Wednesday, September 2, 2009

It's Time to Look Ahead

Ok people, the worst is behind us and it's time to prepare for the future. There are still some rocky times ahead and many of us are having to deal with some tough times right now, but there's light at the end of tunnel. Before you get there make sure you have a plan so when it hits your prepared.

A huge problem that I see so prevalent in today's society is instant gratification. In the olden days when you wanted to buy a home (or anything of value for that matter) you had bite, fight, scratch, scrimp, and save just to barely have enough money for a down payment. So when you finally had that money saved and you got that home, it meant something to you! That was your blood, sweat and tears that went into that down payment. In recent years, all you needed was a heartbeat and the lender told you you were qualified, you'd need zero money for a down payment and the seller would give you a credit for all your closing costs! Can you see the problem!!! There's no vested interest, there's no skin in the game!! I'm not saying I'm perfect or immune to it either. I've been caught up in myself, but the time has come to see things for what they are, make ourselves better and look and prepare for the future.

A great we do that is to start a budget. We know we've over spent before, but now we can learn from those numbers to help us have more money in the future. Here's a few simple steps to help get you on your way.

1) Go back over all your expenses for the past 6 months (this will take some time, but it's worth
2) Separate them into home or Business expenses
3) Categorize each expense - Here are some examples of what I use
Bank Fees
Personal Grooming
Pet Care
Savings - (Yes, this is a category!! You must always remember to PAY YOURSELF
You get the idea. Do this for each of the past 6 months
4) Now look at What your income has been for the past 6 months (break it down monthly).
Have you been living within your means??
Where can you make cuts? What have you been spending too much money on?
For me it was food! I love to eat, but I was spending way too much money on it!
5) Use the average for the past 6 months of each of your categories to come up with a budget
amount. Now you have budget for this month, see if you can stick to it! Remember it's a
working budget make changes to each category as needed!

Here is a great rule to live by when it comes to your finances. 70-10-10-10
Live off of 70% of your income

10% goes to Savings (once you have at least 6 months of reserves (that means you if you lost your income you could still live with NO money coming in for 6 months) then you can start using this 10% for investment)

10% goes to Charity (Remember, you have to give to receive, you deal it out in slices and it'll come back to you in loaves)

10% goes to Investments (I'll leave this up to you!)

Take a few hours Tonight and get this done! It's the start of a new month and just think come December you could be buying all those holiday gifts with CASH instead of putting yourself further into debt!

Think about it, it's worth it!

And remember, I'm never too busy for you or your referrals!

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