This is tip #10 of at least 10 in the series. I will try to publish most of them as e-zine articles, but if any are missing, they will all be available on my blog.
In Tip #9, we discussed the need for creating a budget. Now, in Tip #10, I am going to discuss a budget in more detail. Thanks, and enjoy Tip #10…
Tip #10 – I am going to cover the best budget I have ever seen, heard of, or used, and to give credit where credit is due, much of this comes from T. Harv Eker and his 3-day ‘Millionaire Mind Intensive’ (which, with tickets from his book “Secrets of the Millionaire Mind”, is FREE!!! FYI, I personally found ‘MMI’ to be awesome.
First, you have heard 1,000 times, you need to keep track of any and all expenses for at least 1-2 months, and the longer the better. If you don’t know where your money is going now, how can you budget it? Managing your money requires that you know where your money is going.
Now, for the budget itself… T. Harv Eker suggests a system of jars, with a percentage of your income designated for each jar. This can be tweaked to meet your needs, but here are some suggested guidelines:
Necessity Jar – 50%
Education Jar – 10%
Long Term Savings Jar – 10%
Give Jar – 10%
FFA (Financial Freedom Account) Jar – 10%
Play Jar – 10%
Now, on to the main objection most of you will have immediately… “I can’t live on 50% of my income”. Noted. So here is what you do. First, you determine what amount of money you can spare for the jars, and you use that money to do your jars. If you can only spare $10/month to do your jars, spend $5 of it on necessities, and $1 on each of the other five jars. What matters here is not the amount, but creating the habit of managing your money properly. “It’s not the amount; it’s the habit!”
Also, how serious are you about creating all of the wealth you want in your life? If you are real serious, then go a little further. First, put 10% into your FFA jar. Next, consistently throw all of your spare change into your FFA Jar every day. Also, when you come into a windfall of any kind, put that in your FFA Jar. What you will find is, when you start to effectively manage your money, and you focus on it, all kinds of wonderful things will start to happen. You will get a bonus that you don’t need for necessities, and you can put it in your FFA Jar. You will get a raise, and you won’t need the extra money for necessities, so you can increase what you are putting in your FFA Jar. You will find unnecessary expenses you can eliminate, or ways to make some extra money you weren’t making before, and you will be able to add that to your FFA Jar. No matter how small it starts, if you manage your money effectively, over time what you are able to put away for your Financial Freedom Account will grow and increase in ways and amounts that you can not currently fathom! It will turn into a giant snowball, that continues to gather size and speed as it rolls down the hill!
Now, on to some details about the jars, what they are for, and the purpose they serve.
The Necessity Jar (50%) is fairly obvious. This is living expenses that you must pay on a regular basis. Rent or mortgage, utilities, insurance, phone, food, car payment, gas, etc.
The Education Jar (10%) is money spent to make you better, like taking courses and seminars in your field. Stay on top of your game. The learners inherit the earth, while the learned are wonderfully prepared for a world that no longer exists (or something like that).
The Long Term Savings Jar (10%) is saving for occasional large expenses. This might be a down payment on a house, a child’s college tuition, or, depending on your preferences, maybe even for Christmas (if you have a hard time covering Christmas out of your Necessities Jar).
The Give Jar (10%) is for charitable giving, and it serves at least three purposes. First, giving is Biblical. God instructs that we give the first 10% of our income. Further, we are told that if we give, it will come back to us magnified many times. Second, helping out others when you don’t “have to” feels great. You are making a contribution to society. Third, without even realizing it, many people sabotage themselves when it comes to building wealth because they don’t feel worthy. Let me use a personal example here. I grew up poor, and I learned that rich people were greedy and selfish. Well, that mentality wasn’t exactly conducive to creating great wealth. When I started trying to improve my finances, family and friends would give me the standard guilt trips, both Biblical and otherwise, and, unsure how to respond, I would feel guilty and dejected. When I started consistently tithing, and the guilt trips came my way, I was happy to respond. “Well, I am doing win-win-win business, without ever taking advantage of any one. I am providing jobs and income for my help and/or contractors. ‘I get rich doing what I love. I deserve to be rich because I add value to other peoples lives.’ Also, I am tithing my church, and giving to some other causes as well, which I was never able to do when I was poor. Can you point out to me the flaws in what I am doing?” Wow, did that change things!!! No more guilt. No more feeling dejected. No more wondering why I was working so hard to get ahead in life. Now I felt great, and it reflected in my business and other areas of my life! FYI, when I started giving, jumping up to 10% all at once hurt too much, so here is what I did… I started giving a smaller amount, and I pledged that every time I had a windfall or a blessing to count, I would increase my giving. I quickly got up over 10%, and it was not painful at all. I only share that because it may be a good option for others who find 10% giving immediately to be unpalatable.
The FFA Jar (10%) is your Financial Freedom Account. This is your “save and invest the difference” money. This is where your money starts to work for you, instead of you working for your money. Your FFA money can never, ever, be spent! Ever! It is the proverbial goose that lays the golden eggs, and you must never kill the goose!
The Play Jar (10%) is money that is for just that – play. Many people, especially those of us who grew up poor, are not very good at receiving (goes back to the feelings of guilt already mentioned). The Play Jar serves to strengthen our receiving muscles. This is not for average, every day stuff… The Play Jar is for the kinds of fantastic things that we can not normally afford, but now we can because we have money set aside just for that purpose. This is the kind of stuff we would love to do ‘when we have more money’. This is not just dinner out, but a fancy dinner with dessert, candlelight and ‘the best wine on the list’! This is not just a visit to the spa, but getting the massage with the hot rocks and the cucumbers! The play jar is where you get to experience a slice of the good life, and, used properly, it will serve to motivate you because you want more!
Now, I just shared with you the best budget I have ever seen or used, and it works (if you work)!!!
Please pass this on to anyone you know who may benefit from it… Together, let’s get inspired, let’s get motivated, let’s create some buzzzz, and let’s help some people (family, friends, and ourselves) create all of the wealth and success they want in life!!!
Showing posts with label budget your way to wealth. Show all posts
Showing posts with label budget your way to wealth. Show all posts
Monday, November 10, 2008
Wednesday, November 5, 2008
How to Create All of the Wealth and Success You Want In Your Life – Tip #9
This is tip #9 of at least 10 in the series. I will try to publish most of them as e-zine articles, but if any are missing, they will all be available on my blog…
In the first seven tips, we focused largely on things applicable to success in general; in Tip #8 I said we would take the next two or three tips to get specific and focus in on the other part of our series title – wealth! So, without further ado, Tip #9…
Tip #9 – Create a budget. “A budget is people telling their money where to go instead of wondering where it went.” -John Maxwell
Almost everyone has heard that failing to plan is akin to planning to fail… Well, so it is with your money and finances. If you don’t have a budget, and/or a method of consistently keeping track of your net worth, then, by default, you are planning to fail. Instead of you controlling your money (and wealth), your money is controlling you.
Most people have heard that one of the secrets to wealth is to pay yourself first… However, most people don’t do it. I said in a previous article, getting rich is simple, but it isn’t easy. T. Harv Eker says something akin to, “If you pay yourself first, you will never miss it. If you pay yourself last, you will never do it”, and he is, to my experience, 100% right.
You work all year to pay Uncle Sam, the grocery store, restaurants, the utility company, gas stations, Wal-Mart… But ask yourself, what part of the year do you work to pay yourself? If you are like most people, the answer is little to none. Does it make sense to work hard to pay everyone else, and not pay yourself?
Here is a little reality check. It is not, “When I have more money, I will start to manage it.” It is, “When I manage my money, I will have more… money to manage.”
I am not sure, but this sounds like Robert Kiyosaki… “With every dollar we get in our hands, we hold the power to choose our future to be rich, poor, or middle class… Poor people simply have poor spending habits.” “It is the lack of self-discipline that is the #1 delineating factor between the rich, the poor, and the middle class.”
On the lighter side, Stuart Wilde said, “The trick to money is having some!”
Ralph Waldo Emerson said, “Shallow men believe in luck. Strong men believe in cause and effect.” So it is with wealth and budgeting. If you pay yourself last, and wait for luck to make you wealthy, it is likely to be a very long wait. However, if you believe in cause and effect; if you manage your money (spelled B-U-D-G-E-T), and follow my three rules from Tip #8, you will quickly find yourself amassing a pretty good nest egg of wealth.
If you enjoy my tips, please pass this on to anyone you know who may benefit from it... Together, let’s get inspired, let’s get motivated, let’s create some buzzzz, and let’s help some people (family, friends, and ourselves) create all of the wealth and success they want in life!!!
In the first seven tips, we focused largely on things applicable to success in general; in Tip #8 I said we would take the next two or three tips to get specific and focus in on the other part of our series title – wealth! So, without further ado, Tip #9…
Tip #9 – Create a budget. “A budget is people telling their money where to go instead of wondering where it went.” -John Maxwell
Almost everyone has heard that failing to plan is akin to planning to fail… Well, so it is with your money and finances. If you don’t have a budget, and/or a method of consistently keeping track of your net worth, then, by default, you are planning to fail. Instead of you controlling your money (and wealth), your money is controlling you.
Most people have heard that one of the secrets to wealth is to pay yourself first… However, most people don’t do it. I said in a previous article, getting rich is simple, but it isn’t easy. T. Harv Eker says something akin to, “If you pay yourself first, you will never miss it. If you pay yourself last, you will never do it”, and he is, to my experience, 100% right.
You work all year to pay Uncle Sam, the grocery store, restaurants, the utility company, gas stations, Wal-Mart… But ask yourself, what part of the year do you work to pay yourself? If you are like most people, the answer is little to none. Does it make sense to work hard to pay everyone else, and not pay yourself?
Here is a little reality check. It is not, “When I have more money, I will start to manage it.” It is, “When I manage my money, I will have more… money to manage.”
I am not sure, but this sounds like Robert Kiyosaki… “With every dollar we get in our hands, we hold the power to choose our future to be rich, poor, or middle class… Poor people simply have poor spending habits.” “It is the lack of self-discipline that is the #1 delineating factor between the rich, the poor, and the middle class.”
On the lighter side, Stuart Wilde said, “The trick to money is having some!”
Ralph Waldo Emerson said, “Shallow men believe in luck. Strong men believe in cause and effect.” So it is with wealth and budgeting. If you pay yourself last, and wait for luck to make you wealthy, it is likely to be a very long wait. However, if you believe in cause and effect; if you manage your money (spelled B-U-D-G-E-T), and follow my three rules from Tip #8, you will quickly find yourself amassing a pretty good nest egg of wealth.
If you enjoy my tips, please pass this on to anyone you know who may benefit from it... Together, let’s get inspired, let’s get motivated, let’s create some buzzzz, and let’s help some people (family, friends, and ourselves) create all of the wealth and success they want in life!!!
Friday, October 10, 2008
How to Create All of the Wealth and Success You Want In Your Life – Tip #1
Over the next few weeks, I am going to share at least ten tips on things you can do right now, even in a bad economy, to start creating all of the wealth and success you want in your life. I will try to publish most of them as e-zine articles, but if any are missing, they will all be available on my blog at http://thelundletters.blogspot.com/
Also on my blog are some motivational quotes that have become quite popular, and I will try to add some more of them in the coming weeks, so earmark my blog as one of your favorites, make a habit of going there, and let’s see if we can create some magic in your life!
If you like what you see, refer friends and family. Check out my blog, and feel free to e-mail me comments as well, at reinvestorsfl@aol.com
Thanks, and enjoy Tip #1…
Tip #1 – Especially at a time like this, when our American economy, and to some degree world economies, are in turmoil, you must take 100% responsibility for your life, your wealth, and your success. You can not sit back and idly wait for success to come to you – you need to figure out what you want, take the bull by the horns, and go out and make your life what you want it to be.
Abraham Lincoln said, “Things may come to those who wait, but only the things left behind by those who hustle.” Are you living your life based on what is left behind, or are you out there hustling and going after the gold?
I have been using the quote, “You can have your excuses, or you can have your dreams, but you can’t have both,” for some time now, and I honestly don’t know where I got it from. I might have created it myself, or I might have got it from someone, somewhere along the line, but if so I don’t know who. Anyhow, do you go after and get what you want in life? Or do you make excuses? The easy way out is to blame the economy, blame the real estate market, blame the politicians, blame the competition, point out how bad things are, and say that just getting by is doing better than most today. Blame is a game that nobody wins. As long as it is someone or something else’s fault, you can not improve. That is the easy way out, but is it what you want for your life? “You can have your excuses, or you can have your dreams, but you can’t have both.”
“What you ardently desire, sincerely believe in, vividly imagine, and enthusiastically act on must inevitably come to pass.” -Paul J. Myer
What Paul Myer is saying in that quote is something that great and successful people have known for hundreds of years, but somehow the other 99% of us rarely get looped in. Our circumstances don’t make us – we make our circumstances. If we want something, anything, badly enough, we really can go out and make it happen in our lives. Jim Rohn has a neat saying – “you aren’t a tree”. You aren’t stuck in one place. If you aren’t happy where you are at, move. If your life isn’t what you want it to be, stop blaming, stop making excuses, figure out what you want your life to be, and start making it so! We have all heard the old adage, if you continue doing what you have always done, you will continue to get what you have always got. If you aren’t happy with your current results, own up to them, take 100% responsibility, and start figuring out and doing what is required to get where you want to go. I have had a number of young real estate investors over the years ask me for advice, and I told most something like this… start where you are right now, with what you have right now, and figure out what you need to do to get where you want to go, and then “just do it”. Nido Qubein said, “Your present circumstances don’t determine where you go; they merely determine where you start.” Isn’t that great?!!!
I am not sure if many of you have studied Abraham Lincoln much, but he had a ton of great sayings, including, “Always bear in mind that your own resolution to succeed is more important than any other one thing.” Ella Wheeler Wilcox said, “There is no chance, no destiny, no fate that can circumvent or hinder or control the firm resolve of a determined soul.” Now, personally, I think things may hinder us some, but if we are bound and determined, and we take 100% responsibility, I don’t think there is much that can keep us from accomplishing just about anything we make up our minds to accomplish.
Now, what you can expect going forward… I used a lot of quotes in this tip, and I will try no to be quite so loose with them in other tips, but I will still use some. I will continue to give you great information, and it will continue to be up to you what, if anything, you get out of it. If you read my tips, say that was nice, and go about your day, nothing much will happen. However, if you find some advice that is pertinent to you in your life, and you capture it, and you act on, maybe, just maybe, something I share with you now or in the next few weeks could change the rest of your life for the better!!! Now, that would be what I would hope and pray for! Also, please pass this on to anyone you know who may benefit from it… Together, let’s get inspired, let’s get motivated, let’s create some buzzzz, and let’s help some people (family, friends, and ourselves) create all of the wealth and success they want in life!!!
Also on my blog are some motivational quotes that have become quite popular, and I will try to add some more of them in the coming weeks, so earmark my blog as one of your favorites, make a habit of going there, and let’s see if we can create some magic in your life!
If you like what you see, refer friends and family. Check out my blog, and feel free to e-mail me comments as well, at reinvestorsfl@aol.com
Thanks, and enjoy Tip #1…
Tip #1 – Especially at a time like this, when our American economy, and to some degree world economies, are in turmoil, you must take 100% responsibility for your life, your wealth, and your success. You can not sit back and idly wait for success to come to you – you need to figure out what you want, take the bull by the horns, and go out and make your life what you want it to be.
Abraham Lincoln said, “Things may come to those who wait, but only the things left behind by those who hustle.” Are you living your life based on what is left behind, or are you out there hustling and going after the gold?
I have been using the quote, “You can have your excuses, or you can have your dreams, but you can’t have both,” for some time now, and I honestly don’t know where I got it from. I might have created it myself, or I might have got it from someone, somewhere along the line, but if so I don’t know who. Anyhow, do you go after and get what you want in life? Or do you make excuses? The easy way out is to blame the economy, blame the real estate market, blame the politicians, blame the competition, point out how bad things are, and say that just getting by is doing better than most today. Blame is a game that nobody wins. As long as it is someone or something else’s fault, you can not improve. That is the easy way out, but is it what you want for your life? “You can have your excuses, or you can have your dreams, but you can’t have both.”
“What you ardently desire, sincerely believe in, vividly imagine, and enthusiastically act on must inevitably come to pass.” -Paul J. Myer
What Paul Myer is saying in that quote is something that great and successful people have known for hundreds of years, but somehow the other 99% of us rarely get looped in. Our circumstances don’t make us – we make our circumstances. If we want something, anything, badly enough, we really can go out and make it happen in our lives. Jim Rohn has a neat saying – “you aren’t a tree”. You aren’t stuck in one place. If you aren’t happy where you are at, move. If your life isn’t what you want it to be, stop blaming, stop making excuses, figure out what you want your life to be, and start making it so! We have all heard the old adage, if you continue doing what you have always done, you will continue to get what you have always got. If you aren’t happy with your current results, own up to them, take 100% responsibility, and start figuring out and doing what is required to get where you want to go. I have had a number of young real estate investors over the years ask me for advice, and I told most something like this… start where you are right now, with what you have right now, and figure out what you need to do to get where you want to go, and then “just do it”. Nido Qubein said, “Your present circumstances don’t determine where you go; they merely determine where you start.” Isn’t that great?!!!
I am not sure if many of you have studied Abraham Lincoln much, but he had a ton of great sayings, including, “Always bear in mind that your own resolution to succeed is more important than any other one thing.” Ella Wheeler Wilcox said, “There is no chance, no destiny, no fate that can circumvent or hinder or control the firm resolve of a determined soul.” Now, personally, I think things may hinder us some, but if we are bound and determined, and we take 100% responsibility, I don’t think there is much that can keep us from accomplishing just about anything we make up our minds to accomplish.
Now, what you can expect going forward… I used a lot of quotes in this tip, and I will try no to be quite so loose with them in other tips, but I will still use some. I will continue to give you great information, and it will continue to be up to you what, if anything, you get out of it. If you read my tips, say that was nice, and go about your day, nothing much will happen. However, if you find some advice that is pertinent to you in your life, and you capture it, and you act on, maybe, just maybe, something I share with you now or in the next few weeks could change the rest of your life for the better!!! Now, that would be what I would hope and pray for! Also, please pass this on to anyone you know who may benefit from it… Together, let’s get inspired, let’s get motivated, let’s create some buzzzz, and let’s help some people (family, friends, and ourselves) create all of the wealth and success they want in life!!!
Saturday, September 6, 2008
Times Are Tough; Get Free Help Here!!!
We all know the saying, tough times don’t last, but tough people do. Well, I keep hearing (and occasionally saying) that times are tough, and I figured it was time to ‘cinch the belt in a little’. Due to a current confluence of events, I find myself looking for ways to save a little more and spend a little less (just like the good old days), so I am writing this article as much for me as I am for you!
First, in offering full disclosure, the confluence of events… My wife and I were blessed with our second son on May 10th, 2007; while definitely a blessing, he also adds to our cost of living. I quit my JOB in December 2007. Just prior to that, times were good, so I bought a big new house and a big new truck. Despite a large down payment, the house still carries a large monthly mortgage. The real estate market is doing worse than the economy overall, and the combined value of my real estate holdings has dropped quite a ways (meaning smaller paydays if/when I sell any of my existing properties in this real estate market). Last, but not least, I recently purchased two fixer upper single family houses, and we are trying to finish up one while we do the early stage repairs on the other… So the ‘cash cushion’ I kept on hand is getting tied up in the purchase and repairs of those two houses.
Second, with that out of the way, some pain free ways to save more and spend less… If you have not shopped around your automobile insurance in the past 1-2 years, now is a good time. I am not saying settle for a low quality insurer, or for less than adequate insurance, but I am saying keep your insurer honest by making sure you are getting your money’s worth. Many people are surprised by the fact that the same two insurance companies, offering the same insurance coverage, two years apart, may flip flop completely in their rates… I have experienced it personally. Also, if applicable, you may shop around other insurance, such as life, health, disability, etc. You may save money without any sacrifice! Are you on a cell phone plan that makes the most sense for your usage (I know someone personally who should be on an unlimited plan, who continually spends a fortune on overage minutes – WHY?)? If your electric bill is high, Lakeland Electric does FREE energy audits. Maybe you know about some things you aren’t willing to do right now, like upgrade to more energy efficient appliances, but maybe there are also some cheap, easy ways to reduce your electric bill significantly that you haven’t thought of. If you have a sprinkler system, is it off during heavy rain periods? Do you heat and cool your home sensibly (for instance, I heat to about 73 degrees in the winter, and cool to about 77 degrees in the summer; a 4-5 degree swing should not result in any real discomfort, and if a bigger spread doesn’t bother your family, even better)? How about giving yourself a financial check-up? Are all of your investments, evaluated individually, doing well, and do they make sense? Do you know what you are invested in, and how and why it should make you profits? Likewise, if you borrow, do your loans make sense? Could they be structured better, have better rates, etc.? Especially if you carry a balance on a high interest rate credit card, can you get it reduced somehow? I know I am constantly bombarded with zero interest rate for X amount of months credit cards that might help. As an example, when I have a loan I plan on paying off in full in the next year or two, I get a zero interest for eighteen months credit card, pay off the loan with it, and now my entire payment pays down principal instead of part going to interest. Are you one of those people that pays bills late for whatever reason, thereby incurring late fees, penalties, higher interest rates, etc.? Figure out what it takes to get and stay current, and the savings alone will help keep you there. If you tend to spend more when you use a credit card instead of cash (which most people do), chuck the credit cards. If, on the other hand, you have a high level of self discipline, then use no fee, high rewards credit cards, charge all of your normal expenditures, pay the bill in full every month, and rack up rewards (I do this and my business earns my wife and I nice meals out). In fact, since I am rehabbing two houses, I redeemed over $200 in Discover cash back bonus awards this past month. If applicable, improve your credit scores so any future borrowing will get cheaper and cheaper (better rates, lower fees). When it comes to tax time, are you getting all of the deductions you are entitled to? Many people intentionally don’t take income tax deductions they are entitled to because they think it might cause an audit; little side bar here – as long as you aren’t doing anything ‘wrong’, the audit will probably hurt less than the money you are throwing away (in the rare event you do get audited)! Here is one I have found saving me a lot of money recently… When I see something in a store I ‘have to have’, I wait and research it on-line later. Two benefits – first the urge to spend often goes away, thereby cutting out the expenditure altogether, and second, I find almost everything I research I can buy cheaper on-line than what I would have paid in the store (yes, even including shipping and handling). If you eat meals out a lot from the JOB, can you save money by packing a lunch more often? Something I find my family guilty of quite often – we throw away perfectly good leftovers while we eat out or prepare something more appetizing. Three solutions quickly come to mind – one, eat the leftovers; two, freeze the leftovers for later; three, prepare smaller meals. If you have the time and inclination (I don’t), plant a garden. Do you make sure to bargain shop, and take advantage of sales on things you know you will use anyhow? And, on the opposite side of the coin, avoid buying junk you don’t need at all just because it was on sale! Do you clip coupons, actively look for sale prices, etc.? While I think exercise is great, and I actively exercise myself, if you are one of those people who has an expensive gym membership, and only goes to the gym twice a year, get rid of it. Here is a fun, easy way to save a little dough – my wife takes my kids to the library almost weekly, and they not only get all the books they can read for free, they even get a bunch of kid’s movies on DVD! With the popularity of cell phones these days, I know many people that have done away with their land line because it was wasted money. Last and definitely not least, the old adage, Pay Yourself First! ‘If you pay yourself last, you will never do it. If you pay yourself first, you will never miss it.’ These are all things that, with just a little front end work, can help you save more and spend less without any sacrifice to your lifestyle. Next, on to the things that might hurt a little…
Third, ways to save more and spend less where the terminology ‘no pain, no gain’ applies… These you will feel a little more. Depending on how bad you want to reach your goals, how bad your financial situation is, your time constraints, etc., let’s start with the extreme – can you work more hours, get a second job, start a part-time business (even if temporarily to get over the hump)? Perhaps a stay at home spouse can pick up some work from home? In this economy many stay at home parents watch extra kids for friends or family, allowing one family to make extra money (babysitting) and allowing the other to save extra money (cheaper than daycare). Maybe private school or home schooling needs to be replaced by public school, even if only temporarily while times are tough? It isn’t for everyone, but I know one couple that happily rented out an extra room in their home for a long time. Consider a smaller, cheaper, more fuel efficient car, now or the next time you car shop (yes, as mentioned previously, I failed miserably in this category). While on the subject of vehicles, most of you are probably already combining many errands into fewer trips and avoiding unnecessary driving these days. Are you making the most of free entertainment at home? Have a brainstorm session with your family of all of the fun, free or cheap things you can think of to do at home, and then implement the favorites and save the cost of travel and entertainment out. Most Americans can save some money by eating out less, and personally I know when I cut back on soda and drink more water my body and my wallet both appreciate it. If you routinely drink coffee at Starbucks, or drink alcohol at bars/restaurants, besides the moral issues, let me kill you now for what you spend per drink! Ouch! And I won’t even get started on cigarettes/tobacco. Last, here is the thing everybody hates to do – create a budget! First and foremost, spend as you normally do, and track every penny for at least a couple of months… and find out where your money is really going. If you can make yourself do it, continue to keep track of expenses for a full year, so you are sure to include once or twice a year expenses like holidays, birthdays, insurance, taxes, etc. Nine times out of ten, there will be some expenses that are shockingly high, and you will know where to look to stop the bleeding.
This article is just to whet your appetite, but if you got some helpful hints out of it, and or you want more of the same, search the internet for some sights on saving money… I know I stumbled across some when I was looking for personal finance information not too long ago, and I saw some good tips, as well as some that I would never recommend… I will share a few since they may be good for a chuckle… Reduce showers to once a week (they said you would save on hot water, shampoo, soap; I suggest you would probably save on dating, too!). Train your cats to use the toilet (somebody claimed it can be done). Go around early on garbage day and gather what you need from what others throw away (they do say one man’s trash is another man’s treasure – LOL). Become a vegetarian - it is a cheaper lifestyle (I know meat can be expensive, but that seems extreme to a meat and potatoes guy like me!). Anyhow, enough of the extreme!!! Best wishes everyone, and hopefully I will see you… on the other side of the rainbow (you know, where the pot of gold is)!
First, in offering full disclosure, the confluence of events… My wife and I were blessed with our second son on May 10th, 2007; while definitely a blessing, he also adds to our cost of living. I quit my JOB in December 2007. Just prior to that, times were good, so I bought a big new house and a big new truck. Despite a large down payment, the house still carries a large monthly mortgage. The real estate market is doing worse than the economy overall, and the combined value of my real estate holdings has dropped quite a ways (meaning smaller paydays if/when I sell any of my existing properties in this real estate market). Last, but not least, I recently purchased two fixer upper single family houses, and we are trying to finish up one while we do the early stage repairs on the other… So the ‘cash cushion’ I kept on hand is getting tied up in the purchase and repairs of those two houses.
Second, with that out of the way, some pain free ways to save more and spend less… If you have not shopped around your automobile insurance in the past 1-2 years, now is a good time. I am not saying settle for a low quality insurer, or for less than adequate insurance, but I am saying keep your insurer honest by making sure you are getting your money’s worth. Many people are surprised by the fact that the same two insurance companies, offering the same insurance coverage, two years apart, may flip flop completely in their rates… I have experienced it personally. Also, if applicable, you may shop around other insurance, such as life, health, disability, etc. You may save money without any sacrifice! Are you on a cell phone plan that makes the most sense for your usage (I know someone personally who should be on an unlimited plan, who continually spends a fortune on overage minutes – WHY?)? If your electric bill is high, Lakeland Electric does FREE energy audits. Maybe you know about some things you aren’t willing to do right now, like upgrade to more energy efficient appliances, but maybe there are also some cheap, easy ways to reduce your electric bill significantly that you haven’t thought of. If you have a sprinkler system, is it off during heavy rain periods? Do you heat and cool your home sensibly (for instance, I heat to about 73 degrees in the winter, and cool to about 77 degrees in the summer; a 4-5 degree swing should not result in any real discomfort, and if a bigger spread doesn’t bother your family, even better)? How about giving yourself a financial check-up? Are all of your investments, evaluated individually, doing well, and do they make sense? Do you know what you are invested in, and how and why it should make you profits? Likewise, if you borrow, do your loans make sense? Could they be structured better, have better rates, etc.? Especially if you carry a balance on a high interest rate credit card, can you get it reduced somehow? I know I am constantly bombarded with zero interest rate for X amount of months credit cards that might help. As an example, when I have a loan I plan on paying off in full in the next year or two, I get a zero interest for eighteen months credit card, pay off the loan with it, and now my entire payment pays down principal instead of part going to interest. Are you one of those people that pays bills late for whatever reason, thereby incurring late fees, penalties, higher interest rates, etc.? Figure out what it takes to get and stay current, and the savings alone will help keep you there. If you tend to spend more when you use a credit card instead of cash (which most people do), chuck the credit cards. If, on the other hand, you have a high level of self discipline, then use no fee, high rewards credit cards, charge all of your normal expenditures, pay the bill in full every month, and rack up rewards (I do this and my business earns my wife and I nice meals out). In fact, since I am rehabbing two houses, I redeemed over $200 in Discover cash back bonus awards this past month. If applicable, improve your credit scores so any future borrowing will get cheaper and cheaper (better rates, lower fees). When it comes to tax time, are you getting all of the deductions you are entitled to? Many people intentionally don’t take income tax deductions they are entitled to because they think it might cause an audit; little side bar here – as long as you aren’t doing anything ‘wrong’, the audit will probably hurt less than the money you are throwing away (in the rare event you do get audited)! Here is one I have found saving me a lot of money recently… When I see something in a store I ‘have to have’, I wait and research it on-line later. Two benefits – first the urge to spend often goes away, thereby cutting out the expenditure altogether, and second, I find almost everything I research I can buy cheaper on-line than what I would have paid in the store (yes, even including shipping and handling). If you eat meals out a lot from the JOB, can you save money by packing a lunch more often? Something I find my family guilty of quite often – we throw away perfectly good leftovers while we eat out or prepare something more appetizing. Three solutions quickly come to mind – one, eat the leftovers; two, freeze the leftovers for later; three, prepare smaller meals. If you have the time and inclination (I don’t), plant a garden. Do you make sure to bargain shop, and take advantage of sales on things you know you will use anyhow? And, on the opposite side of the coin, avoid buying junk you don’t need at all just because it was on sale! Do you clip coupons, actively look for sale prices, etc.? While I think exercise is great, and I actively exercise myself, if you are one of those people who has an expensive gym membership, and only goes to the gym twice a year, get rid of it. Here is a fun, easy way to save a little dough – my wife takes my kids to the library almost weekly, and they not only get all the books they can read for free, they even get a bunch of kid’s movies on DVD! With the popularity of cell phones these days, I know many people that have done away with their land line because it was wasted money. Last and definitely not least, the old adage, Pay Yourself First! ‘If you pay yourself last, you will never do it. If you pay yourself first, you will never miss it.’ These are all things that, with just a little front end work, can help you save more and spend less without any sacrifice to your lifestyle. Next, on to the things that might hurt a little…
Third, ways to save more and spend less where the terminology ‘no pain, no gain’ applies… These you will feel a little more. Depending on how bad you want to reach your goals, how bad your financial situation is, your time constraints, etc., let’s start with the extreme – can you work more hours, get a second job, start a part-time business (even if temporarily to get over the hump)? Perhaps a stay at home spouse can pick up some work from home? In this economy many stay at home parents watch extra kids for friends or family, allowing one family to make extra money (babysitting) and allowing the other to save extra money (cheaper than daycare). Maybe private school or home schooling needs to be replaced by public school, even if only temporarily while times are tough? It isn’t for everyone, but I know one couple that happily rented out an extra room in their home for a long time. Consider a smaller, cheaper, more fuel efficient car, now or the next time you car shop (yes, as mentioned previously, I failed miserably in this category). While on the subject of vehicles, most of you are probably already combining many errands into fewer trips and avoiding unnecessary driving these days. Are you making the most of free entertainment at home? Have a brainstorm session with your family of all of the fun, free or cheap things you can think of to do at home, and then implement the favorites and save the cost of travel and entertainment out. Most Americans can save some money by eating out less, and personally I know when I cut back on soda and drink more water my body and my wallet both appreciate it. If you routinely drink coffee at Starbucks, or drink alcohol at bars/restaurants, besides the moral issues, let me kill you now for what you spend per drink! Ouch! And I won’t even get started on cigarettes/tobacco. Last, here is the thing everybody hates to do – create a budget! First and foremost, spend as you normally do, and track every penny for at least a couple of months… and find out where your money is really going. If you can make yourself do it, continue to keep track of expenses for a full year, so you are sure to include once or twice a year expenses like holidays, birthdays, insurance, taxes, etc. Nine times out of ten, there will be some expenses that are shockingly high, and you will know where to look to stop the bleeding.
This article is just to whet your appetite, but if you got some helpful hints out of it, and or you want more of the same, search the internet for some sights on saving money… I know I stumbled across some when I was looking for personal finance information not too long ago, and I saw some good tips, as well as some that I would never recommend… I will share a few since they may be good for a chuckle… Reduce showers to once a week (they said you would save on hot water, shampoo, soap; I suggest you would probably save on dating, too!). Train your cats to use the toilet (somebody claimed it can be done). Go around early on garbage day and gather what you need from what others throw away (they do say one man’s trash is another man’s treasure – LOL). Become a vegetarian - it is a cheaper lifestyle (I know meat can be expensive, but that seems extreme to a meat and potatoes guy like me!). Anyhow, enough of the extreme!!! Best wishes everyone, and hopefully I will see you… on the other side of the rainbow (you know, where the pot of gold is)!
Subscribe to:
Posts (Atom)