Tag: Goals

A Picture Guide To Creating An Effective Budget – Part 1 of 3

Budget.  For many, this is a scary word.  It means numbers.  Making sense of numbers.  Calculating numbers.  And quite frankly, I’ve learned over the years that not everyone is comfortable confronting numbers.  But if you want to have control of your financial situation and use simple concepts that big businesses use to your advantage, you’ll need to be armed and ready to face the numbers.  I’m happy to say that they’re not as intimidating as they may seem!

Even numbers can be visual, and in this Three-Part Series, I’ll show, in pictures, how you can create an effective budget that gives you power and control over your finances.  In Part 1, we’ll address the overview of a budget and why it is important.  In Part 2, we’ll go over how to create a budget; and in Part 3, we’ll address what to do after you’ve created your budget to maximize its use.

So what is a budget, why is it important and why do you need one?

A budget is an itemized financial plan for a certain period of time such as a week, month or year.  You anticipate your income (inflows) and plan your expenses (outflows) accordingly so you can see what you’re left with.  Ideally, you will spend less than you bring in.  Here is what this looks like:

This snapshot of a budget allows you to see your monthly income, itemized expenses and what you have remaining. This makes it easy to see if you’re sending more than what you’re bringing in.

Over time, a budget helps with planning ahead and in anticipating problems that may arise.  This insight allows you to think about what changes should be made and respond by reallocating resources as needed.  For example, if you’re over your groceries amount for the month, you can plan to spend less.  Or if you’re spending too much on cable each month, you can negotiate a lower rate with your cable company.

See how the highlighted amounts changed compared to those in Exhibit A. By planning and reducing your expenses in certain areas, you’ll be left with more to reallocate.

To your benefit, a budget provides an organized and easily understood breakdown of how much money you’re bringing in and how much is leaving your pocket.  It is an invaluable tool that allows you to manage your money and prioritize your spending.  An important point is the fact that the effectiveness of a budget doesn’t depend on your income.  In fact, your financial situation is largely about what you do with your money as opposed to how much you make.  With a budget, you can identify and get rid of wasteful spending, quickly adapt as your financial situation changes and attain your financial goals faster.  You’ll have a more accurate sense of if you’re able to afford your dream vacation or your friend’s wedding.  You’ll know how much you can save for your future.  This financial clarity is especially empowering.

With the reductions made in Exhibit B, additional money at your disposal can help you save more for your future or toward planned expenses.

In Part 2 of this series, we’ll go over each step in creating a budget that is tailored to your situation.  Share your experience with a budget or what you would like to see in Parts 2 or 3 in the comments section below!

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Quick Takeaway: Take the Wheel and Steer Toward Your Goal

From time to time, your windshield gets foggy.  Instead of snow, rain or sleet, your view gets blocked by lack of focus, second-guessing yourselves or negativity from others.  It is normal for this to happen and it is fine to pull over on the shoulder to regain your composure.

The biggest challenge, however, is in snapping out of it and getting back on the road.  Take yourself out of the current situation and look at the big picture.  Remind yourself why you started the journey in the first place.  Envision what it will be like when you get there and why you want that feeling.  Imagine it being real.  Use that motivation as the push you need to keep going.

So what’s the takeaway?

Don’t let a few raindrops on the windshield blur your vision. You’re in the driver’s seat. Steer toward your goal! Keep dreaming big and don’t let anything get in your way along the road to success!

“There is a curb called Failure
A loop called Confusion
Speed bumps called Friends
Red lights called Enemies
Caution lights called Family
You will have flats called Jobs
 But, if you have a spare called Determination
An engine called Perseverance
Insurance called Faith
You will make it to a place called Success!”

– Unknown

Have you had a time when your view became foggy?  How did you get yourself back on track?  Share your experience below?

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Life is Fragile: Here’s How to Make the Most of it

I recently shared this on TheAfter5Edge’s Twitter handle and facebook page and received a lot of positive feedback.  For this reason, I wanted to take the opportunity to elaborate on what was a short but important reminder.  We’re often so caught up being “busy” that we forget what should take priority in our lives.  So I wanted to take a moment to stop and reflect.

Life is fragile.  We have the option of going through life quietly or living life boldly.  Either way, our time is limited.  It is ours now to treasure and we should make the most of it while we can.

Spend it wisely.  Despite our limited time, we have the option to live life with meaning, with purpose and by design.  Think of what you want to have in your life and create a plan accordingly.  Create a life that makes you feel whole and complete.  Do the things you want to do.

Do good deeds.  The world becomes a better place with each of our acts.  Reach out to an elderly neighbor.  Let someone go ahead of you in a line.  Give up your seat on the bus.  Donate your used clothing.  Give your old books to a local library or organization.  Buy lunch for a homeless person.  Your options for doing good deeds are endless.

Help and spend time with people.  Our best experiences in this world are created with the people in our lives.  Help others when you can and don’t underestimate your ability to provide value.  Take time to celebrate the achievements and special moments of others.

Enjoy each moment.  Take walks.  Eat outdoor in the summer time.  Take time to relax and meditate.  The destination is fulfilling but make sure to enjoy the journey.  Choose your battles.  Keep things in perspective and always remember that most things are not that big of a deal in the grand scheme of things.

What takeaways do you have about life and how to make the most of it?  What rules do you live by to maximize your experiences?

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