As I’ve already expressed, your entire year is not just one month multiplied times 12. Your year is full of different events and one-time events that can greatly influence your money. The next step is to capture all those things in your 12-month snapshot. Here are a few to start with: … [Read more...] about How to Budget – Step 4 – Add In Those Special Times
Now here is where your budget will become far more advanced than everyone else’s: • Copy your one-month column 12 times so that you cover all 12 months! Yes, our budget is going to go for the whole year. What’s Wrong With One-Month Budgets? Lots: … [Read more...] about How to Budget – Step 3 – Take It All The Way to 12 Months
Take that list of your major expenses you created in Step 1 and list them for one month. Create one column and put your rows of expenses near the bottom half of the page. Income Now let’s go up to the top of the column. This is where we will list your income for the month. For most of us, that will simply be your paychecks and your spouse’s paychecks. Congratulations if you have other significant forms of income. Some examples might be: … [Read more...] about How to Budget – Step 2 – Income Vs Expense
THIS IS NOT going to be one of those “how-to” examples where you’re told to record ever purchase you’ve ever made. Doing that accomplishes NOTHING but wasting a lot of time. Besides, Mint.com can already do this for you automatically. I’ll have more on that later in this series. Instead, look back through your checkbook from the past few months. What were your MAJOR expenses? Make a list of them. I highly recommend using Microsoft Excel if possible. And yes, there will be a link to the template we create throughout this series at the end. Here are a few examples: … [Read more...] about How to Budget – Step 1 – Where Does All My Money Go?
Creating a budget is one of the single best financial actions you can take for your household. Once you have your goals and priorities straight, the next step is to learn how to manage your money. Setting a budget is something that has to be done even before you learn how to invest your money. Why? Because all the income in the world won’t make you any richer as long as you’re spending more than you take in. … [Read more...] about How to Budget My Money – Introduction
Once you have your reasons for saving money and your motivation to one day retire, there’s only one thing left to do: • Start saving today! Why? One simple reason: The effects of compound interest. Simply put, when you save your money, the effects of compound interest cause your money to grow far beyond anything you could have ever saved on your own. See for yourself: … [Read more...] about When Is the Best Time to Start Saving for Retirement?
As part of my annual financial checkup, I have updated my “Money Design” for financial freedom. This is my plan to one day automate my income rather than rely solely on employment income. My plan can be summarized by the flow chart below: … [Read more...] about My “Money Design” – 2012 Update
If you’re doing a good job of saving up for retirement and looking at the possibility of meeting your goals sooner than later, one of the next biggest hurdles you’ll have to overcome is how to physically get your money out of your retirement accounts. For most personal accounts such as a 401(k), 403(b), or IRA, you have to wait until age 59-1/2 or get slapped with a hefty 10% penalty fee. There are special exceptions to the 401(k) and 403(b) that may allow you to access your money without penalty by age 55. But even still, what if you are able to retire even sooner than that? Fortunately, this is where a 72(t) comes in. A 72(t) is a little-known tax code within the IRS laws that allows an individual under the age of 59-1/2 to take … [Read more...] about Retire Early Using a 72(t)