Let’s talk about the “B” word…

The word “Budget” is not a bad word; instead it should be used in everyone’s vocabulary. Creating a budget is crucial to improving your finances. A budget will allow you to stop missing payments, damaging credit, and paying late or overdraft fees. Simply by creating a budget you have now started to delegate where your money goes. Every dollar has a place, including savings, bills, and spending money. Having a budget can also help that person that claims to not have any money find some extra cash each month.

Create a list of every bill, expense, and spent amount for a month. The money that is spent on snacks, coffee, etc. must have its own category also. The budget will also show any extra left over after all bills are paid. It is important that this extra money is also delegated into a category, such as a savings account. This is the most difficult and important part of this process because it involves sacrifice and seeing your finances on paper. Once you start telling your money what to do, you can regain financial control and begin to enjoy using the “B” word!

$900.00 off your cell phone plan!!!

       How bad do you need that smart phone? I for one have wifi 90% of the time, the only time I don't have wifi is on the road! when I shouldn't be using it anyways. But I still have service for emergencies, I can call or text anytime and use the internet (up to 30MB). The only thing you are giving up is unlimited data, is it that bad to not be able to check face book on the road? Or receive an email on your commute to work? For a few of the important people out there it absolutely is, but I'm am referring to the majority of us. The majority of us that spend $105.00 a month on a smart phone, we don't need. The same smartphone that has built in wifi, and service is always available, just not unlimited data. 
          Listen it's simple get a prepaid phone for $30 per month, give up the unlimited data during your commute, save $75.00 a month and you get $900.00 a year. I can think of better ways to spend or invest that money each year, instead of driving and throwing $75.00 a month out the window on your way to work!

I wear your granddads clothes…

Well….not literally,

Buying a brand new car is exciting, but depreciates by thousands as soon as we drive it off the dealership lot. So the majority of us seek newer pre-owned cars, with low miles so we can save money. Clothes also depreciate quickly, how much is the shirt worth immediately after you purchase it and leave the store? Want to save some money on your next clothes shopping trip? You could save hundreds, and still have brand name clothes without the brand new price tag.

Consider buying pre-owned “low mileage” clothing, at your local thrift shop.  I bought my last 5 dress casual outfits for work from my local good will, I purchased 3 pairs of pants, and 5 dress shirts, my receipt……$32.50. The brands included Dockers, American Eagle, and Abercrombie all in like new condition. You don’t have to announce where you went shopping, and you can still wear the brands you want for a fraction of the cost. Just be sure to donate your unused clothing to your local thrift shops.

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Personal finances are like running a business

             

        If you owned a business and spent every penny you made, your business would be worth nothing. The same is true with your personal finances; you can't build an estate if you are not keeping any percentage of what you take in for yourself. The spending decisions you make much like a business must be a priority to the big picture. 

              Businesses don't waste money on frivolous purchases, each decision is carefully thought out seek return on investment. Return on investment can mean many things, buts it's not selfish, and ties directly to the big picture. Invest in essential needs including food, electricity, and clothes. Allocate some towards your future by starting a retirement, and protect your family with an insurance policy. But also invest in priorities that include relationships with good friends, your marriage, and family. Because the return you receive from those investments are far more valuable than any amount of money.

Why am I broke???

The excuse is universal as to why we lack a decent savings account, “we just don’t have the money”.  In some cases this excuse is legitimate.  The individual may be laid off, have large medical expenses and other reasons that can be financially devastating. In most instances it is not whether or not they have the money, but instead it’s what they are doing with it. If it is a real challenge for you to fill your car with gas for the week, then maybe you don’t need that $4.75 Starbuck coffee every morning. Skipping the coffee alone would save $23.75 per week, or $95.00 per month, that would help with some gas money, or take that same $95.00 per month and start a 529 college savings account for your child. Imagine your son or daughter having $33,000 to start college…Wow! This is one of those much LARGER goals!  That’s what your coffee money could become over 18 years at a conservative earning of 6%.

             The thought of waiting for your big break, a large raise at work, or to stumble onto a pile of money is wishful thinking. Nothing is going to change unless you make a change. There are not too many people that would say their salary is where they want it to be. The misconception lies at the source, your money. It’s not that you don’t make enough money, it’s making smarter decisions with the money you have. 

It starts with the most difficult part of the entire process, taking a look in the mirror. 

Running in place

Treading water or running on a treadmill, each require work; however, you cover no ground, make no progress, and move no closer to your goals. This is how many people maintain their finances. The “one paycheck at a time” life style, little savings, just enough each Friday to pay bills. Typically people will borrow money to make purchases because the mentality is that if they can pay the monthly payment, then it is affordable. The real goals of these people are much larger than the materialistic items they possess. The issue is their priorities are out of order, living for today instead of the future.

The common problem among many people in today’s society is their comfort in making everyday purchases while increasing their consumer debt. Convenience is the temptation and instant gratification is the result, but at what price? We live in a buy it now, pay for it later world. There is a mountain of debt and little to no savings. There are ways to control money and avoid cash advances, credit cards, and loans and begin the road to financial recovery!

I shared a link to an Article on Lifehacker.com on the debt trap!

http://lifehacker.com/5-big-mistakes-keeping-you-in-debt-and-how-to-overcome-1467734451

25-50-$25,000

I was 25 years old, 50 pounds overweight and buried in $25,000 of debt.  I was married in August of 2008, to the most amazing woman. We had our first son the very next year! Big changes in our lives, well besides what we were doing financially. The system remained the same, pay bills one week to the next and try to find the money we needed to raise our baby boy.

Time is the only thing that moves past you without being noticed. I blinked my eyes; 2 years had gone by…no changes. My son was now 2 years old, we were still broke, just able to pay bills and live in our cheap rental house.  The words savings account, 529 plan, and investing were not in our vocabulary. Instead our plan included credit cards, overtime and loans to acquire the financial resources we needed just to get by. I was working to make money not for me and my family; instead I was making money for the cable company, Visa credit cards, bank loans, and the motorcycle I could not afford.  I was working for a paycheck but I never had any money left.  I knew I needed a major change and it was not going to be easy.

I was going to stop working for my money, and start putting my money to work.