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 profit; for a family, this is the “fun” money. What to do with this difference is another topic, for another time.

Project Budget

A project budget focuses on controlling expenses. The idea is there is a certain fixed amount of money available to pay for everything. By tracking expenses, a person can make sure that everything will be covered. When a person delivers a result “on budget”, this is the type of budget being discussed.

The key is to track expenses, enabling decisions to be made correctly. Questions about buying resources, hiring people, purchasing advertising are typically discussed in this context. Income is typically fixed at the beginning of the project or available in clearly defined amounts. Often, a project budget references an operational budget.

Goal Budget

A goal budget is where a target amount of money is set and the amount of income is tracked. If expenses are tracked, they are done so only as an impact on the income. For example, a fund-raising project is handled this way.

Any expenses tracked in this budget are simply expenses directly related to getting income. For example, a fund-raiser may purchase envelopes to distribute so that people can mail in donations. The primary focus is the rate of growth of the amount saved. Again, this effort can be related to other, more comprehensive activities, such as a family saving for a vacation as part of their overall budget.

Having the Right Structure

When a person is creating a budget, having the right focus is a critical element of success. Understanding the different kinds of budgets can really help setting the emphasis correctly.


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 have good credit scores because they pay their bills on time and know how to take out loans responsibly. This allows them to grow wealth slowly and live well for most of their life. However, because the Well-Off Person usually is dependent on their job, they can find themselves in dire straits if they are laid off, injured and can’t work, or have other costly events that dry up their savings. This mostly due to the fact they are afraid to invest in anything, but sure things.

The Highly-Wealthy Person on the other hand knows how to manage their money by having an emergency fund, has a high credit score by paying their bills on time, and know how to take out responsible loans just like a Well-Off Person. The only difference is that a Highly-Wealthy People know how to make their money work for them with or without them. They understand these 3 Principals of Money.

Principal One: You can’t do everything yourself.

When creating wealth, the most important principle you need to take to heart is to understand you can’t do everything yourself. Which is why when you’re creating money with your money, it’s important to know you need to delegate a lot of the work to other people. Especially in hiring people. For example, in real estate you hire contractors to do your fix n’ flips and hire a property manager to manage your buy n’ holds. You do this because even if you know how to do it, it doesn’t make any sense for you. Why focus on only one or two properties when you can have ten working for you by having the right people in charge. In stocks, why would you learn how the market works and plug yourself in when there are people you can hire to do it for you 24/7. Instead, enjoy yourself.

Principal Two: You have to take calculated risks.

Principal Two simply means you have to risk money to make money. If you don’t risk anything, then you can’t make anything. This is the pinnacle of investing and what keeps many people from doing it. As they are more worried about losing a hundred dollars on a bad investment and would rather spend a hundred dollars on something worthless they don’t need. This makes many investors afraid to pull the trigger when investing and fall for the fallacy of the perfect deal. Where they will turn down even the best deals because they believe there will be a better one over the horizon. The only way to overpass this fear of losing your investment, is to embody the concept of Sunk Costs. Sunk Costs are costs that you have sunk into an endeavor that will never pay off and you will never get them back. The idea behind sunk costs is that although they are lost forever, it should not affect your decision in shutting down the investment. If it isn’t going to work, it isn’t going to work and you need to accept beforehand that the funds spent were a calculated risk and their loss was expected to happen if it failed. Accepting sunk costs will allow you to avoid throwing good money after bad.

Principal Three: If you can’t understand it, then don’t invest in it.

Too many people get into the hype of something. They listen to too many experts on the subject. Too many experts on the news. Too many “experts” in their family and friends. And they find themselves putting all their money into something they have no understanding of. This can be from complicated companies, products they use but have no understanding of their business model, and other financial instruments that are hard to explain, let alone understand. This is why for many investors, they need to stick to what they know. If its stocks, stick with stocks. If its real estate, stick with real estate. If it’s a business or company you know through and through, then stick with it through and through. The idea is that you have to an understand an investment, how it works, and its ability to grow in the world we live before you invest in it. This entails having to research the subject, know its past and present, and the major things that can affect it. The only way you can ensure you don’t get screwed is to have at least a basic understanding of what you’re investing in.


Knowing what financial type of person you are will allow you know where you need to go from here. Knowing if you spend too much money and bust your budget means you have to create financial discipline. If you are defensive with your money but seem to want more, than you need to start thinking about how to take more calculated risks. If your wealthy, you need to figure out better investments to get higher returns so you can even do more than you ever could have imagined.

Lucas M. Thomas, has been an effective businessman and entrepreneur starting his very own Professional Writing Services Business in early 2011 while attending Arizona State University.

Known as LT Copywriting it grew from writing Advertising and Persuasive Copy to Technical Writing, Ghostwriting, and Editing Services.

Allowing him the knowledge he needed to become a professional marketing consultant for small and large business.

In May of 2014, he graduated from Arizona State University with his Bachelors of Science in Management, his Minor in Economics, and 2 Certificates; One in International Business and the other in Small Business and Entrepreneurship.


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 will let you order and use coupons with your best efficiency and ease. Storage boxes, card files, baseball card holders, notebook sheet protectors are just some ways to store coupons. Find your best system and experiment as much as needed to simplify the process.

Begin your shopping experience on home turf so to speak. Kick start your couponing at often used grocers or discount retailers as a good way to get your feet wet and begin fine tuning your process. Knowing the store layout puts the focus on matching savings to purchases and holds item hunting to a minimum.

Only buy stuff you use. A good savings is no savings for items you don’t or won’t use. Have a shopping list and stick to it. Remember, a coupon used just to save money equates to impulse buying and wasteful spending.

Clip just the coupons you’ll use. Also, coupons left intact on full-page sheets are easy to organize. Be careful with “brand commitment” you might now have. Brand loyalty can become contrarian to money-saving, so make wise decisions about brand loyalty.

Another way to see brand loyalty is to admit that some brands favored for personal reasons. While extreme couponers may suggest that you never pay full retail for anything, you can ignore this thinking. I suggest that you not allow couponing to rule your life or force substituting a brand that you don’t like at all for one you really do prefer.

Try to use coupons on double and triple days. Also, use coupons when they apply to cut-rate sale items, and for really good savings look for stackable coupons. These are manufacturer and store coupons paired together. By all means, find a coupon for any big-ticket buy.

Getting the best deals may mean shopping more than one supermarket, big retailer, or other store. The rule is to follow sales wherever they may happen. Don’t lose sight of your goal, which is total cash saving.

Everything has its jargon, and couponing is no different. Understanding the coupon language will make a noticeable difference in money savings. Below are some common acronyms used in couponing, and the list is endless. Also, the site is a good source for acronyms.

  • OYNO – On Your Next Order
  • MIR – Mail-in Rebate
  • BOGO – Buy One Get One
  • AR – After Rebate (as in the price after you figure in the rebate savings).
  • CO – Cents Off Coupon

Couponing is cash. It’s cash you don’t take out of your pocket or checking account when spending on necessities. The secret to couponing is to find your best method and use it to save cash every week.


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 you are still confused why adopt this automated solution, we have created a list of reasons that you must infer to:

1) Smart Technology: Mobile-friendly expense management solutions help you track, manage and restrict employee expenses with just a click. Not just that, it also helps you save a lot of time!

2) Synchronized Prepaid Business cards: The standard usage of synchronized prepaid cards would eliminate the manual card entries for expenditures like travel booking, client servicing et al.

3) Virtual Receipts: Believe us when we say that no employee would appreciate a boss who makes them carry receipts back to office after an exhausting business trip. All they have to do is, click a picture and upload it with a touch. It would save your auditor’s time also when they sit down to review them.

4) Increased Transparency: An employee would prefer if the company adopts a modern and transparent process of filing reimbursements, expense management and taking approvals. It would also eliminate the cases of dishonest claims and minimize fraud.

These reasons should be enough to inspire you to make a move, to go ahead and opt for such automated expense management solutions that not only increase your business productivity but also keep your employees happy! Needless to add, it makes you come across as a good boss too! Now if you are looking for saving time and money, or increasing your team’s productivity, you know what and how to improve.