Sandy knows she is growing her savings by having a surplus each month and putting it in high yielding online banks. When she was puzzled about budgeting, she wrote in and said:
I have $100,000 saved up in bank accounts by following good frugal practices that you and others outline. I however don’t budget and never keep track of my expenses. I know I’m saving money because my account grows every month. Why should I budget …
There are many reasons to making a budget and keeping track of all expenses apart from growing a surplus. I admit that it is actually very difficult to keep an expense tracking system up-to-date because not bothering to update it doesn’t have an immediate effect on us. However, maintaining a budget is like maintaining a bridge. There may not be problems even if you stop maintaining for a long time, but consequences may be disastrous when it does. Below are some more reasons why you want to maintain the bridge:
Builds Discipline and Organization
Having a budget really builds your discipline and organizes your finances, which is the first step of knowing your overall financial health. Without easy to read data, there is no way of knowing what is going on!
Forces You to Think About Money
This is a side benefit of having a budget but an important one. The more time you spend thinking about your money, the more focus you are in building your wealth. Once you start thinking about money often, you will find that you are able to find more ways to save and more ways to generate income!
Crisis Prevention
Looking at your finances in regular intervals will allow you to spot trends and see areas that can be improved way before it becomes a problem. By preventing crisis from starting, you are way ahead of everyone else who can only react!
Great Tool to Start Family Discussions
Money is always a hard subject to discuss. If the whole family is involved in budget making and expense tracking, it makes discussions much easier. It is always a good idea to just lay out the facts when talking about money matters and the expense tracker is the perfect tool to do this!
Quantifiable Way of Measuring Progress
In theory, we all want to reduce our spending and make more money but it is impossible to know how we are doing without actually keeping track of it. Budget tracking to measure progress is not just a benefit but a requirement!
Without a budget, how do we know that we are meeting our goals?
Knowledge is Power
By keeping track of your budgets, you will know exactly how much money you actually need on a monthly basis. Equipped with this knowledge, you are able to plan and allocate the required emergency funds, immediately know how unexpected issues like losing a job or having a child will do to your financial health.
Stress Reliever
Knowing your exact financial situation is such a stress reliever because you don’t have to worry about the unknown. Even if your financial situation is shaky, you will be spending time fixing the problem and not trying to find out what the issue is!
Let’s get back to thinking of the bridge. Keep maintaining it and you won’t be sorry. Become lazy and be ready to suffer the consequences.
Permalink: 7 Reasons Why We Need to Start Budget Tracking Now
]]>
Here’s an interesting graphic of the spending breakdown for the average U.S. consumer. It’s based a theoretical household “unit” consisting of 2.5 people, not individuals. Looks like such a household unit spends approximately $50,000 per year. Click on image for larger version.
I guess taxes are not considered an expense by the government. I’m not sure where leisure travel or vacation spending falls under, perhaps split as transportation and housing?
The image was created by Visual Economics, using information taken from the Consumer Expenditure Survey by the U.S. Department of Labor.
Permalink: How The Average U.S Consumer Spends Their Paycheck
]]>
Filed under: Company News
The new GM is up and running with its re-branding campaign. Without much new iron to put on the showroom floor, it apparently has decided to start small — small, as in the Cadillac Fragrance for men. (And no, the bouquet is nothing like Valvoline or Brylcreem.)
The company GM licensed to make this new line of scents, Beauty Contact Inc., describes it as “at once bold and sporty, yet luxurious and refined. [It] pays tribute to the opulence and extravagance of past eras, as well as the luxury and ease of today.”
Continue reading Cadillac cologne, for the scent of . . . bankruptcy?
Cadillac cologne, for the scent of . . . bankruptcy? originally appeared on DailyFinance on Fri, 24 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Economy
California may soon have a budget and the ability to repay the IOUs it started issuing on July 1. The damage this budget stand-off has caused to California’s bond rating could take a year or more to fix. California’s bonds are just two steps away from junk status.
Lawmakers must vote on 31 bills to complete this task and many of those bills include severe cuts to the state budget. While Governor Arnold Schwarzenegger announced a tentative deal on Monday night, the devil is in the details. Those details must now be voted on department by department. The legislators must find a way to fix a $26.3 billion budget shortfall.
Continue reading California working on a budget to fix its $26 billion shortfall
California working on a budget to fix its $26 billion shortfall originally appeared on DailyFinance on Fri, 24 Jul 2009 11:00:00 EST. Please see our terms for use of feeds.
Read | Permalink | Email this | Comments
]]>
Filed under: Economy, Investing
I was just as happy as anyone who owns stocks to see the Dow close over 9,000 yesterday. But the question that remains unanswered is why exactly did stocks rally? There are four reasons commonly offered to explain the recent rise in stocks: their prices were cheap relative to earnings, the economy is getting worse more slowly, second quarter earnings are better than expected, and investors are focusing on the economic recovery. I don’t think any of these explanations hold water.
One explanation that might make sense is that cash is scrambling into stocks — due to both short covering and huge cash balances afraid of being left behind. Short sellers bet that a stock will fall by borrowing shares from a broker and selling them at what they think will be a high price. If their bet is right, they can repay the stock loan by buying shares back in the open market at a lower price.
Continue reading Four market rally explanations that make little sense, and one that might
Four market rally explanations that make little sense, and one that might originally appeared on DailyFinance on Fri, 24 Jul 2009 10:30:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Company News, Technology, People, Media
Twitter co-founder Biz Stone said his company, oft-criticized for not generating much revenue, will prove the nay-sayers wrong by “adding value.” Speaking at the Fortune Brainstorm Tech conference in Pasadena, California Thursday, Stone elaborated more than he has publicly on the company’s plans to make money with the service. “The first step,” is by “launching an educational sub-site called Twitter 101,” which will help companies and users figure out how to use Twitter.
Monetizing real-time search appears to be a way Twitter plans to make money. Whatever other means the company will use, it will make money this year, Stone said. Twitter 101i, launched late Thursday, is “sort of a phase one,” of the revenue generating process, he told the audience.
Continue reading Twitter: We’ll teach you how to make money tweeting with Twitter 101
Twitter: We’ll teach you how to make money tweeting with Twitter 101 originally appeared on DailyFinance on Fri, 24 Jul 2009 10:00:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Economy
With 15 million Americans unemployed, state unemployment systems are overwhelmed and millions of people have had to wait weeks to get their benefits, according to a report in today’s New York Times. Of the 12.8 million eligibility reviews that have occurred during the recession, 4.6 million took more than three weeks — that’s 2.1 million more than federal rules allow.
About 80 percent of the unemployed workers get payments within three weeks, but cases that require review can take months. Thirty-eight states have failed to make decisions within the federal deadline. In the last year, states processed 61 percent of cases where eligibility was questioned by an employer within three weeks — well below the 80 percent required by federal rules. More than a half million cases took more than eight weeks and 350,000 took more than 10 weeks.
Continue reading Unemployment benefits delayed for millions
Unemployment benefits delayed for millions originally appeared on DailyFinance on Fri, 24 Jul 2009 09:30:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Company News, Investing, Earnings
The following post rounds up the companies making headlines today:
Schlumberger (SLB) said Friday its second-quarter earnings tumbled 57 percent as oil and natural gas companies cut back on exploration and drilling, particularly in North America.The company topped earnings estimates on an adjusted basis. Shares fell about 1.8 percent in pre-market trading.
Microsoft (MSFT) reported late Thursday a 29 percent decline in profit on a 17 percent sales slide due to a weakness in the global PC and server markets. The software giant missed analyst estimates on the top line by more than $1 billion. Shares dropped 7.7 percent ahead of the bell.
Continue reading Stocks in the news: Schlumberger, Microsoft, Black & Decker
Stocks in the news: Schlumberger, Microsoft, Black & Decker originally appeared on DailyFinance on Fri, 24 Jul 2009 09:00:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Economy
Big financial events bring economists and analysts out of the wood work, anxious to give their opinions and get their names in the media. The increase in the minimum wage, which is effective today, is a prime example. The federal minimum wage will go from $6.55 to $7.25. That is an 11 percent hike, which is a pretty healthy bump.
Some states already have minimum wages above $6.55, so workers in those state will get a smaller benefit. The national increase is a big enough jump that some small businesses may not be able to handle the increased expenses. And some large businesses with a lot of low-end workers could use the increase as an excuse to cut more workers.
Continue reading The new minimum wage: Will it just increase layoffs?
The new minimum wage: Will it just increase layoffs? originally appeared on DailyFinance on Fri, 24 Jul 2009 08:30:00 EST. Please see our terms for use of feeds.
]]>
Filed under: Economy, Earnings
When the Treasury released an update for the budget in June one of the notable aspects arising from the figures was that revenue, particularly from businesses, is evaporating. The operating income from large corporations is not a perfect sign of future government collections from companies, but it is, at least, a sign that the tax man may have a bad year.
Part of the difficulty with the Budget is that spending may be close to plans while receipts may not. The Administration made fairly optimistic projections for the strength of GDP growth and the moderating of the rise in unemployment. Now it faces the prospect that corporations are losing money, or that their profits are shrinking, compromising its tax base forecasts.
Continue reading IRS income and corporate earnings
IRS income and corporate earnings originally appeared on DailyFinance on Fri, 24 Jul 2009 08:00:00 EST. Please see our terms for use of feeds.
]]>