Refocusing on Finances
July 3rd, 2009
Life is a journey that we’re all on; we make decisions that send us down various paths. Sometimes we get incredibly busy with one thing or another and neglect most of the other things in our lives. For example if you’re a workaholic then you might not pay nearly as much attention to your family or your friends as you should. If you keep this up for a long time you will loose touch with your friends and family. Each of the paths that we take is different and unique and there is nothing wrong with being very focused on only one part of our lives.
Remembering to stop and refocus your priorities is important in order keep balance in your life. We have all had times when we became incredibly busy with one aspect of our lives. Sometimes its more than one thing pulling at our attention but you can’t loose sight of the things that aren’t getting attention that are truly important (like family). Recently for me I haven’t been posting on this site and to take it a step further I haven’t been focusing on my money as much as I have in the past. It doesn’t mean that because I was focusing my energies elsewhere that my finances went away.
Did I stop paying my bills when my focus was elsewhere? No – they still got paid. Did I splurge on expenses? No – though I’m sure I spent a bit more than I would have normally. If everything is going alright with one aspect of our lives like money and we pay less attention to them there’s a good chance nothing bad will happen. But there’s an equally good chance that nothing good will happen. I believe that its time for me to pause and refocus on my finances for a little bit.
My wife and I had decided to focus on reducing our debt with minimal success though the debts have creeped down a bit with our payments. By refocusing on my finances I’ll be able to put some effort back into this goal.
So rather than simply saying that I’ll be refocusing my efforts on my finances this weekend I plan to:
- Review all of my spending for the past couple months
- Set up a budget for the upcoming week (and post it)
- Get a lay of the land with my debts and assets
- Finally see what next steps need to be taken
Stay tuned!
Posted in Financial Situation, Uncategorized | No Comments
Lowering Expenses by Keeping Receipts
February 22nd, 2009
When times start getting tight the very first thing people will do is to start cutting back on their expenses. Unfortunately a great many people don’t know where all of their money goes – they inevitably loose track of a few dollars here and a few dollars there. Although this is a generalization I believe that it’s very true since it happens to me the moment I stop tracking my spending.
To help me track my spending I keep all of my receipts and ask for them all the time. I don’t keep these receipts for tax purposes or anything of the sort. I keep my receipts to track my spending to the penny, and it helps.
How I track my spending with receipts:
Step 1 – Get the receipt
Every time I spend money I ask for a receipt – it takes a bit of time to get used to asking for one but most stores will give you one when you ask (assuming they don’t give you one right away).
Step 2 – Track the Spending
Using the receipts I input them into spreadsheet so I can see exactly where my money has gone. The receipts help keep everything honest and free of a poor memory. Rather than thinking I spent about $50 for groceries I will know I spent exactly $55.43. This level of detail can be very useful
Step 3 – Adjust budget
Having the receipts allows me to see real numbers and adjust my budget appropriately.
Some people advocate using one trackable source for their spending such as debit or credit cards but I find that small purchases get lost in the shuffle.
The only drawback to using your receipts is the fact you have be somewhat vigilant in putting the receipts into whatever tracking system you use. If you let them collect for too long the sheer amount of receipts can prevent you from tracking them.
Keeping my receipts has helped me keep my spending under control and allowed me to adjust my budgeting to be more realistic.
Posted in Budgeting and Planning, Uncategorized | 1 Comment
Site Problems
November 26th, 2008
It seems that I am having some technical issues with the site at the moment. Hopefully they’ll clear up soon as I have some big news to announce.
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Baby Steps to Debt Reduction
October 15th, 2008
When babies are learning to walk they take a bunch of small steps and they fall down a lot without hurting themselves. They don’t just jump up and go for a jog. The analogy is great because too often when we start a new project or learn a new skill we try to dive in. Very often the results are very disappointing. There is something to be learned from baby steps.
By taking small steps we effectively break the project or goal down to small steps that are achievable. Babies take smaller steps because they don’t know how to walk and their muscles aren’t able to support them for very long. When it comes to a lot of financial matters we need to take a lot more baby steps rather than trying run metaphorical marathon.
A perfect example of this can be seen with debt reduction. I am like a lot of people out there and I’ve got my fair share of debt. Like all of these people in debt I want to reduce my debt. There are a lot of ways to reduce your debt but if you’ve been spending your money faster than you can make it for years it might be more difficult than you first think. By trying to remove all spending and drop all of your money to pay down debt can be a real shock to your system. I have tried this approach and it requires a lot of effort and I have failed many times.
Rather than doing everything at once you can start by taking baby steps. Starting with something like tracking all of your spending to figure out where you are spending too much of your money. This can help you when it comes time to cutting back and increasing your debt repayment. There are many different approaches out there from debt snowballs to tactics for which debt to repay first. Starting small gives you the opportunity to learn and try what will work for you.
I am still in debt but I am now making some headway, there have been a great many mistakes along the way and a few gun ho approaches where I tried to reduce my spending and pay down my debts at the same time. It failed and over time I’ve learned to take small steps and because of the baby steps I understand how I got into debt and what the solutions are. The baby steps have helped me learn.
Posted in Debt, Uncategorized | 1 Comment
Planning Ahead
August 30th, 2008
Planning ahead can be incredibly beneficial when its actually done rather than talked about. Over the course of my career I’ve worked in project management and I’ve seen a lot of good plans go awry and projects started without any planning. When things did go awry the situation was a lot easier to fix and direction restored when the project was planned out. When you don’t plan ahead you don’t know what to expect.
Without a plan you end up going in all sorts of directions for without a direction. You loose your focus. Say for example you want to start a business and you’re a good developer (programmer) and good with computers. You take the leap and go for it one week you’re fixing a company’s network and the week after you’re looking after a small broken program that needs fixing. You’re passably good at all of these items but there is no real direction to this business of yours.
The analogy paints an interesting picture in that you might succeed without a plan but the likelihood is far lower because there is no purpose behind what you’re trying to accomplish.
Not everything in life needs to be planned ahead
Yes there are times when things simply don’t need to be planned out – a spontaneous trip to the beach can end up being a beautiful and memorable day. I would like to think that intuitively people should know when they need to pause and plan out their actions but too many people don’t even do that. I could be wrong but I think this one is based on experience; If the activity is something that you think will be complex or challenging then you should plan it out.
Planning ahead can save you a lot of money
When I was in high school my computer science teacher showed us a very ancient video that talked about planning out a software project. The video was dated when we watched it in the early 90’s but what I remember from that video to this day is fixing a problem when planning out a programming project might cost you $1000 in the planning stages but finding and fixing that same problem as you’re about to get into testing might cost you $25,000. That’s a big difference and it applies all over the place.
A do it yourself home reno – if you start without planning a project out can mean you need to call a plumber in when you’re 95% done and he tells you that you have to rip up all the work you’ve done to just to be able to finish the last 5%. They might not be great examples but it happens all the time.
Planning ahead is particularly important when it comes to your money – without planning ahead you end up floating along without much direction. If you happen to be saving your money you might be missing out on interest or investment opportunities.
If you are living pay to pay and beyond your means just making ends meet can be a challenge planning ahead might mean the difference between paying late fees on your credit card bills (that you might forget otherwise)
Planning a project or your finances out can seem like it’s a real pain in the butt but when you don’t do it there is a much bigger chance that something will go wrong and when that happens you lose money and time. I’ve seen both sides of the picture and yes you can have a successful project that’s not planned out but I would say these are rare. You don’t have to go to the extreme because you can get stuck in analysis paralysis where you spend more time planning than doing but the concept can save you thousands of dollars.
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5 Reasons I Admire Successful People
June 3rd, 2008
Successful people are an inspiration to many and a source of jealousy to many more. For every success story that we hear we often forget that there are countless others that didn’t accomplish anything. Most of us know who Bill Gates, Stephen Spielberg, and Warren Buffet are based on their immense success not the tens of thousands that failed or worse never tried. I admire these people for 5 main reasons:
- They prove it can be done
- They show perseverance
- They show ingenuity
- They make great case studies
- They overcome adversity
They prove it can be done.
For me the most important of the 5 points I mention is the fact that these incredibly successful people prove beyond a shadow of a doubt that it can be done. Whatever our goals maybe we can reach them. On the days that my finances and projects frustrate me I need to stop and think about a successful person. There are a lot of successful people out there and they all show that my goals can be achieved as well. Regardless of what they themselves accomplished by sticking with it I too can achieve my goals, whatever they may be. They also show me that I don’t need to dream small – I can aim as high as I want. Knowing that people before you have achieved great things can be incredibly inspiring when you’re starting your own journey.
They show perseverance.
The very first step in tackling a goal is starting; unfortunately it’s only the first step after which we realize just how many steps there are to accomplish our goal. Successful people don’t let the size of a project daunt them. They simply keep going. Do you think that we’d be hearing about Warren Buffet today if he decided to take it easy when he made 1 million or even 100 million? I seriously doubt it. These people have a complete and utter devotion to their passions. This perseverance also shows me that although I might not have a burning passion for something the way they do but that type of passion does exist in our world and I’ll find mine. Finally their perseverance reminds me just how much can be accomplished if you pour your heart, brains and effort into something.
They show ingenuity.
Another great point about incredibly successful people is that they don’t stop. This isn’t just their passion for whatever tasks they have but the fact that they don’t let problems or setbacks stop them. Thomas Edison tried thousands of times before he made the light bulb work. He tried different combinations many of which probably seemed very odd to people. Successful people aren’t afraid to try new things and go around the conventional wisdom to get to their goals. They use ingenuity to solve the problems that they encounter on route to their goals.
They make great case studies.
Before you laugh this isn’t a plug for a school assignment or anything of the sort. I personally learn by trying and doing, but before I attempt something I like to see what others before me have done so I can learn from their efforts (and often their mistakes). Highly successful people make a lot of mistakes before they finally get to their goals and again most people don’t hear about these stories only their successes. When Edison succeeded in making the light bulb, the one that worked got all the praise and the thousands before simply fell away as unimportant. Learning from others mistakes can help guide us down the routes to our own success even if we learn how to avoid a potential problem.
They overcome adversity.
Adversity is all around us each and every day of our lives. For the most part these are small problems that we don’t remember an hour later and we learn to handle these problems. When the adversity becomes larger most of us simply follow down the path of least resistance and never challenge the adversity. Successful people decide that adversity is something to be challenged and they adapt themselves to the situation. A perfect example of this is the story of Apple. We all know this company for their iPods and computers, but the reality is that this company was struggling before Steve Jobs brought the company back and now their products are common in most North American households.
Successful people inspire me; they show me the bright light when things are not looking as good as I would like them. I’ve used examples of incredibly successful people in this post but it’s not meant for only them. All successful people show these traits even if they’re not necessarily financial in nature.
Posted in Commentary, Uncategorized | No Comments
Getting Caught Up Financially
May 22nd, 2008
When I first started writing this blog I was further in debt than I am now and I was spending money all the time. Now a couple years later I’m spending less (and making less) and I’m still in debt though not as much. The reality is that although there has been some improvements, significant ones even, it really isn’t enough. I am still struggling financially.
Now I might be struggling a bit but I also know that I can get caught up financially. I’ve made progress and this post is the beginning of making more progress in the right direction. My frustration with my finances is still there and I’m still not making enough money but I’m also juggling a few things and there’s no point for it all. It’s time to take this blog out of the theoretical and put it into practice.
Figure out where things stand
Before knowing what really needs to be done to adjust spending and get my financial situation caught up I need to make sure I know where I stand.
Step 1
Outstanding Bills:
- Cable/Phone Company: $685 (With the current Bill)
- Car Repairs $TBD (This needs to get done or I can’t renew my plates)
- License Plate Renewal $76 (need to get the car looked at first)
- Car Insurance $233 (Automatic Withdrawal)
Those are the three items that are in arrears and need to be fixed ASAP. The good thing is that I have the money in my account right now to take care of all of that any get caught up on all of my other expenses.
Step 2
The next item for figuring out where things stand is to pull together my cash flow for the past couple months and see where things stand. This exercise will be one for this evening but I have everything in place to actually accomplish it (I have kept virtually every receipt). After getting the cash flow together it’ll be time to pull all of my current bills out of their hiding place and figure out which have been paid and which haven’t.
I’ll need to know what bills are due when so they aren’t missed anymore. I need to start using a calendar and putting this information on it. Right now I’m not making a lot of money compared to what I used to make but I should be able to get the ship righted. Once I have a list of what my spending has been and what bills are due it’s onto the next step of the process: budgeting.
Step 3
Now that I know what my expenses and income are I can make sure that I don’t overspend on anything. It comes down to budget time! I’m notoriously bad for keeping to a budget but In order to spend less than I make I’m going to have to be diligent about it. This blog is going to help me with this – my goals initially will be weekly and I’ll adjust this as needed. My spending will be tracked daily (I’m still debating if these will be posts or not) and an update will be weekly. The goal with only a weekly goal is to correct and ajust to changing situations and to keep everything as tight as possible. Once I’ve managed to get caught up I’ll see about pushing this goal out a little further.
The whole idea behind this step for me is to make myself accountable for getting caught up and balanced. I have always been hesitant about showing my actual income and expenses on this site and I’m not really sure why. Maybe it’s a slight embarrassment of telling the world what I spend my money on. Regardless, its time to stop hemorrhaging money like it was going out of style and get my financial situation on track.
Posted in Budgeting and Planning, Debt, Financial Situation, Uncategorized | 3 Comments
