Welcome in the new month with a free eBook copy of book #4 in the Systemic series: "Forsaken". Be sure to pick up your copy at Amazon.com on Sunday, November 1st!
Thanks! And hope you enjoy!
Saturday, October 31, 2015
We do a Spending “Reset” Every Year
Like many other people, we have regular monthly and annual
budgets by which we abide. We also track
our expenses throughout the year to gauge our spending. However, just because expenses have been at a
certain level throughout the year or even previous years, it doesn’t mean that
we necessarily assume they’ll remain the same moving forward. Things can change quickly at times when it
comes to all sorts of various financial situations such as living location,
type of living environment, size of family, job and career situation, health
and medical costs, and more.
Therefore, we do a spending “reset” each year to ensure that
we’re on the right financial path before we get too far along.
Reviewing last year’s
budget and final totals
At the start of each year, I finalize our previous year’s
budget and review the overall numbers.
This allows me to see what our total expenses were, what our estimated
expenses were, how close we came to these estimates, what unexpected costs (or
savings) were realized, where high and low cost months were and why, and
compare overall costs to overall income to see whether we made or lost ground
in our efforts to grow assets.
Adjusting for the new
year
Once I’ve analyzed last year’s numbers, I can harness the
data I’ve gleaned from those numbers and use them in making adjustments for the
upcoming year. This allows me to make
changes in our budget forecast based upon not just one prior year’s
information, but since we track this information every year, over multiple
years to help smooth out the hills, valleys, and hiccups that occur throughout
a single year. Things like relocating,
buying a new vehicle, buying a home, having a child, major home repairs and the
likes can skew a year’s financial data, but over time, we can get a better
average of overall costs and cost inflation.
Forecasting for the
following year, but…
With such information in hand, I typically forecast our
budget out by several years. This is
helpful since it allows me to better plan for major purchases and determine
where income needs to be as well as where we might find cost savings over
time. However, I’m realistic when doing
this.
I realize that things related to medical costs, home
repairs, growing children, career changes, and similar items will come into
play and may make my multi-year forecasts irrelevant or even obsolete. Therefore, while my budget forecast helps
with long-term planning when it comes to larger purchases and our overall
financial pictures, I tend to take it with a grain of salt since as a family of
four our costs are constantly changing and evolving each and every year.
Disclaimer:
The
author is not a licensed financial professional. This article is for informational purposes
only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in
this article is solely at the reader’s discretion.
Friday, October 23, 2015
Free eBook Giveaway of "Forsaken" on Sunday, October 25th and Wednesday, October 28th!
Get your free eBook copy of Forsaken -- book 4 in the Systemic series -- at Amazon.com on Sunday, October 25th and Wednesday, October 28th!
Thursday, October 22, 2015
Why Diversification Might Help You with Your Greatest Money Issue…Fear
Scared of money?
Impossible you might say. People
love money, right? So how could they be
scared of it? But I hear time and again
how people like to carry credit cards rather than cash so they don’t have to
worry about it being lost or stolen. I
hear how people worry about identity theft and their financial information
being stolen. I read about the fear of
inflation eating away at savings or fear of a stock market collapse. There’s even a song by Notorious B.I.G entitled,
“Mo Money, Mo Problems.” So obviously,
money fear is an issue for some people.
So how could diversification help with combating such fears?
A nice combination of
real and imaginary
Even though shares of stock might technically be “pieces of
a company” this doesn’t necessarily translate to the shareholder directly as
actually owning something physical. For
example 1000 shares of a car company doesn’t necessarily mean you own an actual
part of an assembly line, six vehicle engines, or a vehicle itself. Therefore, I consider things like stocks,
bonds, ETFs, futures contracts, and non-physical commodities as more imaginary
investments based purely on the faith that someone will compensate you
monetarily for your shares rather than provide actual physical goods or
services for those shares.
This might be best illustrated with commodities. Owning futures contracts or ounces of silver
or gold through paper contracts doesn’t necessarily mean that someone is actually
setting these precious metals aside in some vault somewhere. Meanwhile, if I go out and buy actual coins
or bars and put them in a safe deposit box, I own actual precious metals.
Therefore, diversifying my investments between real
(physical), and imaginary (promised) assets can make me feel better about my
money and hedge against finding out down the road that the metals in my account
were never there to begin with.
Winning a little a
lot
Don’t you hate when the stock market is on the downturn and
day after day you see your account balance fall? But what if at the same time you owned gold
or real estate and these values were increasing? Or what if while gold and the housing market
were trending down, the stock market was going up? Or what if your US stock market holdings were down
while your Asian or European holdings were up?
There are a variety of scenarios to play with, but my point
is that when you’re well-diversified, you may see wins in different areas which
could balance out or even exceed your losses.
While they might not be as big of wins, they are wins nonetheless, and
as I mentioned previously, they may help take some of the sting out of losses
in other areas. Not only this though,
they may help keep up your motivation to continue saving and investing, even
when longer investment downturns take place.
Disclaimer:
The
author is not a licensed financial professional. This article is for informational purposes
only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in
this article is solely at the reader’s discretion.
Tuesday, October 20, 2015
Get Your Free eBook Copy of "Descent" on Wednesday, October 21st!
Get your free eBook copy of "Descent" -- book #3 in the Systemic Series -- at Amazon.com on Wednesday, October 21st!
Some of My Best Money Habits Come in Pairs
I’ve developed a number of good money-related habits over
the years. And during this time, I’ve
come to realize that some of my best money habits seem to come in pairs. While I didn’t necessarily mean for it to
happen this way, it has. And in the
process, these pairings have helped me better organize our family’s overall
personal financial data.
Tracking not just
expenses but income too
As a college student, I was forced to track expenses by my
parents, but as an adult, I found this exercise in personal finance very
rewarding. Over the years, tracking my
expenses have allowed me to gauge things like personal rates of inflation,
determine where and how I was spending my money, as well as look for places to
cut costs or spend more efficiently.
However, as I entered the working world, I realized that this was only
half the battle, especially once I became self employed.
Gauging not just expenses, but income too allows me to
determine when in the year I break even (income outweighs expenses) or whether
or not I’m going to break even, which tells me that I either need to cut costs
or increase income. It also helps me
gauge from where my income is deriving, in what amounts, and where I should or
could better focus my income-earning energies and resources.
Budgeting AND
forecasting
In my younger days (i.e. college), I kept a budget. Each month, I would set out a limit for my
spending in different categories and then track my costs throughout the month
trying to match or beat that budgeted number.
However, I eventually realized that just about every month was different
in some way. Either there’d be an
unexpected expense or an expense like vehicle insurance or holiday shopping
that in the back of my mind I knew was coming but for which I still wasn’t
fully prepared for. This would in turn
throw my monthly budget off, and I would find myself trying to cut costs the
following month to compensate.
Therefore, I eventually realized that it was beneficial not
just to budget monthly, but to forecast expenses out for the entire year – and
eventually multiple years – in an effort to better prepare me for all the costs
that I would encounter. This made it
much easier to more accurately budget, and over the years this allowed me to
refer back to prior budgets in an effort to refine my forecast predictions for
upcoming months and years.
Shopping AND selling
resale
For years, our family has been good as shopping resale. We’d find bargains at resale shops,
consignment stores, antique malls, online, and garage sales. And while we’d save a lot of money buying
items through such venues, we eventually realized that we could make some good
money through reselling at the same such venues.
With the internet making it easier than ever to find buyers
for used items, we’ve turned our passion for shopping resale into a passion for
selling resale items as well, improving our financial situation on both sides
of the coin.
Disclaimer:
The
author is not a licensed financial professional. This article is for informational purposes
only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in
this article is solely at the reader’s discretion.
Monday, October 12, 2015
Columbus Day Giveaway!
Get your free ebook copy of "Downfall" -- book #1 in the Systemic Series -- at Amazon.com on Monday, October 12th!!
Tuesday, October 6, 2015
Get Your Free Copy of "Descent" on Sunday, October 11th and Wednesday, October 14th!!
Get your
complimentary ebook copy of book #3 in the "Systemic Series" available at Amazon.com on Sunday, October 7th and Wednesday, October 14th!!
A Retirement ‘Bucket List’ Could Improve Finances
Building a bucket list in retirement could be a great way to
outline some goals and life achievements that you may have wanted to accomplish
for decades. And while laying out such
goals can be a great way to get your retirement dreams in line and organized,
it may also work to improve your finances.
While these goals don’t necessarily have to revolve around a
list of craziness that includes things like skydiving or driving a race car
(unless that’s what you want), creating such a list can be integral to
organizing the financial components of your retirement.
Outlining goals can
help with creating a budget
Some people look at retirement from afar as a time in which
to relax, carefree and unimpaired by the worries of the working world. Some such people will continue throughout
their retirement unfazed by a lack of responsibility or purpose. Other people however, may, after a time,
become somewhat disillusioned with a life in which there are few goals or
objectives.
For those types of people, having an idea of what they’d
like to do before they actually reach retirement could allow them to forecast
and create a budget that helps them meet such goals in a way that doesn’t have
them stretching their finances. Knowing
that a certain retirement living location will come with a higher cost of
living, that playing golf on a regular basis can become quite costly, that
traveling overseas could add thousands of dollars a year or more onto a
retirement budget, or that buying that boat to finally cruise around the lake
or take to the ocean will run $20,000 or $30,000 and put a heavy dent in
retirement savings could lead to a push in increase pre-retirement savings or to
cut costs in other areas.
Goals may lead to
location finalization
If a retiree wants to hike in the mountains, swim daily in the
ocean, enjoy the desert landscape, or live near distant family members as a
part of their retirement bucket list, relocating might be on the retirement
menu. Outlining these goals ahead of
time could provide better clarity when it comes to retirement location
finalization.
With a location – or at least geographic area – pinpointed
with the help of such bucket-list goals, a pre-retiree may then begin to
investigate pertinent financial information related to the cost of living in
such a location. Things like property
tax rates, local and state income and sales tax rates, insurance rates (both
home and auto), utility costs, food costs, gas prices, and more might all be
considerations. This way, costs won’t
come as such a shock or have a retiree rethinking their relocation ideas.
Trying a new career
Some retirees don’t want to quit working in retirement; they
just want to quit working in a particular job or industry and have a desire to
explore new employment realms and possibilities. However, trying a new endeavor in retirement
could prove risky and rely upon funds that might otherwise be set aside for
covering retirement expenses.
Figure out what potential work or career options might be on
the retirement career bucket list could allow pre-retirees to start researching
such industries or roles ahead of time.
This can help in developing a business plan, setting money aside solely
for this purpose, and maybe even try out some new ventures before retirement
officially begins in an effort to see just how feasible such goals are in an
effort to reduce risk and be better prepared financially.
Disclaimer:
The
author is not a licensed financial professional. This article is for informational purposes
only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in
this article is solely at the reader’s discretion.
Thursday, October 1, 2015
Get Your Free Copy of "Forsaken" on Sunday, October 4th!!
Get your complimentary ebook copy of book #4 in the "Systemic Series" at Amazon.com Sunday, October 4th!!
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Using Experiments in Retirement Planning
It can be extremely difficult to know what retirement is
truly going to be like before you get there.
And once you’re there, it’s going to be too late to prepare. However, there are some relatively simple –
and cost-effective – experiments you might try well in advance to your golden
years in an effort to better ready yourself for retirement. While these experiments could be designed to
prepare you for a future that may be decades away, they might also have significant
ramifications in cutting your costs in the here and now.
Saying no to expensive coffee
While it might seem difficult for those who crave that fancy
gourmet coffee from the local coffee shop each morning, avoiding such
temptations can lead to big savings and carry over into purchases for things
like donuts or pastries, fast food, and similar convenience-type items.
CNN
Money noted in 2011, “Americans spend an average of $8.43 each time they
stop at a coffee shop, according to data compiled by Mint.com. With caffeine
fiends filling up an average of 46 times last year, this adds up to a total
annual bill of $385.97.”
Making these items an occasional treat rather than a regular
buy can cut costs substantially and help make such items more special if you do
indulge just once in a while.
Dining in
According to Bundle.com, “The average monthly cost
of Dining Out for people in the U.S. is $281.”
Reducing meals out – and the additional expenses that come
along with them like taxes and tips – may act to push you to make tasty treats
of your own at home and as a family. Learning
how to create your own delicious pizzas, get creative with pasta dishes – adding
new herbs and seasonings – and cooking other delectable meals at a substantial
cost savings as compared to going out can substantially reduce your dining
budget and provide you with an extensive menu to carry with you into
retirement.
Reducing the family vehicle
fleet
Reducing the family fleet by just one vehicle could equate
to substantial savings and help prepare you for retirement at the same
time. By reducing costs on things like a
car payment, fuel, parking, insurance, maintenance, and repairs, savings in
this area could equate to thousands dollars each year. Not only this, but it can help you learn how
to function with one less vehicle so that come retirement, it will be no great
hardship to continue on this path should you desire to continue these savings.
Disclaimer:
The
author is not a licensed financial professional. This article is for informational purposes
only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in
this article is solely at the reader’s discretion.
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