Showing posts with label Goals. Show all posts
Showing posts with label Goals. Show all posts

Tuesday, December 9, 2014

5 Things You Might Do Well At Work But Terribly At Home

“Never get so busy making a living that you forget to make a life."” 
- Unknown

A few months ago I met with a friend who wanted me to help her with her finances. She felt she never had any money and she didn’t know what to do. She wasn’t asking me for money but she wanted me to go over her budget and see what things she needs to change.

After she asked me to help her, I paused for a bit and asked her a question.

“Wait a minute,” I said, “don’t you manage a multi-million budget at work?”

“Yeah, I know,” she responded, “I guess I never thought about my own budget.”

Many times we acquire great skills at work – skills we probably didn’t have before. We might have learned a bit more about finance, accounting, time management, organization, leadership, management, and teamwork or communication skills. The interesting thing is that time after time I meet someone or someone I know comes to me because they’re struggling with something personally that they might be doing well at work. Below are a few of these things many people do well at work but, for some reason, don’t do a good job at home.

Manage a Budget
As discussed in the introduction above, there are many people who manage a lot of money at work, but for some reason can’t or don’t manage their personal finances. Money management is a great skill to have and many of us have it. Use that skill to take control of your spending, your budget and your credit. Just like you spend an ample amount of time at work looking over numbers and making decisions, you should do the same at home. Make the time and effort because I can guarantee you that your money is more important to you.

Organize Yourself
I had a friend a few years ago who introduced me to his co-worker. His co-worker bragged about how organized my friend was. I was shocked. I didn’t say anything, but I knew my friend for at least 5 years and our circle of friends knew that he was awfully unorganized. My friend was messy, he never knew where he left papers and he was always late paying bills – and he was my roommate. Organization is another great skill to have. Transfer that skill to your personal life and, just like you do at work, you will become more productive.

Follow Up
As a program manager a few years ago, my goal was to acquire and retain new business for the company. Anyone that has ever worked on sales knows that following up is key to getting the sale. I did a great job at work, but a terrible job following up with friends and family. At work, I used to respond to our stakeholders in less than 24 hours. At home, I would receive a call, a voice message, a text message and you would be lucky if you heard from me. The people outside of work are very important to you, probably more important than the people you’re trying to sell to. Apply the same rules at home as you do at work. Be responsive at home, be accessible and just make sure you return phone calls.

Manage Your Time
Productivity is important at work. Many of us use an Outlook calendar to schedule our time at work and we try to stick to it as much as we can. We include meetings, tasks, projects and more meetings in our calendar. However, many of us don’t do the same with our personal life. We don’t schedule our life! Plan a date with your significant other, schedule the time when you’ll pay your bills, don’t forget your little cousin’s birthday party, and schedule some time to grow. You will accomplish more in life if you apply the same time management strategies you use at work.

Exercise Your Patience
I had a niece that used to work at a fast food chain. Anyone that has ever worked in fast food knows that you have to be very patient with the customers. My niece was always very polite, patient and professional when speaking to customers. At home though, my niece was the opposite. She hated waiting, she hated how her younger sister would nag and she couldn’t stand being at home. Patience is a great virtue. At work we become very patient with clients, co-workers and our boss. It shouldn’t be any different at home. Why does it all of a sudden change? Take the same measures and effort you apply at work to your home and you will be happier. There is no difference.


Are you a different person at work as you are at home? I always believed you should always exercise the great qualities you were given as a human being, no matter where you are. In fact, I think these qualities are much more needed at home than at work. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.  

Monday, September 15, 2014

Thinking About Investing? This One Single Investment Can Give You The Most Return On Your Investment


"Average people would rather be entertained than educated. Rich people would rather be educated than entertained"
- Steve Siebold

Since last year I've been taking investments courses to learn more about how to trade, invest, and retire. The instructor did something clever during one of the retirement courses.  He asked the class (which mainly consisted of middle class folks between the ages of 35-50) if anyone had a retirement plan. About half of the class raised their hand. He then asked questions to every single person who raised their hand about their retirement plan: what type of retirement plan is it? which plan do you have? how much money has it made you? what has been your ROI? As he asked these questions, most people responded with "I don't know." Out of the 20 people he asked, only one person was able to answer all of the instructor's questions.

The instructor then stepped back thought for a second and then gave us the following scenario. 

"Let's say," he said, "I have this plan that will make you money and I want you to be part of my master plan. Who's in?"

The class looked a little confused. One person raised her hand and asked, "Well, what are you going to do with our money?"

The instructor quickly answered, "I don't know."

Another person raised his hand and questioned the instructor, "Well, how much money are we going to make?"

"Don't know," the instructor immediately responded.

After a few of my classmates asked a few more questions and received the same response from the instructor of "I don't know," one person raised her hand and exclaimed, "then, why should we give you our money?"

The instructor then smiled and responded with another question, "Well, why are you giving part of your paycheck to someone when you don't even know where that money is going, how much you're making or who you're investing with?"

We all fall in the same trap. We don't really want to do our homework so we'd rather "trust" and pay someone else to do the homework for us. Some of  us might just think that all this "investment talk" is complicated so we don't want to deal with that. Some of us might just underestimate ourselves and feel as though we will never get to retire, or that we're just not smart enough to make important life decisions. Instead, we get lazy and never do anything about it. Others will just follow along with the herd.

Time to time I have people approach me or call me and ask me what I think they should do with their money. In other words, they want to know where they should invest. Should they put their money in real estate or in the stock market? They heard a buzz about gold or the Euro, should they put their money there? I will then give my so-called expert advice and try to lead them in the right direction. However, there is always one type of investment that people fail to understand that can give them the most return on their investment. If you're thinking about investing in someone, invest on this:

Yourself.

I don't mean, go to college (unless that's what you want to do) or buy a bigger house. I'm recommending that you either invest some money or time in yourself to get educated about money. Retirement, investments, your hard-earned money are very important life decisions and the best thing that I feel you can do is start there. Buy a few books (but read them), or do what I did and get some audio books and listen to them on your commute to and from work. Your skills will improve and you'll be a lot more valuable. Learn from people that do the work you want to do or are interested in doing. Look at youtube videos to get ideas or subscribe to a few blogs or articles to enhance your knowledge. This will help you really understand what you're getting yourself into if you're planning on buying investment property, or if you're planning on putting your money on a start-up company or if you want to buy stocks for a certain company. 

Some people might have the money to invest in themselves but might just not have the time. I have also 'been there, done that.' However, if this is something you really want to do or deem important, then I know you'll find a way. Get educated. Invest in yourself. 

Any thoughts? 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Monday, September 8, 2014

Still Trying To Figure Out What To Do With Your Money? Here Are Some Suggestions


"If you want to live a happy life, tie it to a goal. Not to people or things."
- Albert Einstein

I came up with a realization this weekend. As I have been sitting down with friends, family, clients and couples, I realized that I am actually not a financial adviser or a financial planner. As I reflected on all the sessions I had with people, I realized one important thing that I didn't realize before. I've been advising on money now for almost a year and this theory just clicked recently. This is my realization:

I'm not a financial adviser, I'm a life adviser. I'm not a financial planner, I'm a life planner.

As I reflect back on the sessions I had with people, I try to quantify the the type of conversations we have during our sessions. Most of our conversations are about goals, dreams or about the things we want out of life. The main reason I see people struggling with saving, debt and budgeting is because there is no clear vision to what they want in life. There is no plan. When there is no plan to follow, no goals to accomplish, the money just disappears. Before your money continues to disappear, I want to dedicate some time to hopefully help you discover what you want to do with your money. 

Everything we do in life has a price. Most of our goals and dreams have a price tag. However, most people don't take the time to calculate the actual price of their dream or goals and many people don't set plans or personal targets for themselves. I write with the hope that this can help you figure out a few things. 

Ask Yourself A Few Questions
Take two hours of your day, of your life to ponder about your life and your future. Grab a piece of paper, a notebook or a diary and a pen or pencil and start answering these questions:

  • Where do I see myself next year? In 3 years? In 5 years? Where do I want to see myself?
  • What have I accomplished these past 5 years? What do I want to accomplish in the next 5 years?
  • What are my goals in life?
  • If money wasn't an issue, what would I be doing with my time?
There is no right or wrong answer here. There are no limits to what you can dream or imagine. There is nothing that is impossible when doing this exercise. 


Do Some Research
When I ask people what they want to accomplish, I get a few typical answers: 'I want to open up a 401k to retire' or 'I want to get out of debt.' I definitely respect the goals of my clients, but my goal is to make them happy and to really think about what they want out of life. However, I personally think that there are other accomplishments to think about than just getting old and paying off bills and creditors. I take my time to educate and help people think things through. For example, I ask the question, 'do you know that a 401k really is and how it works'? Or 'do you know how much money you'll need to retire for 20 years?' What about 'Have you thought about how you could potentially retire younger and what it takes to make that happen?'

I propose that everyone goes online and just does some research. You can google pretty much anything. Here are some questions you might want to google:

  • What's a 401k?
  • What should I do when I'm 30?
  • How to start a business
  • How much is a farm?
  • How to invest in Real Estate?
  • Where should I travel?
  • Where should I take my family?
You'd be surprised how attainable your goals might be after doing some research. I recommend you research about things you love, you wish to do, and things that matter to you the most. 


Set A Few Goals
Goal setting is key to life. I would personally prefer to be 70 years old and not retired but knowing that I accomplished 95% of all my life's goals and dreams than be 70 years old, retired and not knowing what the heck I did with my life. I set daily, weekly, monthly and yearly goals. We've all done this to some extent. We typically call these 'New Year's resolutions.' Here are some suggestions to get started:

  • Choose a deadline that is realistic
  • Make sure that your goal is measurable
  • Hold yourself, or have someone hold you, accountable
If you want to learn more about goal setting, research this: SMART goals. Start with a goal for this week. Begin to gain discipline. Discipline is one of the key factors to accomplishing goals. 


Be Encouraged
Does this blog seem draining? Too bad. We can't expect to be encouraged every single second, or to have someone push us on every single time we encounter hardships. I suggest that you develop the discipline to be self-motivated. If you've never been the self-motivated type, then you should hang around very driven and motivated people. If you think it's impossible to travel to Europe because it's a lot of money, then talk to someone who will encourage you. If you hang around people that always tell you that you're doing things wrong or that you can't do something, then it's time to start hanging around a different crowd. Encouragement comes a long way.

Stay the course and believe. The biggest obstacle is yourself. If you can overcome your personal barriers, then you can accomplish anything. Any thoughts?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Friday, August 29, 2014

Remember...You Can't Take Your Money With You When You Die

"You'll never see a U-Haul behind a hearse...I can't take it with me and neither can you. It's not how much you have but what you do with what you have."
 - Denzel Washington

Recently, I had a conversation with someone who reads my blogs. This person asked why I talked about money so much in my blogs. This person was under the impression that I was completely obsessed with money and he confirmed this when he told me, "Allen, you can't take your money with you when you die."

I completely agree with that statement. It is definitely true, you won't be able to take any wealth with you when you die. So why try, right? Perhaps it might be better for me to explain why I even write these blogs on money in the first place. Secondly, I want to explain why I truly feel that money is important. Finally, I want to explain what, I believe, you do take with you when you die.

Why do I write blogs on money?
I am not rich. I don't consider myself wealthy, either. However, I do consider myself blessed. God has given me the strength to learn quickly, apply what I learn, be brave, work hard, persevere, believe and achieve. Although I have not yet accomplished all of my goals in life, I have accomplished most of them. Although I am not financially independent yet, I have made great strives to get there. Over the last three years I have read books, watched videos, attended conferences and was mentored by others about money, finance, leadership, management, investments, etc. I have accumulated (and am still accumulating) an abundant amount of knowledge about many topics - money being one of them. I write blogs on money to share information and knowledge to those that might be struggling personally. I write about money because I know there are many people around me, people in my family, close friends that do struggle financially. I write about money to help people. I write about money to teach people how they can change their situation. I write about money to share my experiences with others. I write about money because I care about you. I don't want to live in a world where I achieve all my dreams and those that I love do not. 

Why is money important?
Unfortunately, we need money. We need money to provide for our family. We need money to pay rent, bills and our debt. We need money to attain the things that we really like. We need money almost every day. However, my philosophy on money is different. My intention is not to get rich. My intention is not to become the next top billionaire and buy a private jet. I believe money is important because it can lead to financial independence. If I am able to make proper investments, have a consistent positive cash flow and control my expenses, then I can achieve financial independence. To me, financial independence simply means that you do not have to depend on a paycheck or someone or something else to have money in your pocket. Instead of working for money, I would rather have money working for me. The only reason I want to achieve financial freedom is to have the ability to design my lifestyle. What would you do with your time, with your life, if you never had to worry about money? What would you do with your life if your investments took care of you? If I achieve financial independence by having enough passive income, I would spend my days helping people, spending time with my loved ones and trying to make a difference in the lives of others. I would wake up on Monday morning ready to go take care of my niece's kids so that she can take care of her errands. On Tuesday, I would go to an orphanage and spend time volunteering. You get the point. To me, money is a way to get to that ultimate goal.

What do we take with us when we die?
Nothing. Nothing tangible, that is. We can't take our money with us. We can't take our wedding rings with us. We can't take anything. Yet, we have been given life. Life is not a video game where we have 5 lives to live and then we can press the 'restart' button. Every minute is precious. Every moment counts. My goal is not to get rich. My goal is not to try to make a fortune so I can take it with me. My goal is to touch as many lives as possible while I'm alive. I can't take my pride, my glory, my accomplishments with me when I die either. I can, however, leave many things behind for others to have - from smiles, to money, to knowledge and assets. I'm not worried about what I'll be taking with me when I die. God will take care of that. I'm concerned with what I will leave behind. 

My intention was not to try to defend myself in this blog. My sole purpose for writing this piece was simply to give you an idea of what my true goals in life are. It's all embedded with a purpose. What is your purpose in life? Have you thought about it? Share. Comment. Have a great three day weekend. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Thursday, August 28, 2014

How To Turn Your Cash Flow From Negative To Positive

"Discipline is doing what you know needs to be done, even though you don't want to."
- Unknown

Yesterday, I began to tell my story (Read How I Survived With $11 In My Pocket). Let me pick up where I left off...

So I finally got a job and things started to look a lot better. However, if you remember the story, I was still deep in debt, I received a lawsuit, shortly after a sheriff came to my office to let me know that my wages were going to be garnished, and I still had some bill collectors calling me consistently. 

It took me a few years to get out of this financial hole. This is not easy to do, but yet I was able to do it and I wanted to share the two main ways I was able to turn things around. At the time, I felt as though i was living paycheck to paycheck and most of my money went to paying bills, debt and other people with little or no money staying in my bank account. I had negative cash flow every single month for years. This is how I eventually got out. 

Sacrifice
I used to hate the word sacrifice. It pretty much means that you give up things that you like. Most people kind of want to change their situation, but they don't really want to do anything about it. Most people worry that they're in a financial hole but they don't want to give up anything to get out. I'm sorry to put it this way, but the most effective way to get out of a financial hole is by committing to sacrifices.

In order to prioritize my life and financial goals I gave up quite a few things that were not easy to give up. For five years I didn't own a television. This meant that I also didn't have cable. I had to be content with the car that I drove that was falling apart. I drove that car until (literally) the wheels fell off. For three years I didn't have a bed, just two mattresses on the floor. Beds are expensive and so are cars. If you add up the total amount you would spend on a TV and on monthly cable, it also begins to be expensive to have those luxuries. The phone I had was never new. In fact, I was trying to downgrade at one point but T-Mobile wouldn't let me. I bought clothes maybe once or twice a year and tried to take care of them so that they would last me for five more years. I also gave up going out so much so I can save a little on gas and dining out.

Discipline
As I mentioned before, none of this was easy. Most people feel that they need to reward themselves immediately after they receive a paycheck. Some people I know spend half of their paycheck the Friday they get paid. 

If you really think about it, I didn't have enough money left over (positive cash flow) to buy a new TV. Most people buy things with money they don't really have. I strategically put money aside every month for the bigger goals in life. For over four years I tracked my income and expenses on a spreadsheet (until I learned about mint.com three years ago.) Every month, I sat down for hours to look at where I needed to cut, what other sacrifices I needed to make and stuck to my plan. I also made sure that if I had money, I didn't spend it. the biggest discipline I attained was the ability not to spend money when I had it. I read tons of books and articles about managing expenses, investments, getting out of debt, how to save, how to develop better habits, how to become more disciplined, time management, all read to help me achieve my goals. I read (or listened to) a book every month. I read articles every single week. I forced myself to wake up earlier every morning although I convinced myself in college that I wasn't a morning person. I even gave up french fries for 9 months and eventually became vegetarian. People ask me why I became vegetarian and my simple answer is that I just wanted to see how long I could do it. It's now been five years. 

Throughout this experience, the money I made had nothing to do with me getting out of a hole (read Why How Much Money You Make Doesn't Matter). It was truly the discipline I developed and the sacrifices that I made that eventually helped me reach my goals. What was the end result? Now, I have a TV ( and I do have cable but I just bought it to watch the World Cup games - I'm about to cancel it) and a better car. However, I'm more proud of the fact that I have no loans, no credit cards, positive cash flow and I have been able to reward myself lately with trips to Hawaii, Cancun and Orlando. It also takes discipline to reward yourself at the end. 

Warren Buffet once said, "The most important thing to do if you find yourself in a hole is to stop digging." Can you stop digging?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Wednesday, August 27, 2014

How I Survived With $11 In My Pocket


"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."
- Martin Luther King Jr.  

I humbly write these blogs to help encourage others and help people understand that whatever financial situation they might be in, whether they're in a hole or not, that they can improve their circumstances. Yesterday I received great feedback from my Interested In Improving Your Monthly Cash Flow? Follow These 5 Steps... blog. I received a few emails and some text messages about this blog with a few folks wanting to know more about my story. I decided to take a quick detour with my blogs and introduce to you my story as it pertains to my finances. This is not a "How I got rich quick" story. It's more of a survival story.

Most financial planners that I have met might know a great deal about 401Ks or investments. However, most of them might have never struggled to make ends meet, had to live paycheck to paycheck or had bill collectors calling them every day. Therefore, many of them might not be able to tell you how you can get out of your tough financial situation. I feel as though most people can relate to my story and this is why I encourage others to keep pushing. Here's my story...

During the recession of 2008 I found myself jobless. After working for multiple education companies and trying to become a substitute teacher, I was once again applying for unemployment and applying to jobs only a teenager would apply for during the summer. I was a college graduate with a business degree and a huge appetite for success but at the time no one gave me a chance to prove myself. I had two bill collectors harassing me, a warrant for a failure to appear in court (which to this day I still can't remember why I had to go to court in the first place) and a car that kept breaking down.

One day, in late May, I closed my bank account before they charged me again with overdraft fees. I decided that I would just live off of the $300 or so I had left and whatever I received from unemployment I would use for rent. At the time, I lived in a small two bedroom house in Fontana with my nephew. That day I told my nephew I couldn't pay rent anymore so I called the landlord and gave the 30 day notice. I had no clue where I would go or what I would do. In the meantime, my goal was to find any job to have enough money to last me through this.

I took any job that came my way. At the time I also played in a band but we were lucky if we even got money for gas when we performed. I painted a house (or tried to paint a house) for a few bucks, I put strings on guitars for a music store for a few dollars and I babysat here and there. Once a week I tutored my friend's daughter in reading and since she didn't have money to pay me, she blessed me with shrimp tacos every time we ended a lesson. On Tuesdays, I drove to San Bernardino to teach a kid's mariachi group how to play mariachi music. The families would pitch in to give me $20 for gas. In no way did I complain about my situation. Yes, it was tough and I would get sad at times but my mom taught me to be happy for what I do have. I cheered loudly even if I only received $20. 

Shortly after, my cash was low and I had to move out of my house so I began to sell my possessions: microwave, toaster oven, TV, etc. I made a few hundred dollars but now I only had four boxes left with my name on them filled with books, clothes and a few memories. I was close to selling my guitar but some of my bandmates didn't let me. I was lucky enough to have a brother that let me stay with him. I was happy to just sleep on the floor so that I didn't have to sleep in my car. I stayed with my brother for a few months as I continued to apply for jobs every day. I interviewed with so many companies but felt as though I had the worst luck in the world. I didn't have a suit to properly present myself so I always wore the nicest shirt I had (which had a small hole that I had to cover during interviews). I didn't know why no one would hire me. 

I finally received a call in early August from a company that called me a week before to tell me that I didn't get the job. This was an education company that did SES tutoring and they offered me a 3-month assignment as an independent contractor. If I met certain targets in three months, I would be able to stay with the company. If I failed, I was out. I had no choice. The day I received that call I only had $11 and had to decide whether I used those $11 for gas or for food. I used the money for gas and hoped that I would somehow survive until I received a paycheck. I started work on a Wednesday and, by an act of God, I received a small paycheck on Friday for my first three days of work. At that point, I knew things were going to change...

To be continued...

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Friday, August 22, 2014

The Question Most People Struggle With When Dealing With Their Money

"People with goals succeed because they know where they're going."
 - Earl Nightangale

Every month I meet with family and friends to help them go over their finances and put systems in place so that they have a budget to stick with. Every month, I also receive a phone call, or a few phone calls, from someone who frantically wants me to help them with their finances. When I receive that phone call, that particular person feels as though they're the only one struggling with their money and that their situation is unique.

I have yet to encounter a situation that is unique or a situation I truly believe can not be improved. However, you might think that most of the time I spend going over people's finances, I spend creating budgets, reviewing bank statements or teaching them about money. Although this is true, most of my time, however, I spend helping each individual answer one single question. This one single question is the toughest question to answer and is why I truly believe some people are struggling with their money. Most people can't answer this question.

The question most people can't answer is this: What do you want to do with your money? 

Most people earn good money, but they have no clue what to do with it so they spend it. Month after month, people receive a paycheck and month after month that paycheck disappears. What is the most common response to this question? It's: "I want to pay off my debt." Interestingly enough, the most common answer I receive with people has to do with spending it on their bills and paying other companies, not spending it for themselves. 

I don't want to make it seem like I have the answers to everything in regards to finance, but my purpose with these blogs are to help. If you have trouble answering that one simple question, now is the time to really start thinking about it. The following tips are ways I have tried to help others answer this question.

Ideas are OK
One individual I met with spent almost 30 minutes thinking about this question to only give me an, "I don't know." I then asked her to just jot down ideas and just think of what she would like to do. She told me she thought she couldn't answer the question because she hasn't really set goals for herself. I told her that's OK. An idea is a great start. All goals start off as an idea or a dream. It can be something as simple as "go to a Dodgers game," to "I don't want to work for my company anymore," to "I want my  kids to go to college." Later, we'll talk about goal setting, but you have to start somewhere.

Short-Term Goals are OK
I feel as though some people ponder that question so much because they try to look at their future a lot more. However, if you have trouble thinking long-term, think short-term for now. What are things you want to buy or have your money do for you in the short-term? Some people might want to take their kids on a family vacation in the next year. Some people want to go back to school this fall. Some people might just want to buy a house or move out of their crummy apartment. Although, I do suggest thinking longer-term at one point in your life, start off thinking about the next one month to three years. 

Get Educated
Some people can actually save well and have money saved up. Some people might be planning on saving money but might still not know what to do with that money. Eventually, these folks tap into this pool of money because they have no other choice. For those of you that might be dealing with this situation, I recommend doing some research. Just google, "what to do with money I have saved." For those that are thinking about investments, look into real estate investments or setting up an investment portfolio. Most people don't know how to do this because they were never taught these things. However, if you start asking the right questions, you'll start getting the right answers.

Spend this weekend trying to answer the question: What do you want to do with  your money? Discuss it with your spouse, write down some ideas and you'll see how things will begin to improve very quickly. Was this blog helpful? Share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Thursday, August 21, 2014

Do I Need A Budget For Everything? Even If I Just Want To Buy A Pen?

"Don't spend more money than you've got. Don't spend money before you've got it."
 - Lillian Vernon

A few months ago I was meeting with one of my 'clients' to go over how they did against their budget for the previous month and to create a budget for the following month. As we were creating their budget for the month of June, I asked the question, "Are there any birthdays coming up in June that I should be aware of?" The couple looked at me with a question mark on their face. "If so," I continued, "then it needs to be in your budget." The couple said that they had three birthday parties that month so we added a budget for those birthday presents. 

"Wait a minute," the wife asked, "so we should also have a budget for Father's Day presents?" I nodded, of course. "Is there something we shouldn't budget for or do we have to put a price on everything?" the wife asked. The husband finally chimed in, and jokingly said, "Yeah, should I create a budget even if I just want to buy a pen?"

When I first began to create a budget for myself, I realized that I was actually pretty good with sticking to most of my budgets. However, time to time I did go over on something. After carefully analyzing my spending habits, I then realized my problem. My problem wasn't that I was overspending on certain areas I budgeted for, my problem was that I was spending on areas I never budgeted for. These items were not emergencies, if that's what you're thinking (we'll talk about emergencies at a later date). These were items I did not plan to buy, that I could have easily planned a budget for. Below is a list of some budgets you might want to create to help you better plan your budget.

Birthday Parties & Special Occasions
If you're like me and you have a big family, birthday parties happen every month (and depending on the month, they might happen every week). Set a budget for birthday presents, birthday parties you might be throwing for your kids, anniversaries, and for other Holidays that require you to spend: Thanksgiving, Christmas, Valentine's Day. Set a limit for yourself so that you don't overspend and then regret it. For example, for birthdays presents, you might set a limit to not spend more than $20 per present. After you set your budget for the month, try sticking with it.

Trips & Vacations
Before committing to a trip or a vacation, try to set a budget first. You should think about gas or other type of transportation (i.e. rental cars, plane tickets, etc.), the hotel stay, food, entertainment (i.e. theme parks, zoos, etc.) and the shopping you want to do. If you like to take souvenirs, don't forget to add that to the budget. Try to avoid the spontaneous trips to the casinos or Las Vegas. Instead, make plans and make a budget. 

Big Purchases
When I moved to my old apartment, the goal was to make it look sexy. However, it takes quite a bit of money to make it look sexy. There were also some things we needed for the apartment such as an iron, a vacuum and a blender. I could have bought all those three items during the first month of us moving in. However, I decided to time my budget. The first month, I set a budget to buy the iron. The second month, I bought the vacuum and the third month we purchased the blender. Afterwards, I began to set a monthly budget to add to the sexyness of the apartment. However, it took time to purchase these items and every month there was a budget allocated for those items we wanted to purchase.

Remember, the goal is not to break your head trying to budget for the cost of a pen. The goal is to plan a lot better. Plan those dates with your wife. Plan for those birthday parties. Plan to buy that laptop that you need. Plan, plan, plan...and set a budget as you go. 

Can you think of any other things you should set a budget for?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Wednesday, August 20, 2014

5 Ways To Create A Budget For Yourself - Anyone Can Do It!

"A budget is telling your money where to go instead of wondering where it went."
 - Dave Ramsey

A  friend of mine was sharing with me how much he makes a year but was angry with a realization he had the other day. "Allen," he says, "I just found out that I make $45,000 a year, but that I only have $238.53 in my bank account. Why don't I have $45,000 in my pocket? Or at least half of that!"

When I was in college, I too had this realization. I told my roomate that I felt like I was just a middle-man for companies. I get paid only to hold that money for a few days before I give it to Verizon, the electric company, and other companies that I have to pay on a monthly basis. Although, I won't go over how to stop being a 'middle-man' during today's blog (or getting out of the Rat Race as Robert Kiyosaki would say), I do know that budgeting is the first step to taking control of your personal finances.

The following 5 steps will help you budget a bit better. 

1. Start by knowing how much money you make a month, on average
For some of us, our monthly income is the same every month, but this is not true for everyone. Start by putting down how much money you make a month and if it's not a number that is constant, then just use an average. 

2. Use basic categories to track your expenses
Before you start to jot down all the expenses you have on a monthly basis, first start off with the basics. Below is a list that I use when creating my basic categories:

  • Auto & Transportation
  • Bills & Utilities
  • Education
  • Entertainment
  • Food & Dining
  • Gifts & Donations
  • Health & Fitness
  • Home
  • Personal Care
  • Shopping
  • Travel

3. Break down the basic categories into subcategories
The more detailed you are with your budget, the more you'll understand where your money goes and where you want to allocate your money. From the basic categories that you created, create subcategories to track each transaction. Here's an example of the subcategories that I use:
  • Auto & Transportation
    • Gas & Fuel
    • Auto Insurance
    • Car Wash
    • Maintenance
  • Bills & Utilities
    • Electric Bill
    • Phone Bill
    • Water
    • Internet
  • Education
    • Student Loans
    • Books
  • Entertainment
    • Movie Theaters
    • Music (Yes, I still pay for music)
    • Concerts & Shows
  • Food & Dining
    • Fast Food
    • Restaurants
    • Groceries
  • Gifts & Donations
    • Presents
    • Donations
  • Health & Fitness
    • Gym
    • Doctor
    • Dentist
    • Sports Team
  • Home
    • Rent
    • Decorations
    • Home Improvements
  • Personal Care
    • Hair Cut
    • Spa & Massages
  • Shopping
    • Clothes
    • Desired purchases (tablet, laptop, etc.)
  • Travel
    • Timeshare
    • Hotel
    • Food for Travel
4. Look first at where your money went
Before you begin putting targeted amounts next to each category, first find out what your spending habits look like. Most bills and payments that we make are the same, for the most part, so those can stay constant. However, you do want to find out how much you are spending on clothes, a hair cut, fast food and other expenses that might change every month. You might want to look at the last three months and see how much you were spending on each category. Then, you should continue into the final step. 

5. Decide where you want your money to go
If you truly did this exercise, you might already have gotten depressed before you got to this final step. Most people realize later in life that they are spending more money than what they make. This is the main reason why you might feel that you're struggling to make ends meet every month or every week. This is the same reason why you feel like you never have money. You're probably spending more than what you're true means are. If this is the case (and even if it isn't), you want to place controls and decide how you want to spend your hard earned money. 

As I mentioned in my last blog, this will not happen overnight. Take the time and have the discipline to do this consistently for at least a year and you will start to see positive changes. It's not how much money we make but how much money we actually get to keep. 

Was this blog helpful? Comment. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Tuesday, August 19, 2014

5 Easy Steps To Follow...For Those Struggling With Finances


"Too many people spend money they haven't earned to buy things they don't need, to impress people they don't like."
 - Will Smith

Some people call me the accidental Financial Planner. Well, actually, no one calls me that but I thought it was a catchy name for my informal title. Since last November, I have gladly spent numerous hours helping people trying to get their finances together. My goal has always been to help people control their expenses so they can have enough money to not worry about money. (Don't worry - I won't be disclosing any names!)

Interestingly enough, I found myself giving the same tips to different people over and over again. These tips are essentially very basic and simple and will make a huge difference with the way you handle your money. If you properly follow these 5 steps, you will learn a lot about they way you handle your money, where your money actually goes and what changes you need to make to ensure financial health for yourself and  your family. 

1. Track Your Expenses
The first question I typically ask someone when I meet with them is, "what do you spend your money on?" The most common response I get from parents is: "on the kids." However, after fully reviewing all expenditures, it always turns out that perhaps less than 15% of the total expenses are spent on the kids. Other people can't remember or don't even know how much they spent on their phone bill or that they had a gym membership. It is important for everyone to track their expenses. There are many free tools out there that will actually do this for you. Most banks have online banking but a great tool for those that might have multiple accounts, and my favorite tool, is mint.com.

2. Use Less Cash
Cash is bad for a few reasons. One reason: if you have cash, you will spend it. If you don't have cash, you won't have something to spend. Another reason cash is bad: most people who heavily use cash to make transactions, payments or to buy things don't track their expenses. Many people have the habit of cashing their paychecks or going to the ATM frequently to take out cash. Unless you are writing down why you took out $100 on July 2nd of 2014, you will never know where your money went. Use your debit card to make transactions instead so that your transaction can be tracked and you can truly find out what you're spending your money on. 

3. Tag Your Expenses
Most people are lazy. They want a program or their online banking system to track perfectly what they spent when they went to Target. I have yet to find a system that will read your mind. It's impossible for a program to know that on August 2nd, you went to Target to buy groceries and that on August 8th you went to Target to buy clothes. Most people don't want to tag the expenses appropriately. Spend two to three days a week looking at your account and making the appropriate adjustments to your transactions. 

4. Review Your Expenses
Usually, after I meet with someone for the first time to go over their finances, the individual is excited about making changes to their financial habits. They leave with a mint.com account and with some financial knowledge about where their money went. However, when we meet a month later, I ask the question, "how many times did you look at your mint.com account?" The typical answer is one to three times. If you're only looking at your bank statements or checking your budget one to three times a month, you are doomed to repeat the same financial mistakes. It's of no value if you have online banking or a program that tracks for your expenses if you're never looking at your numbers. Try looking at the numbers at least once weekly, and then get in the habit of looking at them twice a week. I personally look at my mint.com account three times a week. 

5. Create a Budget
Most people are scared of the word "budget". When I told a certain individual that we needed to get her on a budget, her response was, "A budget? A budget will just tell me that I can't spend my money!" This is actually not true. A budget is a way for your to plan how you want to spend  your money. So, if you deemed it valuable to spend your money on video games every month, then you can definitely do that as long as you create a budget and a plan to execute that budget. I personally love going to the movies so I have a budget every month allotted to going to the movies. A budget really helps you decide where you want to put your money. 

Taking control of your finances will not happen over night. This will take time and discipline. Many of us were never taught about budgets, expenses and money. I hope to educate those that might be struggling taking control of their money. Am I an expert? Absolutely not. However, those of you that know me well, also know that at one point, I was also living pay check to pay check, getting deeper in debt, having collections calling me and a law suit from a credit card company. If you're in a hole - trust me - you can get out. Anything is possible. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Monday, August 18, 2014

A Deeper Look Into Our Habits



"Successful people are simply those with successful habits."
 - Brian Tracy

Last week, I disclosed some results from a study that compared the habits of the rich and poor. I wanted to spend some time going over these results and giving everyone more insight into the numbers and what this all really means. 

"I maintain a daily to-do list" 
The rich have the tendency to have a set plan for the day and follow the plan as closely as possible. Many of us might have one or two things to do for the day, and we might get lucky if we accomplish one of those things. 67% of the rich complete at least 70% of their daily tasks. 


"I love reading"
Although 86% of the rich love to read, they don't like to read for pleasure. 88% of the rich read self-improvement books at least 30 minutes a day. The rich heavily focus on improving their skills, their business, their finances and their happiness. Only 2% of the rich read self-improvement books more than 30 minutes a day. 63% of the rich actually listen to audiobooks during their commute to work, whereas only 5% of the poor listen to audiobooks. The rich strategically use their time to improve, even if it's in the car. 

"I do more than my job requires"
A job is just a job - right? Well, the mental aspect of what we do many hours a week is crucial for our daily lifestyle. 86% of the rich work an average of 50 hours or more a week, compared to 43% of the poor who work as much. Yet, when surveyed, only 6% of the wealthy individuals found that they were unhappy because of work. 


"I focus on my goals every day"
Goals are one of the key differentiators between the rich and poor. Remember - a goal is not a wish. It is not something that you hope will happen but something that you need to make happen.  Interestingly enough, 67% of the rich put their goals in writing.  The wealthy set daily, monthly and annual goals. 
"I watch reality shows on TV"
Looking deeper into this comment, I found out that 67% of the rich spend one hour or less a day watching TV! No wonder they don't watch Keeping Up With The Kardashians. The rich don't watch TV because they're against it, they would just rather use their time doing something more productive and they don't think much about watching TV. Instead, they created a daily habit of reading. 
"I play the lottery regularly"
The rich decided not to play the lottery, not because they don't want to risk their money on the jackpot, but because they would rather not rely on luck. Besides, most people that win the lottery lose their money within a few years after hitting the jackpot. Instead, the rich spend their time building their knowledge and taking other risks with their businesses, purchasing businesses, taking over investments and managing risks. 

In the end, no matter what you want to do in life, many of what we succeed or fail to do will be determined by our daily habits. Where are you spending your time? With who? Are there any habits you need to get rid of or be more consistent with? Share your thoughts.

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way. 

Sunday, April 27, 2014

Nick - The Man With No Arms, No Legs and No Limits

A good friend gave me a book for Christmas. The book was called Life Without Limits by Nick Vujicic, a man who has lived with no arms and no legs all of his life. The book was very inspiring and made me think constantly about myself. After finishing the book I looked for videos on Nick on YouTube and read a few more articles about him. After watching a few videos, I was impressed by how much Nick would smile.

Nick lived a rough life during his youth. He was teased frequently by other kids and called names such as "freak" or "alien." Nick grew up watching other kids play basketball, surf and go on dates with girls. At age 8 he contemplated committing suicide since he believed at that time that his life was already pre-determined: he couldn't do anything, he wouldn't get married and he would always need others to help him because of his disability.

However, Nick's attitude was impressive. He relied on God to remain positive and used his huge heart to get through some tough times. He learned how to swim, how to surf, how to use a computer and type, how to run a business and how to speak in public. Now, Nick goes throughout the world motivating other people and preaching how life can be lived without limits. He speaks to children about bullying and about loving themselves and each other.

Many times we are angry about the things that we don't have or the things that we do have that we don't like. We'll hate ourselves because we feel we're ugly or we're fat, we'll convince ourselves that we're not smart enough and we'll believe that we're not capable of achieving success. Yet, we forget the things in our lives that should matter. We forget that we have the blessings of our family, of our close friends, of the music we love, of the hands that allow us to hold our babies, of the lips we possess to kiss our mom on the cheek, of the dirty little car that has more than 200,000 miles but is still going, of the home that provides us a bed to rest, of the food we eat every single day and of the heart that allows us to forgive and love with no limits.

You are better than you think. You are beautiful. You are strong. You are smart. You can accomplish anything. The only limits you have are those you are setting for yourself.

"Whether you think you can or you think you can't - you are right."
- Henry Ford

"You cannot control what happens to you, but you can control your attitude towards what happens to you, and in that, you will be mastering change rather than allowing it to master you."
- Brian Tracy

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way. 

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