I personally have a number of small and medium-sized projects going at any time, and I have a few rules for how I handle the money for these projects. It's important to me that each project pay for itself along the way, or that I gather start-up funds specifically for each project. If I need start-up funds, I'll usually write a couple articles for the Yahoo! Contributor Network until I have the $10-20 sitting in my PayPal account that I need to get started.
From there, I like to have a separate spreadsheet for each project which lists the funds I've earned specifically for that project and all of the expenses I have for the project. This method of budgeting my money forces each project to have a positive balance of profit. It also helps to never feel like I'm wasting money by working on any of my projects.
Once the project is earning money on its own (because I really like the idea of passive income, no matter how small), then I can reinvest the money it makes into scaling up to make even more money over time. This way, I make a small up-front investment of time and effort by writing a few articles for the Yahoo! Contributor Network, and I get to see a return on that time investment over and over again. This really helps to keep me motivated, especially when I don't feel like budgeting money responsibly.
Monday, November 29, 2010
Friday, November 19, 2010
Investing Money
This diagram shows the idea of an investment feedback loop and gives a visual to show why saving money is so important. The idea is that eventually your earnings off of your investments take over your income, and you can quit your job because you'll be making enough money from your investments to cover everything.
When You Need Money Now: Tips to Help You Cope
When you're in a bind for money, it can seem like the world is closing in on you. All of a sudden every penny becomes critical and every expenditure hurts. This can cause you a lot of emotional and psychological stress, so here we're going to look at some tricks you can use to help stabilize your emotions and deal with the fact that you need money now.
Here's the deal. Financial trouble bothers us so much because being broke and needing money is the closest we can get to dying without really dying. Money pays for food, shelter, health, and everything else we need to live a productive and fulfilling life. When you take money away, all of those needs still remain, so when you need money now, that represents a gap between what you have and what you need, and the gap is threatening to end your life.
When you realize that the reason you're panicking when you need money now is that you associate needing funds with death, it helps to take a bit of the edge off. What you need to do next is slow down and look at all of your resources and figure out where you can cut and save to create positive cash flow towards whatever it is that you need to pay for. There are two ways to do this: create income, or lower other expenses.
A great way to lower other expenses when you need money now is to reduce your expenses by cutting away some monthly bills that you don't absolutely need. A common example of this is having your television service turned off for a few months. Another common example is by not eating out for a set period of time. Both of these ways are based around lowering your expenses by changing your habits.
In terms of creating income, you can always sell things you don't need on eBay or Craigslist, or get a part time job on the side to help make some more money. While some people think this is beneath them, it's their own spending habits that often get them in the hole to begin with, and that's why they need money now, so they should be willing to go the extra mile to do something about it.
Here's the deal. Financial trouble bothers us so much because being broke and needing money is the closest we can get to dying without really dying. Money pays for food, shelter, health, and everything else we need to live a productive and fulfilling life. When you take money away, all of those needs still remain, so when you need money now, that represents a gap between what you have and what you need, and the gap is threatening to end your life.
When you realize that the reason you're panicking when you need money now is that you associate needing funds with death, it helps to take a bit of the edge off. What you need to do next is slow down and look at all of your resources and figure out where you can cut and save to create positive cash flow towards whatever it is that you need to pay for. There are two ways to do this: create income, or lower other expenses.
A great way to lower other expenses when you need money now is to reduce your expenses by cutting away some monthly bills that you don't absolutely need. A common example of this is having your television service turned off for a few months. Another common example is by not eating out for a set period of time. Both of these ways are based around lowering your expenses by changing your habits.
In terms of creating income, you can always sell things you don't need on eBay or Craigslist, or get a part time job on the side to help make some more money. While some people think this is beneath them, it's their own spending habits that often get them in the hole to begin with, and that's why they need money now, so they should be willing to go the extra mile to do something about it.
Sunday, November 14, 2010
The Surprising Truth Behind Using Money Management Software
The point of money management software is to use our current level of technology to save time and increase efficiency when working with a budget or allocating funds. The only problem is that most money management software is made extremely complicated with features that the vast majority of individuals working on their budget will never even think to use.Software developers think that a program being "powerful" means that it has more bells and whistles than other money management programs. Unfortunately for the end user, this creates confusion which leads to worse money management.
You may be surprised to know that if you have Windows, then you already have all of the money management software that you need. Simply put, you can do 99% of your necessary money management and budgeting with the calculator that comes with Windows and a word processor. You can use a spreadsheet if you'd like, but not all computers have a spreadsheet. Additionally, a spreadsheet adds another level of complexity to people who aren't extremely familiar with computers and can alienate them.
The idea is to have money management software that anyone can use, and to be able to use it effectively. So here's what you do. Start off by pulling up Notepad and the Calculator in Windows. Save your Notepad file as something like "Budget.txt". At the top of the file, write all of your sources of income and how much you expect that to be per month. Next, leave some space and then write out all of your necessary bills with how much they cost. It could look something like this:
Paycheck .......+$395
Power Bill .....-$150
Rent ...........-$100
Groceries ......-$ 60
And so on. Eventually you'll have an amount left over, and from this amount you'll want to allocate funds for savings accounts, investments, and other goodies. The trick with money management software is for it to be put to use and be practical, not to have a bunch of features that you will never use.
You may be surprised to know that if you have Windows, then you already have all of the money management software that you need. Simply put, you can do 99% of your necessary money management and budgeting with the calculator that comes with Windows and a word processor. You can use a spreadsheet if you'd like, but not all computers have a spreadsheet. Additionally, a spreadsheet adds another level of complexity to people who aren't extremely familiar with computers and can alienate them.
The idea is to have money management software that anyone can use, and to be able to use it effectively. So here's what you do. Start off by pulling up Notepad and the Calculator in Windows. Save your Notepad file as something like "Budget.txt". At the top of the file, write all of your sources of income and how much you expect that to be per month. Next, leave some space and then write out all of your necessary bills with how much they cost. It could look something like this:
Paycheck .......+$395
Power Bill .....-$150
Rent ...........-$100
Groceries ......-$ 60
And so on. Eventually you'll have an amount left over, and from this amount you'll want to allocate funds for savings accounts, investments, and other goodies. The trick with money management software is for it to be put to use and be practical, not to have a bunch of features that you will never use.
Friday, November 12, 2010
A Fool-Proof Method of Budgeting Money
There is a very simple method to budgeting money that anyone can use to get their finances under control. While you still have to go through the motions and follow the budget once you've created it, there are also safeguards you can put in place to help make sure that you stick to your plan for your money. Here we're going to take a look at a fool-proof method to dealing with your budget, as well as other things you can do to help yourself succeed.
First thing's first: figure out how much income you have coming in. This can be from jobs, gifts, whatever, but you need to know exactly how much income you have before you can start budgeting money. Once you have this on hand, figure out the bills and other expenditures you have that absolutely must be paid. Things like rent, gas, a car payment, and a power bill fall under this category.
After you've mapped out these things, you'll need to set aside an amount for savings that you won't touch under any circumstances. Ideally this will be at least 10% of your total income, or 25% of what's left over after you've paid the critical bills like food, shelter, and power. This savings should first go towards an emergency fund in a separate bank account that you won't touch for anything other than an absolute emergency (like your car breaking down or your house catches on fire). Once your emergency fund is about the size of three months income, then you can start saving for investments. This allows you to let your money work for you.
While these savings are great, you should also be paying down any debt you have with whatever money is left over. Stop blowing money on things you don't need, and start paying off your debt. The longer you let your debt hang over your head, the harder budgeting money becomes, and the more you'll owe over time.
First thing's first: figure out how much income you have coming in. This can be from jobs, gifts, whatever, but you need to know exactly how much income you have before you can start budgeting money. Once you have this on hand, figure out the bills and other expenditures you have that absolutely must be paid. Things like rent, gas, a car payment, and a power bill fall under this category.
After you've mapped out these things, you'll need to set aside an amount for savings that you won't touch under any circumstances. Ideally this will be at least 10% of your total income, or 25% of what's left over after you've paid the critical bills like food, shelter, and power. This savings should first go towards an emergency fund in a separate bank account that you won't touch for anything other than an absolute emergency (like your car breaking down or your house catches on fire). Once your emergency fund is about the size of three months income, then you can start saving for investments. This allows you to let your money work for you.
While these savings are great, you should also be paying down any debt you have with whatever money is left over. Stop blowing money on things you don't need, and start paying off your debt. The longer you let your debt hang over your head, the harder budgeting money becomes, and the more you'll owe over time.
How to Get Money Quick: What Really Works
Have you ever been in a bind or had some other reason that you absolutely had to get money quick? Everyone gets in this type of situation from time to time, but here we've got the answers to your problems!
The first thing to realize is that you need to calm down and take a big picture view of your current money problems. If you have a lot of raw emotion pushing your motivation without a logical plan laid out, then as soon as your emotion fizzles down, your drive to succeed and make money will also dwindle.
So how do you create a long term plan based around getting money as soon as possible? Just think ahead to the next week instead of the next 24 hours. Think about the reason you need to get money quick, and decide if there is any way you can put off payment to give yourself a little bit more time. Finally, figure out how much money you'll need to guarantee that you won't end up in this same situation of needing money as badly as you do now.
Alright, so with a plan in place, it's time to get started. To get money quick, you have two main choices. Either you can sell some items you have laying around that you don't use on Craiglist, or you can try your hand at performing simple services for people on the Internet. Ignore companies wanting you to fill out surveys -- most of these are scams. The real way to make money is to find a message board for people who build websites or do Internet marketing, then offer your services to assist them in a buying and selling services type section.
This is fast because there are always people who need simple tasks done like checking website stats or writing short articles, but don't have time to do it themselves, so they paid people real money in real time to do these things for them.
The first thing to realize is that you need to calm down and take a big picture view of your current money problems. If you have a lot of raw emotion pushing your motivation without a logical plan laid out, then as soon as your emotion fizzles down, your drive to succeed and make money will also dwindle.
So how do you create a long term plan based around getting money as soon as possible? Just think ahead to the next week instead of the next 24 hours. Think about the reason you need to get money quick, and decide if there is any way you can put off payment to give yourself a little bit more time. Finally, figure out how much money you'll need to guarantee that you won't end up in this same situation of needing money as badly as you do now.
Alright, so with a plan in place, it's time to get started. To get money quick, you have two main choices. Either you can sell some items you have laying around that you don't use on Craiglist, or you can try your hand at performing simple services for people on the Internet. Ignore companies wanting you to fill out surveys -- most of these are scams. The real way to make money is to find a message board for people who build websites or do Internet marketing, then offer your services to assist them in a buying and selling services type section.
This is fast because there are always people who need simple tasks done like checking website stats or writing short articles, but don't have time to do it themselves, so they paid people real money in real time to do these things for them.
Subscribe to:
Posts (Atom)