Three Types of Budgets

download (90)Whenever someone is working on a financial goal, one of the topics that comes up is working with or within a budget. The fact is that there are three distinct types of budgets, each with their own structure and approach. This subject is definitely not a “one size fits all” topic. Understanding the different types of budgets will help you track the right information for the task you are working on.

Operational Budget

Most of the time when someone is talking about their budget, they are referring to an operational budget. An operational budget is one that tracks ongoing financial activity. This the day-to-day budget of a business or a family.

An operational budget tracks both income and expenses. The purpose of this document is two-fold. First, by tracking all financial movement, or “cash flow”, a person can get a much clearer picture of the financial situation. Hopefully, this picture will allow a person to make any desired changes in an efficient manner. Second, the focus of this budget is on the difference between income and expenses. In a business, this is

The 3 Financial Types of People in the World

download (92)There are 3 types of people in this world when it comes to finances. They are the Perpetually Broke Person, the Well-Off Person, and the Highly-Wealthy Person.

The Perpetually Broke Person never has any money and ultimately lives paycheck to paycheck. This is sometimes due to economic hardship, but these people exist every pay scale as the Perpetually Broke Person is always spending their income immediately after receiving it, and how much income is less important than how quickly they spend it. This is mostly on consumer goods such as clothes, electronics, and other items that can empty a bank account quickly. Another aspect of the Perpetually Broke Person is that they are amazingly good at giving away their future wealth by getting loans on things they don’t need or can’t even afford such as new cars, home improvement projects, and vacations and getaways.

The Well-Off Person is the next step up and does much better financially then the Perpetually Broke Person as they know how to manage their money by saving it for emergencies and big purchases. They also

10 Tips for a Better Couponing Experience

There was a time when people bartered for almost everything. Nothing went at full price and negotiating was the norm. Couponing, in a sense, is a return to the days when buyers made their best deal with sellers, saving hard-earned cash in the bargain.

I’m not an extreme couponer, but I do save money every time I shop at my two primary grocery stores. Plus, I save money via coupons at other retailers, and it’s like putting cash into my pocket.

The most practical way to start couponing is to have a system that makes sense for you, is a process you’ll regularly follow, and doesn’t overburden an already full schedule. The following are tips that will help you develop a money-saving process using coupons that fit into your normal weekly routine.

Start by setting aside the same day weekly to clip, sort and file coupons. Thinking through the process and journaling transactions will help set up a routine. Successful use of money is always set upon routine. Using a journal system with couponing can add personal depth to the process. You can plan menus, record thoughts, and note experiences or anecdotes.

Sort, file and toss coupons regularly. Give thought to a system that

Highlights Of Automated Travel & Expense Management Solutions

download (89)As your business reaches international levels and competitions get tough – the need for speed is imperative. It is of utmost importance to explore different options for quicker success, but it also calls for upgrading your business with the latest technological developments in order to keep pace with the changing times. One such development is Automated Travel and Expense solutions for an organization. Gone are the days of manually collecting the receipts. Your crew counts on your ability to help them at all stages of professional life. Considering that everyone now uses mobile phone applications, what if you could offer them a user friendly, fast and smart solution for Travel and Expense Management? This virtual based solution is not only faster and easier, but cheaper also which makes it a viable solution for Small and Medium Enterprises.

Only 42% of SMEs have given enough thought and importance to appointing a Chief Financial Officer, says the latest Small Business Accounting survey. And this number drops drastically for companies that accommodate less than 25 employees. This calls for an immediate action. If

How To Stretch Your Salary When You’re Stuck

download (87)Sometimes your salary isn’t paying quite enough to cover all you wish it could. Maybe you got promoted to an exempt position that looks good on your resume, but now that lucrative overtime bonus is gone. You could have been offered benefits that you truly need (medical insurance, for instance), and on paper it all looks good, but in your wallet there’s not enough cash.

This is where that “B” word – Budget – comes in to help.

All the experts start with an honest assessment of where your money is currently going. If you don’t know where your money is currently going, how can you control its flow? Write down all the ugly reality on paper so you can look it in the face and deal with it.

The problem isn’t automatically solved by a higher salary; it is solved by controlling the way you spend what you earn.

You can see this in the sad tale of many lottery winners whose huge chunks of money are gone in a few years or the way even high earners go bankrupt. This means

Pension Crisis – Are You Ready For Retirement?

download (86)After working so hard for so many years, many retirees expect to have a very comfortable life after retirement. Most employees who are pensionable feel at ease knowing that they at least have the pension to keep them comfortable after they retire. However, this has not been the case for many retirees; most have retired only to find that they have very little to live on making life quite uncomfortable. Pensions for state public employee continue to face serious issues with funding and this has left many retirees frustrated because the features and benefits expected are no longer guaranteed.

In reality, if you want to have a comfortable life after retirement and you wish to be independent rather that dependent on your children, it would be best that you start preparing for that phase of life early enough. It helps to have savings and investments to back up your pension and any social security benefits you are entitled to. You can only say that you are ready for retirement when you have much more than pension to look up to

Spend Less On Your Car – 5 Tips

download (88)Your car. You need one, we all need one. This necessity means that we are going to spend our hard earned cash on these things. So which ways are there to keep our spending in check in our cars?

Let’s look at a few ways to keep the miles ticking over, and the pounds firmly in your pockets.

1) Insurance.

This is the enemy of the pockets of all young drivers, and sometimes older drivers can be stung too. So how can you keep this enemy at the gates? This is a simple fix, use a comparison engine. It’s been said again and again, but it is very common for people to just stick with their insurer. Loyalty will get your wallet nowhere in this game! Make sure you look around, and always keep these pesky insurers on their toes!

2) Driving speed

Keeping your speed low on the motorway can save you hundreds of pounds, per year. If you use the motorway frequently, we are talking in the thousands. Remember, this is all tax free money that you could be using for something

Prior Planning Prevents Poor Performance

images (31)Living a life full of joy and peace requires that you are financially secure. No, not wealthy, no not rich, but financially secure. Don’t get me wrong, I am not saying that the way to joy and peace is money, but you will never experience true joy and peace while being in debt. These are principles that I was taught at a young age.

I was never given an allowance rather, I earned a few dollars by sitting on my father’s lap while “we” drove the lawn mower around. I was taught first, to give back to God what He has blessed us with. Second, wise spending leads to a wise future. Then lastly, save everything I can. Dave Ramsey, a well-known Christian financial expert, was and is my role model when it comes to budgeting money. One of the greatest statements he ever said was, “Know where your money is going before you ever spend it.” It was on this statement that I started my first budget, and it is on this statement that I will explain how

8 Apps and Sites That Will Put Cash in Your Pocket

images (30)Are you living paycheck to paycheck? If you’re like a lot of people, your cash barely lasts until the next payday. While a windfall would be nice, it’s not likely. With little effort you can tweak your spending habits and maybe have a few dollars left over at the end of the week. Save a little here and you can spend a little there.

There are many ways to cut spending, save money and make a little extra cash. While each method may bring in a seemingly insignificant amount of change, together they add up to big savings. At the end of the week, you’ve managed to hold onto a good amount of your hard-earned dough.

Here are 8 ways to turn a pinch of technology into some great money-making opportunities:

1. InvisibleHand is a browser add-on. When you shop online it lets you know if there’s something less expensive out there than the item you’re about to buy. It works with Google so that when you Google something, it automatically checks for the lowest prices of that item and alerts you.

4 Ways A Budget Can Pay Off

download (85)What comes to mind when you think of creating a budget? For many people, even the thought of putting one together is unappealing. However, there’s another more positive way to look at budgeting that may surprise you. Budgeting can be a way to gain more control of your finances and empower you to do more of what you want to do in life. So while making a budget does require forethought and discipline-and may require you to reign in impulse purchases-it pays off by putting you in the driver’s seat. Over time, a budget has the power to:

1. Let you decide. When you allocate dollars as part of a budget, you give yourself a chance to be thoughtful about where your money is going and to make adjustments, if needed. For example, if you are shocked by how much you’re spending dining out or buying new clothes, you can curtail spending in those areas. Ultimately, knowing your spending patterns gives you the power to put your dollars toward the things that mean the most to you, and help you

4 Mistakes Young People Make And An Easy Way Out

download (84)Defaulting On Loan

The fact that you are out of college with no job, tired and broke. You may have enough reasons to default on your loan. That explains why 26% of American have defaulted on their loan before the age 30. This research comes from Credit Karma and Qualtrics. But the fact that you have no job doesn’t mean you should just sit and whine. An easy way can be to call your card company and negotiate on your loan. Your company will be more willing to sort you out.

Failure To Build A Good Credit Score

The effect of a poor credit rating can’t be ignored. Your credit card history carries everything. Your credit card score will determine if you can not only buy a home, but maintain it. If you will get a car insurance. If you will even get a job in certain states. A good credit card history is the key to your financial life. It is what opens the doors of possibilities for you. But the moment you abuse it, it will have no mercy on

How To Live Happily Within Means

images (29)In the modern world, the pulls and pressures are more for spending whatever one earns. The consumerism and materialism are the main culprits behind this pathetic situation. Even if an individual attempts to rein in the expenditure within the limit of his/her income, the lifestyle of the people in the surroundings would tempt and induce towards wasteful and extravagant expenses.

The aspirations and inspirations are the two vital factors that influence the human lives. The different combinations of these two elements produce the following three lifestyles.

1. Spend less and Save more – Frugal type where money is given importance.

2. Spend more without concern for the future – an Easy-going type that ignores the future, and

3. Spend and Save diligently – the Ideal type caring for the present and future.

The third lifestyle actually means ‘ Live happily within Means.’ This is applicable for the individual and the government as well. The steps involved in this practical concept are narrated here below.

Aim high. Pursue with a systematic and pragmatic approach. Ambition backed by the right attitude coupled with sincere efforts is desirable,

How To Keep Those Pennies In Your Pocket

download (82)These ideas I have learnt through personal experience, and surfing the internet:

  • Instead of buying brand new computers and gadgets such as cables, mobiles and tablets, you can buy them refurbished. No, not badly damaged, but showroom pieces such as a computer with a small scratch or chip on the corner of the casing, or buy from a stock clearance sale, or even a used mobile that is still up to date. You can buy cables from the Sunday markets for mobiles and computers, and save there too.
  • Don’t purchase appliances too cheap, such as microwaves, as they tend to need a lot of repairs and get replaced more regularly than good quality ones. Find a brand that is reputed to be enduring, but is also good on the pocket. One such example is a Dyson Hoover which if looked after can last five times longer or more than a cheap Hoover that fails in six months to function. It is worth paying that bit more on buying the item, than forking out for expensive repairs and replacements such as washing

Maximize Your Income With 1 Tool

images (27)Having a steady income is fantastic, especially after university. As it turns out, after receiving anything several times we begin to ignore the teeny-tiny changes. We go on autopilot and enjoy champagne with our guests until we feel the turbulence and have to sprint back into the cockpit to take control, and do it again.

I used to reach a point where I’d look at my accounts and say, “What do I have to do?” and “How long until my next paycheck?”

Historically, budgeting has worked in every case by giving every dollar a name before we spend it, so you, and the cash know where the heck it is going.

Then again, historically, we’ve never been accessible 24/7 to everyone we know, thanks to the Internet and almost feel like time has dwindled, or we may have dawdled.

As individuals, we have three general directions for our money: Needs, Wants, and Saves.

These are true for every dollar you’ve earned, or found. However, these three categories look different for everyone.

With a simple system, you can teach yourself to hog-tie your spending, and find

Four Money Saving Hacks – How Do You Stick to a Budget?

download (81)There was a candy store on my walk back home, and my weakness was a local, oversweet jelly like candy called jujubes. I used to buy them every chance I got if I had spare pocket money.

My grandfather would encourage me to not ‘waste my cash’ on that ‘junk’. All the things he said were true – it was bad for my teeth, it was probably full of chemicals. He made some very good arguments. But I didn’t stop.

We all have weaknesses we spend our money on. We have a hard day, we think we owe ourselves the treat of a nice dinner, or a vacation after a tough year, or a new flatscreen TV, or that pretty outfit in the window. The temptations are many. It’s hard to walk down a brightly lit cheerful shopping street and not buy something. But there are some saving hacks you can use to get over the temptation.

Some of these hacks actually work. Take it from a former jujube lover: eventually as I got older, I tried to get over my candy

Optimal Cost Structure and Effective Scale Economies

download (80)How do firms choose their cost structure? What is the nature and function of scales of operation? What are sources of functional and dysfunctional scales of operation? These policy questions relate to the optimal overhead of a business enterprise-the appropriate mix of expenditures that maximizes the return on investment and shareholders’ wealth while minimizing the cost of operations, simultaneously.

Clearly, effective economies of scale (MES-Minimum efficiency scale) are correlated with optimal cost structure and critical to sound business strategies designed to maximize the wealth producing capacity of the enterprise. In these series on effective expenditure management, we will focus on the pertinent strategic overhead questions and offer some operational guidance. The overriding purpose of this review is to highlight some basic cost theory, strategic expenditures relationships, and industry best practices. For specific financial management strategies please consult a competent professional.

As we have already established, the optimal cost structure and appropriate scale of operation for each firm differs markedly based on overall industry dynamic, market structure-degree of competition, height of entry/exit barriers, market contestability, stage of industry life cycle, and its

4 Effective Questions: Saving Money Quick and Proper

download (78)You have learned to organize your present incoming with your current expenses. You have tipped the scale to work in your favor and have found a surplus. Too often, our ‘extra’ cash is wasted. Spent on ATM fees, the interest on your next card statement, or knick-knacks you buy as you go about your week.

The emotional trouble with saving is the decision to hold back spending because ‘you must shield yourself from enjoying life or indulging.’ And this is so difficult if we only think about it. Saving is a habit; you may put away $10 a week, some can save $100 or more a week. In either case, the driving force behind finding a huge lump sum after a week, months, or years, is the habit. And we are only talking in the short-term.

There is an easy way to get started with valuable Savings. Start with your emergency fund. Why? The emergency fund carries the cash that keeps you moving forward when “life” happens. A few examples are moving, career change, job loss, or sickness.

The design of the

22 Great Ways to Save Your Money

download (77)How to Save your Money?

1. Turn off the television.

The Greatest way to save money is to drastically cut down on the amount of television you watch. There are a lot of financial benefits to this: less exposure to spending-inducing ads, a lower electric bill (and perhaps a lower cable bill if you downgrade your subscription), more time to focus on other things in life, such as a side business and so on.

Want to take things a step further? Consider cutting the cord to cable TV altogether.

2. Enough with the collection and time to sell

Many years ago people thought their collection would bring them riches. Beanie Babies were a big fad at one time, as were Longaberger baskets. Now you can find those items on resale sites like Craigslist and at garage sales for a fraction of their initial cost, leaving many people who sunk thousands of dollars into their “investments” wondering what happened.

To avoid situations like this, never collect items of questionable value. And if you want to recoup some of the money you’ve already spent on collectible items,

Playing By The Rules – A Treadmill To Debt

download (79)Know this!

  • Today’s economics and demographics are different from even a decade ago, your approach to saving and investing must reflect that.
  • Job and benefits security is fast becoming extinct. You mistake responsibility for planning for your future.
  • Americans are living longer, so your money has to last longer.

Check always – separate financial fact from fiction

  • financial freedom wake-up call
  • financial freedom personal check-up
  • 21st century investing and savings
  • debt-free retirement
  • discern financial fact or fiction

Reality check

  • Look at every purchase you make now and ask yourself, “Is this a need or a want?”
  • Discover if your life or marriage is being affected by financial stress. If so, make a plan to eliminate stress.
  • Tune out the daily, weekly, and monthly “latest” gyration of the stock market and the analysis along with it. If you’ve done your homework and save and invested thoughtfully, these numbers have little day-to-day effect on your long-term financial goals.

Act upon

  • Your success or failure to achieve what truly matters to you is up to you. It’s your choice, not the choice of your financial advisor, your parents, your neighbors of employer.
  • Debt is not OK – we

Effective Cost Management and Optimal Pricing Strategies

download (76)How do firms choose their pricing strategies? Do higher prices automatically result in higher profits? How do firms that opt for premium pricing compare to firms that opt for volume? Do price increases always result in higher total revenues? These strategic policy questions relate to the optimal price points of a business enterprise-the appropriate mix of value propositions that maximizes net income and thus the return on investment and shareholders’ wealth while minimizing the cost of operations, simultaneously.

There are divergent pricing objectives and many factors influence pricing strategies. For those familiar with the relevant academic literature the critical factors are well known and supported by contemporary research. The primary goals of effective pricing strategies and core elements of effective pricing strategies are equally well established. However, some industry watchers and practitioners continue to identify profit maximization as the primary goal of business enterprises. As we have advised in previous review and guidance, this focus on profit maximization is a bit misguided.

While profit maximization is a legitimate strategic business goal, for several reasons the primary goal of a business is