Archive for February 2014

How Well Is The United States Managing Its Budget?

Question: Do you know how much tax revenue the United States collected last month?

Next Question: Do you know how much the United States spent last month?

These are numbers are available to you simply by visiting Congressional Budget Office website HERE.

Just like the equation: INCOME – OUTGO = EXACTLY ZERO ™ applies to you and me, it also applies to governments and businesses.

In January, the CBO estimates that the U.S. spent $10 billion more than was collected. For the first four months of fiscal year 2014, we have spent $184 billion more than was collected.

Here are some reasons you should care about these numbers – especially if you are a citizen of the U.S.

  1. Increased deficits means more national debt. And the taxpaying citizens will have to pay this interest as well as repay the debt (which is in excess of $17 trillion).
  2. No balanced budget requirement for the U.S. means deficits will continue. Just as having no personal budget will tend to lead to overspending. I, for one, would love to see some requirement that my beloved country would have to save money and follow the I Was Broke. Now I’m Not. Ladder!
  3. You are already feeling the impact of the national debt, and it won’t be getting lighter. There is relentless borrowing from the Social Security trust fund. Don’t just take my word for it – read the report issued by the Social Security Administration HERE.

I’m only voting for representatives who demand a balanced budget. I feel that would be most “representative” of me – and will help the U.S. continue to prosper into the future.

Leadership Tip: Making Hard Decisions

When you are called into a leadership role, you will inevitably face a very difficult situation that requires a hard decision.

And the moment will come when you realize you are the leader who must make that hard decision.

I’ve faced them as the leader of I Was Broke. Now I’m Not. and INJOY Stewardship Solutions.

I’ve had to make them as the leader of my family.

Here’s what I know to be true about this difficult decisions:

  • It is no fun at all
  • It exacts a pound of flesh from you
  • Some people won’t understand the decision
  • It never gets easier

I always run these decisions through the following filter:

  1. Glean all information I can via conversation and gathering data from everyone and everything involved
  2. Prayer
  3. Discussion with my bride
  4. Conversation with my leadership team

Here are some questions I ask:

  • What is the real situation?
  • What is the real decision that is needed?
  • What is best for my family?
  • What is best for the business?
  • What is best for all parties involved?

This post is part of a Leadership Series here at the wildly popular JosephSangl.com. Click HERE to read more posts in the series.

Small Business Tip: Separate Business Accounts From Personal Ones

One of the top mistakes small business owners make is to intermingle their business expenses with their personal accounts. This can create many issues including:

  • Difficulty in identifying true business profitability. When personal and business expenses are in the same accounts, it becomes very difficult (impossible?) to readily determine the company profits or losses.
  • Misuse of company money for personal expenses. Whether intentional or unintentional, this can erode financial margin that is critical for the viability of the business.
  • Difficulty in selling the business. Even if the business is profitable, it can cause potential buyers to become wary of the true performance of the company.
  • Drive the tax preparer nuts. I’ve had conversations with tax preparers who find it nearly impossible to prepare a clean tax return because of intermingled business and personal income and expenses. This can lead to issues with the IRS later. That is never a good thing!
  • Frustrates the family bill payer. When the person in the family who is responsible for paying the bills must balance business bills with personal bills, it can cause them to become very frustrated. So frustrated that smoke may start coming out of their ears!

If you are running your business expenses through your personal accounts, invest a few hours to separate them. The bill payer and tax preparer will thank you, and you will be able to more readily assess the performance of your business!

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.

10 Things Parents Should Teach Their Children About Money

All parents want their children to succeed in life. I’m regularly asked, “How do I teach my children about money?” This is a great question, but we should start with another question: “What should I teach my children about money?” Once we determine the “what,” then we can focus on strategies for “how” to teach them.

Here are some key things every parent should teach their children about money.

10 Things Parents Should Teach Their Children About Money

  1. Your dreams should drive your money decisions.  Every great accomplishment began with a dream. Money will flow to a great idea and plan. Let your dreams influence the way you manage your money.
  2. Money will go farther if you prepare and follow a budget.  A budget ensures you generate maximum impact with all of your money.
  3. Be very cautious with debt.  Debt has led to the destruction of many people. Demonstrate how debt can help achieve dreams or produce income and net worth. Share how it has led to enormous stress and financial disaster.
  4. Investing allows you to capture the power of compound interest.  Compound interest has allowed many people to fund their wildest dreams. It allows the combination of diligence, time, and money to yield a tremendous harvest.
  5. The importance of insurance.  Insurance allows you to transfer risk thereby preventing a catastrophe from destroying everything you’ve worked to build up.
  6. Giving is living. There’s nothing more satisfying than offering a hand up to someone who can benefit greatly from such a gesture.
  7. Financial margin reduces stress.  Living life “on the edge” with zero savings is for the birds. Share how a simple decision to keep some money in an emergency savings account can prevent life events (like car breakdowns, appliance failures, or emergency home repairs) from causing tremendous financial pain.
  8. A financial education is just as important as your school education. You can have more degrees than a thermometer and still be broke. Be certain to gain a financial education while receiving your professional education.
  9. Every decision is not purely a financial decision. There are times you will have to make decisions because it is “the right thing to do” even though it might not make financial sense. Be certain to allow your core values and beliefs to drive your decisions.
  10. You can either pay now and play later or you can play now and pay later. And it usually is much more painful to pay later!

Anything you would add to this list? Join the conversation on the I Was Broke. Now I’m Not. Facebook Page.

Monday Money Tip: What Else Could You Do With That Money?

In my continuing quest to help you have better Mondays, I am pleased to offer this weekly Monday Money Tip. My goal in offering these tips right at the start of each week is to give you all week to take action so you can enjoy the weekend knowing you took your finances to another level this week!

This week’s tip is focused on an important financial concept known as “Opportunity Cost.” Check it out below:

Key Question: What is the next best alternative use of your money?