Tag Archives: managing money

Lifestyle

Planning Your Ideal Budget

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Developing a budget does not mean adding up the total income you have to work with each month, then allocating funds within that level. The definition is: “planned expenditures and a program for financing them.” Figure out what you want to spend each month in order to live the life you desire while maintaining your true priorities, then look for ways to fund this budget.

Why? You might not know how you’ll earn the income that you’d like for your ideal budget when you first make it, but you’ll also never find out if you don’t start asking. Your option is to continue to scrimp and deny yourself the lifestyle you’d like to live and end up looking back on your life with regret. You might also find that when you make your ideal budget, it isn’t really as far off as you had imagined before you put it on paper in black and white.

Financial Tips

Is This A Good Investment?

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You hear economic reports in the news.  You see investment advertisements.  You attend a seminar on how to increase your return or reduce your taxes.  Your friend tells you about a great opportunity.  Your financial advisor suggests you put your money into something as part of the planning they are doing with you.

You can trust your friend, your advisor or yourself, but do you have a strategy or system to evaluate the options you are presented?

Where do you start to decide if something is a good investment for you? Obviously, having professional assistance is important, but it’s not good for you or your advisor if your deciding criteria is simply ‘I trust you.’  It is also not good for anyone if your standard answer is ‘I only invest in xyz because that’s what I have always done’.

Without going back to full-time school to learn investment fundamentals, you can start with a few key questions:

1. What is my financial goal, short-term and long-term?

2. What type of investment is this: income, growth, combination, etc.?

3. What is the value of my overall investment assets?

4. What percentage of my overall investment assets does this investment represent?

5. If I invest, how and when would I get my money back?

If you start by considering the overall foundation of building an investment portfolio, the individual investment selections will be easier to fit into place because you will then have a basis for asking questions to help you decide what’s best for you.

Financial Tips

Focus on the Reward

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If you have a lump sum of money that you will be using to supplement your lifestyle, be aware going into that arrangement and plan for the withdrawals. For example, have a set amount of money transferred to a spending account each month, rather than simply accessing the savings money whenever necessary. When you withdraw funds from a savings account for whatever purpose, even money you have diligently saved for something specific, you can have the uncomfortable feeling of watching your money diminish, which can too easily create feelings of scarcity, fear, and/or lack. The solution is to plan for the withdrawal and to focus on the plan or the reward, not the savings value.
How? If you are funding your lifestyle from a lump sum of money such as in retirement or a temporary leave of absence from work, you still need to know your monthly expense requirements and manage monthly cash flow like you do with regular income. This means a percentage of the money that you have transferred from your pool of savings is allocated to saving and giving. This way you maintain some structure and the reduction of capital is part of an overall plan.