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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What? I’m An Adult?

That moment when Adulthood gets real.
That moment when Adulthood gets real.

For most of us mentally adulthood was not a sudden thing, we just found ourselves THERE. I thought about this off and on over the years and came to a conclusion, for me it was kind of experiment in freedom that evolved until I had a oh shit moment.  Basically  I can remember testing the waters of adulthood around the age of 16 1/2 when I got my first “Real Job” as a dishwasher in a Hilton hotel. Before getting that job of mine, I just tried daily to stay occupied so my mom had not reason to give me something to do. Then one day I found myself with something to do constantly, and it was after getting my first full responsibility job. So here it was for me, in steps I can remember.

  1. At 16 had a girlfriend who attended Purdue University ( yes I was in high school, my game was tight…lol)
  2. Got a Job working as a dishwasher, at Detroit Metro Airport Hilton. (worked my ass off too)
  3. Opened a checking account
  4. Began to save Money.
  5. Had to buy my own cloths now, as my mother explained it. “You work, get your own clothes”.
  6. Got my first loan. The loan was through a local credit union. I impressed the loan lady because I saved $800.00 as a deposit, but had no money for car insurance thanks Dad for the insurance down payment)
  7. Bought my first Car
  8. Broke up with girlfriend, had freedom now, silly me (She was smart too, she’s an engineer now)
  9. Got 15 more girlfriends over time
  10. Purchased a gold chain on credit to help credit rating it (gold chains, and car audio were the hot thing).
  11. Opened a Hudson’s (now Marshall field) Charge Card to establish credit.( They use to call then charge cards,LOL)
  12. Enrolled in school after graduating High School and had to dig deep to pay for classes. (had to sit out for 6 months because I got behind on tuition. Felt like a loser)
  13. Graduated
  14. Got a job as a field technician.
  15. Bought a more expensive vehicle (custom Chevy S10 truck, girlfriend lost her mind, called me a moron), debt, see where this is going.
  16.  Moved out from my parents, partially (My mom saved me on the groceries)
  17. Got Married
  18. Debt
  19. Children
  20. Debt
  21. Debt
  22. Divorce
  23. Fast forward at this point – no debt, now frugalish

So, I’m not sure how your life played out, but I remember one day  about 6-8 months after I graduated High school while arriving home at 4am and thinking “Shit, I HAVE to go to work in a few hours” because I had to pay for:

  • Rent
  • Car insurance
  • Various small credit cards
  • School
  • Car Payment
  • Food
  • Gas
  • and the list goes on.

 

In that moment at the age of 19, it hit me that I was an adult, responsible for my own being. I think it was in the fall, because the weather was turning cold and a few of my friends were still in highschool. The only thing I could think was there is NO turning back forever.

Here is the point I would like to make, we basically stumble into being adults. There is no course, seminar or step by step manual, and no one has perfected the process. One thing I do know, out of all the years I and maybe you too, were in school none of it really prepares us formally to be adults . Only by going the path of experience can we obtain the lessons to be an adult, but it sure would have been nice to have a manual, or lesson plan. Our parents give us bits a pieces of information you need to navigate, but it seems so foreign, because and they seem so OLD, and unwise to us when you are a young adults. So listen to them now, because nothing is new in the world, except electronics, and bad television.

We all say, “If I only knew then what I knew now”. Well what you know now can help you in the future, all that is required are a few downs times and recoveries back up. Don’t sweat the small stuff, because the majority is small stuff.

Here is one thing I have for everyone, myself included. As long as you stay alive, free and healthy “90% of what happened in the past will not matter when you get to the future.

So take the thing you know now to live best in THE BILLIONAIRE LIFESTYLE.

 

Now go live The Billionaire Lifestyle

 

Emmitt Muckles

 

photo credit: The Case of the Mysterious Suitcase via photopin (license)

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Are You Financially Fat or Obese?

FMO =Financially Modified Organism

Are you carrying too much financial weight and don't know it?
Are you carrying too much financial weight and don’t know it?

photo credit: AMURICA via photopin (license)

We all have a favorite pair of pants or a shirt that makes us feel great when we wear them. So we tend to cherish those items and not wear them as often. When we do wear those items it tells us we fit the mold of what we were when we bought them.
I have a pair of pants usually slated for me in the spring, but often a little eye-opening moment happens when I try to put those pants on every few years. They don’t fit any longer. I can’t button them and usually just put a belt on without fastening the pants. The reason for my new found situation, I gained weight, because i let things slide. Over the months of not wearing those pants, I put on somewhat feels like a few tons of butt and belly meat.

The simple act of putting on a pair of jeans has told me I have not been paying attention to my weight and physical condition, and I have work to do. This is actually a post about finances but stay with me here.

The very same thing happens almost by magic to us financially. We start taking on financial weight in the form of small debts which can affect out overall and previous lean financial state. Have you ever done an audit of your credit card or debit card spending and try to shed some financial weight?

Credit cards and debit cards are like a financial buffet VIP pass, allowing the holder of these small densely packed financial calories cards to got wild.  I like to think of credit cards and debit cards as the High Fructose corn syrup in your purse or wallet waiting to enter your financial body. Ewe Financial GMO, or FMO Financially Modified Organism.

Have you ever taken and financial inventory of your spending habits regarding your credit and debit cards. The world is our financial buffet with the membership sitting right in your pocket waiting for you to enter the feast. If you have never taken an inventory, it’s time to do so. Here are the steps for your spending habit inventory.

  1. Gather your credit card statements. 3 months worth
  2. Gather your bank statements attached to your debit card. 3 months worth
  3. Look at each transaction and label it(AN) Absolutely Necessary (example, automobile gas purchase, is absolutely necessary, getting a cheeseburger because you were too lazy to make lunch is not.)
  4. If the purchase was for comfort, entertainment, recurring payments for something you don’t use, or laziness label it (UN) unnecessary

Tally up your unnecessary purchases, particularly the recurring payments. If you are not using the recurring item or service you are being billed, the answer is simple CANCEL IT!

Are you a Debt Slave
Are you a Debt Slave

Performing a routine audit and having an action plan can allow you to maintain a manageable healthy financial weight. One practice I have performed since 2004 has been to find a comfortable level of money to work with per month,  no matter what raises or financial increases I get to spend that Set monetary level. I have based my living expenses of $2800 a month give or take a few bucks for the last 12 years. Anything over that $2800.00 amount is slated for going into savings of some sort. Some of that $2800 right into savings as well.   my income, I increase the amount per month directly to my savings account. Now I will not sit here and say that I am a perfect financial guru, I am a human with emotions and emotions can make us irrational, Sometimes I refer to myself as a recovering debt alcoholic with an infrequent tendency for falling off the wagon from time to time personally. Because I pay attention to my finances overall and frequently, I can get back on the wagon and recover without too much mayhem and destruction in my life.

I know a few people with the mindset who constantly rationalize well I’m broke so might as well spend it while I got it. I experience this from the time I was a child, especially from the various peer groups in my life. I too was there in my young adult life, and I now refer to myself as a former Fat Debt Slave. Financial responsibility is a choice and sometimes the choice is uncomfortable for a defined period.

Financial health is equal to physical health, they both have to be monitored and maintained to make the life trip easier for the long-term. Simply adding debt to your budget unconsciously can and will cause discomfort.

Unless you have a financial generation of unlimited proportions, we have to monitor our financial situation constantly. Purchases we find important today may be just a small or medium burden tomorrow. I am not advocating not living your life and not having awesome experiences, but be mindful of where and how your financial resources are allocated and how the bottom line will be affected.

 

Have an awesome day.

The Billionaire Lifestyle.

 

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