Managing Your Finances Before Military Deployment

Military Deployment

When Army Major Mark Stone (not his real name) deployed to Iraq last year, he found himself more scared about what was happening at home than in the Mideast.

Shortly after arriving at his duty station, he suffered an eviction scare. The rent on his two-bedroom apartment was paid a week late. He quickly switched to online bill payment and got the help of a trustworthy stateside friend to take care of most financial issues. He also convinced his apartment manager to waive any late fees.

Whether the deployment is planned or somewhat of a surprise, members of the United States armed forces and their families are seldom covered as far as financial planning for the service member’s absence. One Army wife complained that when her husband first deployed to Iraq, he forgot to pay a credit card bill. When she tried to call the credit card company to find out the actual balance, the customer service representative refused to give her any information since it wasn’t a joint account. Her husband’s credit rating suffered as a result.

A number of Internet sites offer help for the deploying service member and his or her family. Meredith Leyva, of Pensacola, Florida, is the wife of a Navy officer. She founded the site CinCHouse.com to provide ideas for managing finances during deployment and general assistance for military families.

Another helpful site is Operation Home Front, at http://www.operationhomefront.org. Many service members and their families also find excellent advice at the site of the United Services Automobile Association (USAA). This organization was founded in 1922 by a group of Army officers seeking to self-insure each other for automobile insurance. It’s located at http://www.usaa.com.

There are some logical steps all military families can take to make their financial lives easier, according to USAA. The first is to build an emergency savings fund of three to six months of living expenses. Families facing a deployment should put aside a minimum of $2,000 more to cover unexpected expenses such as car repairs, plumbing problems, or other unanticipated bills.

Leyva says before a service member deploys, the family should set aside additional funds to cover routine responsibilities the member routinely performs, such as maintaining the lawn or cleaning the house. In the chaos of a deployment, it might prove necessary to hire someone else to take care of these services.

If the deployment results in an unused vehicle, families in the U.S. should check out potential savings on insurance. And for single service members or those with minimal possessions, it might be possible to avoiding paying any rent or utilities by placing items in storage.

All service members should realize that the Servicemembers Civil Relief Act of 2004 might qualify them to get a lower interest rate on mortgages and credit card debts well as protection from eviction after any late rent payments. In some cases, they are eligible to delay civil legal actions, including divorce, foreclosure, and bankruptcy.

Sometimes deployment to Iraq has led to an improved overall financial situation for a family. Those at home are forced to take action to pay bills, understand what’s required to keep the family afloat, and become very adept at handling financial issues.

USAA offers a handy pre-deployment financial checklist:

1 – Choose someone at home to handle bill payment and other issues. Depending upon your state of residence, you might need to execute a power of attorney to do this.

2 – Set up a record of all your personal or family accounts and take a copy with you once you deploy. Singles should provide this data to a responsible individual in the States, preferably the one with the power of attorney. For married service members, all accounts should be in both spouses’ names.

3 – Arrange for automatic payroll deposit, investments, and bill payments whenever possible. You might need to find a bill payment service that permits you to pay obligations online from any place in the world with access to the Internet.

4 – If possible, set up any loans your family might need while you’re away. You might be able to secure lower interest rates based on your military service.

5 – Create a special folder in which to store receipts and financial and legal documents during your deployment.

6 – Take the time to update life insurance policies, beneficiary forms, and wills. Also check out insurance savings if one or more vehicles won’t be driven while you’re overseas.

7 – Notify any creditors and other financial institutions that you’re deploying. Be sure to furnish them, as well as the representative you designate to handle emergencies, with a way to contact you if problems arise.

8 – Consider the benefits available through Servicemembers’ Group Life Insurance. It presently includes traumatic injury protection, which could keep your family afloat if you suffer certain types of injuries.

Once you’re completed the checklist, you can deploy knowing you did everything possible to protect your family and your credit rating while you’re gone.

Taking Control of Your Finances After Graduation

Finances After Graduation

If you have recently graduated from college, now is the time to take control of your financial situation. Many college graduates have little or no idea of how best to keep track of their money, especially if the temptation to blow a paycheck proves too strong. Fortunately, you do not have to be a financial expert to have a good understanding of how to keep control of your finances.

Set up a savings account

While it is likely that most of your income will be spent on rent and bills, you should aim to pay as much of the surplus into a savings account. Ideally, this should be a savings account that gives you easy access to your money in case you need to use it at a later date. If you are confident that you will not need to touch the money for a set period (for example, six months or one year), you can “lock away” your money, which often offers a more attractive interest rate than instant access savings accounts. Sometimes, these accounts may specify that you cannot make a withdrawal during the set period, or that you will lose interest for the month in which you make a withdrawal.

Look for a savings account that offers a good rate of interest, as this will obviously mean that you will see maximum reward for your savings. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate. In either situation, make sure that there are no hidden conditions attached to the savings account or interest rate. For example, some savings accounts offer a very attractive interest rate to new customers for the first year only. After this, you are demoted to an interest rate that is average, at best. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate.

Tax-free savings accounts are the best option, as nothing is deducted from your interest. Unfortunately you cannot put an unlimited amount of money into a tax-free savings account. They are capped, meaning that you can pay in a certain amount of money per tax year. While the government is keen to encourage as many people as possible to have savings, they do not want to be waiving tax too much as they gain nothing from it.

Budgeting

Drawing up a budget is a handy way to see whether your outgoings are in line with your income. This might seem obvious, but many people are shocked to find that outgoings such as rent, bills, food and socialising far exceed their monthly income. Listing all of your outgoings is also a good way to pinpoint exactly where your money is going each month. It is often the little things that add up the most. Buying a coffee on the way to work can soon cost you several hundred dollars over the course of a year.

Once you have worked out where your money is going, look at any areas where you can cut down on frivolous or unnecessary spending. Most people will find at least one area in which they can cut down on their expenditure. It is vital that you stick to this plan if you want to see an improvement in your finances.

Many college graduates are afraid to sit down and work out how best to take control of their finances, but it is something that should be done to avoid sliding into debt. With a little bit of research or help from a financial advisor, you can seek out the best ways to make your money work for you.

Teach Your Teenager to Manage Money

Manage Money

In these uncertain financial times, it is important to teach your teenage children how to manage money. You are a role model for your teenager to learn budgeting techniques and now is the perfect time to show him how to manage his finances.

There is no need to tell your teenager every detail of your family finances, however he should not take for granted that he is well provided for. It is essential that he becomes aware of the need to manage his own money responsibly.

Pocket money

Ask your teenager to prepare a written budget. This budget should be for a period of three months and should take into account the cost of the season’s clothing for those months. The teenager should also include irregular spending such as purchasing Birthday gifts and visits to the cinema or similar entertainments. Everyday spending, such as fast-food on the way home from school, also needs to be budgeted for.

Once your teenager has written a budget, it is time to sit down with him and negotiate. Does his pocket money cover his expenses? Are you giving him enough money? Has he been realistic in his assessment of his needs? If he feels he needs more money, where can he cut down his expenses? It is important to have a written budget to refer to, as teenagers tend to impulse buy and not consider how far the money needs to go.

You need to be firm and not give extra money to your teenager when he makes mistakes. If he buys one pair of designer jeans, instead of two or three pairs from a department store, then he must be prepared to wear the one pair of jeans everywhere he needs to wear jeans. Your teenager will quickly learn to manage his clothing account and be more careful when he prepares his next three months budget.

The Part-time Job

Teenagers should experience the financial benefit of having a part-time job. You may need to renegotiate with your teenager how much pocket money you are now prepared to pay him. If you decide to reduce your working teenager’s pocket money give him a clear explanation, so that he understands why he is receiving less pocket money. One reason, for example, may be that he uses the family car to drive to work, thus increasing your fuel costs.

Allow your teenager to enjoy the advantages of earning his own money. He should be able to purchase the occasional extra treat or spend more on his clothing and entertainment.

You might consider suggesting to your teenager that he makes a small donation to charity. In these hard financial times such a donation would really be appreciated by the charity, and your teenager would learn that part of managing money is to share with those less fortunate.

Saving money and Investing

Once your teenager has a regular income, you may wish to encourage him to save towards a future goal, such as purchasing his own car. Teenagers are more likely to save if they have an obtainable goal.

Due to the volatility of the share market, it is actually a good time for your teenager to purchase a few shares. Shares will eventually bounce back and a young investor may find they have made a very nice profit if they have the patience to wait.

You have now taught your teenager to adhere to a written budget and he will manage his money much more effectively. Remember teenagers learn best by example, so if you have never prepared a written budget for yourself, now would be an excellent time to start. It is never too late to learn how to manage money and your whole family will benefit, not just your teenager.

Skype as a Business Tool

Skype as a Business Tool

Starting a home based business is not an easy task. One of the most important things to be concerned about is finances. Every penny you spend has to go towards benefiting your business. You will have to consider products that will become an important asset to your new business. That is why I try my best to look for products that cost me very little. Despite the fact that I am being cost conscious, I only want to use products that are fully functional and have great quality.

Skype has become one my most valuable business tools. I started to notice that most of my daily work is done over the phone. I started using my cell phone on regular basis for these business calls. Soon my phone bill started increasing each and every month. I needed a more cost effective solution immediately. That’s when I considered using Skype.

I had used the program occasionally to call some of my family and friends. It never crossed my mind to use it for my business needs until I started looking at some of its features. My phone troubles were definitely over when I began to use Skype regularly.

Getting Skype Unlimited for only $29.95 was an unbelievable bargain. I only had to pay it once a year instead of a monthly bill. This saved me a bundle. No longer did I have to worry about how many minutes I was using because it was unlimited calling within the United States and Canada.

In order to have others call me from a mobile or landline phone, I decided to get a SkypeIn number. I was even able to choose the area code I wanted my number based out of. Voicemail was a free feature that came with the SkypeIn number. For those times that I was unable to answer the phone, callers are still able to reach me by leaving a voicemail.

There are so many extras that you can use to customize your Skype experience. For some of my clients, I use the desktop sharing application called Skype Unyte. I am able to share my desktop with them in order to display some of the documents needed. This allows me to basically have a business meeting without having to email them to my customers and then wait for a response. I am able to be more productive with Skype and it has become a necessity for my business.

3 Tips to Help Get Your Home Loan Mortgage Approved at Standard Rates

3 Tips to Help

The statistics for rejection rates on home loans are now over 30%. Around a third of all home mortgage loan applications are rejected at the first hurdle. This has resulted in a steady increase in the amount of mortgage loans completed by so called “sub-prime” companies in the USA ( currently out of all home loans approved over 34% are issued by sub-prime lenders).

Why is it that some people get their mortgages approved with no problems whereas others often struggle, seemingly having to negotiate obstacles set up by the mortgage finance company, even then not getting the loan they want and having to approach sub-prime lenders with higher rates? What is the difference between a successful application and a rejected one? What are main stream lenders looking for when they evaluate your application?

The reality of the situation is, that getting your home mortgage approved really depends on how closely your circumstances match the criteria set out by the lender. All lenders have a set of “rules” or “criteria” that are used in deciding whether or not to approve a loan. Obviously, all applicants should at least show themselves to be creditworthy and be able to provide documented proof to support this. The FICO score is a popular credit scoring method used by many lenders (but not all – some have their own in-house credit scoring system, although most work in much the same way). The FICO scale runs from 300 to 850. The vast majority of people will have scores somewhere between 600 and 800. Above 720 or so means you will be offered good terms on mortgages, loans and credit cards.

Nowadays all lenders have a credit scoring system for aspects of your background, your credit “score” is derived from your background in the following areas:-

1) Credit History – The next indicator of your credit-score is your existing payment history, i.e. your credit card and loan repayments. if your credit file shows you have been making timely payments towards existing debt then this increases your score. However, too much existing debt on credit cards or loans can obviously count against you. Generally, lenders are most interested in the last six months of payments made, so, if you have had any “hiccups” in last 6 months perhaps you should postpone your loan application and make your credit as clean as possible.

2) Employment background – Generally speaking, for best chance of approval, you should have been in continuous employment for at least 2 years, preferably with same employer but at the very least within the same industry. In the lenders eyes this vastly reduces the chances of you being unemployed and shows some stability in employment – lenders love stability!

3) Existing commitments – Your income dictates the amount of repayments you can support. As a rough rule of thumb, finance companies say that a person’s total monthly liabilities should not be greater than 42% of his or her net monthly earnings. It is worth spending a few minutes checking this out yourself, it could mean that in order to qualify for your mortgage loan, you may need to reduce your monthly repayments to make the proposal acceptable to the lender.

Many lenders now offer a “pre-approved” home loan if you might there standard criteria, the benefits can include a written 120-day commitment which gives you extra leverage to negotiate with sellers with written proof of an approved mortgage amount. It would be wise seek this approval before making any commitments or even viewings to avoid disappointment.

 

Got Debt? How to Regain Control of Your Finances

Regain Control of Your Finances

Debt. Who doesn’t have debt? Barely anyone I know! However, debt can be controllable, or it can be over-whelming. Which category of debt are you in? If you’re ready to take charge of your debt and get in control of your finances, here’s how to do it.

Add Up Your Total Debt – Yes, put it all on paper and figure out exactly how much you owe. Ignorance may be bliss, but knowledge is power. The first step to debt freedom is knowing how much you owe and who you owe it to. Don’t leave anything out, and more importantly, don’t freak out when you see the bottom line!

Stop Spending – In case that was difficult to understand, let me put it another way – Stop Spending Money! Take the time to figure out exactly where your money is going and cut out what is not necessary. Many will be almost shocked to see where their money is going. The good news is that by simply finding out where you spend, you have also found places to cut back.

Repay Your Debt – This is the hard one, but you need a plan of repayment for the debt you have. More importantly, don’t take on more debt during this time. Your primary goal now is to pay off the debt you currently owe to others. Contact your creditors to see if you can work out a lower interest rate or a more suitable payment plan, but get that debt paid off. Remember, this will not happen over-night, but as each outstanding debt gets paid off, you will feel financially lighter!

Create a Monthly Plan and Budget – A healthy financial budget will have you spending no more than 35 percent on a mortgage (or rent), 15 percent on vehicles and gas (don’t forget insurance), 10 percent to savings, 15 percent to paying off debt, and 25 percent on your future. Figure out what you bring in each month then distribute your funds to each category. Stick to your budget.

Make a Priority List of Your Debts – Secured debts (as in loans attached to your home or car) come first. Pay these bills on time all the time as well as your utility bills and necessary expenditures (like doctor visits, etc). Second is the government. Make sure your taxes are paid. Unpaid taxes can cause some real havoc down the road so take care of it now. Lastly, pay towards your credit card bills. As stated previously, take the time to contact the credit card companies. Many will work with you as far as interest rate and repayment options.

Earn More Money – Simple, but there are only so many hours in the day, aren’t there? Any opportunity to bring in a little extra cash to the household is worth it.

Tough Love and Tough Choices – If bringing in more money isn’t an option, but you can’t cut it financially with the amount of income already coming in, you may need to make some tough decisions. A less expensive place to live is one option. Perhaps only one car payment may be a needed alternative until you are financially stable again.

Save, Save, Save – A little bit of money can sure add up. Just think, if you can muster up $10 a day to save and can get 8 percent interest, you will have $57,000 in ten years! In twenty years, you will have $180,000! All that off $10 a day! Keep in mind that a $10 a day investment is an investment into you and your future! To me, that is the best investment of all!

With some time and effort, as well as this step-by-step plan of action, you can be on the road to seriously regain control of your finances and debt. There is no better investment than that of you and your family. Start today!

Waking-Up Your Entrepreneurial Spirit

America is known as “the land of opportunity.” This country was founded by entrepreneurs and the entrepreneurial spirit has been alive since. Despite the economic crises, small business owners continue to thrive with the hopes of surviving the bad economy. While “the giants” have been helped by the government, the “little guy” and the “Mom and Pop’s” struggle to stay afloat. This has caused a bad case of “the Blues” in this country, and it has put out the fire in the hearts of many entrepreneurs. Are you one of the many that has given up on your entrepreneurial dreams? Has this economy kill your desire to start your business?

One example of the entrepreneurial spirit alive and well in the United States is US-based travel site Iceland in 8 Days. After a vacation to Iceland, the site owner saw the beautiful natural wonders of such places as Gufufoss, Litlanesfoss, and the Solheimasandur Plane Crash, and knew they wanted to share their experiences with the world. Thus, Iceland in 8 Days was born.

If your answer is yes, maybe is time to look back to history, when our forefathers and founders came to this land, looking for the dream. They had less financial opportunities, they had less technology and resources at their disposition, they had less lines of communication, and certainly “no WEB.” Despite that, America grew to what it is today, and many people from countries around the world, still want to come here and make their dreams a reality. We complain, we talked about Dooms Day, we wine about the present state of the country, but have we asked ourselves how our entrepreneurial spirit is doing.

You may argue that you have no desire to start a business; that it is not for you – not your style. You may argue that you are happy working as an employee, and happy to get paid weekly, bi-weekly, monthly or whenever you get paid. Not everyone is cut to be a business owner, and it is fine if you want to work for someone else. What I am talking about is the attitude in which you approach the way you make your money – as an employee, or as a business owner. Are you constantly complaining about your boss, your co-workers, having to go everyday to work, having to open your business everyday and dealing with your customers…? If you answer yes, it is time to wake up your entrepreneurial spirit. It is time to wake up the spirit with which you earn your living everyday – being that as an employee or as a business owner.

This country was founded and developed by people with hopes and dreams, and the spirit to work hard for their families. This country was awakened once, and it needs to be awakened by us, again. We cannot depend on the government to fix our spirits, as this is the only thing that truly belongs to us and nobody can take away. Despite the situation we are in right now, being that employed or unemployed, renting, or losing our home or business, there is something that no one can take from you – and that is the spirit with which you approach every day. The same spirit that was with our forefathers and founders, the same spirit that lives in every one of us despite race, color, age, religion, creed or gender. This spirit is inside you and the only one that can raise it or kill it is you. So stop blaming the economy, the crisis or the government, and wake up again – wake up your entrepreneurial spirit.

Three Lessons from a Home-Based Business Entrepreneur

Although I have a full time job that keeps me busy for a typical 40 hour workweek, I’ve also been a home-based business owner in my off hours. Twice, actually. Successfully handling a career plus a home-based business is a delicate balance and one that takes a lot of work and dedication. But you already knew that. What I’ve come to realize recently is that some other would-be entrepreneurs might not have some of the basic knowledge needed to run a successful home-based business. Tips and tricks that might normally take years to learn are often overlooked in the formative months of a new business venture. Today I’d like to share some lessons I’ve learned about becoming a successful home-based business entrepreneur.

I’m not going to discuss the common-knowledge type of lessons like writing a business plan or building a website or understanding search engine optimization. I won’t discuss the different types of business models: sole proprietorship, corporation, partnership, etc. These are all lessons that are readily available in any good business book. What I will discuss are the little details that are often overlooked at the beginning and might not be learned until you’ve been in business for a year or two – or scramble to learn after you realize you’ve been doing it wrong for too long.

Home-Based Entrepreneur Lesson 1: Know your target audience

This one might seem obvious. When we decide to sell a product or service we think we know exactly who is going to buy it. We might identify “married women aged 30-45,” for instance, or other basic demographic statistics and think that’s enough information to get us started. And yes, that’s essential information to have, but it only scratches the surface of truly knowing and understanding your target audience.

The key to knowing your target audience is to intimately understand those people who buy from you. Know their habits, their routine and their preferences. You have to dig deep and get to know the people behind that demographic information and understand them on a personal level. What does that 35 year old woman with a $50,000/year income eat for breakfast? What does she do on a Friday night for entertainment? Where does she take her family on vacation? And how do the answers to all those questions relate back to the product or service you want her to buy? Want another example? Check out the Hobart Handler 190 review on Tool Guides Hub and figure out what their target audience wants.

How do you learn this information? You have to ask questions. Lots and lots of question. Do surveys of current clients. Talk to potential clients and ask them about their habits and buying needs. Get on the internet and join forums where you think your audience might frequent and “become” one of them, interact with them and become their friend. You’re not making these inquiries to generate sales, so don’t give a sales pitch – you’re making these contact and establishing these friendships so you can better understand who your client is.

Home-Based Entrepreneur Lesson 2: Know your true expenses and profit margin

Let’s say you sell a product for $20 that costs $5 to produce. But is your profit margin really the full $15? No, of course not. And on the surface we know that we have to calculate overhead into that profit margin formula, but do we really understand all the details that need to go into the “overhead” calculation? We must count everything. Let me repeat that… we must count EVERYthing. Not just the expenses that have a big dollar figure attached to it, but also our time and creative energies that are spent to make the sale of each single product and the time it takes to build a successful business that might not generate direct sales but will generate a reputation in your field.

When we calculate overhead we must look at two different streams of expenses. First the hard costs of producing the product or service along with any other costs associated with running our businesses. Do you use sticky notes to doodle on while talking to a client on the phone? Both the pen and the sticky notes need to be calculated into the office supply column. Brochures, business cards, letterhead and envelopes are all common supplies we already calculate into business overhead expenses, but did you count the legal pad of paper or the day planner you used to write a note to yourself that a potential client requested a brochure to be sent through the mail? Did you calculate gas and mileage that it took to drive that brochure to the Post Office? You get the idea. Everything you use has to be calculated and tracked and recorded.

The other major overhead expense that is often overlooked is your time. If you’re providing a service to a client, the time you spend with that client is not the only time required to make that sale. How many hours did you spend tweaking your website or promoting your business on Twitter or Facebook just to generate that single sale? How many minutes did you spent stuffing envelopes or addressing post cards for a direct mailing campaign? Did you pull out your day planner at the doctor’s office to make notes about a client’s project or make a marketing phone call while driving your child to soccer practice? All those little blocks of time need to be captured and recorded in a time log. If you had to sit at your desk and make those notes or return a call to a client, you’d count them – so make sure you’re counting those minutes of work you do while multi-tasking in other areas of your life. Every single minute you spend thinking about you business or doing a task for your business needs to be recorded and calculated into your overhead calculations.

Home-Based Entrepreneur Lesson 3: Know what marketing is all about

Marketing is a big scary word. It’s a whole degree at the local university. There are entire corporations dedicated to nothing but marketing. The world of marketing is huge and overwhelming and intimidating. But without marketing, your business has no chance at success and you’ll flounder before you even start. In fact, many experts say you should dedicate 60% of every business day to nothing but marketing your business.

You don’t have to hire someone to do your marketing for you. And once you understand what it is, you’ll realize you can do the majority of it on your own. In fact, once you understand that marketing is nothing more than a game, you will realize how fun it is. Marketing is nothing more than bringing your message to your target audience in such as way that they want to buy your products or hire you for your services.

When you start doing your basic research on how to market your products and services do some Google searching for “grass roots marketing” – this is code for talking to your audience directly using techniques that are less expensive but often more effective. So instead of sending out a mass mailing of direct mail pieces you’re visiting the local Mom’s group and giving a lecture on a topic you’re an expert on that your audience wants to hear about. And as a side benefit you’re able to pass along your business information to that audience. For instance, if you are a home-based travel agent, your lecture might be about how Moms can be tourists in their hometown or how to organize a field trip with the playgroup to the local children’s museum. And don’t forget the benefit of using social media outlets as a tool for marketing your business – connecting with people you know or who are interested in your topic is another key marketing task.

In Lesson 1 you learned that you need to really understand the individual personalities and habits of your target audience, and knowing your audience will make marketing much easier. You know where your audience is, what they do and what their habits are, so bring your message to them and make sure the message is delivered in such a way that they understand it.

These three valuable lessons will help you be a successful entrepreneur. Truly understanding who your customers are, fully accounting for every expense in your business and learning how to market your product to your audience – these are lessons to build upon as you establish your home-based small business.

Wrestling with Your Finances

Wrestling with Your Finances

It is generally accepted that having a budget makes good financial sense. In the complex world of personal finances how can you get where you want to go when you don’t know where you’re starting from? For example, how do you purchase a house or plan for retirement when you don’t really know how much money you have?

Why do you need a budget?

In a word: Control. In order to reach your monetary goals you have to have control over your money. Is that going to make the electric bill any less because you monitor it? Of course not, but by monitoring your budget you can see exactly where your money goes. That is the first step to controlling it.

Budgeting made easy

No, really. Creating a first draft budget isn’t difficult. There are many computer programs that will help you do this such as Quicken and Microsoft Money but to really gain an understanding of your finances you may want to start with a simple Excel spreadsheet. There are templates for budgets on Microsoft’s website, but if you want to try it on your own create a few basic columns to start. For example:

Budget Dec-06 Jan-06

Monthly Income

Monthly Salary

Taxes

Benefits

Total Income

Monthly Expenses

Rent

Car Payment

Cell Phone

Electric

Cable

Gym

Credit Cards

Dry Cleaning

Fuel

Food

Clothes

Gifts

Misc. Entertainment

Hair

Cat Care

Medical  amp; Prescriptions

Car Insurance

Student loans

Total

You may be tempted to budget on a biweekly or weekly basis, depending on how often you are paid, but starting off with a monthly budget gives you the perspective necessary to understand where your money is going.

Notice that this budget isn’t fancy. You can use simple Excel functions to subtract your expenses from your income. At this point you will likely only be 100% certain on a few of these points. Your rent (or mortgage) payment likely does not differ from month to month and neither will certain other bills like your car payment. For items you pay on an annual or biannual basis (i.e. insurance) check your last bill or estimate the amount and divide it into monthly increments.

Determining actual expenses

Now for the fun part! There are a few ways to go about determining your actual expenses and some are more painful than others. If you are the type of person that puts everything on their checking account debit/credit card this part will be much easier for you than your cash-carrying friends. Simply go into the next workbook of the excel spreadsheet you created and Create columns for all of the items you listed on your budget, then grab the latest copy of your bank statement. Go through every transaction and add it to its’ respective column.

This may take a bit of time, but it is far easier than going through receipts when you pay with cash. If you prefer to pay with cash for certain items, either keep the receipts or keep a notebook around and jot them down on a list. You may miss a few things this way, but it will probably be fairly accurate if you make the effort. Once these are totaled, check the totals against your budget estimates. There will likely be a few areas that will surprise you.

To verify the accuracy of your income, take your last few pay stubs (or last one if you are a salaried employee) and average your income, taxes and cost of benefits. Place these numbers into your budget. For the bills you pay on a less than monthly basis, verify your estimate by checking the last bill, checking your last payment if it came out of your checking or other account, or make a quick phone call to the company and check the amount. If you are comfortable with your estimate use it until the next payment is due on that account.

Tracking your Budget

Now that you have determined your actual income and expenses it is relatively easy to maintain your budget. If you get a raise or a new car, simply adjust the amounts accordingly. When the season changes adjust your gas and electric budgets to the new amounts you are billed. The amount of time you want to spend and the level of control you want over your budget will determine the number of changes you make to it from this point forward.

Regardless, you should of course make any of the obvious changes mentioned previously and you should perform a yearly (or more often) audit of your budget. To do this, simply go through another bank statement and keep track of cash expenses for a month. Make the necessary changes like you did to your original estimate. Auditing your budget will be easier than the original write-up as you already have your expenses itemized into columns.

Power over your money

Now that you have completed your budget, you have the power to evaluate your finances to see where you can make changes to meet your goals, and it will give you the power to monitor the spending habits you hope to change so you can make adjustments as necessary. Creating a budget will give you a good understanding your money; this is the first step to controlling it.

Are You a Terra Verde Entrepreneur?

Terra Verde Entrepreneurs are different than most. There’s something in their blood that sets them apart from everyone else.

Is it their drive to succeed? Their motivation and creativity? Their willingness to risk failure for the possibility of success?

And at the end of the day, why?

Whatever it is, I’ve outlined a few defining traits below. (Notice that they don’t all have to do with business. Work/life balance is essential to being a successful entrepreneur!) I would venture to say that a Terra Verde Entrepreneur, whether they call it that or not, embodies these characteristics and remains true to themselves:

1) Create opportunities for themselves and others

2) Love the people around them

3) Have great vision and passion

4) Help those less fortunate

5) Thank others for giving them opportunities

6) Practice their faith

7) Recognize talent in the next generation

8) Celebrate for no reason at all

9) Support small business

10) Read to a child

11) Relax every day

12) Celebrate the arts and creativity

13) Maintain their own personal wellness

14) Take care of the environment

15) Reach for their dreams

16) Celebrate life

I believe that these values are important for Entrepreneurs to have. Not only do these values steer us away from the Ebeneezer Scrooge-esque kind of existence, but they also resonate with the reasons we became entrepreneurs in the first place.

When I ask people what they do for a living, whether they like their jobs, and why they decided to go out on their own, their answers are almost always the same. We want more time with our families and our kids. We want to have the time to play sports or take an art class. We want to have the resources to look out for those less fortunate.

Is it possible to become a successful entrepreneur without losing your soul to the black hole that is money? I encourage all entrepreneurs to stay true to ourselves, to take care of the values that put us in these positions in the first place, and to use our resources for good.

So, are you a Terra Verde Entrepreneur?