Things that you need such as food, shelter, clothes etc and
· Things that you want.
There are certain expenses that you may not be able to do a lot about while there are some that you can. For example review your cable TV subscription. Do you use all of the features and applications that you are currently paying for? If not then change to a lower subscription. Say your current subscription is $100.00, if you change to a $40.00 one this saving of $60.00 can be used to pay down your credit card debt.
Review all your current subscriptions and spending habits and by adjusting as necessary you will find that the savings will pile up without really affecting your current life style. Now that is not so hard is it?
Finally when you are working your budget do it in a time frame that you are comfortable with and can easily manage. Create a weekly and monthly budget allowing for the spikes for items that are billed annually. A method that I have used is taking the yearly items and dividing it by twelve which gives me the monthly amount that I need to budget for. This amount stays in the bank till it is required, earning interest which creates extra income that you currently do not have. That is the power of a well constructed budget.
Author Brian Norton, teaches budgeting and financial control to individuals and small business owners so that they can succeed financially,Brian runs and operates several very successful businesses and is a sort after speaker and trainer, sign up for budgeting tips at http://benjimite.com
Article Source: http://EzineArticles.com/?expert=Brian_D_Norton
http://benjimite.com/
www.computerpuppy.com
When it comes to creating your budget, this is a task that no one enjoys as it is mundane and boring right? Creating a budget is the only way to stay on top of your finances. The next part is actually sticking to it.
Sticking to a family budget is as difficult as exercising regularly and eating less of the fatty foods. We all know that exercise and eating correctly are important for maintaining good health just as we know that creating and sticking to a budget is good for our financial health, so why do so few actually do it?
Exercising, eating correctly and budgeting are always found on our new years resolution lists that we promise ourselves we will actually follow this new year, and promises that we always break. There is always an excuse as to why these promises are broken and the tales are interesting and endless.
The four steps to creating a workable budget are,
· Arm your self with all the information you require
· Work out where you are now,
· Decide on the goal you are trying to achieve,
· Determine how you are going to get there.
Arming your self with all the information is a process that is slow and painful, you will be glad that you took the time to do so, as nothing is more effective than sitting down with your shoe box full of receipts, credit card and bank statements and going over them for the last 12 months researching and determining your spending habits. As you go through this exercise break your spending into one of four categories,
- You can do it less often
- You can choose a cheaper option,
- You don't do it at all, or
- You choose not to change your behavior.
You shouldn't make your budget too strict because. if you do the chances of not sticking to it grow considerably.
Tip, as you go through your receipts, bank and credit card statements use different colour highlighters to create a colour coded system to identify where you are spending your money. This will help you plug those leaks. You could use a coded system as below.
· RED = Entertainment,
· BLUE= Mortgage payments
· YELLOW= Household groceries and expenses,
· GREEN=Utilities
· BROWN=Dinners out and coffees
Get the idea? This system works as it lets you identify with a glance where the money is leaking and on what specifically. A small note pad in your pocket is also a great idea so that you can jot down the items you bought that day with its relevant cost so that at the end of the week you can collate the notes and see if you have stayed within your budget. A simple system which works.
Americans and Australians are spending more than they earn, and in Australia alone spending on credit cards has blown out to a massive 40billion dollar debt, that is 40 Billion owed on credit cards alone now that is a very scary figure.
Research shows that the reason people give for getting a credit card is firstly for an emergency and secondly to get a good credit score. Wow there must be compounded emergencies to have a 40 Billion dollar credit card debt in Australia alone!
Before you race off and cut up your current credit cards here is a suggestion. Place your credit card in a jug of water and freeze it, so that now when you get tempted to go to the bargain sale or get something that you are convincing your self that you just must have, you will have to wait till the card thaws out and in that time the urge should have dissipated. Interestingly very few people actually use their credit cards for emergencies.
Resist the urge to pluck a figure out of the air when you are preparing your budget. Go back to the information you have dissected and look at your historical spending and to make it even more simple break it down into two categories,
· Things that you need such as food, shelter, clothes etc and
· Things that you want.
There are certain expenses that you may not be able to do a lot about while there are some that you can. For example review your cable TV subscription. Do you use all of the features and applications that you are currently paying for? If not then change to a lower subscription. Say your current subscription is $100.00, if you change to a $40.00 one this saving of $60.00 can be used to pay down your credit card debt.
Review all your current subscriptions and spending habits and by adjusting as necessary you will find that the savings will pile up without really affecting your current life style. Now that is not so hard is it?
Finally when you are working your budget do it in a time frame that you are comfortable with and can easily manage. Create a weekly and monthly budget allowing for the spikes for items that are billed annually. A method that I have used is taking the yearly items and dividing it by twelve which gives me the monthly amount that I need to budget for. This amount stays in the bank till it is required, earning interest which creates extra income that you currently do not have. That is the power of a well constructed budget.
Author Brian Norton, teaches budgeting and financial control to individuals and small business owners so that they can succeed financially,Brian runs and operates several very successful businesses and is a sort after speaker and trainer, sign up for budgeting tips at http://benjimite.com
Article Source: http://EzineArticles.com/?expert=Brian_D_Norton
http://benjimite.com/
www.computerpuppy.com
Follow These Ten Tips on Budgeting and Be in Command of Your Finances
The most effective way to fix your financial problems is to be aware of exactly where you stand with money. These ten tips on budgeting will show you how to take command.
Tips On Budgeting 1 - Why You Need A Budget
The main reason to construct and monitor a budget is to put you in control. This will also help to reduce all the stresses you have about your money and where it goes. A further benefit is that it will help you control and reduce your debts if you have them, plan for the future and save money.
Tips On Budgeting Two - How To Plan Your Budget
To start off your budget plan don't just concentrate on your current income and outgoings. You need to plan for your future and budget for savings plans or other interest generating activities that will look after you in the longer term.
Tips On Budgeting 3 - Getting Your Budget Started
Your budget must record monthly income and costs and set it up so that you can plan for the months ahead. Knowing exactly how much income you get every month is often a lot easier to record than all of your monthly outgoings. Before you create your budget lay your hands on your check account statements for the last year as well as your credit card records. You need to do this so that you don't omit sporadic expenditure (every three months or yearly).
Tips On Budgeting Four - Now Make Your Budget
Use the first column of your worksheet to record your income at the top and then below list all of your regular expenditure. As well as the most obvious payments such as mortgage, electric and gas bills, loan repayments and so on list all of the cash payments that you make regularly like commuting, coffee and lunches, eating out and mobile phone top ups.
Tips On Budgeting 5 - Positive Or Negative?
After you are sure you have recorded everything then you are ready to tally up everything and calculate if you have a positive cash result at the end or a negative one. Many of you will end up with a negative balance which shows you are spending more than you earn. If you find yourself in this situation don't worry. The truth will set you free.
Tips On Budgeting Six - Examine Your Expenditure
Carefully look at all areas of your expenditure. Do you think there are items you can eliminate or reduce your spending on? Without a doubt there will be. Dining out, buying newspapers, coffee everyday, extravagant purchases, too many cell phone calls, using cabs where you should have used the bus or subway, hopping in the car for short journeys when you should have walked or used cheaper means to get there, the hundreds of cable or satellite channels that you subscribe to and rarely watch - the list is endless. Set yourself a target to drive out all unnecessary spending - don't go for 30% go for 100%. Even if you don't meet this target you will be surprised at how much you will save over time.
Tips On Budgeting Seven - Keep It Up To Date
There is no point in creating a budget for one time use. You must update it regularly with items you have forgotten, unplanned expenditure, increases in income and so on. You can also use it to control future spending. Try this technique - work out what your weekly expenditure needs to be in terms of groceries, commuting and cash payments and then withdraw exactly that amount of cash at the start of the week and use it. You will likely find that you will eliminate even more unnecessary items as it will be really painful to part with the cash.
Tips On Budgeting Eight - Plan For The Longer Term
Another advantage of having a budget is planning for your future. You can schedule expenditure for savings, retirement plans, future vacations, next car purchase, next home purchase, putting your kids through college and even a second honeymoon. Whatever your dreams for the future are you can plan for them with a well thought out budget.
Tips On Budgeting 9 - Why Not Improve Your Income?
Don't only concentrate on reducing expenditure, but consider how to improve your income. There are a multitude of ways that you can achieve this - work overtime, another part time job, have a yard sale, sell all the items you no longer require or need on eBay or start a home business. By concentrating on increasing your income then you will become so busy that time will not be available to visit the mall and waste your money on things that are not really needed.
Tips On Budgeting 10 - Start Right Now
You will experience an enormous feeling of relief and pride after you have constructed your budget and finally have control over your finances. Don't be like the majority of people who are not in control and have no idea where their money is being spent. It doesn't matter if your budget is negative, you now have the power to change the situation. These tips on budgeting will help you if you take action - so use them now!
Crystal Graham is a financially savvy writer who has a passion for helping people save more of their money. You can learn additional tips on budgeting and a lot of other saving money advice at her blog=> http://www.savingcashnow.com
Article Source: http://EzineArticles.com/?expert=Crystal_Graham
Tips On Budgeting 1 - Why You Need A Budget
The main reason to construct and monitor a budget is to put you in control. This will also help to reduce all the stresses you have about your money and where it goes. A further benefit is that it will help you control and reduce your debts if you have them, plan for the future and save money.
Tips On Budgeting Two - How To Plan Your Budget
To start off your budget plan don't just concentrate on your current income and outgoings. You need to plan for your future and budget for savings plans or other interest generating activities that will look after you in the longer term.
Tips On Budgeting 3 - Getting Your Budget Started
Your budget must record monthly income and costs and set it up so that you can plan for the months ahead. Knowing exactly how much income you get every month is often a lot easier to record than all of your monthly outgoings. Before you create your budget lay your hands on your check account statements for the last year as well as your credit card records. You need to do this so that you don't omit sporadic expenditure (every three months or yearly).
Tips On Budgeting Four - Now Make Your Budget
Use the first column of your worksheet to record your income at the top and then below list all of your regular expenditure. As well as the most obvious payments such as mortgage, electric and gas bills, loan repayments and so on list all of the cash payments that you make regularly like commuting, coffee and lunches, eating out and mobile phone top ups.
Tips On Budgeting 5 - Positive Or Negative?
After you are sure you have recorded everything then you are ready to tally up everything and calculate if you have a positive cash result at the end or a negative one. Many of you will end up with a negative balance which shows you are spending more than you earn. If you find yourself in this situation don't worry. The truth will set you free.
Tips On Budgeting Six - Examine Your Expenditure
Carefully look at all areas of your expenditure. Do you think there are items you can eliminate or reduce your spending on? Without a doubt there will be. Dining out, buying newspapers, coffee everyday, extravagant purchases, too many cell phone calls, using cabs where you should have used the bus or subway, hopping in the car for short journeys when you should have walked or used cheaper means to get there, the hundreds of cable or satellite channels that you subscribe to and rarely watch - the list is endless. Set yourself a target to drive out all unnecessary spending - don't go for 30% go for 100%. Even if you don't meet this target you will be surprised at how much you will save over time.
Tips On Budgeting Seven - Keep It Up To Date
There is no point in creating a budget for one time use. You must update it regularly with items you have forgotten, unplanned expenditure, increases in income and so on. You can also use it to control future spending. Try this technique - work out what your weekly expenditure needs to be in terms of groceries, commuting and cash payments and then withdraw exactly that amount of cash at the start of the week and use it. You will likely find that you will eliminate even more unnecessary items as it will be really painful to part with the cash.
Tips On Budgeting Eight - Plan For The Longer Term
Another advantage of having a budget is planning for your future. You can schedule expenditure for savings, retirement plans, future vacations, next car purchase, next home purchase, putting your kids through college and even a second honeymoon. Whatever your dreams for the future are you can plan for them with a well thought out budget.
Tips On Budgeting 9 - Why Not Improve Your Income?
Don't only concentrate on reducing expenditure, but consider how to improve your income. There are a multitude of ways that you can achieve this - work overtime, another part time job, have a yard sale, sell all the items you no longer require or need on eBay or start a home business. By concentrating on increasing your income then you will become so busy that time will not be available to visit the mall and waste your money on things that are not really needed.
Tips On Budgeting 10 - Start Right Now
You will experience an enormous feeling of relief and pride after you have constructed your budget and finally have control over your finances. Don't be like the majority of people who are not in control and have no idea where their money is being spent. It doesn't matter if your budget is negative, you now have the power to change the situation. These tips on budgeting will help you if you take action - so use them now!
Crystal Graham is a financially savvy writer who has a passion for helping people save more of their money. You can learn additional tips on budgeting and a lot of other saving money advice at her blog=> http://www.savingcashnow.com
Article Source: http://EzineArticles.com/?expert=Crystal_Graham
The Confidence Factor - Where to Find the Strongest Control of Your Budget
If you are trying to figure out why you can't make ends meet, or even if you're just trying to get a grip on how you spend your money, there is one indicator you should pay special attention to. I call it the "Confidence Factor." The Confidence Factor is the percent of your household's take-home pay that is spent on the categories of food, housing, and transportation. The lower that number is - the better your chances of avoiding financial difficulty.
The United States Bureau of Labor Statistics (BLS) provides an annual report explaining how consumers spend their money. The information in the report is taken from data or interviews involving over 120 million households. The data for 2008 was released in October, 2009. The average for all the data collected showed 63.7% of take home money going into the three biggest areas of spending - food, housing, and transportation - what I call the three budget boulders.
Over the years, information from the BLS data has been used to manage welfare programs and to manage the criteria for making loans to consumers. This data gets a thorough analysis by different organizations as well as economics specialists trying to better understand why people get into financial difficulty. One thing they have found is a relationship between what I am calling the Confidence Factor and the occurrence of bankruptcies, late payments, and other signs of financial difficulty.
As you might guess, the more money you have obligated to the necessary spending for food, housing, and transportation, the less money you have for other things you need like clothing, healthcare, entertainment, insurance, college savings, retirement savings, and a host of other needs.
There is a magic number when you look at the data. That number is 65%. If your total expenditures for food, housing and transportation require less than 65% of your take home pay (That would be what's left of any income after taxes and mandatory fees for Medicare, employee parking, etc. have been taken out.) you fall into a category of people who seldom have financial difficulty. And since the average for 2008 was 63.7%, according to the BLS data, we would expect most households to be in fairly decent financial condition as far as paying the day-to-day bills.
You might not think about the 65% as being such a critical number until you consider what you still need to do with the remaining $35 out of every $100 you bring home. The BLS categorizes the remaining spending categories as apparel, healthcare, entertainment, personal insurance and pensions, and "other." You might recognize these categories as the areas where you have some choice about how you spend your money. Actually, you have choices about food, housing and transportation, too. But once you make those choices, they are difficult to change because that change would involve a major disruption in your lifestyle - relocating, downsizing to a smaller house, buying a cheaper car. Yet those few decisions you make about where you live will determine how much your house costs, how much you pay for utilities, maintenance, insurance, and taxes, how far you have to travel to get to work, schools, and shopping, and whether you must buy a car to get around.
Once you have accepted your lifestyle you must then find a way to pay all the day-to-day expenses with the money you bring home. Even if you spend only 65% on the three budget boulders of food, housing, and transportation, you are still left with only $0.35 out of every dollar you bring home to pay off your credit cards, save for retirement and college for the kids, and spend on vacations, clothing, healthcare, gifts, and entertainment.
The problem comes when you have obligated yourself to spend more than 65% of your take-home pay for food, housing, and transportation. When you do that, you cannot be so confident that you can cover all your other expenses with the money that is left. Data shows a significant increase in financial difficulty for households that spend more than 70% of their take-home pay on food, housing, and transportation. Having less than $0.30 out of every dollar you bring home to pay for everything else is not enough money to make ends meet.
The biggest change you can make in your spending comes from changing the areas where you spend the most money. So, how can you decrease what you spend on food, housing, and transportation?
To reduce food costs:
Avoid dining out. Prepare your own food.
Avoid pre-packed and pre-sliced foods. Buy food in bulk quantities, and whole vegetables and fruit.
Avoid single portion sizes and pre-assembled dishes. You're paying for that convenience.
Brown-bag it. Not only will this help you control costs, but you will have more control over how much you are eating, too.
Shop smart. Use coupons. Be aware of sales.
To reduce housing costs:
Before you think about moving to a smaller home, review your household insurance policy to see how much money you can save by increasing the deductible amount. Shop around to find the insurance companies that reward good credit scores with lower premiums, or that don't penalize you if you have a bad score.
Don't make improvements to your house if you can't afford them. This includes new furnishings.
Adjust the thermostat so your furnace and air conditioning don't work so hard. Having a warmer house in winter and a cooler house in summer costs money.
Reduce electricity usage. Don't leave lights or TV on when you don't need them.
Do your own house and yard maintenance if you can.
Refinance your mortgage; ask if you can get rid of PMI premiums if you have them.
To reduce transportation costs:
How many cars do you really need? If you sell one of your cars, you will not only get money for it, but you will also reduce your insurance and maintenance costs.
Are you making car payments for a car that is more for show than for transportation? Consider trading down.
When you shop for a car, talk with your insurance carrier to get a comparison of insurance costs for different models you are willing to consider.
Use your car(s) only when necessary. Combine trips to the store. Don't "tour" without a purpose.
Use regular gas unless your owner's manual tells you otherwise.
Review your insurance. Increasing your deductible amount will save you money.
Obey traffic laws. This will avoid the cost of citations, and will improve the chances of avoiding accidents. (Accidents cost money.)
Maintain your car and keep it as long as possible. You don't need a new car every 2 or 3 years.
Buy - don't lease.
So? How much of your take-home pay do you spend on food, housing, and transportation? How will you give yourself a better chance to make ends meet? Study your spending habits to determine how much you spend on the three major budget boulders and make plans for getting it down to less than $65 for every $100 you bring home. Doing this will build your confidence.
James W. Stone, has been involved in new product development and marketing for most of his working career. Jim has a degree in Mechanical Engineering, and an MBA. His current interests focus on the psychology and sociology that influence our daily decisions when we spend money.
Much of this is covered in his book "Spend Joyfully!" http://www.spendjoyfully.com
Read more of Jim's articles at http://www.jameswstone.com
Article Source: http://EzineArticles.com/?expert=James_W._Stone
www.computerpuppy.com
The United States Bureau of Labor Statistics (BLS) provides an annual report explaining how consumers spend their money. The information in the report is taken from data or interviews involving over 120 million households. The data for 2008 was released in October, 2009. The average for all the data collected showed 63.7% of take home money going into the three biggest areas of spending - food, housing, and transportation - what I call the three budget boulders.
Over the years, information from the BLS data has been used to manage welfare programs and to manage the criteria for making loans to consumers. This data gets a thorough analysis by different organizations as well as economics specialists trying to better understand why people get into financial difficulty. One thing they have found is a relationship between what I am calling the Confidence Factor and the occurrence of bankruptcies, late payments, and other signs of financial difficulty.
As you might guess, the more money you have obligated to the necessary spending for food, housing, and transportation, the less money you have for other things you need like clothing, healthcare, entertainment, insurance, college savings, retirement savings, and a host of other needs.
There is a magic number when you look at the data. That number is 65%. If your total expenditures for food, housing and transportation require less than 65% of your take home pay (That would be what's left of any income after taxes and mandatory fees for Medicare, employee parking, etc. have been taken out.) you fall into a category of people who seldom have financial difficulty. And since the average for 2008 was 63.7%, according to the BLS data, we would expect most households to be in fairly decent financial condition as far as paying the day-to-day bills.
You might not think about the 65% as being such a critical number until you consider what you still need to do with the remaining $35 out of every $100 you bring home. The BLS categorizes the remaining spending categories as apparel, healthcare, entertainment, personal insurance and pensions, and "other." You might recognize these categories as the areas where you have some choice about how you spend your money. Actually, you have choices about food, housing and transportation, too. But once you make those choices, they are difficult to change because that change would involve a major disruption in your lifestyle - relocating, downsizing to a smaller house, buying a cheaper car. Yet those few decisions you make about where you live will determine how much your house costs, how much you pay for utilities, maintenance, insurance, and taxes, how far you have to travel to get to work, schools, and shopping, and whether you must buy a car to get around.
Once you have accepted your lifestyle you must then find a way to pay all the day-to-day expenses with the money you bring home. Even if you spend only 65% on the three budget boulders of food, housing, and transportation, you are still left with only $0.35 out of every dollar you bring home to pay off your credit cards, save for retirement and college for the kids, and spend on vacations, clothing, healthcare, gifts, and entertainment.
The problem comes when you have obligated yourself to spend more than 65% of your take-home pay for food, housing, and transportation. When you do that, you cannot be so confident that you can cover all your other expenses with the money that is left. Data shows a significant increase in financial difficulty for households that spend more than 70% of their take-home pay on food, housing, and transportation. Having less than $0.30 out of every dollar you bring home to pay for everything else is not enough money to make ends meet.
The biggest change you can make in your spending comes from changing the areas where you spend the most money. So, how can you decrease what you spend on food, housing, and transportation?
To reduce food costs:
Avoid dining out. Prepare your own food.
Avoid pre-packed and pre-sliced foods. Buy food in bulk quantities, and whole vegetables and fruit.
Avoid single portion sizes and pre-assembled dishes. You're paying for that convenience.
Brown-bag it. Not only will this help you control costs, but you will have more control over how much you are eating, too.
Shop smart. Use coupons. Be aware of sales.
To reduce housing costs:
Before you think about moving to a smaller home, review your household insurance policy to see how much money you can save by increasing the deductible amount. Shop around to find the insurance companies that reward good credit scores with lower premiums, or that don't penalize you if you have a bad score.
Don't make improvements to your house if you can't afford them. This includes new furnishings.
Adjust the thermostat so your furnace and air conditioning don't work so hard. Having a warmer house in winter and a cooler house in summer costs money.
Reduce electricity usage. Don't leave lights or TV on when you don't need them.
Do your own house and yard maintenance if you can.
Refinance your mortgage; ask if you can get rid of PMI premiums if you have them.
To reduce transportation costs:
How many cars do you really need? If you sell one of your cars, you will not only get money for it, but you will also reduce your insurance and maintenance costs.
Are you making car payments for a car that is more for show than for transportation? Consider trading down.
When you shop for a car, talk with your insurance carrier to get a comparison of insurance costs for different models you are willing to consider.
Use your car(s) only when necessary. Combine trips to the store. Don't "tour" without a purpose.
Use regular gas unless your owner's manual tells you otherwise.
Review your insurance. Increasing your deductible amount will save you money.
Obey traffic laws. This will avoid the cost of citations, and will improve the chances of avoiding accidents. (Accidents cost money.)
Maintain your car and keep it as long as possible. You don't need a new car every 2 or 3 years.
Buy - don't lease.
So? How much of your take-home pay do you spend on food, housing, and transportation? How will you give yourself a better chance to make ends meet? Study your spending habits to determine how much you spend on the three major budget boulders and make plans for getting it down to less than $65 for every $100 you bring home. Doing this will build your confidence.
James W. Stone, has been involved in new product development and marketing for most of his working career. Jim has a degree in Mechanical Engineering, and an MBA. His current interests focus on the psychology and sociology that influence our daily decisions when we spend money.
Much of this is covered in his book "Spend Joyfully!" http://www.spendjoyfully.com
Read more of Jim's articles at http://www.jameswstone.com
Article Source: http://EzineArticles.com/?expert=James_W._Stone
www.computerpuppy.com
10 Tips to Make Sure Your Financial Budget Will Succeed
You've analyzed your past expenses, put them into spreadsheets, loaded Quicken with all of your data and come up with a budget. Now what? The tough part! You actually have to stick to your budget and put your plans into action. This is easier said than done. In many cases you will have forgotten about your budget and your financial goals 6 months or a year down the road. How do you keep this from happening to you?
Here's how. Make sure you follow some of these tips below so this doesn't happen to you.
1. Create a budget with realistic targets - Let's say one of your budget goals is to not eat out for lunch or dinner on a regular basis. If you are honest with yourself you may find this to be an unrealistic goal. Sometimes it's a nice break to eat out and have a relaxing rewarding evening. In other words, don't set the bar too high. Drastic and unrealistic goals are one of the surefire ways your budget will not succeed.
2. Budget for expenses that don't occur on a routine basis - Make sure you give consideration to expenses that occur once a year, such as holiday presents, birthdays, vacations, weddings, car maintenance costs, etc. These expenses don't occur every month and they will bust your budget plans wide open. Make a list of these events on a calendar and put a dollar figure to them. Place them in the month they are expected to occur so you can plan in advance how you will pay for them. The regular routine expenses are not the reason your budget will fail. It is these "gotchas" that will wreck havoc on your budget if you don't plan for them.
3. Put your budget in writing - Take the time to write down your budget plans. Making a mental note of your budget goals is a recipe for failure. Don't assume that your financial future will take care of itself by making a simple mental note to yourself. If you have your budget goals detailed in writing you can review and remind yourself weekly and monthly of your financial goals.
4. If you have a bad month or week, don't give up! - Let's say you have been reaching your budget goals for three months. In the fourth month, for whatever reason, you didn't reach your budget goals. Maybe you even stopped trying to stick to your budget! If this happens, don't just throw your hands up in the air and admit to failure. Everyone falls off the wagon sometimes. Your budget is a journey. There will be bumps in the road, so the key is to realize that everyone makes mistakes. This relates to a story I like about a great old time golfer named Walter Hagen. Before each round of golf, he told himself that he would have 4 or 5 bad shots. During the golf round, if he hit his ball into a bunker, he would tell himself, "There is one of my bad shots that I was expecting", hit the ball out of the bunker and move on. It didn't phase him one bit because he had knew there would be some bad shots in his round.
5. Adjust your budget over time - This one is a biggie! It can take months or even years to fine tune a personal budget. When you initially made your budget plans, you probably had to guess at some of your figures. They might not have been in touch with the realities of every day life. For example, you may have underestimated your monthly grocery or utility bills. If this happens, analyze all of the underlying money that was spend in this category to see if your initial estimate was unrealistic. If it was, try to come up with a more accurate number and then to stick to that new figure. It is this type of adjustment that is one of the keys to making sure you can stick to your budget.
6. Review your budget every month - This is where you will make any adjustments that are needed. Set aside the first day of each new month to review your income and expenditures and match them to your budget goals. By actively reviewing your finances and comparing it to your budget, you can adjust your spending habits. This gives you a chance to analyze areas that exceeded your budget expectations and make the adjustments in your spending habits or your budget. The goal here is to not forget about your budget. One tip that has worked for me is to put a printout of my basic budget goals on the refrigerator. That way every day, several times a day, I would notice my budget goals sheet. I may not read it every time, but I notice it and it reminds me that I need to stick to my budget. That is why tip number 3 is so important.
7. Set specific short-term goals - Let's say one of your budget goals is to have all of your credit card bills paid off in two years. If your credit card balances total $20,000 that would be $10,000 a year. Divide that number further into quarterly reductions in your credit card bills, in this case $2,500 every 3 months. Now, this is a more tangible budget goal to shoot for isn't it? I find that when I divide intermediate and long term goals into short-term tangible stepping stones, I am able to feel a greater sense of accomplishment and am more likely to succeed. This brings us to number seven...
8. Reward yourself - That's right! Treat yourself when you reach your some of your short-term goals. Since your financial budget is really a journey, take some time to smell the roses on your way. Sticking to your budget should not be a restrictive, unpleasant experience. Not only should you take the time to enjoy your financial accomplishments along the way, but use part of your budget for fun things that you enjoy. Just make sure your rewards don't end up breaking your budget!
9. Pay yourself first - I'm sure that one of your budget goals is to save and invest a portion of your income. One of the keys to make sure you succeed at this is to do what the IRS does with your paycheck, take it out of your discretionary income immediately. This way, the money is saved away right off the bat. Move the money immediately into a savings or mutual fund account. Many mutual fund companies can setup automatic deductions from your paycheck. Despite your best intentions to save, the hectic, daily demands of life can reduce the amount you are able to save.
10. Attitude is everything - When most people think of a budget, they picture restrictions and pain. Almost like a diet. You know what happens with most diets? They don't seem work for long! First, if your budget is too strict, too restrictive on your spending, it won't work either. However, you will need to limit your spending in some areas and this will take some adjustment in your attitude. I found that when I am feeling limited and sorry for myself when I can't purchase something that I want, I remember my financial goals I set with my budget. I think about the satisfaction I feel when I reach those goals. Over time, you find that you don't want to disappoint yourself by breaking your spending goals on a spur of the moment purchase. Now, I actually get more pleasure knowing that I am reaching my budget goals when the thought of an impulse purchase crosses my mind.
If you follow these tips, your budget plans are more likely to be a great success. By taking some simple steps you will find that living within a budget is not as tough as you imagined. It can actually be fun and rewarding!
Greg Quincy is the publisher of the website http://www.financialtipsforyou.com, offering his insights and tips that he has gained from working in the financial industry and the economic challenges of raising a family.
http://www.financialtipsforyou.com/
Article Source: http://EzineArticles.com/?expert=Greg_Quincy
www.computerpuppy.com
Here's how. Make sure you follow some of these tips below so this doesn't happen to you.
1. Create a budget with realistic targets - Let's say one of your budget goals is to not eat out for lunch or dinner on a regular basis. If you are honest with yourself you may find this to be an unrealistic goal. Sometimes it's a nice break to eat out and have a relaxing rewarding evening. In other words, don't set the bar too high. Drastic and unrealistic goals are one of the surefire ways your budget will not succeed.
2. Budget for expenses that don't occur on a routine basis - Make sure you give consideration to expenses that occur once a year, such as holiday presents, birthdays, vacations, weddings, car maintenance costs, etc. These expenses don't occur every month and they will bust your budget plans wide open. Make a list of these events on a calendar and put a dollar figure to them. Place them in the month they are expected to occur so you can plan in advance how you will pay for them. The regular routine expenses are not the reason your budget will fail. It is these "gotchas" that will wreck havoc on your budget if you don't plan for them.
3. Put your budget in writing - Take the time to write down your budget plans. Making a mental note of your budget goals is a recipe for failure. Don't assume that your financial future will take care of itself by making a simple mental note to yourself. If you have your budget goals detailed in writing you can review and remind yourself weekly and monthly of your financial goals.
4. If you have a bad month or week, don't give up! - Let's say you have been reaching your budget goals for three months. In the fourth month, for whatever reason, you didn't reach your budget goals. Maybe you even stopped trying to stick to your budget! If this happens, don't just throw your hands up in the air and admit to failure. Everyone falls off the wagon sometimes. Your budget is a journey. There will be bumps in the road, so the key is to realize that everyone makes mistakes. This relates to a story I like about a great old time golfer named Walter Hagen. Before each round of golf, he told himself that he would have 4 or 5 bad shots. During the golf round, if he hit his ball into a bunker, he would tell himself, "There is one of my bad shots that I was expecting", hit the ball out of the bunker and move on. It didn't phase him one bit because he had knew there would be some bad shots in his round.
5. Adjust your budget over time - This one is a biggie! It can take months or even years to fine tune a personal budget. When you initially made your budget plans, you probably had to guess at some of your figures. They might not have been in touch with the realities of every day life. For example, you may have underestimated your monthly grocery or utility bills. If this happens, analyze all of the underlying money that was spend in this category to see if your initial estimate was unrealistic. If it was, try to come up with a more accurate number and then to stick to that new figure. It is this type of adjustment that is one of the keys to making sure you can stick to your budget.
6. Review your budget every month - This is where you will make any adjustments that are needed. Set aside the first day of each new month to review your income and expenditures and match them to your budget goals. By actively reviewing your finances and comparing it to your budget, you can adjust your spending habits. This gives you a chance to analyze areas that exceeded your budget expectations and make the adjustments in your spending habits or your budget. The goal here is to not forget about your budget. One tip that has worked for me is to put a printout of my basic budget goals on the refrigerator. That way every day, several times a day, I would notice my budget goals sheet. I may not read it every time, but I notice it and it reminds me that I need to stick to my budget. That is why tip number 3 is so important.
7. Set specific short-term goals - Let's say one of your budget goals is to have all of your credit card bills paid off in two years. If your credit card balances total $20,000 that would be $10,000 a year. Divide that number further into quarterly reductions in your credit card bills, in this case $2,500 every 3 months. Now, this is a more tangible budget goal to shoot for isn't it? I find that when I divide intermediate and long term goals into short-term tangible stepping stones, I am able to feel a greater sense of accomplishment and am more likely to succeed. This brings us to number seven...
8. Reward yourself - That's right! Treat yourself when you reach your some of your short-term goals. Since your financial budget is really a journey, take some time to smell the roses on your way. Sticking to your budget should not be a restrictive, unpleasant experience. Not only should you take the time to enjoy your financial accomplishments along the way, but use part of your budget for fun things that you enjoy. Just make sure your rewards don't end up breaking your budget!
9. Pay yourself first - I'm sure that one of your budget goals is to save and invest a portion of your income. One of the keys to make sure you succeed at this is to do what the IRS does with your paycheck, take it out of your discretionary income immediately. This way, the money is saved away right off the bat. Move the money immediately into a savings or mutual fund account. Many mutual fund companies can setup automatic deductions from your paycheck. Despite your best intentions to save, the hectic, daily demands of life can reduce the amount you are able to save.
10. Attitude is everything - When most people think of a budget, they picture restrictions and pain. Almost like a diet. You know what happens with most diets? They don't seem work for long! First, if your budget is too strict, too restrictive on your spending, it won't work either. However, you will need to limit your spending in some areas and this will take some adjustment in your attitude. I found that when I am feeling limited and sorry for myself when I can't purchase something that I want, I remember my financial goals I set with my budget. I think about the satisfaction I feel when I reach those goals. Over time, you find that you don't want to disappoint yourself by breaking your spending goals on a spur of the moment purchase. Now, I actually get more pleasure knowing that I am reaching my budget goals when the thought of an impulse purchase crosses my mind.
If you follow these tips, your budget plans are more likely to be a great success. By taking some simple steps you will find that living within a budget is not as tough as you imagined. It can actually be fun and rewarding!
Greg Quincy is the publisher of the website http://www.financialtipsforyou.com, offering his insights and tips that he has gained from working in the financial industry and the economic challenges of raising a family.
http://www.financialtipsforyou.com/
Article Source: http://EzineArticles.com/?expert=Greg_Quincy
www.computerpuppy.com
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