|
|
|
A Look at Florida Department for Incorporating
The Florida Department of State, Division of Corporation is the Florida Department for Incorporating. They are the division of the Department of State to contact for questions about incorporating in Florida. Besides providing excellent online...
New "Goodies" At Google
Copyright 2005 Jim Edwards
Search giant, Google.com, recently expanded their reach yet again by offering new and expanded services going far beyond simply searching the Internet for relevant information.
Jumping on a growing bandwagon already...
Prepaid cell phone plans: Great option or Last Resort?
There was a time when prepaid plans were marketed mostly to people with poor or bad credit. Now, prepaid plans are being marketed as a great alternative to unlimited plans. Here are a few things to consider before you sign up for your prepaid. ...
Public Speaking For “Scaredy Cats”
Business communications researchers have studied the phenomenon of stage fright experienced by would-be public speakers. Let me summarize most of the findings in very down-to-earth terms: Most people would rather die than stand up before an audience...
What Goes Into Starting A Successful Home Based Medical Transcription Business?
This article is advice about what medical transcription is, what
skills a home based medical transcriptionist needs, what the
initial investment is to start a home based medical
transcription business and what someone should consider...
|
|
| |
|
|
|
|
|
|
How to Live Within Your Means
Planning and goal setting are critical to your success if you want to become wealthy. The two key traits of people who do not become wealthy are, firstly, they tend to spend all of the money they have and, secondly, they do not know what they spend their money on. The lack of goals is the main culprit. Ric Edelman, author of The Truth About Money and Ordinary People, Extraordinary Wealth, calls this "spending unconsciously". He says the reason why people spend without giving it much thought is they have no goals. Without goals, we live unconsciously from moment to moment, we never plan for the future, we spend all of our money, and as a result, we are unlikely to ever become wealthy.
"Unconscious spending" is more prevalent in our society than we realise. I would estimate approximately 80% to 90% of the population do it. With the exception of one or two people, the vast majority of my clients had no idea what they spent their money on until I asked them to prepare a list of their total expenditure and outgoings before our first session. In fact, many were too frightened to do the initial exercise and waited until they arrived at my office, so I could help them through the ordeal. Money matters simply scare people. They are terrified to know how out of control their finances are. Yet, this is precisely what needs to be done before we can start working on a solution.
Whilst it is important to become relaxed and carefree with our financial matters, this does not mean careless. We become carefree with money when we know that it is not a scarce resource, we work on increasing our income, we invest a little time on a regular basis to plan and review our finances, and we systemically set aside part of our earnings regularly to build our savings and investments for the future. We are careless with money when we don't keep track of what we are spending and squander money on things that are wasteful, extravagant and not needed.
I often compare money to water, another important commodity in our lives. Both are essential and critical to our survival, however, we rarely worry about water in the same way we do about money. We systematically set aside water when it rains in dams and reservoirs to provide us with water ‘on tap' when we need it. We are careful not to waste water, however, at the same time we can relax and not have to worry about it on a day to day basis. When we apply the same reasoning to managing money we are well on the way to becoming wealthy.
After we resolve our beliefs about money and realise that becoming wealthy is within our possibilities, the next step is to put aside a little time to set goals and do some planning. Planning does not have to be an arduous affair. It takes approximately one to two hours upfront to prepare your plan and, thereafter, an hour a month to review or revise it.
The first part of your plan is to set some goals. For example, accumulating $500,000 in income-producing assets in 15 years is not a difficult goal to achieve. If you save $170 a week into investments returning an average of 15% per annum for 15 years, you will have your half a million dollars. Goals will help you focus on the future and increase your willpower to prevent overspending. The more concrete you make your goals, the more committed you will be to achieving them. Set timeframes and break them down into manageable steps, as in the example above, to make your goals more realistic and attainable.
Along the way, however, we also need to manage our day-to-day spending to ensure that we set aside the required savings to achieve our goals. In designing the Money Program, I used a simple, effective formula that everyone can apply to easily manage their finances. I call this the 40%-30%-20%-10% rule. This formula is used to measure your expenditure and cash outflows. You divide your expenditure into four categories and calculate the total of each category as a percentage of your net (after tax) income. The four categories are Fixed Costs, Variable Costs, Discretionary Costs and Savings.
Fixed Costs are your essential costs that are known and have to be paid on a regular basis. For example, mortgage or rental payments, personal loans and credit card repayments, insurance, council rates, and school fees. These costs are usually determined by your lifestyle choices, the size and cost of your house, cars and major possessions, and therefore difficult to change without making major adjustments to the way you live.
However, because fixed costs are comprised of debt and committed payments, they are critical in determining your ability to create wealth, as well as your capacity to lead a stable financial lifestyle. If your fixed costs are too high, you will probably be living from payday to payday worrying about the next large bill that arrives. If your fixed costs take up too much of your weekly pay packet, there will be less to spend on other essential costs, and often little for luxuries - unless you go further into debt.
Variable Costs include our essential living expenses, which can vary from week to week, yet you have some control over what you spend. These will include food, clothing, groceries, mobile phone expenses, medical and motor vehicle running costs, such as petrol and repairs.
The previous two categories relate to essential costs that we cannot live without. Some are controllable (variable costs) and some are set (fixed costs). Discretionary costs are expenses that are non-essential and highly variable. These costs are very much
in your control and where most choice is possible about how much is saved each month. For example, entertainment, dining-out, presents, holidays and all luxury items that we love but can live without. I affectionately call this part of our budget, our ‘play money'. The problem with most budgets is they often exclude this significant element and this is why most people fail. We all need a little play money and a few luxuries in life.
Whilst working with this formula with my clients, I found that people who live within their means tend to spend their money roughly within the 40%-30%-20% rule. That is, their fixed costs are roughly 40%, their variable costs 30% and discretionary 20% of their net income. The more I worked with this formula the more I realised it was an excellent way to achieve two things. First, it provides you with a simple effective method for planning and allocating your finances, and secondly, it is the perfect method for getting you out of debt and into wealth.
The most critical category is fixed costs. The fixed costs of people who are living comfortably within their means are generally around 40% of their income. People with fixed costs above this percentage, tend to lead lifestyles that cost them more than they can afford. The size and quality of their homes, cars, furniture and other items that they have borrowed for, have forced them into excessive debt. Because fixed costs are comprised of debt and committed payments, they are crucial in determining your ability to create wealth. If you want to be wealthy, you have to be committed to dropping these costs below 40%.
When clients first come to me, their fixed costs are often 50%, 60% or even 70% of their net income. The aim is to reduce that percentage to 40% or less, over time. Creating wealth is about building strong financial foundations that cannot be shattered regardless of what we may be faced with in the future. Regrettable, strong foundations take a little time to build.
People in severe financial hardship usually have fixed costs that are greater than 65% or 70% of their net income. This is usually due to excessive debt or insufficient income. People who are in financial crisis, where they tend to live from payday to payday and seem to be going from one financial problem to the next, tend to have fixed costs between 45% to 60% of their income. If their fixed costs are approximately 40% of their income, they are living comfortably within their means, and if their fixed costs are below 40%, they usually have excess money that could easily be channelled into additional savings and investments. So the key to good financial management is managing and controlling your fixed costs.
Remember, it is all done by measuring your fixed costs: if your fixed costs are 40%, you are living within your means, if your fixed costs are above 40% you will be putting yourself under financial strain, and if they are below 40% you will be in a surplus position. Therefore, if you want to accelerate your wealth, keep your fixed costs well below the 40% mark and invest the surplus.
If excessive debt is keeping your fixed costs high, formulate a debt free plan and do not go deeper into debt. Learn to live with cash. It is far more finite and when the cash runs out, you know you definitely cannot afford to buy those extra purchases. If low income is your problem, consider all alternatives to increasing your income. These may include: part-time work, turning hobbies or crafts into cash or investing in additional training to further your career prospects.
Also, to decrease your fixed costs you may have to make some difficult decisions about the way you live. Is the house you are living in far too costly for you? Are you running two cars when one could suffice? Can you downsize anything now, which is costing you far too much money? Are you trying to live well above your present means buying clothing, accessories or electronic gadgets that you cannot afford? Are you a shop-oholic, and can never resist a bargain - regardless of whether you need it or not? Are your credit cards always to the maximum limit and you cannot afford to pay the balance? These are often difficult choices to make, but well worth it in the long run.
Remind yourself that you can have the bigger house, cars, toys, etc - later, when you can better afford them. If you get a bigger mortgage to upgrade your house or borrow for a better car, you will increase your fixed costs. By keeping your fixed costs as low as possible, you will accelerate your progress to becoming wealthy. Your plan should always aim at decreasing your fixed costs below 40% by either increasing your income or decreasing your debt, or both. Once you have achieved this, use the extra money to add to your savings and investments. This is the guaranteed way to accelerate your path to wealth.
Copyright © Ann Marosy, 2002
The 40%-30%-20%-10% formula is featured in The Money Program: Managing the 6 Stages of Wealth. Visit: www.moneta.com.au
About the Author
Ann Marosy has a Bachelor of Business from RMIT and developed a successful career in company accounting. Ann taught accounting at university; established her own recruitment agency and was a finalist in the SA Executive Woman of the Year 1991 award. In recent years, Ann has provided consultation to private clients on money management practices. Using her financial background and personal experiences, Ann designed the Money Program to assist her clients to understand and manage money.
|
|
|
|
|
| Compare Cell Phones & Service - Cingular, Sprint, T-Mobile ... |
| Research, compare, and buy cellular phones and services. |
| www.letstalk.com |
|
| Free T-Mobile Cell Phones and Other Wireless Deals |
| Save on T-Mobile cell phones and plans. Compare deals to TMobile.com. 1-year T-Mobile plans available with popular phones. Or pick another wireless carrier. |
| www.a1wireless.com |
|
| mobilecellphone.com |
| www.mobilecellphone.com/ - 2k - Cached - Similar pages |
|
|
| Mobile Cell Phone Rental in Japan :: RentafoneJapan |
| This page contains information on mobile cell phone rental in Japan and Korea - Japanese, Korea, and International GSM mobile cellular phone and mobile ... |
| www.japanvisitor.com |
|
| Communications - Mobile-Cell-Phone Ezine Articles |
| EzineArticles.com allows ezine or email list publishers to upload or download free expert content that can be used within email newsletters or websites. |
| ezinearticles.com |
|
| Cell Phones and Service from Virgin Mobile |
| Cellular Phones and Service from Virgin Mobile. Ringtones & downloads for your mobile phones, as well as cell phone accessories, prepaid cell phones, ... |
| www.virginmobileusa.com |
|
| Mobile / Cell Phone Is Linked To Cancer, you need protection from ... |
| Test your exposure levels to mobile / cell phone radiation and check if it's safe to carry a mobile phone! |
| www.radar3.com |
|
| Repair4MobilePhone: Do-It-Yourself Mobile (Cellular) Phone ... |
| Repair4MobilePhone: Do-It-Yourself Mobile (Cell) Phone Upgrading, Modding and Repairing · site map · search · Mobile (Cell) Phones | IrDA | BlueTooth ... |
| repair4mobilephone.org |
|
| YouTube - New Apple iChat Mobile Cell phone |
| New Apple iChat Mobile Cell phone 00:25. From: foxymcfox Views: 90457. << Now Playing ... New Apple iChat Mobile Cell phone *FAKE* 00:33. From: foxymcfox ... |
| www.youtube.com |
|
| YouTube - New Apple iChat Mobile Cell phone *FAKE* |
| ... turned off or an old version of Macromedia's Flash Player. Get the latest flash player. This is a video response to New Apple iChat Mobile Cell phone ... |
| www.youtube.com |
|
| Java Mobile Cell Phone Games - A220 Mission 1 |
| An arcade style shoot em up game , Java Midlet for your Mobile / Cell Phone. Fly through mountains and cave systems eliminating multiple enemies before ... |
| www.jpowered.com |
|
| Java Mobile Cell Phone Games - Alien War |
| Alien War is an arcade style game , Java Midlet for your Mobile / Cell Phone. JPowered is a leading provider of Java Mobile Cell Phone Games. |
| www.jpowered.com |
|
| Communications - Mobile Cell Phone |
| Mobile Cell Phone Tips. Broadband-Internet, GPS, Mobile-Cell-Phone, Telecommunications, Satellite-TV, Satellite-Radio, VOIP, Video-Conferencing » View ... |
| communications.smartads.info |
|
| Free mobile, cell phone and text news alerts - Philadelphia ... |
| Set up free mobile, cell phone alerts to stay connected with the news. Receive text message alerts when news happens on the WCAU Philadelphia, PA website. |
| www.nbc10.com |
|
| Buying a Virgin Mobile Cell Phone? Want $10 free airtime? |
| I have some Kickback codes that I will e-mail you if you want that will give you $10 Extra in airtime when you activate your Virgin Mobile Cell phone. ... |
| www.topix.net |
|
| Skype from Mobile Cell Phone |
| Skype from Mobile Cell Phone,cell phone,cellular,mobile phone,skype,Skype as we already know is one of the most popular VoIP applications. |
| blog.tmcnet.com |
|
| Yahoo! Answers - can you use a t-mobile cell phone with verizon ... |
| 3 answers - i want to get a t-mobile phone and use m verizon sim card. is that possible? if not can i use the t-mobile phone with a verizon plan? |
| answers.yahoo.com |
|
| Compare Prices on Samsung X210 Mobile Cell Phone - ShopFerret ... |
| Use ShopFerret to find the best stores and lowest prices for the Samsung X210 Mobile Cell Phone. |
| www.shopferret.com.au |
|
| eBay: Custom Mobile Cell Phone Pay Per Click Website +Adsense ... |
| Find Custom Mobile Cell Phone Pay Per Click Website +Adsense in the Business Industrial , Other Industries , Websites Businesses for Sale , Internet ... |
| cgi.ebay.com |
|
| Tmobile |
| Review Cell Phone: pad Samsung Trace T519 T-Mobile Cell Phone ... Paper Thin T-Mobile Cell Phone with 1.3 meagpizel camera and MP3 Player. ... |
| www.1800mobiles.com |
|
|