Before you can decide how to invest your money or how much to stash away, it’s important to ask yourself the fundamental question: • Why care about money? The answer is harder than you think. … [Read more...] about Why Care About Money?
What would be the point of a blog if we didn’t explore an idea that may be slightly controversial? Anyone who reads this blog knows that my quest for financial freedom heavily relies upon disciplined saving and planning for retirement. Like many people, I am using my employer-sponsored retirement plans, IRA’s, and personal savings to build up a fortune that I can one day live off of. All of that is fine and good in theory, but what if everything I just said was ALL WRONG! What if all the money I’m saving will one day be worthless? It sounds crazy, that’s exactly what one famous author is promoting in one of his new books. … [Read more...] about Are We Fools for Saving Our Money?
I recently read an article on Daily Finance that posed the question of whether having one-million dollars was enough to retire. For many, one-million dollars is perceived as being the classic bench-mark of finally having enough money to retire as well as a symbolic goal for finally “being rich”. But as you can expect, the article posed several questions about whether retiring on one-million dollars had become a myth. Would it be enough to retire or stop working altogether? Where Does One-Million Dollars Get You? Perhaps it’s a sign of the times that our expenses have gotten out of control. Or maybe our society just simply “thinks” they need too much to live comfortably. Either way, we can explore this situation a little further. … [Read more...] about Retiring on the One-Million Dollar Myth
At many times throughout this series and especially in Part 2, I told you not to worry just yet about your individual credit card purchases and to treat them all as one “big category”. The reason I did this is because I didn’t want our lesson to get hung up on analyzing credit card purchases to death. You have a lot of other bills besides a credit card, and most of them are fixed each month. As we’ve already shown, knowing what you’re going to spend each month versus what you’re going to take in is extremely helpful in creating a budget. But in no way does this mean that we should ignore your credit card purchases. In fact, hitting the credit card category is the first place I usually look to cut my spending and re-direct the money … [Read more...] about How to Budget – Making It Easy with Mint
Time to test the gold in fire. Earlier I told you that a well designed budget would be the key to money management and staying within your means. This is still true. If you’ve created something that is tailored for you, meets your goals, and is comfortable enough for you to live with, then you should do well. All of this would be great if “you” were the only person this budget was for. The problem is that it’s not just “you”. A budget is usually for you, your spouse, and your family. Although that doesn’t sound like a lot, there’s a lot going on inside that group. Just like how a company sets a budget, each department will likely have competing goals and agendas. Similarly, sometimes each person in the family feels differently about … [Read more...] about How to Budget – Step 7 – Sticking to the Plan!
So after Step 5, does your budget meet our goals? Did you make adjustments and sacrifices? Do you have a positive balance for each month throughout the year? Is less money going out than is coming in? If so, then you are ready to move on to adding in your investment goals. Notice we didn’t do this in any of the previous steps. This is because you have get your business in order before you can start getting advanced with your budget - You have to walk before you can run. After we’re meeting our basic set of goals, let’s start digging a little deeper and adding in our investment goals. … [Read more...] about How to Budget – Step 6 – Adding In Your Investment Goals
Every great budget follows one simple formula: • [ Money In > Money Out ] = Good Or in other words … • [ Money In – Money Out > $0 ] = Good Basically you’ve got to have more money “coming in” than “going out”. Any other way is just a recipe for disaster! Don’t under-estimate how incredibly powerful this equation is. Everyday, people make the mistake of buying things on credit that they can’t afford or taking on payments when their income simply can’t sustain it. It’s simple physics that you can never have more going out than coming in. … [Read more...] about How to Budget – Step 5 – Apply the Formula for Success
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