February 23, 2012

Creating the Perfect Budget for Your Family

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What’s the secret to getting a grip on your family’s finances? It isn’t a magical method or product; it’s something humans have utilized for centuries: a budget. Budgets are financial plans of your income and how it will be used. With a budget, you can plan your spending, saving, borrowing, and investing. Budgets don’t oppress your finances; they free them.

A budget is useless if you can’t stick with it. Creating the perfect family budget may involve some trial and error until you formulate a plan you’re able to follow. So how do you get started? These tips will help you craft the perfect budget for your family.

  • Make it simple. An unnecessarily complicated budget will only deter you from using it. A software program may help, or a simple ledger. Use whatever you find easiest.
  • Plan with definite income. Sometimes bonuses don’t show up; don’t rely on them as you plan your budget.
  • Set financial goals. A bigger picture, like a house or business, is something a budget will help you attain.
  • Plan for emergencies. Unforeseeable expenses do happen. You can turn to personal installment loans online if you need a buffer.
  • Separate your needs from your wants. Essential expenses should come first, but beware of wants disguised as needs. If your income isn’t taking care of the essentials, there’s probably a want in your midst.
  • Plan on spending less than you make. Allowing a 10% income buffer will provide peace of mind and help prevent unnecessary debt.
Filed Under: Budgeting, Family/Individual Finance

The Author’s Best Asset: Patience

Many might think that writing a book is the American dream; they’re right. It is. But you have to understand one important thing about it:

It’s a struggle.

That’s not to say it’s a struggle to write, though. Lord knows if you want to write a book, you’re simply ‘going to do it.’ There’s no ifs, ands, or buts about it. What ends up being a struggle is not the effort you put in — rather, it’s the reward you end up receiving.

You might think that good ol’ J.K. Rowling, Stephen King, Stephenie Meyer, and Rick Riordan woke up one day after their debut novel was released, and then the money started pouring in. From our point of view, that’s how it seems. One day, we walk in the bookstore, we see “Harry Potter,” and then we learn immediately that this is a ‘bestseller.’

What we don’t see is that it took two years — maybe three years, maybe four years! — for that book to really sell! How many of you would know right away when Rowling’s first book was published? Not many. Probably when you walked into the bookstore, the book had been on the shelves for a half year already. You just didn’t know it.

What this all boils down to is this: authors get paid in royalties, and if you plan on being one, don’t expect the royalties to start flooding in. It takes a lot of time to break big as an author, so be patient. Keep writing. That’s your true income.

Because if you stop, you’ve sealed the deal on never becoming the next Rowling, King, Meyer, or Riordan. Much less earn any money from it.

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Filed Under: Budgeting, Family/Individual Finance Tagged With: , ,

Getting Debt Free For a Stress-Free Life

The current financial crisis, which came dramatically into view as the U.S. stock market crashed in October 2008, has left many people scrambling to make ends meet. The crash was just one element of the current economic crisis, which includes high unemployment, a slowdown in consumer spending and high levels of debt.  All these elements are putting a drag on the U.S. economy.

What’s the answer for people concerned about coping in this tough economy?  Though there’s apparently no quick fix coming down the pike, a look at your own household budget may be what’s needed to bring financial order out of chaos and smooth things out at home.

One of the biggest economic issues in many homes today is the burden of credit card debt. It’s worth taking a hard look at your debt situation in order to deal with it reasonably, and get your own economic situation in order.

 

Basic creditcard / debitcard / smartcard graph... 

Image via Wikipedia

 

 

If you have a problem with credit card debt, know that you are not alone. The easy availability of credit in the last decade put many people in a difficult position when the economy crashed.  The problem with unsecured credit card debt, unfortunately, is much more than just the amount of money owed, but also the sometimes-astronomical interest fees that go along with it. High interest rates can make this kind of debt very difficult to pay off.

How can you fix it? At a minimum, stop using your credit line so you can start getting your debt situation under control. Next, start paying off the cards with the highest interest rate first. Do all you can to get the interest rates lowered, too. Some banks are willing to work with customers and lower their rates if they have been making payments in a timely fashion. It’s worth a phone call.

 

Know that it’s worth it to get out of debt, for your own peace of mind and for your future economic health and well-being.

 

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Filed Under: Budgeting, Family/Individual Finance, Personal Finance Tagged With: , ,

The Sound of History (and the bubble and crash) Repeating

Being human, we all seem to think we are utterly unique in our situation. Yet there is something in the human condition that is unavoidably universal, between cultures and times.

These are tough times we’re in right now. Yet there have been tough—very tough—times in the past. For those people who are elderly today, the current economic troubles facing the U.S.—and the world—may seem strikingly familiar.

The 1920s, sometimes referred to as the “roaring 20s,” were a time of great modernization and economic growth in the United States. There was a feeling of exuberance in the air, as the U.S. had put time between itself and the horrors of World War I. There was money to be made and the stock market had a dramatic run-up—followed by a harrowing crash on October 29, 1920—a day that lives on in infamy as “Black Monday.”

Reading reports about this very memorable and historic day in the U.S. economy, one can’t help but think—the more things change, yes indeed, they stay the same.

Though generations of presidents and banking officials have all assured us that it could never happen again, the events of October 2008, and the harrowing slow-motion stock market crash and recession that followed, bear some striking similarities to the events of the 1920s. The real estate bubble grew and grew as more and more citizens borrowed against their home and borrowed with the help of easy to attain credit cards. Ultimately, a crash occurred and today we are all in recovery mode.

Will our economy recover? Signs indicate that we will. Recovery seems to be slowly (very slowly), but surely, underway already.

Next time, maybe we’ll remember all we’ve learned from this downturn about avoiding easing credit and remembering to save for a rainy day.  These are the lessons learned, we hope, to ensure a stronger and more lasting recovery this time.

 

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Filed Under: Budgeting, Finance, Government, Personal Finance Tagged With: , ,