Budgeting For Prosperity
Budgeting For ProsperitySeven Steps to Follow To Achieve Financial FreedomWithout a sound financial plan, a business is doomed to failure - managing your personal finances is no different. A sound personal financial plan is crucial to both your financial and emotional well being.We have prepared a simple and easy to use budgeting process for you. This budgeting process will show you how to thoroughly develop a financial plan and lead you on the road to financial freedom.Make a complete list of your monthly income.The budgeting process always starts with a monthly income; one's income will show how much one has to spend each month.When developing your monthly income, make certain to include take home pay from your job, any bonuses that you receive, dividends and interest income from investments, tax refunds from the government, gifts from other family members, and any other type of income you may require during the particular month. If you would like a comprehensive income budgeting tool, please call your credit counselor at American Debt Solutions. They can be reached at 1-800-246-4019.
Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income budgeting worksheet.Make a complete list of your monthly expenses.Just like the complete list of an income, one must make a comprehensive list of his/her expenses.When you make your list of expenses, it is important to break them into three distinct categories, fixed, flexible, and discretionary.Fixed expenses: expenses that do not change from month to month.Good examples of fixed expenses are your mortgage or rent payments, a car payment, insurance premiums (such as life insurance, car insurance, or health insurance) or any other expense that does not vary from month to month. Once you have gathered all of your fixed expenses, you need to make a total of your fixed expenses for use a little later in the process.Flexible expenses: expenses that vary from month to month.Typically, you can control your flexible expenses to a certain extent. Flexible expenses include items such as groceries, utilities, clothing, restaurant expenses, haircuts, fuel and other items that change from month to month. You should be able to see that you do have at least some control over your flexible expenses.
Again, total all of your flexible expenses; we will also use this later in the process.Discretionary expenses: Discretionary expenses are clearly not necessary for your survival and may be the cause of many of your financial problems.Good examples of discretionary expenses are entertainment, vacations, movies, alcohol, and club memberships. Again, total all of your discretionary expenses.Put your expenses in order of most importance.If your expenses exceed your income, you will be in a position where you will need to use credit cards to pay for your income's shortfall. This is how most people get into credit card debt. It is important to monitor your use of credit to pay these expenses. The long-term effects of borrowing to pay for your current expenses can be very hazardous financially.
Your credit counselor at American Debt Solutions will be happy to provide you with a credit card worksheet to help you track your credit card debt. When you have totaled the monthly payment on all of your credit card debt, make sure to include this total in your total of fixed expenses discussed in point 2a above.Subtract your total monthly expenses from your total monthly income.By subtracting all of your monthly expenses from your monthly income, you will clearly see if you are going to have financial difficulties. If you have more expenses than you do income, you will have a negative expense-to-income ratio. In lay terms, this means that you are spending more than you are making. This is the typical cause of excessive credit card debt.
Since you are spending more than you are making, you must finance your budget shortfall with a source of credit such as your credit cards. If you do not stop this trend, your credit card debt will grow and grow until you no longer have the ability to use your credit cards.If you do have a negative expense-to-income ratio, you need to consider which of your expenses you can reduce. First, start with your discretionary expenses and then move on to your flexible expenses to see what expenses you can eliminate or diminish. If you would like a comprehensive expense budgeting tool, please call your credit counselor at American Debt Solutions. They can be reached at 1-800-246-4019.
Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your expense budgeting worksheet. At the end of each month go over every expense that you incurred. Look for additional ways to curb unnecessary spending. There is nothing more impactful in life than holding yourself accountable for your goals.
If you hold yourself accountable, you will always reach the goals that you set for yourself. If you don't hold yourself accountable for reaching your goals, you'll find that you never reach them. This is probably the most important element of a debt management or credit counseling program. There is no secret to financial success (see point six below for the secret) and there is no secret to getting out of debt (see point four above for the secret). The beauty of a consumer credit counseling or debt management program is that you are held accountable for the goals that you set for yourself in terms of becoming debt free.When you are reviewing your expenses at the end of each month, remember to set spending limits and goals that that are attainable.
You did not get into debt in one day and you will not get out of debt in one day. Any worthy goal takes time to achieve. Once you get the hang of the budgeting process and see that you are making real progress, you may want to go through the budgeting process quarterly, instead of monthly, as long as you continue to make progress.Try to put 10% of your monthly income into savings (401k and IRA savings plans have additional tax benefits).By saving 10% of your income you will learn one of the greatest secrets to financial wealth, the compounding of interest. If you save 10% of your income each month, your money will start to work for you in short order. It was Albert Einstein who said that his greatest discovery was the compounding of interest.When you consider your savings plans, first make certain that you completely fill your 401k and IRA savings plans.
This will allow your savings to accumulate tax free. This will accelerate the growth of your assets by 20 to 40%, depending on your tax bracket.After you have filled your tax deferred savings plans, any additional savings that you can make should go into a regular savings account. This could include a money market account at a bank (a very secure but low yielding investment) or some type of investment account (a much less secure but typically higher yielding asset over the long run).Also, remember that any reserve that you create will help to insure that you do not have to live paycheck to paycheck.If you would like to learn more about how to build wealth in your life, please call your American Debt Solutions credit counselor. They can be reached at 1-800-246-4019. Make sure you ask them about our ADS Wealth Building ProgramTM.
This program will show you the secret to building wealth in your life. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you with our Wealth Building ProgramTM.Divide all of your expenses by the number of paychecks you receive each month.By dividing your total expenses (obtained by adding your fixed expenses, your flexible expenses and your discretionary expenses) by the number of paychecks that you receive, you will see whether your paycheck is sufficient to cover your expenses If it is, you should be in good shape. If it is not, you may have to rely on other sources of income or you will need to reduce your expenses. Again, if you need to reduce your expenses, you must look to your discretionary expenses first and then your flexible expenses second.
If you cannot reduce your expenses, you may want to call American Debt Solutions and speak with your credit counselor. We will help you develop your budget at no charge. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income and expense budget worksheet.We, at American Debt Solutions, hope you find this article both informative and helpful and wish you the best in securing a debt free future.If you would like to speak with one of our credit counselors today, please click here now or call us toll free at 1-800-246-4019.American Debt Solutions, 2003, All Rights Reserved. American Debt Solutions is a 501(c)(3) Not-For-Profit Organization dedicated to providing a debt free future for our customers.
American Debt Solutions is a member of the AICCCA and has certified credit counselors on staff to serve your needs..
Paul S. Goldner is a noted author, entrepreneur and professional speaker.Paul has written numerous articles in the area of Financial Management, Consumer Credit Counseling, Financial Acumen and Debt Management.
Paul?s company, American Debt Solutions, is a market leader in the area of consumer credit counseling and education.
Paul can be reached at 914-646-9591,1-800-246-4019, PGoldner@adshq.org and WWW.adshq.org.
Armchair Millionaire Community Bulletin: You Don't Have to Be Rich to Live Rich
Interesting work by Richard Easterlin, an economic historian at UCLA, found that even though the gross domestic product per capita in the U.S. has more than doubled in the last 50 years, there has been virtually no change in the percentage of people who call themselves happy. In other words, a lot more wealth hasn't given us any more happiness. I'd also assert that more income won't necessarily provide you with financial security, either. Whether they are conscious about it or not, many people adjust their spending upward with their income, ending up with the same net worth earning $100,000 a year that they had when they earned $40,000 a year.
When we asked members of the Armchair Millionaire community to weigh in on this topic, we found that many have found ways to achieve financial security without a high income. Here are two such comments:"I make $50,000 a year--peanuts in Chicago--but I manage to save and invest over $15,000 a year. I contribute 25 percent of my pay to my...
Armchair Millionaire Community Bulletin: You Don't Have to Be Rich to Live Rich
Ira > Armchair Millionaire Community Bulletin: You Don't Have to Be Rich to Live Rich
Control Health Care Costs and Save Taxes?
One of the most prominent issues being discussed in the media is the rising cost of health insurance. Employees are being asked to contribute an ever increasing amount of their pay to group insurance premiums. Employers face double digit increases health insurance premiums while dealing with customers who are not accepting price increases. Self?employed individuals and those who must purchase individual health insurance are feeling this same bite out of their own pocket. These are in addition to the cost concerns of medications and prescriptions.Health Savings Accounts may be a way to cut health insurance premiums, take control of health care costs and save money on taxes.Health Savings Accounts (HSA) were part of the Medicare Act Congress passed in December, 2003.
They are designed to help take control of health care expenses with a tax-favored savings account and a high deductible health insurance plan. Money in the savings account helps pay the deductible and health expenses...
Control Health Care Costs and Save Taxes?
Ira > Control Health Care Costs and Save Taxes?
Louisiana Bankruptcy Lawyers
Although the laws of the state of Louisiana are different from the laws of the other states, bankruptcy is one area where there are more similarities than differences. This is because bankruptcy relief is under federal law, so the information in this context is pretty much the same in all the states.
But there is one glaring exception. It is about exemptions, the items that you do not lose by declaring yourself bankrupt. Under Louisiana Bankruptcy Law, the exempted items include IRA savings, which is a great exemption indeed.
So for a bankruptcy case pertaining to Louisiana, a better course would be to hire a lawyer who knows this aspect of the state law. Another aspect to be considered is that of time limitations. Although
Louisiana Bankruptcy Laws conform to the federal laws, the time limitations may require the engagement of a lawyer.
If you look keenly into the Louisiana Bankruptcy Law, you will find that the legal terminology used in the...
Ira > Louisiana Bankruptcy Lawyers
Take Advantage of End-of-Year Tax Breaks for the Self-Employed Physician and Healthcare Professional
There are lots of advantages to being self-employed that include quite a few tax breaks.
Even individuals who are just moonlighting on the side are allowed to set up a retirement plan for their own business and sock away a portion of the money earned into a pre-tax account.
According to Andrew Schwartz, CPA and founder of the MDTAXES Network of CPA's who specialize in providing tax and accounting services to healthcare professionals, "That holds true even for physicians and healthcare professionals who work for a hospital or clinic and are currently participating in that company's retirement plan."
Schwartz lists tax-savings situations for the self-employed as follows:? In 2004 self-employed individuals can contribute up to $18,000 into a SIMPLE
or up to $41,000 into a SEP or a Solo 401(k), depending on their income and whether they participate in a 401(k) plan or 403(b) plan through another employer. Self-employed individuals or Healthcare professionals...
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Behind The Curve?
BEHIND THE CURVEMarket index funds like Vanguard's famous S&P500 fund and the SPY "Spyder" on the AMEX caught on in the late 90's, right when the long bull market turned into a crazy bubble with a blowoff top in 2000.There are very good reasons to use index funds ? low expenses, the failure of most active managers to beat the indexes consistently and the statistical trend that says stocks return an average of 11% per annum over long periods of time. A cheap route to a "sure" return in a world of unreliable fund managers and individual investors who couldn't time the market right if they had an Olympic chronometer and three judges - looks good, huh?Just invest, forget about it and spend your time thinking about a comfy retirement. The S&P500 returned an annualized 17% per year from mid-1982 to mid-2000. Easy money with only a couple of dips on the way.Except ? what happens to your portfolio if the market indexes go nowhere for years on end?The statistics say that over the decades, the...
Behind The Curve?
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The Basics of Business Record Keeping
As a business owner, you may rely on an outside accountant to do your taxes and prepare financial statements. However, it's best that you or someone in your organization take on the responsibility of keeping an accurate set of financial records. Keeping good records yourself, no matter how unpleasant it may seem, will minimize the costs of paying an accountant and allow you more control of your financial information and operations. Maintaining good records can also help you avoid headaches at tax time by keeping track of your receipts and other records throughout the year. This can help you remember the various transactions you made during the year so you can properly document and maximize your tax deductions.
Normally, tax records should be kept for three years, but some documents - records relating to a home purchase or sale, stock transactions, IRA and business or rental property - should be kept longer.Good record keeping not only enables the IRS to evaluate your business...
The Basics of Business Record Keeping
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