The first step to financial success lies in knowing your financial situation at any given time. There is an anecdote attributed to John D. Rockefeller--that as a child he was given a monthly allowance from his parents, but upon stipulation that he had to save 10% of it, give away 10% to charity, and account for the rest of it. While his parents required that he record down to the penny where he spent it--you can be a bit more lenient on yourself!
Track your spending for 1-2 full months
Use a program like Quicken to keep track of all your personal finances. I recommend the latest version of Quicken or a similar financial program if you already own one. You should start out by entering in your present-day personal checking account, savings, investments, and cash situation.
To complete this step, you will also need a cheap plastic filing container or something similar. You can purchase these for about $15 at Office Depot, etc. As you make payments, keep track of all the receipts you receive, the checks you write, and any other monetary transactions you make. Like I mentioned earlier, you don't need to be exact when it comes to cash--just try to be, as much as you can tolerate.
At some later time, at your leisure, enter all this transaction data into Quicken. As you do so, put the purchasing receipts into the file folder under the appropriate Category. Make separate labels for each of the file folders-- I suggest some of the following:
You can also add your own categories or remove some as appropriate. At this point, you may be wondering why you have to do all this. For the moment, just trust me that it will be beneficial to you (I will explain it later on). Also, it takes a grand total of about 10-15 minutes per week to do what I just described. The next section, Budgeting, will take a little longer. But budgeting also requires that you need to at least perform the first step mentioned above, that is, keeping track of what you currently spend.
Planning your Budget
I can already hear what you are going to say--oh no, not a budget! I don't like them either, because they tend to reign in my emotional spending or "I gotta have it" mentality. The truth is, you are the master of your financial destiny (not to sound corny, but its true for the most part). If you want to buy that fancy knickknack with the wireless PDA attachment downloader, then by all means, get it. But if it doesn't serve your needs in the long run, then you will have wasted $X dollars to serve your fleeting emotional desires. Besides, you will notice after tracking your budget for several months where the real money is flowing. You might buy a fancy computer toy only occasionally, at $200+ dollars, but eating out at lunch everyday + dinner with the girlfriend at fancy restaurants all the time is leaving you broke. How about going to bars? I like to drink, but a beer at a bar or nightclub can range from $4-$10. It's probably even more if you live in areas like San Francisco or New York.
Anyway, the point of planning your budget is just to get a better grasp on directing the flow of your money. I'm not saying that you should totally change your lifestyle or even change it at all--but if you are complaining about not having enough then there are certain things you should do, mainly spend less. It will be described later the benefits of saving & investing your money (which you probably already know anecdotally, but perhaps do not have extensive experience personally).
Good Luck!
About The Author
Shanti Braford
Editor/Publisher
The Long-Term Value Letter
Lincoln Stretch rentals Alsip ..Despite how easy it is to balance a checkbook, very... Read More
Get Access to Realistic profitable strategies & discover the mindset... Read More
**If it's Spam, it's a Scam!- If it sounds too... Read More
Are you having problems with debt? Are you afraid to... Read More
The lists of bank and savings accounts that are available... Read More
If you are the normal consumer, then you've probably experienced... Read More
Developing and living by a household budget is by far... Read More
Finding a stable and secure income that will come year... Read More
Future financial success is not a guarantee that any one... Read More
The Prudential has dubbed those who refuse to leave home... Read More
If you've developed a household budget to get your spending... Read More
The Check 21 Law is the new federal law for... Read More
Recently, many of these loyalty rewards programs have come to... Read More
Address labels are many things to many different people. If... Read More
What is it about being frugal, why do it at... Read More
1. Don't focus on your finances.The reason most people get... Read More
Holy Shenanigans! More STUFF?Loosing one's business due to lack of... Read More
Next to our physical health most of us are primarily... Read More
Saving money is not easy and is made more difficult... Read More
I think most of us have at some point in... Read More
I thought I was through with exams when I finished... Read More
1. If you have your haircut every 3 weeks, try... Read More
Predatory lending exists in the mortgage industry. It's typically when... Read More
Confused about whether you can contribute to a Roth IRA?... Read More
Super-mumsIt seems that the proof of maternal efforts is no... Read More
Western Springs shuttle limo ..Millions of people have a checking account and many people... Read More
I think most of us have at some point in... Read More
Budgeting. It's a word we're all familiar with. Everyone knows... Read More
If you, like most people, have not seriously considered what... Read More
During the last twenty years, banks have offered a number... Read More
It is possible to eat a healthy, balanced diet without... Read More
The cries are heard from the distance, "I need help... Read More
Finding a stable and secure income that will come year... Read More
Many people spend their little income haphazardly without any planning... Read More
Just about everyone has a checking account. Checks present easy... Read More
It is crucial as an individual who is striving for... Read More
Most Americans have been brought up to be concerned about... Read More
1. Lighting & Light Bulbs Install low energy light... Read More
Has anyone been to the gas pumps lately? Soon $3... Read More
Are you having problems with debt? Are you afraid to... Read More
Reducing the clothing budget was a serious challenge for me.... Read More
Here are some tips that can help you save money... Read More
Your food budget is the most flexible area of your... Read More
Six Scholarship judges were sitting around an oval table. Forms... Read More
I've been going through and interesting growth period lately that... Read More
Things are so expensive these days. We seem to be... Read More
The first step to financial success lies in knowing your... Read More
My personal opinion is that in today's new economy, it... Read More
For most of us the process of getting out of... Read More
You've decided you want a bigger, better and more desirable... Read More
Personal Finance |