Budget 101 Your Money Inventory

100 dollar bill in the light

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Budgeting money first steps
GET YOU MONEY ON TRACK!

Money Inventory Basics

It’s that time again, Tax season.  The first quarter of every year is when new resolutions are made, and many people get their tax refund. Tax refund time is the perfect setting to start your financial makeover.

Some years ago, I got fed up with my financial status. I had a good income but I could not keep any of the money I made for any length of time.  There had to be a reason I was making a good living but living paycheck to paycheck. Many of us may find ourselves in the same situation.

When you think about your finances and where your money is going, on the surface things may seem ok. A closer look at your finances may be in order. I know you may have heard this all before, but it really is true. Money and resources must be managed.  The time is ripe to knuckle down and become your own auditor.

Where do I start: Budget – Money  – Inventory

Steps

  1. Grab a piece of paper ( Not your computer or tablet)
  2. Think – about every and I mean every dollar you spend.
  3. write down three columns on the piece of paper. Label them Bills – Necessary – Unnecessary.
  4. Write every dime you have spent in the last three months in bills and spending.
  5. Separate the items into the three columns.
  6. List how much money you make per month on the paper.
  7. Add the total of the columns and play with the unnecessary from the money you make to see how much you can save.

100 dollar bill in the light
100 dollar bill in the light

photo credit: torbakhopper transparency with ben, scott richard via photopin (license)

What am I doing

Recording where your money has gone is a start and only a start. The reason for writing down these numbers is to find out how many bills and spending items are on the table.  The next action putting items in categories gives you and indication where your money is going while placing priority on those funds.

I did it you can too!

Listing out where my money was going was a sobering act. I started to find my bank account had a trickle in the form of $20 to $100 expenses that were a pure luxury and very unnecessary.  Little money vacuums such as subscriptions, dues for things I really did not use and other money ripping items. those were the bills listed in the unnecessary.

Hardcore

Once I had a visual on expenditure, it was easy to see I could get my money in control. It became a game to see how much I could save.  When I had a bill that I could not pay off immediately, I developed a time plan by attacking the smallest, then rolling the payments of the paid off debt to the next item on the list. My family thought I was nuts, as they had not had a money mindset change as I had. Actually, my divorce came some time later(go figure). It was imminent anyway. I went nuts, I called credit card companies, closed accounts,  got rid of cable channels, started taking car of my own lawn and snow. I was a mad man.

I want to touch on something I may have breezed over. The reason for the 3 moths of bills was to get a good average of items that many not occur every month. Those surprise non-monthly bills can hit you in the face. If you don’t take an average over time of your spending habits, that sudden expense could derail your efforts.

24 Months – The Outcome Over Time

Failure to reach a goal is typically due to unrealistic expectations. 24 months is a good timeframe to make great changes in your life. As you rid yourself of the unnecessary cost in your life, freedom will show up. The goal is to run for the duration and not sprint to the finish line. This is a lifestyle to make living better and more manageable. Freedom of choice will become more dominant as you free up money to be used or invested. The task I have placed before you is really easy. Start with one item per month then use the snowball moeny management method to get your finances in order.

Next time I will show you some free tools to help you budget.

Now go live the Billionaire Lifestyle.

 

Peace Out Emmitt

 

 

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MONEY IS FLOWING OUT OF BANKS

Dam credit cards
Dam credit cards
You won’t swindle me into Financial slavery with promises of gifts.

Banks, Mortgage and lending institutions are throoooooowwwwing money at the public once again. Look around your city and count the new construction sites and building project currently in place and happening. That fact alone is a sure sign we banks are lending money.

A couple of week ago I received an ad for a Chase Bank backed Frequent Flyer credit card. Now to be honest I have not applied for any type of credit card for some time now and wanted to see what the offer was about. At the very least I could have my monthly bills go to the credit card and gain some air flight miles. I don’t need or really want another credit card, but what the hell. I filled out about ten lines of information and within two minutes BOOM, I had been approved for $9000.00 dollars. WTF! I expected maybe a $2000.00 dollar limit, but noooooo, these freaks went all out.

Since the Credit card was backed by Chase Bank, the statement would be an element in my chase portfolio. This is when it got real for me, I was basically going to eventually use the credit card to pay my monthly automatic payments, so I have one bill every month, which means I would transfer the payment options to this new SouthWest airlines card. There was a flaw in the system. Two weeks later, I open my Chase Bank App and see a my SouthWest Airlines Credit card has an available balance of $8901.00 and I don’t remember charging anything. As I looked at the statement, the realization was apparent of the obvious annual membership fee.  Immediately I call the bank to ask if they could remove the fee. When I was informed, the fee was the reason you obtain the perks and it was not retractable, I got a little hot under the collar. I know, why am I bitching, Right? This is not acceptable in my world. Why should I pay you to loan me money, of which you may get the chance to charge me for using the money. NOPE, Not happening today. I politely ask to remove the charge and cancel my credit card. Chase Bank complied.

Moral of the story, I not paying you any more than I have to, for the reason of using your credit card. It was a setup too. They figured I would run the card up to the maximum and then they would have a super debit slave to charge and EXTRA $99 dollars and year. I am not that person.

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For the average consumer and public at large there is a trickle effect of the banks opening available money to the common folk. Compounding the financial health of a our situation, have a look at how many new large trucks and SUVs are on the road these days, due to the recent drop in gas prices. It is all a trap.

This is all bait, as what goes up must come down. Sure interest rates are low and money is flowing, but don’t forget 2008, when shit hit the fan. Now is the time to save and invest wisely. Stay on a frugal path, and look for opportunities to advance your appreciating asset portfolio versus buying depreciating asset such as Cars and boats, rims and other items that only lose value with time. To me banking is such a hustle. As I write this post I am in the middle of purchasing a home. That will be a entire new post, because the pimping gets real when purchasing a home, even if you are buying it as a cash purchase, which I am not.

 

Think slowly and evaluate everything in reality. Especially actions concerning money.

 

Now Go live The Billionaire LifeStyle

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Money & Debt = Financial Comfort food = Retail Therapy

debt_comfort_food

Everyone has that thing which brings them to their happy place……. for a short period of time.  If you poll a one thousand people you will find everyone has a comfort vice.  Many people use drugs, some people use work, others use television while many people use consumerism/materialism and the illusion of wealth as their comfort vice. If you wonder where the term retail therapy come from, think comfort debt.

In years past I used money,  consumerism, materialism and debt like a drug.  When my emotional state was down, relief was had by purchasing some truly unnecessary item to divert my attention away from my real life problems and issues.  I have haunting memories of being depressed because I did not have enough cash on hand in my bank account. With my bank account being in the red zone and depression filling my emotional tank, the only relief I could muster was by buying something on credit to make me feel as if financially everything was OK. Let’s face it, being a human being is an exercise in excess and restraint, and I, like many of us humans had far more excess than restraint.

What most wisdom would suggest is life should be is a management of moderation. Realistically, life is more of a roller coaster, and when the sea we are sailing on is to calm, we feel justified to jump in shark infested waters with just a life preserver or knife, just to keep things exciting more often than not.  Our issues are compounded when judgement,  external acceptance and peer pressure come into the fold.

12932990_10208367892530867_1197993098941897_nThink about the majority of the purchases you had made in your life. How many of those purchase were, I want therefore I need? A prime example is purchasing an automobile. Sure, we all understand the purpose of an automobile is to get you from point A to point B safely. Usually when shopping for an automobile the basic premise is a minor considerations. The pressing issue is how the automobile will make us feel, the physically and emotionally comfortable of the vehicle, the emotional safety and how people will judge us as we are associated with the automobile as a status symbol and envy project. Instead of purchasing a Prius which is a safe, economically sleek get it done vehicle, we opt for a Dodge Challenger. I as most of us, have made those purchases.  The bigger issue comes from the fact of most car purchases and many other items are facilitated via a lease or credit terms. Putting you into depreciating debt. the item just purchased, be it a Television at Best Buy, booming car stereo, latest mobile phone (Don’t get me started on those), automobile or just about anything else in this world loses its value the exact moment you take “possession”. I want you to pay attention to the word possession vs ownership, because until you pay the asking price, lease and financial fees of the acquired product technically you are not the owner.

I recently found a purchase/lease agreement for a 1990 Geo Prism I once owned (eventually), the sticker price was $12570.00. If I had not paid the car off early, the car would have cost me something like $20,000. I would have gotten straight pimped. That is why I now purchase cars I can easily have in my possession for a minimum of 10 years.

It all comes down to comfort food, which relates to my earlier post “Are you financially Fat or Obese” . Are you just financially eating yourself into the black hole designed for you to stay in bondage with the chains of comfort holding you down. I wonder how the consumer landscape would appear if we could all remove our emotions from the equation of making purchases.

Let’s make wise choices and be free.

The Billionaire lifestyle Coach

Emmitt Muckles

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