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Budgeting 101: more FAQ's

Written by: Sean Hyman

Article Overview: Aaahh the Spend It part of the budget. I personally love this part, and who doesn't? To be able to buy those luxury or "big ticket" items, you first need to go through the Save It stage.

Budgeting 101: more FAQ's

Please be certain to check out my previous articles in regards to budgeting, and remember one little insight can save you thousand$ over time. Especially if you invest your savings. How do I save for the “big-ticket” items? Aaah, the Spend It section. I personally love this part – and who doesn’t? To be able to buy those luxury or “big-ticket” items, you first need to go through the Save It stage. Forget about 0% interest, or the store saying, “We’ll pay your first month’s payment”, let’s be responsible and save for the things we want and pay for them in full. For example, let’s say we want a new flat screen TV and it will cost $2,000. Using the budget, we have to find things that we won’t spend so much on so we can save money to buy that item. By looking at our budget, I can show you how to save for it in 6 months just by cutting the budget down. No extra jobs, no garage sale. Here’s how – these are things you’ll need to sacrifice for 6 months in order to get that awesome TV: -Cancel the gym membership (savings: $49) -Cancel the XM radio (savings: $13) -Agree to go out less for 6 months (savings: $100 from the Entertainment category) -Choose not to buy any clothes for you for six months (savings: $75/mo) -Sit the family down and tell them that the vacation this year won’t be as great as last year, but we’re getting an awesome TV instead (savings: $100/mo from the vacation category) - Only use half of your allowance each month (savings: $50) The result = Savings of $387/mo. It will take you just over 6 months to save up for that TV. Take that big pile of cash into the store and negotiate yourself a discount or some free speakers by waving that pile of green around. You’re right in thinking that it took some discipline to get here, but isn’t that better than signing up for the 5 year plan and still be paying it off when the thing may have been replaced by another TV? How can I pay off my debt as fast as possible? Forget the radio commercials that’ll tell you that you can choose to negotiate your debt and only pay 50% of what you owe. You’ll come out with trashed credit that will haunt you for a long time, and possibly having to pay more debt than you originally owed. Paying off debt as fast as possible isn’t as hard as it seems - on paper! Imagine that you want to pay off $24,000 of credit card debt / student loan. Imagine you could have either of these goals accomplished in one year. That’s the mentality you’ll need to have when you pay off your debt. Let’s look at it practically; I’ve adjusted our budget to save $2,000 a month. You’ll notice that we’ve stopped retirement contributions. This is only for a temporary period of time while you pay off that debt. As long as you promise to yourself that you won’t run up the debt again, then this can be an affective method to paying off the debt as quickly as possible. Once the debt is paid, then start contributing to your retirement accounts again. Think this looks like a tight budget – you’re right! But in one year, you’ve paid off $24,000 of debt. In two years, you’ll have paid off $48,000. Just imagine the feeling of being debt free and having the budget as used at the start of the article – wouldn’t life be so much easier?! Then stop wasting time – GET TO IT!

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Article Tags: big ticket items, budget, clothes, discipline, flat screen tv, free speakers, garage sale, gym membership, insight, jobs, membership savings, money, radio commercials, six months, xm radio



Related Forum Posts
Are FAQs effective or useless? - Are FAQs effective tools for your company or useless because no one actually takes the time to read them?
Re: Budgeting Approach - Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.
Re: Budgeting Approach - [quote="baconmarius":252nopeg]Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.[/quote:252nopeg] Good points. Also, there's no successful business without a settled budget for this and that so you really have to mange the money inside the pocket, the assets/investments as well as the liquid ones so you'll always have something to grab the moment you need it the most.
Can a biz website help? - Tara, A website is just another vechicle to deliver your message and keep in touch with your customers. How? well for one your email address will have your web address in it - people judge your professionalism at that level too. Some uses my clients have found beneficial when they thought it wouldn't: 1. Disseminating repetitive information to clients e.g. portfolios, FAQs. 2. Send out newsletters that link back to your webpage (costs practically nothing via email) 3. Writing articles for your industry. These articles will do two things: 1) establish your expert status. 2) Search Engine Optimize your site. 4. Run cheaper ads in print publications by directing them to your Sales message on to a page on your site. 5. Write a special report on "Logo branding" for business owners to download. You capture their email info as you have to email it to them or their mailing address and send them the report. After they have read it they will still be inclined to use your service even if you divulge every step it takes to create a logo brand. The psychology is that they fear they may still mess up and you won't. I did this with my old Web design business as a test (gave them step by step what they needed to do to setup a website) and I still got their business. I installed Trust in them that I could do it best. Those are the major ones.


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