Archive for September, 2008
Beginners Guide to Budgeting
By Firm Hope
Budgeting isn’t a punishment for not being born wealthy. It’s an avenue to know where your money goes and help you reach your financial goals, whether it’s a new home, a comfortable retirement or just making it to your next paycheck. You simply can’t spend more than you make, at least not for long.
What’s going out?
The first step is figuring out where your money goes right now. Use an online worksheet or a plain old notebook to keep track of your spending for a few weeks. Go through your checkbook and credit card statements. Add up the amounts, and you’ll have a good idea about your spending habits.
A few things to consider:
- Common budget categories include housing (rent or mortgage, homeowner dues), recurring bills (cable, utilities, insurance and credit card minimums), food and entertainment.
- Let your categories fit your life. You might have expenses for school-related items (tuition and books), pet care or travel. If your hobby is your passion, make it a category.
- Account for big expenses that occur once or twice a year, such as car insurance.
- Consider making your vehicle its own category. Payments are only the start.
What’s coming in?
When your expenses are tallied, go through your pay stubs and calculate your average monthly income. Don’t forget to include interest income, dividends, bonuses and alimony.
Once you know how much you earn and how much you actually spend, decide where and how much you want to spend. Divide by 12, and voilà – you’ve got a monthly budget. Adjust as necessary until your monthly budget equals your monthly income.
Some things to keep in mind:
- Figure out which of your expenses are wants and which are needs. Actual needs are fairly limited: food, shelter, clothing. Nearly everything else is a want, but even the way we fulfill our needs involves choice.
- Try “The 60% Solution.” Essential spending comes out of the first 60% of your income. The rest includes retirement, emergencies, debt repayment, fun money, etc.
- Prioritize. Fund your retirement first, no matter what. Put enough in your 401(k) to grab the employer match. Then start tackling your debts.
- Don’t forget an emergency fund. This will go a long way to keeping you out of debt should the unexpected happen — and it will. If you don’t have funds now, use your income-tax refund or set up a regular electronic transfer from checking to savings.
Take a little off the edges
Once you’re on your way, keep track — at first weekly, then monthly — of where you’re going off budget and adjust your allocations.
Food, for instance, often goes unchallenged. You might wince at the checkout counter, but you do have to eat. Still, there are ways to cut the food budget without sacrificing quality or quantity.
- Many stores reduce their products based on a 12-week cycle, so notice when something goes on sale, but don’t buy until it hits the rock-bottom price.
- Keep a notebook for a while so you get to know the rock-bottom prices on items that you frequently purchase. Keep track of which products are cheaper store by store.
Food isn’t the only place for savings. Here are some other ideas for keeping your budget on track:
- Bookmark deal-finding Web sites and check them before making any purchase online or any big purchase offline. Check sites such as MyBargainBuddy.com, AbleShoppers and Dealnews for online bargains and coupons
- Review your habits. Do you need the full-on cable package or caller ID? Do you pay full price at a convenience store for items you could buy for less on your weekly grocery shopping trips?
- Some people fritter away cash; others use a debit card as if it had unlimited credit. Whichever you might be, consider converting. A debit card devotee is more likely to think twice about spending cash, especially if you leave your ATM card at home.
- If things still aren’t adding up, look at whether you need to adjust your allocations or change your spending habits.
Building the budget habit
Successful budgeting takes time and persistence, so don’t be discouraged if you don’t hit your monthly goals at first. Here are some ideas to make it easier:
Write it down. If you don’t, you probably won’t stick to it.
- When good fortune comes your way in the form of an “extra” paycheck or a bonus, pay an annual premium, make an additional mortgage payment or use it for seasonal extras, such as summer vacation costs or Christmas presents.
- If you can’t spend less, earn more.
- Get into the habit of thinking ahead. If you know your situation is going to change — a new baby, new winter clothes, a new job — plan for it and try to pay cash.
- Remember, budgeting is the means, not the end. Keep spending “mistakes” in perspective.
- As your income climbs, don’t splurge until you’re sure you’re staying ahead of inflation. A good budget grows with you, so it’s worth re-evaluating your budget every year.
Topics: Build Self-Reliance, Financial Independence | 1 Comment »
Tips for an Effective Job Search
By Firm Hope
Whether you are entering the workforce for the first time, returning to the job market, or seeking advancement, the challenges of a job search are similar. Your goal is to find the position that best meets your needs. You must be qualified and able to sell yourself as the best applicant for the job(s) for which you apply. Here are some tips that can help you in meeting your job search goal.
Know Who You Are
Have a strong sense of who you are. Know your assets and how to market them to employers.
Committed to Lifelong Change
Follow job trends. Take the initiative to maintain cutting edge skills that match changing employer requirements.
Be Computer Literate
Increasing your technical computer skills increases your marketability in the job market. Conduct online job searches. Visit employer Web pages and key job sites such as those listed on our Additional Help and Resources page.
Update Your Resume Often
Customize your resume to reflect the assets you bring to each job. Use key words that can be electronically scanned by potential employers to positions you want. Reflect continuous employment in your skill area. Summer employment should support your field of interest. Volunteer or obtain temporary jobs if you are unemployed. Select a resume format that minimizes any gaps in employment.
Be Your Best
Locating a job is a full time endeavor. Give full attention to all that you do. Errors will knock you out of the running.
Be Organized
Have a written personal plan for vertical and lateral growth opportunities. Know what you must do each day to move closer to your goal. Stay focused.
Expand Your Network
Maintain and continuously strive to broaden your network. If you are working, network inside the company. Join professional groups.
Research Job Trends and Companies
Select targets of opportunity that match your skill areas. Request and study annual reports of select companies. Reflect each company s image in all communications with each company s representatives. Make good use of library resources. Read trade journals and business publications.
Have a Positive Attitude
A pleasant personality is a necessary asset. Your eagerness to adapt and to be a team player is essential. Show that you are flexible. A sense of humor and positive attitude are pluses.
Disclose a Disability Only as Needed
The only reason to disclose a disability is if you require an accommodation for an interview or to perform the essential functions of a particular job. Your resume and cover letter should focus on the abilities you bring to the job, not on your disability.
Be Prepared to Conduct an Effective Interview
Look your best from head to toe. Dress conservatively. Be brief and to the point when answering interview questions. Maintain a demeanor of success and reflect the company image when you respond. Have full confidence in what you bring to the employer and show how your skills meet the company’s specific hiring needs. Ask thoughtful questions about the job and the company. NEVER say anything negative. Follow up immediately with a thank you letter or e-mail transmission.
Remember, push yourself to go the extra mile in your job search and you will find the opportunity you are seeking.
Topics: Build Self-Reliance, Finding a Job | No Comments »
