The Beginner’s Guide to Managing Money

There are people that were born to manage money, but for many others it’s a tough task and it can end up causing people’s finances to spiral out of control pretty quickly. Managing money is as simple as you make it, and as soon as you hit that age when your money is your own responsibility, then that’s when you’ll want to get on top of it straight away and learn how to manage it appropriately. There are many tips to follow that will help you manage your money better, and below we’ll look at some of the most important things to consider to ensure you stay financially sound.

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Create a Spreadsheet

Your first step when managing money is to create a spreadsheet on your computer, as it will help you keep track of all of your finances so you’ll be able to see where you are as the months go on. On your spreadsheet, you should have information on your monthly expenditure and any income you receive. Doing this will give you an idea of how much you are spending on things, and you’ll be able to allocate sums of money for whatever you want. You’ll also be able to see how much money you can save, and what you can cut back on in future months to increase your savings. It’s important that you go into as much detail as you can when it comes to expenditure, such as haircuts, gym memberships, takeaways, and many other costly things just so you can keep on top of it all.

Don’t Spend Money On Items That Are Unneeded

Allocating yourself a sum of money every month that will allow you to spend it on what you want is a good start, but as soon as that money is gone, don’t spend any more money on unneeded items. It’s nice to treat yourself to some new designer clothes now and again, but there’s nothing wrong in buying unbranded clothes either. Ask yourself if the item you are looking to buy can be purchased cheaper, or if it is even needed at all.

Set Yourself Monthly Saving Targets

There is nothing better than earning money and having access to it in your bank whenever you want it, which is why setting monthly saving targets will benefit you greatly. Not only will it benefit you by giving you savings, but it will also make you feel good about yourself knowing you have worked hard to earn every penny. You will quickly realise that budgeting and managing your money efficiently has got you where you are.

The above are just a few of the basic, but most important tips when it comes to managing your money efficiently. You’ll find there are plenty of other tips to follow, and depending on how serious you are about managing your money will depend on which tips you take advantage of. Keep your money management simple, and you will find your credit report will benefit from it in the long run.

Forget Your Goals – How to Make Real Changes to Your Finances

Your life is full of more money advice than you can possibly take in. Unfortunately, much of it falls into the “just give up that expensive cappuccino!” variety, which makes sense on the surface, but only applies to 0.001% of the population. The fact is there are no “easy” fixes to real financial problems. Changing your financial life is just as hard as changing your health, your relationships, or your career. So if you are tired of your money problems, open your mind, take a deep breath and read on.

Forget Your Goals

Chances are you’ve had the same financial goals for a long time now. “I want to own my own home.” “I want to live comfortably.” “I want to be debt free.” If these goals were going to fix things, you’d have checked some of them off the list by now. Unfortunately, for change to occur, there needs to be a clean slate. So stop trying to fix the ramshackle financial house you’ve built in your mind. Instead bulldoze it and rebuild from the ground up. To do that, there are a lot of other things you need to forget.

Forget What You Want to Own

You are currently surviving with what you own. If you weren’t, you wouldn’t be wasting your time reading an article on finances. This means that, at a fundamental level, you don’t need more stuff. This isn’t meant to be a judgment against struggling people who “waste” money on fast food or cigarettes that only the rich “deserve.” Instead, it’s a fundamental change in how you think about possessions. They just don’t matter until your money situation is fixed.

Forget “Saving” Money by Spending It

This goes hand in hand with the previous point but also applies to spending on essentials. If there is a great sale on something you want, but it means buying more than you budgeted, don’t. The hypothetical money you “saved” by spending more may feel good, but it won’t help you in an emergency the way money you actually save and put aside will. Having real money set aside for real emergencies is a must.

Forget Your Credit Score

Your credit score has one real purpose – to make it easier to take on debt. Sure, in the long run making good financial decisions will improve your credit score, but until you get where you need to be financially, it might as well be the high score on an old arcade game. Sure, it makes you feel good about yourself, but you might waste a lot of money achieving it. Save for emergencies and pay off debts that will make a difference to your long-term situation rather than paying off debts that will protect your high score. And never, ever try to improve your score by taking on new debt.

Forget Fairness

Oscar Wilde, who was no economist, once said “Life is never fair, and perhaps it is a good thing for most of us that it is not.” This is hard to accept. The world is stacked against you in many ways that you cannot change. There may be some ways that it isn’t but for the most part, you won’t notice those. If you are going to change your financial life, you cannot beat your head against the wall bemoaning the fact that some people get to have things you don’t and do things you can’t. Yes, it is unfair. It is also the way things have always been. The one comfort is that if you can tolerate that long enough to truly change your financial situation, then you have a better chance of becoming one of the people that other people are jealous of.

Informational credit: Accuplan Benefits Services, providing self-directed IRAs and 401Ks

8 Money Habits That the Wealthiest Individuals Practice Regularly

The gap between the world’s rich and the rest of the population continues to grow and be more evident. As the numbers of poor people increase, more individuals are trying to figure out the secret to becoming successful. While it’s true that family connections and luck have sometimes carved out a path of good fortune to some of the richest people on earth, for most individuals who have earned their way to the top, it’s about specific money habits. Here are some of the best money tips for those looking for a little bit of inspiration from the best.

1. Don’t Live Beyond Your Means

One of the biggest problems that plagues many people who have difficulty with their finances is that they live well beyond their means. It’s important, no matter how much money you bring in each month, to develop a modest budget and to stay within it. Spend less time collecting new things and more time experiencing moments and developing new skills. Drive a used, late model car instead of the newest one on the lot, and live in a house you can afford.

2. Stop Playing the Lottery

Another habit that the most successful individuals share is they refuse to buy into the lottery systems that are run around the country. While millions of people get excited at the thought of becoming an instant millionaire with a lucky jackpot, the reality is that winning the lottery is not something that’s going to happen to you. Every lottery ticket purchase is simply a waste of money that could be better spent. So, if you are a lottery player, think about the cost of all of the tickets you have bought, and what you could use the money for instead.

3. Spend More Time Talking to People

The top people who have reached ultimate success in the world also share another important characteristic; they have a way with their words. Taking the time to talk to people is another key factor that helps propel you to financial success. Meeting new people is easier when you open yourself up to a new conversation. This can help expand your network, which puts you in a better position for your career and ultimately, your finances.

4. Avoid Time Wasters

If you want to get ahead, the first things you need to cut out of your life are the big time wasters. Sitting in front of the television for hours at a time, playing video games, and spending the day online for no specific reason are all big activities that produce no viable outcome for those who crave success. If you are looking for something to do in your spare time, take up a hobby instead, such as music, sports, or reading. Hobbies that help you develop a specific muscle or skill are much more likely to help you be your best.

5. Do Your Best Work

The next helpful tip that can give people a greater chance of finding huge success is to do your best work. No matter what you do to earn your money, make sure you do it well. While many of the richest people in the country had various jobs before they made it big, whatever they did, they did it well and with passion.

6. Get Professional Advice for Money Decisions

Those with large amounts of money must also take special care to protect what they have. Wealthy individuals never make foolish decisions about money because they employ the help of financial advisors. Even if you aren’t a millionaire, it’s still a good idea to get advice from professionals for the best path to take with your financial reserves.

7. Focus on Task Completion and Organization

Making a large amount of money can only be possible if you’re constantly working toward completing important tasks and have some sort of organizational system for everything that you do. People who put things off or procrastinate difficult and time-consuming work may struggle to reach a certain level of success. A system of organization is vital to those who want to be able to deal with more demands as they become more prosperous.

8. Make Realistic Goals for Yourself

The last important habit that the richest people in the world are good at is that they make realistic goals for themselves. You can adapt this idea to your own life and career as well. Instead of existing in a life that doesn’t fulfill you and dreaming about a different path for yourself, set small goals that you can realistically achieve. Once you reach a goal, make a new one, until you finally get to where you want to be financially.
Following in the footsteps of the people at the top of the earnings chart can help you get to where your highest financial level may be. When your hard work and smart decisions start paying off, you must continue to focus on your goals and stay the course.

Can Good Record Keeping Make You Rich?

What if I told you that managing your finances more efficiently could make you rich? Would you be interested in learning how to effectively manage your finances? Something tells me you would be. You see, the thing is… many would assume that in order to get rich you need to acquire more money. While that is a portion of the equation, the other part of becoming financially successful and staying that way is – financial management.

Accountants and Financial Management

Unless you’ve majored in accounting yourself, to effectively manage your finances it is ideal to work with a certified public accountant. Kansas City CPA firm MarksNelson points out that the right accounting firm will work with you to help safeguard and grow your business.

Consulting with an accountant on a periodic basis to set up accounting systems, make major purchasing or investment decisions, evaluate existing accounting systems for errors, and assistance with business tax filing is an investment worth making. It essentially helps you to keep your finances in order, which can certainly lead to a financial increase.

The Importance of Good Bookkeeping

Do you know what money you have coming in and out on any given day? Do you know how much of that money you’re spending on operational costs, investments, or savings? Whether your business brings in $30,000 a year or $100,000 a year if you’re not tracking your expenses, chances are you’re allowing money to go down the drain.

The mismanagement of funds can quickly start a domino effect. It will hinder your ability to purchase inventory, pay salaries, make investments, and even provide quality customer service. In a nutshell, poor bookkeeping can quickly lead to the demise of your organization.

Benefits of Good Bookkeeping

Let’s take a look at some of the ways effective bookkeeping can increase company profits and bring you closer to being rich.

1.  Better Financial Analysis – You can’t make a decision on purchases, hires, investments, or savings if you don’t have a clear understanding of how much money you have (cash flow). Ideally, with the right accounting system in place, you can clearly see where money is coming in and going out each month.

2.  Fulfill Tax Obligations – As a business owner, you’re responsible for paying a lot more taxes than you would if you worked for someone else. Proper financial records make it easier for you to remain in compliance with tax obligations. Keeping track of cash flow, account balances, profits and losses makes it a lot easier to file your taxes every year. It ensures that you’ve paid the correct amount, which can prevent you from receiving hefty fines from the local and federal government. Good records can also help you in taking advantage of the many tax benefits there are out there for small businesses, which of course saves you money.

3.  Prevents You From Going Into Debt – If you’re blindly making purchasing decisions or taking out lines of credit and loans that you can’t afford to pay back, you’re going to find yourself in debt. Quality financial management, however, can help you stay out of debt (or at the very least manage the debt you have). If you have a clear understanding of what you have and what you can afford you will make more effective decisions as it pertains to purchases and borrowing money. Accurately recording company debt can also ensure that you stay on track with payments so you don’t incur more fees or damage your company credit.

4.  Informed Purchasing Decisions – You have to be willing to spend money to make money in the world of business, but if you’re spending more than you’re making – it’s a waste of time. Bookkeeping ultimately helps you to see the bigger picture as it pertains to your company finances. Having a budget for instance lets you know how much you have to spend on necessary expenditures so that you don’t go overboard.

So… you may have caught on to the fact that bookkeeping won’t make your company rich. HOWEVER, it will help you to utilize your money more wisely and can assist you in saving hundreds if not thousands of dollars every year. Think about it… if you had an accounting system in place that allows you to manage cash flow, make more informed purchasing decisions, maintain your tax obligations, AND helps you to take advantage of deductions and credits… you’ll have more money to invest into your business so that you can ultimately meet your financial goals.

What are you saving for?

Seeing that I have already wrote two articles on saving this week, I figure it’s only appropriate to finish the week off with, yet another post, about saving. Consider these three articles the holy trinity of personal finance. Okay, maybe they aren’t that insightful…wait, actually they aren’t really insightful at all. Oh well, I tried 🙂

So we all have a desire to be rich, right? The word “rich” is totally subjective though. I would consider both, Kobe Bryant and Bill Gates to be rich, even thought there is a large discrepancy between their net worths. Being rich isn’t about reaching a specific quantifiable amount of cash, but instead it varies from person to person. Whether we are talking thousands, millions, or billions, I think we can all agree on at least a base line definition of wealth: comfort in knowing we have enough money to survive tomorrow.

Personally, I will feel wealthy when I have the ability to work any job I want, regardless of the salary. Imagine the freedom that would come with such financial stability! Not being dependent on employment income would be the best thing since sliced bread…Sure comfort, peace, and stability are all important reasons for accumulating wealth, but let’s be honest, we also wanna do some crazy awesome things with our hard earned moolah. Thus, the reason for today’s blog post title…What are you saving for?

I can think of a few things I want to do when I achieve great wealth…

1) Pay the Young Life summer camp fee for 50 high school kids that live in under privileged neighborhoods. This last summer I was able to take a charter bus full of these kids to camp through the generous donation of $30,000 from an anonymous donor. I got to be there and witness these high schoolers experience the best week of their lives! It was an incredible experience, and I can’t wait for the day I can do the same.

2) Buy a vacation property. I absolutely love skiing and have not been able to do enough of it since I have been living in San Diego (apparently it hasn’t snowed here since Dec 13th… 1967). It would be incredible to own a cabin in Colorado that I could spend a few weeks at every winter so I could get my ski on. Oh and I would get to said vacation property via my private jet of course 🙂

3) Visit each continent. I think it would be totally sick to go to every continent at least once. Sure Antarctica may be a little difficult to get to, but if you are loaded it’s probably more feasible. As of this point in my life, I can check one continent off the list (North America)… not a great start. Ninjafrica here I come!!!!

So those are three things I am saving for. What about you? Hopefully you have some plan to become financially abundant, what do you plan to do once you get there? Maybe take a year long vacation touring the world? Maybe you want to buy a killer whale and name it Rufus? Or perhaps you want to collect every action figure that has ever existed like this guy…

…whatever it is, I want to hear it. WHAT ARE YOU SAVING FOR?

“Finances are so complicated”

How many people have you heard excuse their lackluster personal finances because managing their cash flow seems like too much work. I’m afraid I know a handful of people that are so intimidated by their finances, they choose to ignore them completely. Guess what?! Managing your money is really, really, really simple. Even more simple than this maze…

There are really only three things that can be done with money.

1) Spend it

2) Save/Invest it

4) Steal it

4) Give it

For the love of all that is holy, don’t try and make personal finance more complicated than it should be. Your goal should be to have less than 100% of your money in the “spend” category. Ya got issues if you are spending 103% of your income every month, sadly this is more common than we all realize.

To keep this post short I’m gonna post up the percentage of my income that gets allocatted to each category every month….

Spending: 60%

Save/Invest: 30%

Donate: 10%

So that is the breakdown of my numbers. Keep in mind it is an average, some months my spending was 35% of my monthly income, and other times it was 140%, so it’s important to try to think over the course of a year or so.

Now it’s your turn sucka, why don’t you post up a quick snapshot of your “Spend, Save, Give” percentages. Try to be honest and accurate. There really is no “perfect” breakdown as each of us is unique and has our own perceptions of what is important to us.

p.s. don’t do drugs (yeah, I know that has nothing to do with finances, but I just thought you mind need a friendly reminder :))