Budgeting Finance

Budgeting is the most important key in any kind of plan for finances. It does not really matter if you are a monthly paid employee or if you receive a pay check that most people can only imagine. You need to have good knowledge on how to handle your money. It is not just about knowing what to buy and what not to buy but it is also knowing the power of the money that you have and then making a plan on how you are going to allocate your funds.

Budgeting is highly needed because you need to have knowledge on how your money is working for you. Track your expenses and uncover cash flow problems so that you will not have to have bigger problems in the future. Budgeting is important for you to be able to reach your ultimate financial goals.

Devise a budget process that works for you. You can create a list, a spreadsheet or a chart that will help you have a representation of your money and all the things that are associated with it. It is important that you stay true to this budget and you follow it to the letter. You need to have a sense of discipline and control so that you will be able to let your budgeting work for you and not against you.

You can search the internet for readymade spreadsheets that you can utilize for your budgeting. You should be able to extract all the categories that you need for your budget and then organize everything so that with one look, you can easily spot the red flags and be able to deduce what action you need to do in order to save you and your finances when necessary.

It is important that you do not overspend. This is the main problem of people who cannot keep their finances in order. Make sure that you are meticulous about your budget plans so that you will be able to keep your finances in check at all times. Do not try to go beyond your means so that you will not encounter problems that may be a little bit harder to solve in the future. If possible, use cash at all times and avoid using credit. While using a credit card may be convenient, you may not be able to handle all the additional costs when you go over your limit or fail to pay your dues.

This article was written by Mike, who is currently working for What PayDay Loans who speicalise in the short-term loan industry, helping you to get cash quickly and easily.

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This first "event" is a hypothetical budget of a young couple. It may help stir your own thoughts about future costs and ways to "cut back" when, for instance, a 1st child arrives. Study the inputs to see a "typical" budget life. It's interesting that a human life can be summed up in the 15 questions listed below. Detailed questions were answered and estimates of typical household costs were used to calculate savings growth over the next 4 years.

Budgeting Event No. 1

A young 20-something about 3 years out of college, with a working wife but no kids. Here is their possible scenario over the next 4 years (assuming the stork doesn't visit them soon). These are the inputs selected for this young couple:

1. YOUR TRADITIONAL MONTHLY PENSION CHECK = 0
2. 401K(S) PRESENT BALANCES = 20000
3. MONTHLY INSURANCE PAYMENTS = 100
4. TOTAL "NET MONTHLY" SPOUSE INCOME + YOUR WORK INCOME + ANNUITY + MUTUAL FUND INCOME + OTHERS JOB MONTHLY NET INCOME? - Average next 4 years = 4000
5. "MONTHLY" HOUSE RELATED PAYMENTS (MORTGAGE/RENT/TAXES) = 1000
6. MONTHLY MEDICARE PART B? = 0
7. MONTHLY FOOD & PROPERTY MAINTENANCE = 500
8. MONTHLY UTILITIES = 225
9. MONTHLY CLOTHES = 200
10. MONTHLY ENTERTAINMENT & AUTO FUEL = 550
11. Monthly EMERGENCY FUND = 200
12. IRA VALUES = 5000
13. SAVINGS & CHECKING = 2000
14. BROKERAGE & OPTIONS ACCOUNT VALUE = 5000
15. "OTHER" YEARLY EXPENSE - AVERAGE NEXT 4 OR 5 YEARS (VACATION COST, ETC.?) = 2000

And the following shows the debt balance for each of the next 4 years, unless the above numbers change. The calculation these numbers came from assumes $75,000 in liquid savings as a proper "cushion" before saying you are at "break even" (in the black):

PRESENT "EXTRA SAVINGS" ACCOUNT BALANCE PROJECTION above a recommended $75,000 "cushion" - NEXT 4 YEARS = -$55,258, -$42,516, -$29,774, -$17,032.

Notice the debt decreasing by around $12,000 per year. When these numbers turn "BLACK" around the 6th year (assuming nothing changes), it just means this young couple has a $75,000 liquid "cushion" that will help with a house down payment or to start a family.

Calculations are done in an EXCEL spreadsheet that allows any person, of any age, to understand their household situation every 4 years or so, when they re-run their own numbers based on their existing household situation at that time. It can truly help in "budgeting your life". This is a very valuable exercise that allows anyone to see how lifestyle incomes and costs affect future savings. The aim is to make intelligent adjustments, as needed, to reach a near term goal. Life is simpler when broken up into a series of shorter goals.

If you want to run your numbers, email me at rostrowski85@gmail.com. I'll send you the spreadsheet.

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Once you have decided you are ready to find your way to financial freedom, it tends to be an uphill battle from there. The first few months of cutbacks and saving for you emergency fund can be difficult for someone who is used to spending money instead of holding on to it.

In the beginning I had two goals: cut back my monthly expenditures to the bone and build up an emergency fund. It actually sounds just as hard as it was to implement these changes. Here are some of the ways that I personally cut back spending during the month:

Assess your monthly gas usage. Of course, we all think about gas prices, but I had never really looked into how much gas I was using frivolously during the month. I would take extra trips during the week on my lunch break or after I had already come home from work. Most of the extra usage occurred on the weekends, where I would find myself driving to 2-3 places every day that were not close. I decided to cut weekday trips out totally only driving back and forth to work and limit myself to only one outing on the weekends each day. I was paying $60.00 per week, and after my change, I am down to $40.00 per week. That is a savings of $1,040.00 approximately per year. That's huge!
Lowered my Netflix subscription. At the height of my Netflix addiction, I was at unlimited streaming and 3 movies at a time. Now that I am reading more, working more, and live at home, I decided to cut that down to unlimited streaming and 1 at a time. From 26.00 per month to 16.00 per month that saves $120.00 a year.
Eating out. This is perhaps the most flexible area to lower expenses. Of course, you can totally cut out going to restaurants to eat. It is pretty difficult for me to have the motivation every single day of the month to cook. Instead, I choose to eat out a maximum of 2 times per week, maybe even less. All I did was make the effort. At the end of the month, February, I had eaten out a total of $254.55. Knowing this, going into March was like a challenge to see if I could do better. End of March came and I had only eaten out $114.83. That was a savings of $139.72.
Buy Generics. This may seem like a no brainer, but even I was hard pressed to buy generics, even in my financial strain. Be that as it may, almost all food and toiletries have a generic brand for usually 2/3 or half the price. These generics are sold next to the brand because they have the same main ingredients. The only thing that is different is some of the inactive ingredients.

Here are some other great ways to cut spending:

Eat dinner leftovers for lunch at work the next day.
Cut out cable.
Cut down internet. When I paid for cable, ATT had a DSL internet package that was only $20 bucks a month. It was the slowest supposed speed and the lowest plan. I could still watch Netflix and surf the internet at a pretty decent speed. You could always cut out internet totally and use the internet at the library free of charge. Of course, that is pretty extreme for most of us.
Cut your own hair. As a woman, I cannot personally say that I will ever be able to do this. Since I already have very long hair, I choose to just not cut my hair at all. It may be easiest for guys to shave their own heads as an alternative to weekly cuts.
Use the dryer and washer less. You don't have to wash everything that has only been used one time. Use your best judgment. Hanging clothes on a clothes line rather than drying can save kilowatts on your money electric bill.
Keep a price book. Mark down all the prices on the things that you regularly buy and see from there what items you can cut back on, buy generic, or buy during sale cycles. I take pictures with my camera phone to make sure I don't forget price and package size.
Shop at thrift stores. Always look for used first. I regret now that I never shopped for used clothes and toys for my child. So many brand new items were wasted and given away anyways for lack of use or outgrowing. Children's clothing is along the lines of a disposable item, because they grow out of clothes quickly.
Invest in a smaller home. I am currently house hunting and only need 2 bedrooms. It's hard to convince myself that going with a house that meets only my needs is the best idea. I don't really need a few more rooms; I just want a few more rooms. For me, a small starter home is good investment for a low mortgage and rental opportunities in the future.
Make the move to a more minimalist lifestyle. The less money you spend on things, the more you have to save and invest. Invest in only your needs and not always all your wants.
Stay home. Become a homebody and spend time with family and friends. It will save you on gas, eating out, and mindless shopping.

The best thing to do before trying any of these tips is to remember this is not a permanent change. Feeling like you will have to go the rest of your life without, let's say, cable can be quite a deterrent for anyone who is starting out. Try a few of these suggestions at a time or maybe just one a month. All of these changes at once can be very overwhelming.

The good news is that doing all of these things to cut down on the monthly expenses can save a lot of money and get you on a track to a more frugal lifestyle, which can only lead to financial freedom and peace of mind. Since I have implemented most of these changes, I feel better about the savings I have experienced and I find that I truly enjoy being more frugal in life. It puts more money in my pockets!

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Budgeting and Cash Flow.....two simple phrases that you would expect to learn the meaning of in grade school. If not, certainly by High School. Well guess what...NEITHER!!! I suspect this is the main reason why so many young people get into financial trouble at such an early age. They have no idea how the whole process works. Did you hear the joke about the newlyweds arguing...one says "Why do we always run out of money before we run out of month", the other one snaps back "We can't be out of money, we have plenty of checks left!" The truth of the matter is that without proper budget planning, your financial freedom will be at risk!

When starting out to prepare a budget you must keep one underlying principle at the front of your mind. That is Honesty is the best policy. When you first start out, you have to do some estimating. Here is where you have to be truthful to yourself. For instance, if you are trying to figure out how much you spend on food each day, don't forget the daily stop to Java Palace on the way to work, or the afternoon snack at the office canteen etc. etc. A well thought out Budget will keep you on track to meeting any and all the goals that you set for yourself. Additionally, just writing down everything on paper that you are going to need when budget planning will help you uncover all the black holes that mysteriously consume your paycheck, month after month. Once you have your Budget in place, honesty has to kick in again. You have to honestly try to stick to your Budget or else you will fail. It does not happen automatically. There will be certain parts of Budget Planning that you can put on auto pilot. Doing so will help you in your quest to achieve financial freedom.

So where and how does one begin to make a Budget. Since I did not learn it in school either, it was a rather fortuitous encounter that started me on the road to never bouncing a check or never getting a collection phone call. Many years ago, while applying for a new auto loan, the bank had some loan documents prepared for me to fill out. One of them was a Personal Financial Statement (PFS). I filled it out then and I have been filling one out every year since. I think it is the greatest tool to learn how to budget. If you have never seen one, go to your local bank branch and ask for a PFS. If they ask why, just say you are preparing to apply for a mortgage. Anyway, I haven't gotten one from the bank in a long time as it is very easy to make your own PFS. In a nutshell, here is what you do. Get a blank piece of paper and draw a line down the middle. At the top of the left side, title it INCOME, and at the top of the right side, title it EXPENSES. Now here is where the fun starts. Back to the left side...write down all your sources of monthly income on an after tax basis. This is important because you cannot pay bills with before tax income, meaning your gross paycheck number is of no value for this exercise. Also keep in mind that if you get paid weekly, take the after tax number and multiply by 52 and divide by 12 to get your true monthly after tax number which is higher than just multiplying your weekly number by four thanks to that extra week that will sneak in once every quarter. When finished, add up the left side to get your total monthly income from which you can work your magic. Now move over to the right side. Start by listing all your monthly expenses that are fixed, meaning they are the same every single month as in your home mortgage and your car payment and your utility bill if you have balanced billing, which by the way if you do not have balanced billing, you should consider it as it will help you stay on track. When you are finished listing all your fixed monthly expenses, start listing all your variable monthly expenses. Here is where some estimation may occur. Do your best to guess and do not leave anything out. Don't forget birthday gifts, entertainment, bowling night, newspapers and the daily Java stop if it fits. Last, put in a miscellaneous category, because you know you are going to need it. Add up the right side. Is the number greater than or less than the left side? If it is less than the left side, you are in fine shape for performing budget planning. If it is less than the left side, you have some work cut out for yourself if you want to succeed with financial freedom.

If the answer above was positive or in other words, you are spending less than you are bringing home, then Congratulations are in order. You are in good company and on the path to financial freedom. You probably have some good habits drilled into you from your upbringing or some other source of financial know how. Let me ask you one question. When you listed all your expenses on the right side, did you make an entry for your self? Did you include an entry called savings? Are you putting any monthly income into a 401(k), I.R.A. or funding any type of retirement planning? I suspect you are addressing this most vital aspect of your finances. One other question. You did include credit card debt right? Is this number growing, declining, or remaining the same? Again, if you are in this camp, I suspect all is well on this front.

If the answer above was negative, well then you just might be related to the couple we spoke about in the beginning that runs out of money every month before running out of month! What to do? In a word...DISCIPLINE! It takes discipline to put your finances in order. One of the reasons that your number is negative is because you were honest enough to write down ALL your expenses and that is a good thing. However, your day of reckoning has arrived. Now you have to start doing some inner reflection. You must ask yourself "Of all those things on the expense side...Do I really need all that stuff?" Is 5 monthly magazine subscriptions really necessary? Is it so important to go out to eat once a week? How about once a month instead! If you made that one change alone, not only would your budget planning look better, but when you actually did go out, it would take on much more significance. Believe it or not, it will bring you more pleasure than the "weekly grind" of going out to eat. If you don't like the word discipline, than I will throw out another word at you...TWEAKING. Time to start tweaking the right side of the sheet. Take a long hard look at every single entry, line by line to determine where you are going to tweak. This is the only way to make the right side fall in line with your resources. Sure you can increase the left side, but that is easier said than done.

Now that you have a general idea of how to start building a budget, we need to turn our attention to fine tuning the right side of the equation because in the early going, that is where you have the most control. For the time being, the left side is out of your control. Sure you can work more hours or get a second job or start a side business all of which will raise the income side of the equation, but as we just mentioned, that is easier said than done. Get this part of budget planning right and your financial freedom will become a reality before not too much time passes by!

Chris Borg is a practicing pharmacist and financial adviser who writes about health care and investing. Chris's latest website on financial freedom is at RatraceBgone, where Chris provides financial tips such as the 9 steps to financial freedom: 9 Steps To Financial Freedom

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When there are so many different money management software packages available, it can be difficult to decide which program is best for you and your needs. There are several websites offering comparisons and reviews on the best finance software, which is a great place to start.

Before buying money management software or personal finance software, you need to ask yourself what you would like your software to do for you. Not all programs will have the same features and some have extra features that you will never use. Before purchasing your money management software, check the following meet your criteria:

Is it easy to use? Purchase software that suits your computer skills and your knowledge of financial accounting, as some programs can be extremely complex.
What will the software allow me to manage? Ideally the best package will be one that allows you to manage your online banking, checking accounts, savings, loans, bills paid, credit cards and mortgages with regular updates on transactions and account balances. The software should be able to import all this information but if you are not happy with it downloading transactions automatically, check you can import transactions manually once you have downloaded them yourself onto your computer.
Will the software remind me to pay bills? Most software will schedule reminders to pay bills, transfer money, etc.
What sort of reports will it produce? Line graphs and pie charts which clearly show where your money is being spent will help you get a clearer picture of your finances.
Will the software help me to budget? Check to see if the package has a budgeting tool to help you create a personal budget.
Does it have personal investment options? If you need to manage bonds, stocks, funds, etc. choose software that will help you with this in order to track and analyse your investments. This will also assist you with home purchases, planning for retirement and other future financial goals.
Does the software incorporate tax options? If you need help with preparing your tax returns, purchase a programme that will carry out simple returns and estimate your tax.
Will the software determine my net worth? Check your software will allow you to do this if required so that you can accurately see your net worth at any time.
What help and support will I get? Check that the money management software has a support system via email, customer forum and an online user manual.
Is it secure? Lastly, and very importantly, check out the security features of the software. You will be entering extremely confidential information such as bank information and personal details.

Money management software will enable you to manage your finances easily and make your money work for you. Being able to have a clearer picture of your finances will help you keep track of your hard earned money and allow you to budget and keep focused on keeping your finances safe, secure and protected.

Our Budget Calculator Is A Revolutionary Software Program That Will Push You To Get Your Financial Act Together Once & For All And Help You Improve Your Cash Flow! Give It A Try Today: http://www.cashflowbudgetcalculator.com/

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Despite the constant burden being placed on drivers with added tax, increased petrol prices and higher insurance premiums, there are benefits to be gained by installing a GPS tracking system to your car. Drivers will find that on the road they will no longer find themselves in endless streams of traffic with their engines expensively ticking over.

Cheaper car costs
The use of a GPS tracker means that travelling to and from work, or whilst on the road as part of your job, you can save money on petrol by taking the most effective route. By taking the most economic journey drivers are able to save time, petrol and ultimately money on their essential trips and GPS tracking devices are one of the most efficient ways of managing fuel consumption.

Figures show that the average car can reduce its running costs by as much as 20% when fitted with a GPS tracker, a saving which will more than pay for its installation within 6 months.

GPS savings
These savings are all important as the cost of running a car continues to rise and by monitoring such things as speed and idling times you not only save money on petrol but also cause less damage and wear and tear on the vehicles engine, brakes and tyres. The system can also be used to advise you when your car is due for a service or if there is any essential maintenance that ideally should be done.

Certain areas such as road tax and insurance costs can affect your choice of car, by selecting lower banded vehicles, smaller engines and diesel cars you can also start making savings at the point of purchase.

GPS insurance
Insurance is another area where GPS tracking is enabling drivers to make savings with several insurers offering policies that utilise GPS technology to monitor vehicle usage and adjust insurance costs accordingly. The premiums are made up from actual usage based on the mileage, driving conditions and driving habits of the insured rather than retrospectively calculating the cost on perceived driving.

This involves the insurance company fitting a GPS tracker into your car from where they are able to download and record your vehicles use. This gives them a real time view of exactly how you use your car and how carefully you drive, low mileage drivers are able to reap the rewards of cheaper car insurance. A number of leading car insurers are offering these policies and drivers who consider themselves good, considerate drivers are benefiting from the offers.

Alex has used GPS tracking services on numerous occasions and he has become a great fan. At university he first started looking at how GPS tracking equipment can change our every-day lives.

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One of the most important qualities of successful business people is they know the true value of money. Unlike others who prefer luxury, these highly successful business people focus on managing their wealth and learning endless ways on how to make it grow.

I have known a lot of people who used to be very rich and in just a snap, everything seemed to fail for them. From riches to rags, there they are; working hard like never before but not earning enough like they used to. The sad part is, some of them don't know how to adapt. They end up doing desperate measures like selling drugs or some of them just lose their minds and start their journey to total insanity. God knows what is going to happen next.

Many people new to business world often make a major mistake. They tend to focus on entering business world to earn lots of money. When they finally have their business going, their eyes are there, gazing fiercely at the result; which is the cash! Green is indeed hypnotizing, isn't it? However, what they fail to focus on is the business itself.

As a person who made his first million during his teenage years and author of You Call the Shots: Succeed Your Way, Cameron Johnson once said, "...money is not an end in itself; it's just a tool!" This simply means, money should be considered as an instrument to achieve your goal to succeed in life. Furthermore, people should know how to control it. Golden rule still applies here - 'Do unto others what you want others to do unto you'. Now let's change 'others' for 'money'. Do unto money what you want money to do unto you! If you make your money a slave through spending it to dead investments, which is luxury, in return, money will enslave you! Makes sense?

Money is like bacteria. A bacterium preserves its life through a host. The host is the person, the host is you! The longer it stays in the host, the faster it can multiply. When you take it out from the host, it dies. Same as money, when you keep it, invest wisely and manage it correctly, it multiplies. If you take it out from your pocket and spend it to get your WANTS not NEEDS, it dies.

If you want success in life, manage your own business by controlling your money. Be your money's boss! Don't let money become your boss. It will take you nowhere when you allow that. Use your money to grow your own business and in return, when your business grows, your money grows. That is the simple logic!

I have some recommendations for you to learn more about making your money work for you. Firstly, read books about entrepreneurship. I know a lot of people are already knowledgeable about this, especially those that have business degrees, however, you can still learn a lot from books. Every author, though some of their ideas resemble, they still have something unique to share as every person has different perspective from one another. So why not learn from them? These ideas could have never been taught in school as these can be from the results of different approaches to achieving success in the business world.

Secondly, if you already own a business, investing the profit is a very good idea. Rather than spending it for luxury, why not use your profit to make your current business bigger. Better yet, learn and try another business with little investment. If you want to try something different like what I am doing now, why not use the internet. Internet Affiliate Marketing is one good business to consider. Internet is very powerful and a lot of people still have no idea how internet can generate tons of money. So do not get left behind.The internet has a lot to offer. It can teach you how to earn money online. Learn, discover and succeed!

Hi! I am Mr. Villacorta and I am new to online business world but I have been learning a lot through the help of an online community that teaches how to achieve success in an honest, ethical and legitimate way. A lot of opportunities are now open for me and I'm gonna grab everything. If you want to grab one and join this community, follow this link Internet Income Opportunity.

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Getting The Most Bang Out Of Your Party Planning Buck

Throwing a party can be such a fun adventure. You envision a room filled with happy, smiling guests all complimenting you on the food and the drinks. The only thing standing between you and making that fantasy a reality is your budget.

You may be having champagne dreams while your bank account can only shoulder soft drink essentials. There are ways to incorporate any budget into your event planning and still come out with a party to be proud of.

Most people don't indulge in alcoholic beverages in the early afternoon, so you could instead serve a punch or coffee or iced tea. This is very refreshing and along with some small snacks and perhaps a tray of assorted sweet tooth delights, you've offered your guests refreshment without the added cost that an event later in the day requires.

Another consideration when event planning is whether or not you need the services of a caterer. Caterers can be invaluable, especially when you are hosting an event of a significant size. If however, your guest list isn't as vast, doing much of the menu planning and cooking yourself can save more than a few pennies.

Perhaps the best money saving technique when it comes to the area of food is to host a potluck event. This idea can be included as part of your event planning process. You plan the party or gathering based on the idea that every guest will supply an item of food or drink. Some many bring a main course or a salad while others will bring a bottle of wine. Once everyone has arrived there is an enormous amount of different food to sample. This is a great way to include the guests in the party planning process and they feel good knowing they've contributed.

Food isn't the only area that you can scrimp and save in. If you are hosting a children's birthday party you can ask a friend or relative to dress up as a clown instead of hiring a clown. There are many adults who love to interact with children and the only payment they'd expect would be a room full of young smiles and a slice of birthday cake. Decorations also don't have to break your budget. If you're hosting a garden party, you can create beautiful, soft lighting by hanging the white lights that normally adorn your holiday tree around your garden. Your guests won't be the wiser, but you will for having opted not to invest in a new set of lights you probably will never use again.

Careful thought while you are event planning can save you money and let you enjoy your party without fretting about finances.

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