BUILDING WEALTH ONE CHANGE
AT A TIME
|
|
|
Do you know where your money goes? If you are having money
issues, you may want to Find out your "Latte Factor" as described by David Bach in his Finish Rich series (www.finishrich.com).
TIPS: Keep a zip lock bag in your purse or in your car or by the phone or where ever you dump out your receipts. <<Don't throw them away. Ask for them always>> Get a receipt for everything and put it in the zip lock bag. At the end of each week separate the piles into piles for the type of spending. AND/OR get a blank check register and document every penny (cash, debit card, credit card, etc.) you spend in the register. There are also small spiral note pads or other methods of keeping track. Pick some tracking method and do it for five (yes 5) weeks. AFFORDABILITY FACTOR By definition to afford is to have the financial means, to manage to spare or give up, to manage or bear without disadvantage or risk to oneself, to make available; provide (www.dictionary.com). So, how does this play out in real life?
Affording something is sometimes a matter of choice. Can you afford $50/month each for cable TV, a cell phone, Cafe Latte's, high speed internet, music downloads, etc.? Maybe you have $250 available every month, but it leaves nothing for retirement or for the kids college fund. Then it becomes a matter of choice. Instead of spending $50 on music downloads and coffee every month you choose to put $100/month in an IRA. The important thing to understand when you are looking at your disposable income (the money left after paying necessary bills) is that you do have choices. A budget helps you determine what those choices will be --- ahead of time. Understand also that there are choices when it comes to necessary bills. You generally have a choice where you live and how much you pay to live there. When it comes to utility bills you also have choices like running the dishwasher or laundry machine fewer times or wearing more clothes during the winter and keeping the temperature down. The type of car you drive is also a choice, including the gas mileage you get. Maybe you could consider a bus pass or riding your bike. Before you roll your eyes, remember it's really about making choices. According to CNNMoney.com they breakdown that the percentage spent in each category should not exceed:
If you're not making enough money there are two choices, make more money or spend less. Maybe it's time for a second job. Maybe it's time for a new career. Maybe it's time to think of a side business to bring in the extra you want to make life what you want. If you have teens at home, it might be time to get them financially involved. If he/she wants new $100 shoes or wants to keep talking on the cell phone, it might be time for your teen to get a job. If you have little one's it's never too early for them to learn money management skills. If they do their chores they get $x if they don't they won't. But if they want toys they need to work. When considering you budget, it's important to think what you want out of life. What are your goals, what do you hope to accomplish out of life, what do you want for your family? Just like paying yourself first, you need to budget for the things you want out of life. "If your pattern is to spend everything you get, most likely an increase in case will just result in an increase in spending" Robert T. Kiyosaki Rich Dad Poor Dad BUDGET FOR WHAT YOU WANT Let's say you're an avid skier. It costs about $3,000 each winter to hit the slops you want with the gear you want. Plan for it. Put it early in your budget line items. Maybe you're a really avid skier and it costs you $9,000 a season to ski. If you make $30,000 gross a year (as a single living on your own without kids for example), it might be difficult to manage $9,000. But maybe skiing is so important to you that you'd rather ski than have a nice car or a decent apartment or eat (just kidding, but you get the picture). Maybe you can get a part-time job at a ski resort that allows you to get great discounts or ski free. If you plan in your budget to do the things you really want, you wont get to a point in your life where you have to ask yourself, where did all my money go and why am I so far in debt? You will have made choices between this or that and adjusted for the things you really want. "If you fail to plan, you plan to fail." -Anonymous STOP FOOLING YOURSELF Stop spending money. It's that simple. If you have lots of debt then stop spending. See how these people did it: Big Spender! If you need a swift kick (or someone you know does), then get Larry Winget on your side.
BUDGETS AND SPENDING PLANS Looking for some good spreadsheets? E-mail me and I'll send them to you at no cost. These are the best freely available online If you have MS Excel. FINANCIAL FITNESS FOR LIFE
|
[Fix Credit] [Stop Living Check to Check] [Spending Plans] [Build Wealth] [Foreclosure] PORTLAND MONEY TRAINER... BUILDING WEALTH ONE CHANGE AT A TIME
Send mail to sladvantage@gmail.com
with
questions or comments about this web site.
|
