Budgeting For Prosperity

Budgeting For Prosperity

 by: Paul Goldner

Budgeting For Prosperity
Seven Steps to Follow To Achieve Financial Freedom

Without a sound financial plan, a business is doomed to failure - managing your personal finances is no different. A sound personal financial plan is crucial to both your financial and emotional well being.

We have prepared a simple and easy to use budgeting process for you. This budgeting process will show you how to thoroughly develop a financial plan and lead you on the road to financial freedom.

Make a complete list of your monthly income.

The budgeting process always starts with a monthly income; one's income will show how much one has to spend each month.When developing your monthly income, make certain to include take home pay from your job, any bonuses that you receive, dividends and interest income from investments, tax refunds from the government, gifts from other family members, and any other type of income you may require during the particular month. If you would like a comprehensive income budgeting tool, please call your credit counselor at American Debt Solutions. They can be reached at 1-800-246-4019. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income budgeting worksheet.

Make a complete list of your monthly expenses.

Just like the complete list of an income, one must make a comprehensive list of his/her expenses.When you make your list of expenses, it is important to break them into three distinct categories, fixed, flexible, and discretionary.

Fixed expenses: expenses that do not change from month to month.Good examples of fixed expenses are your mortgage or rent payments, a car payment, insurance premiums (such as life insurance, car insurance, or health insurance) or any other expense that does not vary from month to month. Once you have gathered all of your fixed expenses, you need to make a total of your fixed expenses for use a little later in the process.

Flexible expenses: expenses that vary from month to month.Typically, you can control your flexible expenses to a certain extent. Flexible expenses include items such as groceries, utilities, clothing, restaurant expenses, haircuts, fuel and other items that change from month to month. You should be able to see that you do have at least some control over your flexible expenses. Again, total all of your flexible expenses; we will also use this later in the process.

Discretionary expenses: Discretionary expenses are clearly not necessary for your survival and may be the cause of many of your financial problems.Good examples of discretionary expenses are entertainment, vacations, movies, alcohol, and club memberships. Again, total all of your discretionary expenses.

Put your expenses in order of most importance.

If your expenses exceed your income, you will be in a position where you will need to use credit cards to pay for your income's shortfall. This is how most people get into credit card debt. It is important to monitor your use of credit to pay these expenses. The long-term effects of borrowing to pay for your current expenses can be very hazardous financially. Your credit counselor at American Debt Solutions will be happy to provide you with a credit card worksheet to help you track your credit card debt. When you have totaled the monthly payment on all of your credit card debt, make sure to include this total in your total of fixed expenses discussed in point 2a above.

Subtract your total monthly expenses from your total monthly income.

By subtracting all of your monthly expenses from your monthly income, you will clearly see if you are going to have financial difficulties. If you have more expenses than you do income, you will have a negative expense-to-income ratio. In lay terms, this means that you are spending more than you are making. This is the typical cause of excessive credit card debt. Since you are spending more than you are making, you must finance your budget shortfall with a source of credit such as your credit cards. If you do not stop this trend, your credit card debt will grow and grow until you no longer have the ability to use your credit cards.

If you do have a negative expense-to-income ratio, you need to consider which of your expenses you can reduce. First, start with your discretionary expenses and then move on to your flexible expenses to see what expenses you can eliminate or diminish.

If you would like a comprehensive expense budgeting tool, please call your credit counselor at American Debt Solutions. They can be reached at 1-800-246-4019. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your expense budgeting worksheet.

At the end of each month go over every expense that you incurred.

Look for additional ways to curb unnecessary spending. There is nothing more impactful in life than holding yourself accountable for your goals. If you hold yourself accountable, you will always reach the goals that you set for yourself. If you don't hold yourself accountable for reaching your goals, you'll find that you never reach them. This is probably the most important element of a debt management or credit counseling program. There is no secret to financial success (see point six below for the secret) and there is no secret to getting out of debt (see point four above for the secret). The beauty of a consumer credit counseling or debt management program is that you are held accountable for the goals that you set for yourself in terms of becoming debt free.

When you are reviewing your expenses at the end of each month, remember to set spending limits and goals that that are attainable. You did not get into debt in one day and you will not get out of debt in one day. Any worthy goal takes time to achieve. Once you get the hang of the budgeting process and see that you are making real progress, you may want to go through the budgeting process quarterly, instead of monthly, as long as you continue to make progress.

Try to put 10% of your monthly income into savings (401k and IRA savings plans have additional tax benefits).

By saving 10% of your income you will learn one of the greatest secrets to financial wealth, the compounding of interest. If you save 10% of your income each month, your money will start to work for you in short order. It was Albert Einstein who said that his greatest discovery was the compounding of interest.

When you consider your savings plans, first make certain that you completely fill your 401k and IRA savings plans. This will allow your savings to accumulate tax free. This will accelerate the growth of your assets by 20 to 40%, depending on your tax bracket.

After you have filled your tax deferred savings plans, any additional savings that you can make should go into a regular savings account. This could include a money market account at a bank (a very secure but low yielding investment) or some type of investment account (a much less secure but typically higher yielding asset over the long run).

Also, remember that any reserve that you create will help to insure that you do not have to live paycheck to paycheck.

If you would like to learn more about how to build wealth in your life, please call your American Debt Solutions credit counselor. They can be reached at 1-800-246-4019. Make sure you ask them about our ADS Wealth Building ProgramTM. This program will show you the secret to building wealth in your life. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you with our Wealth Building ProgramTM.

Divide all of your expenses by the number of paychecks you receive each month.

By dividing your total expenses (obtained by adding your fixed expenses, your flexible expenses and your discretionary expenses) by the number of paychecks that you receive, you will see whether your paycheck is sufficient to cover your expenses If it is, you should be in good shape. If it is not, you may have to rely on other sources of income or you will need to reduce your expenses. Again, if you need to reduce your expenses, you must look to your discretionary expenses first and then your flexible expenses second. If you cannot reduce your expenses, you may want to call American Debt Solutions and speak with your credit counselor. We will help you develop your budget at no charge. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income and expense budget worksheet.

We, at American Debt Solutions, hope you find this article both informative and helpful and wish you the best in securing a debt free future.

If you would like to speak with one of our credit counselors today, please click here now or call us toll free at 1-800-246-4019.

American Debt Solutions, 2003, All Rights Reserved. American Debt Solutions is a 501(c)(3) Not-For-Profit Organization dedicated to providing a debt free future for our customers. American Debt Solutions is a member of the AICCCA and has certified credit counselors on staff to serve your needs.

Paul S. Goldner is a noted author, entrepreneur and professional speaker. Paul has written numerous articles in the area of Financial Management, Consumer Credit Counseling, Financial Acumen and Debt Management. Pauls company, American Debt Solutions, is a market leader in the area of consumer credit counseling and education. Paul can be reached at 914-646-9591,1-800-246-4019, PGoldner@adshq.org and WWW.adshq.org.

How To Avoid The Three Most Common Budgeting Mistakes People Make When Planning a Web Initiative

As we all know, times have changed. Websites have become an absolutely fundamental component to nearly any business. But, while most companies set aside money for website development, they often overlook several key components. As a result, they either far exceed their initial budget or are unhappy with their Website's result.

Many web firms purposely leave these crucial portions of the budgeting process out, so they can 'hook you' in the beginning, and then get more money as the process continues. Obviously, this makes creating a budget all the more difficult.

The good news is that there are some guidelines to help you ensure that your web project is a complete success. The following three components of website development are the most overlooked in early development and budgeting phases. Considering these three aspects of website development will help you ensure your website exceeds your expectations, but not your budget.

1. Extended Photography and Artwork.

When budgeting for web projects, companies usually forget to budget for the purchase of professional photography. Your graphic design department at your company or web firm will provide you with an overall website design called the look-n-feel. Typically, their job doesn't include designing each page of content.

The look-n-feel templates usually have a content area where the implementation team will incorporate content. You will need to include artwork at the top of the page to provide a nice visual to coincide with the content.

Another example of where you would use photography or artwork is where you have a page of content that talks about a unique process your company uses. Spelling out the process in text format is good. A nice visual to represent that process in conjunction with the text is even better. This visual was likely not part of the design team's original goals when designing the look-n-feel for your site.

Budgeting for extended artwork and photography:

a) When developing your project's site map, be sure to look at each top level page as its own homepage for a given section. Your website's homepage has a strategic layout that incorporates a nice balance between design and copy, and so should each top level page. (Top level pages are the initial pages in your site's main navigation areas.)

b) Once you designate what pages are top level homepages, define overall goals of that page/section. What do you want your visitors to learn about? What's the strategy for that section? What overall branding and feeling should be conveyed? Document this information and make sure your web or eMarketing firm knows about this additional design work at the outset if they haven't already talked to you about it.

c) A resource for cost-effective stock photography that we like to use is iStockPhoto.com. iStockPhoto.com has a wide range of royalty-free photography to choose from at very reasonable prices. The only drawback is that you may use a photo that is in-use by another company; therefore, it?s not unique to your company. This is an option you must weigh. Unique photography will cost quite a bit more, but if you are a larger company the expense may be justified. Smaller companies should definitely consider iStockPhoto.com.

2. Copy / Content

There's nothing more disheartening then getting to the end of your web project and realizing you don't have enough copy to fill your website. I have personally seen web projects have everything complete other than copy only to watch companies delay completed projects for months while they try to write their own content. Consequently, the project is not only delayed, but the copy is usually short and weak.

Well written copy is essential for any website, because it grabs the reader's attention and provides cohesiveness throughout the site. It is also essential for search engine optimization and marketing. If you don't have a copy writer on staff at your company, make sure your web firm understands the importance of good copy and helps you budget for it.

Budgeting for copy writing:

a) When you create your site map, in addition to designating which pages are top level homepages, designate which pages you already have sufficient copy for and which pages you don't have sufficient copy for.

b) Meet with a professional copy writer if you don't have one in-house. At the meeting discuss each area of copy that you have, where it will go and what you are missing. Make sure you give them the copy you already have so they can polish it as part of the final deliverable and ensure that all copy is in the same 'voice.' Ideally your web or eMarketing firm will have a copy writer on staff to coordinate this within the project and provide strategy recommendations.

c) This process can happen concurrently with the design and development process. There's no reason to wait until those phases are complete, so start working with a copywriter as soon as you define the overall site map and strategies. This will help ensure that your project finishes on-schedule, which keeps things within budget.

3. Post-Launch Marketing or eMarketing

If there's anything that should never be left out of any web initiative budgeting process, it's post-launch marketing or eMarketing. This by far is the #1 mistake companies make when planning their web initiatives. This is also why companies will put up a website and say, "Our website is just a formality. We've never receive any leads from it."

It's important to understand the overall budgeting required for eMarketing. You must understand the goals of your website and put marketing plans into action that attract and engage your target audience on a regular basis. Not spending money every month on eMarketing is the same as buying a fancy sports car, never performing required maintenance on it, and then calling it a 'piece of junk,' because it doesn't run anymore.

In order to receive value from your website, you MUST nurture the related eMarketing activities on a regular basis. Remember, the website is a tool that facilitates company objectives. Know your objectives and use your website as a tool accordingly.

Budgeting for eMarketing:

a) Be careful when selecting a web firm to help you design and launch your web initiatives. Web firms that boast very affordable website developments costs are so focused on getting your project business that they don't worry or care about what happens with your initiatives when the project is complete. Most web firms don't offer eMarketing services, so be sure you investigate before making a decision.

Ideally, you should pick a firm based on its eMarketing focus, skills and experience and not by the 'prettiness' of the web projects they've done. Remember, anyone can produce a good-looking design, but only an eMarketing firm with a business and marketing focus can show you how to make your web initiatives pay-off.

b) Determine what your website is supposed to do for your company. Are you trying to make sales directly on the web? Do you want leads for your sales team? Once you know what the website ultimate goal is, you can plan to develop tools that engage visitors and have them take your desired action.

Once you know the goals and have the tools to make it happen, you need to determine how much you can afford to spend on each acquisition. You must know your acceptable acquisition cost before you can decide on which eMarketing tools to use. To figure this out, determine the acceptable acquisition cost your company can afford on each customer.

Let's say that at your company each customer is worth $10,000, and you can afford to spend $500 to get that customer. You then need to determine the acceptable cost per 'lead.' In this scenario let's say that your company's close rate is 10 percent that is 10 prospects out of 100 engaged becomes a customer. This means that you can spend approximately $50 per lead.

Now, if your yearly budget for eMarketing is $50,000, you can spread that out over the course of the year and create an eMarketing plan to steadily bring-in leads every single month. In this scenario, we can plan to acquire approximately eight customers per month.

Knowing this information will help determine which eMarketing tools and channels to use. We can quickly determine if a particular channel has or doesn't have the right 'per lead costs' and make decisions accordingly.

By considering these three factors when developing a web initiative budget, you should be on your way to having a successful website that helps you meet your business objectives without breaking the bank.

About Cowell eMarketing
Cowell eMarketing is a small and innovative eMarketing firm for businesses seeking new ways to attract customers. Cowell eMarketing provides web and eCommerce development as well as ongoing eMarketing services such as eMail marketing and search engine marketing. Visit www.cowellemarketing.com to learn more.

Frank Cowell is a Certified eMarketer (as certified by the International eMarketing Association) and CEO, Founder of Cowell eMarketing. Cowell eMarketing provides web and eCommerce solutions, eMail Marketing, Search Engine Marketing, eMarketing Analytics and eMarketing Consulting services.

Shoestring budgeting

After you have taken control over your fixed expenses, its time to take a look at the outgoing household expenses. These include food, groceries, clothing, cleaners, entertainment, etc. Get out pen, paper, and your check book register. Average how much was spent on each of these items per month. You will be astounded at the figure.

By far, the most money going out will be for food and groceries. The key to saving money on groceries is to make a menu for the week prior to going shopping. Get out the calender, see what events are planned that week and write out meals according to the time you will have available. It will save money from impulse buying, and also stop you from pulling in the drive-thru because you cant face preparing a huge meal.
A good place to find great clothes is your local thrift stores. They are being bombarded by teenagers! You would not believe the cool, name brand clothing you will find in these stores. Some may even have the tags still on them. Just get in there and dig. Dont buy just because its cheap, though. Just buy what you came in to get. December is a great month for these shops because people are donating for tax write-offs. You can also find DVDs, CDs, appliances, etc. at thrift shops. Thrift stores are becoming the latest fad!

Instead of shelling out twenty dollars to take your family to the movies, order a pay-per-view movie from your cable provider. You all can watch for the price of one, and have all the pop-corn and soda you want at a much cheaper price than at the movie theater. Instead of going bowling weekly, try having a game night. Everyone has board games. If you dont, pick a few up at your local thrift store.

Try making home made cleaners instead of buying them. Simple things like a little vinegar added to the rinse cycle can serve as a fabric softener. Dryer sheets can be used as dust rags. Explore all your options.

You will save hundreds of dollars each year by following these simple tips.

Wendy jackson writes for http://www.myagonyaunt.co.uk dealing with issues regarding finances, relationships and health.