Archive - Series RSS Feed

How do I budget? Part 04

October 25, 2007 in Budgeting, How Do I Budget Series with 3 Comments

In this series of posts, I am sharing the process that Jenn and I followed to develop a budget that actually worked!

Here are the steps that have already been shared.

STEP ONE  Understand that budgeting is nothing more than "telling your money where to go"

It is so important to tell your money where to go - instead of wondering where it went! 

STEP TWO  Determine the income (take-home pay) you will receive during the NEXT month.

This income is what you will be spending on paper BEFORE the month, the money, and the bills ever arrive! 

STEP THREE  Enter all of your expenses for the NEXT month.

Enter ALL of the real actual expenses that will need to be paid NEXT month into your budget form.

STEP FOUR  INCOME - OUTGO = EXACTLY ZERO

Your income is limited.  If you bring home $3,000 during the next month and spend $3,208, your spending plan will not work!  Where will the $208 come from?  It will have to come from savings OR from debt - usually in the form of a credit card.

YOUR INCOME IS LIMITED!  Let me take it one step further.  Let's say you are really blessed and bring home $70,000 during the next month (don't laugh - many people do!).  If you spend $71,320, your spending plan will not work!  The $1,320 will have to come from somewhere - and many times it is made up with debt.

In STEPS TWO and THREE, we entered all of the income and expenses into the budget and, no surprise, the OUTGO exceeded the INCOME.  You can see the entire budget HERE.


There are two options when the OUTGO exceeds INCOME:

  1. Increase the INCOME - 2nd job, Overtime, side job
  2. Decrease the OUTGO - Decrease the expenses

In this budget, let's say that this family receives salary.  They cannot quickly increase their income, so they are going to focus on reducing their outgo!   They need to eliminate $320 of spending.

NOTE:  This is not a "perhaps, perhaps, perhaps" type budget!  This is how the family will ACTUALLY spend their money next month!  Remember - if your budget is not 100% relevant to you and your family THIS MONTH, you will ignore the budget and use it to start a fire in your fireplace!

What expense can they eliminate?  Again, you can pull up a copy of the budget HERE.

After working together on their budget, the family decides on the following changes.


SUCCESS!!!  INCOME - OUTGO = EXACTLY ZERO!!!


If you want to see the entire EXACTLY ZERO budget, you can view it by clicking HERE!

You might be saying, "These people are CRAZY!  They cut out 1/2 of their dining out, entertainment, blow money, and all of their babysitting money!  They are crazy!"

I would say - "NOPE, they have had enough.  They are so sick of living paycheck-to-paycheck that they are willing to live differently and change their lives forever!  All because of a little sacrifice now!"

Jenn and I prepare a written spending plan every single month before the month begins and before any of the money gets to us.  This is THE REASON we have won with money.

  Subscribe to www.JosephSangl.com 

How do I budget? Part 03

October 24, 2007 in Budgeting, How Do I Budget Series with 1 Comment

In this series of posts, I am sharing the process that Jenn and I followed to develop a budget that actually worked!

Let's review the steps already shared.

STEP ONE  Understand that budgeting is nothing more than "telling your money where to go"

It is so important to tell your money where to go - instead of wondering where it went! 

STEP TWO  Determine the income (take-home pay) you will receive during the NEXT month.

This income is what you will be spending on paper BEFORE the month, the money, and the bills ever arrive! 

STEP THREE  Enter all of your expenses for the NEXT month.

This is where you spend your money on paper!  In Step Two, you determined your total income for next month, and it is now time to spend it on paper BEFORE the month arrives!

These expenses are the real, actual expenses that will happen.  I have seen many people include average expenses for the year.  Averages don't work!!!  Enter the real expense because this budget needs to be highly relevant to the next month!

If the expenses are not relevant to the next month, it is highly possible that you will consider the budget irrelevant for the next month!!!  Smile

If you don't know the ACTUAL cost (utilities, gasoline, etc.), enter an educated guess based on recent spending.

Enter all of the expenses into your budget.  You can obtain your FREE COPY of budgets by clicking TOOLS at the top right-hand corner of the page.

The budget form has some excellent features built into it.

  • If OUTGO exceeds INCOME, the TOTAL will turn RED and tell you how much you have overspent!
  • If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and tell you how much more money needs named!
  • When INCOME = OUTGO, the TOTAL will turn GREEN ...  This is the ultimate goal!

Even if the budget TOTAL turns RED, keep typing in the expenses that you know are going to happen in the upcoming month.  The goal is to get all of the known expenses for the next month on paper.

YES, you will later have to remove some expenses or boost your income to get to GREEN, but the goal right now is to get all of the expenses into the budget form!  By having all of the expenses in the budget, you can make a much more informed choice on what will be removed from the budget.

Click on the picture to the right to see an example budget with all of the expenses loaded.

How do I budget? Part 02

October 23, 2007 in Budgeting, How Do I Budget Series with 1 Comment

In Part 1 of this series, I wrote about the negative feelings that some people have when they hear the word "Budget".

In reality, a budget is nothing more than telling your money where to go.  I have heard Dave Ramsey take the definition a humorous step further - a budget is nothing more than telling your money where to go instead of wondering where it went!

EXACTLY!

So our first step in budgeting is:

STEP ONE  Understand that budgeting is nothing more than "telling your money where to go"

Step One is the largest hurdle of any part of budgeting.  The rest of budgeting is a breeze once you understand what a true budget is.   Once you have internalized Step One, it is time for Step Two.

STEP TWO  Determine the income (take-home pay) you will receive during the NEXT month.

There is a very key word in Step Two - the word "NEXT".  I have learned that preparing a budget for money that has already been spent is not very fruitful.  It is like being a Monday-morning quarterback for your finances.  You want to get that money back.  You wish you could have that money back.  But it is GONE!

The budget must be completed BEFORE the month begins and BEFORE the money ever arrives.  You are developing a spending plan for your money BEFORE you ever get it.  The only way I have found to stop saying "I can't believe I spent my money that way" and "I wish I could have that money back" is to develop a spending plan BEFORE the money was paid to me for the month.

So think about it.  What income will you receive during the next month?

Here are some common ways that people receive money during the month.

  • Paycheck
  • Bonus
  • Side Job Income
  • Child Support
  • Alimony

Whatever your source of income is, write it down.  In fact, write it down and put the dates that you will be paid this money during the next month.  If your income is unpredictable, write down the amount of money that you can count on.

If you have at least one month's worth of expenses in the bank, download the [download#1#nohits].


Because you have at least one month's worth of expenses in the bank, you can sum up your total income and enter the total income in the Income section at the top of the budget form. 

If you are living paycheck-to-paycheck, download the [download#2#nohits]. 


Because you cannot pay all of your bills at the start of the month, you will need to develop a budget for each individual paycheck.  Make the dates at the top of the budget form match up to your income dates and enter the income in the Income section at the top of the budget form.

The series continues ... tomorrow.

How do I budget? Part 01

October 22, 2007 in Budgeting, How Do I Budget Series with 5 Comments

Budget.  The word alone sends chills to many people.  Here are some things that people equate with budgets.

Budget = Restricting

Budget = I Am Broke

Budget = Controlling

Budget = No Fun

Budget = Constricting

Budget = Not going to do it! 

Most people have tried budgets ... and failed!  It was a bad experience, and many will say that they aren't EVER going to budget again.

I want to make a deal with you.  How about reading this series of posts for the next week?  How about trying for just one month this method that I will teach you?  How about giving one shot?  Just one.  My hope is that you will try a budget for the month of November,

In this series of posts, I am going to share with you the exact process that Jenn and I took to prepare a budget that works.  Guess what?  THE VERY DAY that we started budgeting was THE VERY DAY that we started WINNING WITH MONEY!

Some might say "I hate budgets" and "I don't need no stinkin' budget", but I would ask them the following questions:

  • How are you paying for Christmas this year?  I am paying cash.
  • How much is your car payment?  I paid cash for my car.
  • How much did you invest this month?  I have invested for retirement for over 130 months in a row and my daughter's college for over 60 months in a row.
  • How much money do you owe to your credit cards right now?  I owe $0.
  • When is the last time you had a great discussion on finances with your spouse?  Not a fight.  A great discussion.  Jenn and I develop a spending plan TOGETHER every single month.
  • If your car broke down tomorrow, do you have money in the bank to pay for it?  Car repairs are not financial emergencies.  I am not surprised when my car breaks down.  Why?  There is a car repair joint on every corner of every street of every town and city in the country!  It is normal for cars to break down!

At the end of this series, some might call me crazy.  Some might call me insane.  Some might call me a wacko.  I would say to them - call me whatever you want, just don't call me broke anymore!

You see ...  I Was Broke ...  Now, I'm Not!

Read recents posts 

Subscribe to posts

Pay Off Debt – Part 05

September 14, 2007 in Debt Reduction, How To Pay Off Debt Series with 3 Comments

In this series of posts, I am hoping to equip your family to become debt-free!  Jenn and I became debt-free in just 14 months by following this process, and our lives will NEVER be the same!  We have been freed up to pursue exactly what we were put on this earth to do - regardless of the income potential!

Previous Steps:

Step 1 - Understand WHY you want to become debt-free!  You greatly improve your chances of becoming debt-free when you understand the reasons that you are making sacrifices in lifestyle!

Step 2 - List your debts  If you don't know how large the giant is, it makes it really difficult to understand the overall situation!

Step 3 - Calculate your Debt Freedom Date  When you have put together your Debt Freedom Date calculation, print it out!  Put it on the refrigerator!  As you pay off each debt, draw a big line through it!  You will not believe the conversation this will start with your family and friends as they come over to visit (you won't be able to afford to go out to each near as much!)

Step 4 - Establish Accountability  If married, hold each other accountable.  If unmarried, have someone who has won with their own money and has your best interest in mind.

Step 5 - Secure Your Debt Freedom - Save at least $1,000 before attacking your debt!

I have seen so many people calculate their Debt Freedom Date and get all fired up about attacking their debt.  They sell everything and everyone in sight.  They can't shut up about getting out of debt.  It is all they talk about with their spouse.  They have even sold their Clay Aiken AND Celine Dion albums!

Everything goes great for two months.  They smile every time I see them.  "This is awesome", they tell me enthusiastically.

Five months later, they avoid me.  When I ask them what is up, they say something like, "Well, Johnny broke his arm and the emergency room bill and doctor bills cost me $1,500.  I had no savings so now I am right back where I was - falling back into more debt."

How demoralizing is it to attack debt so fervently and then have to go right back into debt?  It is AWFUL!  Don't do that!  Instead, save up at least $1,000 into an emergency fund before attacking your debt and THEN you can attack your debt all you want!

What happens if you have an emergency pop up while you are attacking your debt?  You can use the emergency fund to cover the expense.  To replenish the emergency fund, slow down on the debt pay-off plan until you have the $1,000 back in the emergency fund!

By the way, if you have a house, kids, or more than one car I highly recommend $2,500 for your emergency fund.

Secure your debt freedom plan with your emergency fund!

Congratulations!  You now know the process that Jenn and I used to become (and stay!) debt-free!  You are now equipped!

Question of the Day:  What are you going to do now that you are equipped to become debt-free?

Read Joe's recent blog posts

Subscribe to www.JOESANGL.com

Pay Off Debt – Part 04

September 13, 2007 in Debt Reduction, How To Pay Off Debt Series with 0 Comments

In this series of posts, I am sharing the process that Jenn and I followed to become debt free in 14 months.  You too can become debt-free!  Read on!

Here are the steps that have been shared so far:

Step 1 - Understand WHY you want to become debt-free!  If you aim at nothing, you will hit it every single time!  You are much more likely to become debt-free when you KNOW the reasons you are making the sacrifices!

Step 2 - List your debts  You can't slay the dragon until you have faced the dragon and understand how many heads it has!

Step 3 - Calculate your Debt Freedom Date  This number lets you know when you will actually achieve debt freedom!  Most people can become debt-free (except for the house) in 18 to 36 months!

Step 4 - Establish Accountability

The strongest amongst us can still fall to temptation!  You could be making fantastic progress toward debt-freedom and then a new truck pulling a new boat passes you on the road.  If you are not careful, you will also be pulling a new truck and boat down the road!

There are two key ways to ensure you are held accountable to your goal of debt-freedom!

A.  If married, work together with your spouse.  If unmarried, have someone you trust (someone who has won with their money) hold you accountable!

There is incredible power when you work together with your spouse toward debt-freedom!  It is a common goal that will unify your marriage and cements your commitment to managing your resources together.

I have also found that when I have a bad case of the "I Wants" and "I Gotta-Have", Jenn does not.  She shuts me down!  Then, when Jenn gets a bad case of "I Really Want This", I do not.  I shut her down!  Why?  Because we are not doing debt!  We are THROUGH with it!!! 

B.  Plan your spending every single month!

Planned money goes farther than unplanned money!  Every single month, Jenn and I sit down TOGETHER and spend every single dollar on paper before we are paid.  Don't miss that - that was good!  Every.  Dollar.  On.  Paper.  BEFORE.  We.  Are. Paid.

From the day that Jenn and I started budgeting, we have not incurred any new debt.  In fact, we became debt-free (minus the house) in just 14 months!

I can tell you this.  I HATED the idea of budgeting and now all I do is yell from the mountaintops about how important it is and how EZ it is to budget!  There are FREE budget forms that are available HERE.  Use one of them to start your journey to debt freedom!

Your budget will hold you accountable.  I wouldn't be surprised if it helped you free up $200 - $500 per month to attack your debt even harder (it did for me!).

Question of the Day:  Folks who have already become debt-free.  How did accountability help you stick to your Debt Freedom Plan?

Read Joe's recent blog posts 

Do you live near Anderson, SC?  Sign up for the Financial Freedom Class at NewSpring Church - class begins on Wednesday, September 19 and costs only $20 per household - childcare provided!  You can sign up and pay on-line HERE.

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Pay Off Debt – Part 03

September 12, 2007 in Debt Reduction, How To Pay Off Debt Series with 1 Comment

In this series of posts, I am sharing the process that Jenn and I used to become debt-free in 14 months.  I want you to become debt-free!  When you are debt-free, you are freed up to go do exactly what you have been put on earth to do - regardless of the income potential.  You can do this!

Let's review the steps so far:

Step 1 - Understand WHY you want to become debt-free!  People who have a plan outperform those without a plan.  When you clearly understand WHY you are doing this, you are much more likely to make the sacrifices necessary to achieve debt freedom.  Hopefully, you have LISTED the hopes/dreams/plans you have for your life.

Step 2 - List your debts  If you do not know who you owe and how much you owe them, it becomes very difficult to put together a winning plan!  You can print out a debt list sheet HERE.

Step 3 - Calculate your Debt Freedom Date

It is really very simple to calculate your Debt Freedom Date.  You need two numbers to calculate your Debt Freedom Date - Total Debt Owed and Total Monthly Payments.   I pretend that there is actually only one debt - with one big balance and one big monthly payment.

Look at the sample debt list below.  This family will be debt-free in just 33 months!

 

In the TOOLS section, there is a free tool called the Debt Freedom Date Calculator.  If you enter your debts and monthly payments into this tool, it will calculate your Debt Freedom Date for you!  If you don't have Microsoft Excel, click HERE for a web-friendly version.

Question of the Day:  How many months until you are debt-free?

Read Joe's recent blog posts 

Do you live near Anderson, SC?  Sign up for the Financial Freedom Class at NewSpring Church - class begins on Wednesday, September 19 and costs only $20 per household - childcare provided!  You can sign up and pay on-line HERE.

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Pay Off Debt – Part 02

September 11, 2007 in Debt Reduction, How To Pay Off Debt Series with 2 Comments

In this series of posts, I want to equip you to become debt-free!   Jenn and I became debt-free in 14 months by following this process, and I can tell you this - there is NOTHING like living life without the trappings of debt!

Let's review the first step.

Step 1 - Understand WHY you want to be debt-free!  If you don't have a clear understanding of why you want to become debt-free, you will have a very tough time sticking to this effort.  When you know WHY, you are able to stand firm against the temptation to acquire more debt.

I hope that you have taken the time to write out your hopes/plans/dreams for your life.  Again, I cannot overstate the importance of writing this out on paper!

Step 2 - List your debts

During financial counseling sessions, it is a guarantee for any person who has debt that I will calculate their debt freedom date.  You should see people's reactions as I put together a list of their debt!  Their reactions relay to me the true facts of debt.  Here are some very common reactions that I see/hear.

  • Hiding their eyes
  • "Oh no!"
  • "I've never added it up."
  • "This is scary."
  • Moving to a defensive position as if to guard themselves against the debt
  • Turn their head so they don't have to look at the debt total

I KNOW that it can be scary to total up debt.  The mere fact that it is so scary tells me two things:

1.  People do not like debt.

2.  People have not been paying attention to their finances and do not have a well-defined plan for their life.  Otherwise, they would not have incurred most of the debt.  It is literally ROBBING them of their financial future!

Here is what I say to them - "If you don't know how many heads the dragon has or how large the dragon is, how can you effectively defeat it?"

It is time to slay the dragon.  Use THIS FORM to prepare a well-organized list of your debt.

Question of the Day:  Why is it so scary to total up debt?

 

Read Joe's recent blog posts 

Do you live near Anderson, SC?  Sign up for the Financial Freedom Class at NewSpring Church - class begins on Wednesday, September 19 and costs only $20 per household - childcare provided!  You can sign up and pay on-line HERE.

Have you subscribed to www.JOESANGL.com?  It is easy to do so.  Just click HERE!

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Pay Off Debt – Part 01

September 10, 2007 in Debt Reduction, How To Pay Off Debt Series with 5 Comments

I have found that a vast majority of those who sign up to attend the Financial Freedom Class or the Financial Learning Experience are living paycheck-to-paycheck AND carrying debt.  In fact, statistics from surveys I have recently conducted show that 72% of those attending my classes are living paycheck-to-paycheck.  Of those 72% living paycheck-to-paycheck, 24% are BEHIND on payments.

Only 3% felt that they are doing well financially.


This is a NATIONAL problem.  No matter where I go, I see the trappings of debt - marriages failing, stress, depression, and hopelessness.  And all of this is happening in the wealthiest country on the planet!  This is entirely unacceptable!

So, as part of my crusade to help America become debt-free, I am going to share the process I followed to become debt free.

Before I get started, I want to ask you these questions.

  • Would you join me in my crusade?
  • Would you share this with others?
  • Would you commit to become debt-free?

I WANT YOU TO BECOME DEBT-FREE!!!  It changes your life!  It enables you accomplish far more than you ever thought possible with your personal finances!  It allows you to go do exactly what you were put on earth to do - regardless of the income!

Step 1 - Understand WHY you want to be debt-free!

I believe this is the most important step in becoming debt-free!  In the hundreds of financial counseling sessions I have held, it is amazing how many people do not have a plan for their lives.

I ask them, "Why do you want to win with your money?"  and they stare at me like I am from outer-space.

"Why?", they stammer back at me.

Seriously, I believe that it is the first time that many of these people have ever seriously thought about what they want to accomplish with their lives.  As a result, they are bumbling through life just "trying to make it through the day".

What a miserable way to live!

I cannot overstate this fact - IF YOU AIM AT NOTHING, YOU WILL HIT IT EVERY SINGLE TIME!

When Jenn and I wrote down our hopes and dreams on paper, it opened our eyes to the fact that our money management (or lack of) was literally ROBBING us of our future!  We wanted to move back to Anderson, SC to take a job that paid way less than what we were making, but every single dinner at Outback was robbing us of that opportunity.  Every single debt payment went off to make the bank wealthy while at the same time robbing us of our God-given dreams!

That made me MAD!  It made me FURIOUS!  It made me realize how incredibly STUPID I was to be managing our money so crazily!  I had $755 PER MONTH going out to pay car debt, credit card debt, and student loan debt.  Add in the stupid house payment, and I had over $1,700 per month running off to make the bank wealthy!

By writing out our hopes/dreams on paper, Jenn and I were motivated to manage our money differently.  It caused us to view debt differently.

Are you ready to get rid of your debt?

Take your first step today by print out THIS FORM and filling out your own hopes/dreams.  If you are married, you need to do this separately and then take time to discuss it with each other.

By the way, one of my hopes/dreams is for you to become debt-free!

Question of the Day:  What has kept you from attacking your debt?

 

Read Joe's recent blog posts 

Have you subscribed to www.JOESANGL.com?  It is easy to do so.  Just click HERE!

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

 

Irregular/Seasonal/Cyclical Income Budgeting – Part 04

August 30, 2007 in Budget - Irregular Income, Budgeting with 2 Comments

This series of posts has been focused on how to manage the home economy when it is powered by irregular income.  It is my goal to help you eliminate the feast/famine lifestyle (especially the famine part!!!).

Before we focus on today's step, let's review the previous steps.

Step 1 - Recognize it!  To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.

Step 2 - Determine monthly expenses   It is important to understand how much income is necessary each month to ensure that the household operates smoothly and free from the feast/famine lifestyle.

Step 3 - Save up at least three months worth of expenses  This is your buffer that absorbs the wild patterns of your customers!  It allows you to live life smoothly without the feast/famine episodes!

Step 4 - Become personally debt-free and operate your business debt-free

Now, I am certain that you believe I have completely fell off of my rocker.  You might be saying, "Joe, you are crazy!  There is no way I can do this!"  Well, I have seen many people operate their business debt free.  Let's take a small company like, say, Walgreens.  They do only $47 BILLION in business each year.  Small company.  Yet, the operate DEBT-FREE!!!  Don't believe me?  Pull up their balance sheet right HERE and see for yourself.  You will see that short-term and long-term debt are $0!!!

What are the advantages of operating a business debt-free?  Let me count the ways!

  1. Monthly expense load drops!  There are no interest payments to make!
  2. You business can absorb downturns much more effectively.  Again, there are no interest payments to absorb!
  3. Breathing room.  It is amazing how much stress a pile of debt brings on.
  4. When you spend your own real money, you will manage it better.  I don't know why this is, but if I am spending someone else's money (i.e. the banks) I am much more susceptible to make a riskier decision!  When I am spending my money, I am much more likely to do thorough due diligence before doing a deal!

Question of the Day:  What are some other advantages of operating a business debt-free?

I am PUMPED UP about some announcements I will be making over the next few posts!

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Irregular/Seasonal/Cyclical Income Budgeting – Part 03

August 29, 2007 in Budget - Irregular Income, Budgeting with 3 Comments

In this series of posts, we are learning how to manage the home economy when it is powered by irregular income.

Over the last few posts, we have learned the first two steps to prosper with irregular income and put away the feast/famine lifestyle forever!

Step 1 - Recognize it!  You must recognize that you are living with irregular income!

Step 2 - Determine monthly expenses  It is important to understand how much income is necessary each month to ensure that the household operates smoothly and free from the feast/famine lifestyle.

Today, we look at the next step - Save up at least three months of monthly expenses.

Step 3 - Save up at least three months worth of expenses

WHAT?!!!!  I am sure that is what many of you are saying right now!  Yes, I did say that you need to save up at least three months of expenses.  Remember in step two that you calculated your monthly expenses?  Multiply that number by three, and you have your savings target.  I call this savings the "Known Slumps Fund"!  You know that slumps are coming, so be prepared!!!  This is HUGE in eliminating that horrible feast/famine lifestyle!

WHY?!!!  You might be asking this question.  Why on earth should I save up at least three months worth of expenses?  Man, I am glad you asked that question!

Let's say that you have monthly expenses of $3,000.  This means that you need to have at least $9,000 in your Known Slumps Fund.

Let's look at a year's worth of expenses.  Now, it is easily seen that this person has earned enough to make it this year.  They have taken in $36,500 for the year.  BUT look at how irregular the income is!  Have you seen something like that before in your business?  This causes life to be CRAZY.  In January, you are eating ramen noodles like they are going out of style.  February through April are decent, but then it dies again May through July.  Famine of the worst degree!  All of the sudden, August through October are awesome!  Feasts abound!  Then November and December come in with back to back terrible incomes.  Back to the ramen noodles!Frown

What should you do?  Get a Known Slumps Fund that equals three times your monthly expenses!

Let's see what difference that makes!

When you look at this chart you realize the POWER of having three months expenses in the bank!  Whether you have a $500 month or a $6,500 month, you live on $3,000 that month.  That means that you get to EAT!!!  That means that you can save money (remember the monthly expenses includes retirement savings!).  That means that you can have some fun each month!

The Known Slumps Fund absorbs the irregularities of your income!  Fill up your Known Slumps Fund - it will take so much stress out of your life!!!

Question of the Day:  Which is more important to you - Debt reduction or funding your Known Slumps Fund?

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Irregular/Seasonal/Cyclical Income Budgeting – Part 02

August 28, 2007 in Budget - Irregular Income, Budgeting with 4 Comments

This is part two of a series focused on how to prosper while earning irregular income.  It is my goal to help you stop living the feast/famine lifestyle that is so often associated with irregular income.

As we focus on today's step, it is helpful to review the previous step.

Step 1 - Recognize it!  To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.

The next step is to determine how much money is necessary to make the household operate efficiently for each month.

Step 2 - Determine monthly expenses

To determine your monthly expenses, you should pull up a monthly budgeting form and do the following.

  1. Fixed Expenses  Enter all of your fixed expenses - house payment, utilities, gasoline, car payments, credit card payments, groceries, cell phone, childcare, etc.  This also includes SAVING for retirement!
  2. Variable Expenses  Enter the average of all of your variable expenses - clothing, spending money, entertainment, dining out, etc.
  3. Known, Upcoming Non-monthly Expenses  This is a KEY STEP!!!  If you do not add in all of those known, non-monthly upcoming expenses, you will continue to live the feast/famine lifestyle (more likely the famine lifestyle!!!!).  These type of expenses are BUDGET-BUSTERS.  Here is what I do.  I list all of the known, upcoming non-monthly expenses and place their annual cost next to them.  I then divide that number by twelve to determine how much I need to save per month.
Example of Known, Upcoming Non-monthly Expenses
So in this example, I would include a line item of $483 in my monthly budget for Known, Upcoming Non-monthly Expenses.  This allows me to bring a stop to the feast, famine lifestyle!!!  Want to read more about planning for known, upcoming non-monthly expenses?  Click HERE.
    4.  You now have a monthly budget that will change very little through the year!
 
You have successfully completed Step 2 - Determine monthly expenses!
 
Now, of course, the trick is to have enough cash on hand every month to make this monthly budget work!  Ahhhhh, that my friend, will be discussed tomorrow!
 
Question of the Day:  What have been the biggest budget-busting expenses you have experienced?
 
Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Irregular/Seasonal/Cyclical Income Budgeting – Part 01

August 27, 2007 in Budget - Irregular Income, Budgeting with 2 Comments

 

There is a large group of folks whose family economy is powered by irregular income.

Real estate agents, hair stylists, commissioned salesmen, and business owners all experience cyclical income.

Folks who live with this type of income often tell me that it is impossible to budget.  They say that they have no idea what they will make this month, so it is just impossible.

I say that not only is it possible, but that folks with irregular income need a budget more than anyone!!!

In this series of posts, I will explain how to budget with irregular income.  Here's a hint - It's EZ!!!

Step 1 - Recognize it!

You must recognize that you have irregular income!  If you have ever starved to death during the "off" season, you KNOW what I am talking about!  In order to stop having your life severely impacted by "off" seasons, you must prepare!

Question of the Day:  If your family economy is powered by irregular income, what do you do to prepare for "off" seasons?

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Spending Money Budget for June 2007

June 4, 2007 in Budget - Spending Money with 0 Comments

So here I am - month two of spending my spending money BEFORE I receive it!

This month's budget shows my true priorities - GOLF & Landscaping


I am going to purchase a pair of jeans - or so I am planning on doing so!  As long as INCOME - OUTGO = EXACTLY ZERO, then I win!

Want to put together your own Mini-Budget for an upcoming project, wedding, vacation, or other event?  Go to the TOOLS page and get your FREE copy!

See previous monthly mini-budgets for my spending money HERE.

Spending Money Budget Update – May 2007

June 1, 2007 in Budget - Spending Money with 1 Comment

Last month, I put an end to wildly spending my monthly allotment of "spending money".  At the start of the month, I wrote about how I was going to go about this HERE.

Well, here I am to give an update on how I did with my first month of "spending my spending money BEFORE the money before I actually had it in hand".

As you can see, I did very well this month!!!  Here it is, the end of the month has passed and look who hung around to welcome in the month of June - good ole Andrew Jackson!

I will tell you this - I was reminded again of some keys to budgeting.  Here are some keys that might help you.

  • It is OK to "substitute"  Ultimately, it does not matter how the dollars are spent - as long as you don't exceed the overall budget!  For example, the top thing on my list was to purchase a $30 pair of jeans.  I did not do this.  I decided to "sub" a round of golf instead!  Is that OK?  ABSOLUTELY - even though the round of golf cannot be worn, it was fun!
  • Cash Rules!  There is absolutely NO WAY I could overspend the budget because when the cash is gone - I can't spend anymore!
  • Cash forces you to find a better deal  I found a Grill Cleaning Brush for $0.97 at Wal-Mart!  That allowed me to purchase MORE plants!
  • Spending your money BEFORE you receive it ROCKS!  You have all options still available to you when you plan your spending before you actually receive the money.
Page 21 of 22« First...10«1819202122»