Mid Year Budget Analyisis

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We are approaching month 8 of our 12 month calendar.  How does your budget look so far this year?  Are you keeping track of all of your spending?

It is always a good idea to look at your budget a few times a year and see how it is going.  As always you should ensure that you are spending less than you make, and have a portion of your income that you can invest.

Why do you need to analyze your budget throughout the year?  Costs change, income can also possibly change.  My rent just increased for my apartment.  I had to make extra funds available.  If you get a raise or a promotion, your income can increase.  If you have a sales role or job in the oil and gas industry, then your income has most likely decreased.  There are a lot of scenarios.

Spending habits change.  Say when you started the year you assumed you would spend $200 a month in eating out; however, you now realize that the amount is closer to $300 a month.  You need to find out where else you can cut $100 worth of expenses from another category.

Follow these 3 points for your mid-year budget review:

1) Make sure you are making more than you spend and aren’t incurring a deficit every month

2) Analyze each category and make sure that your allotted amount is close to your actual spend amount

3) See if there are any new categories you need to add, or one that you might need to delete.  I paid off my student loans, so that category isn’t needed for the remainder of the year.

Follow these steps and find budgeting success.

Budget Smart, Invest Wise

 

Student Loans No More

 

It took me a total of 30 months, two and a half years to pay off over $30,000 in student loans, but it has been done.

My student loans were financed out for 10 years, which is typical for these loans.  However, I paid them off in just 2.5 years.  How did I do this?  Dedication, commitment.

It is never easy seeing the majority of your after-tax income go towards something that has already been purchased (tuition) and you don’t see the financial rewards until many years down the road.  Bonuses I would receive were also mostly put towards paying down this debt.

My loans carried a 6.8% interest rate.  It was because of this that I was so adamant on paying them off as soon as possible.  That and the opportunity to put that money into additional investments for my future.

Student loans among recent graduates are at all time highs, and so is the price of college tuition.  I’m glad I got out when I did and don’t have plans to paying for education again.  I can breath a sigh of relief, because I know there are others out there with much more debt they have to repay.

I remember a criminal justice class I took back in college where the professor said that the only two for sure ways to get turned down for the FBI were if you had a felony or if you defaulted on a student loan.  I’m not sure if that is 100% true, but I do still preach that fact to others today as if it is.

Debt is a big burden no matter what kind of debt it is.  Most young people and college students don’t understand what they are getting themselves into when they enter college.  They don’t realize that the thousands and hundreds of thousands of dollars they borrowed for their education will have to be eventually re-payed with their salaries.

However, with all that being said, I am glad I went to college.  I wouldn’t have had the career opportunities or money had I decided not to go, but that was never an option.  Student loans are a fact that you have to accept if you are already entrenched in the college life.  For those of you graduating, there are steps you can take to help get yourself off to the best financial start possible.  If you are interested in getting your financial life off to the right start then email me for a Financial Foundation Consultation.  I will go over anything you need me to: budgeting, debt burden, buying a house, where to invest, etc.  Consultations can be done over the phone or via webcam.  If interested email me at johnwsteinert@gmail.com

Budget Smart, Invest Wise

Video: 401k Millionaire

ONE MILLION DOLLARS.  It has a nice ring to it.  For some of us, we desire to be millionaires one day.  But how?  It can happen many ways.  It all starts with saving.  A 401k is a great way to build up $1,000,000 of net worth.  How is this?  Most of the time an employer will match your contribution up to a certain percentage.  This is FREE money.  Combine that with the fact that 35-40 years of employment and it is easy to see how the amount can add up.  At the end of the day it is all math.

Experts suggest saving various amounts of your income depending on one’s age; however, money saved is money not spent.  Save as much as you can while still enjoying life.  The following video discusses how one’s 401k can lead to millionaire status.

http://time.com/money/3947342/401k-millionaire/?xid=yahoo_money

Budget Smart, Invest Wise

The Idiot’s Guide to Investing

Want to invest like a genius?  It is actually quite simple.  Very few have been able to accumulate wealth overnight; however, many have built wealth over their lifetime.

Ever heard of Warren Buffett?  I’m sure you have.  He’s preached this advice before and continues to recommend it to the average investor.  Another genius investor and entrepreneur… Jack Bogle pitches the same advice as Buffett.  Jack is the founder of Vanguard, which offers low-cost investment options for the average consumer.  Buffett, Bogle, and Charlie Munger all agree on your best bet for investing in your future.

http://finance.yahoo.com/news/investing-pros-john-bogle-warren-160000796.html

Take a lesson from these billionaires of our time.  Investing is as easy as dedicating your money into an index fund.

Budget Smart, Invest Wise