Is the business of your life flourishing or on the verge of bankruptcy? If your traditional business is in trouble, you call a business consultant, so think of this plan as a life consultant. The plan outlined in this article will teach you how to manage your personal finances and get the business of your life back on track.
When you think of a business it has a name and various departments. Think of the area of your life like the departments of a traditional business, human resources is the family. Accounting is the handling of your budget, credit management and investment programs. The training is your education, church and any other classes you may take for pleasure. Operations are the business of house cleaning, yard work, cooking, and laundry. Employee Relations are your exercise program, doctor check-ups, dental check-ups and eye exams.
While all of these departments of your life (business) are very important, the one that seems to cause the most worry for almost everyone is accounting. Surprisingly enough people with money spend time worrying about it too. The difference is rich people worry about how to keep their money and broke people worry about how to get more money. As you will notice I used the word broke not poor. Broke is a temporary condition; poor is permanent state of mind. Occasionally, I am broke. Yes, it takes a little discipline to handle this area of your life but with all of the online services; it is easier than you think. If you are willing to give this plan a try, you will be quickly on your way to a flourishing small business.
Let’s start with your investment program. One important thing to remember is to pay your self first. After all you worked for the money. Most people don’t feel like they have enough money to save but just start with $5 or $10. If you have your money direct deposited to your bank account, have $20 redirected to a savings account. Believe me you waste more than $20.00 a month. Having this money auto-deducted from your check, you won’t miss it, if you don’t see it.
Now let’s tackle the area that is strangling most of us, credit management. Go online and to http://www.freecredit.com. It is a federal law that you are entitled to one free credit report per year. Anytime you apply for credit and get a turned down letter, use it to request a copy of your credit report, it’s free.
When you receive you credit report, review your report to make sure that there are no errors on it. If you have questions about an entry or you know an entry is incorrect, submit a credit dispute form to have it removed. Instructions on how to submit a credit dispute from comes with the credit report.
Make a list of all your bills:
• Mortgage/Rent
• Car Payment
• Electric Bill
• Gas Bill
• Telephone Bill
• Internet Service
• Cell Phone
• Waste Disposal
• Water Bill
• Credit Cards (Balance & Payment)
Discover Card
Master Card
Visa
Any others you have
• Student Loans
Hopefully, when you have completed this list, your income is greater than the sum of these payments. If you find that your income is less than your monthly payments, you need to consult a credit counselor. To find a credit counselor looking in the yellow pages of your local telephone directory or go online and search credit counselors. Call around until you find one that is a not-for-profit that is offering their services free. Free is always the right price.
Example: Jane Doe is single and lives in an apartment. She doesn’t have a separate water bill or waste disposal bill.
The Formula: 10% of your take home pay applied to your bills each month.
Income = $2000.00 per month or $24,000.00 annually
Take Home Pay = $1400 (about 30% of income go to taxes etc.)
Savings = $20.00
Extra on bills = $140 (if you can’t afford 10%, do a lesser amount)
Rent = $500.00
Car Note = $200.00
Electric = $60.00
Gas = $60.00
Telephone = $25.00
Master Card = $2000.00 - $30.00
Visa = $1500.00 - $10.00
Discover = $500.00 - $10.00
Add up all of your regular living bills, rent, car, electric, etc.
Monthly living bills = $845.00
Credit payments = $50.00
Take Home Pay (1400) – [Saving (20) + Extra on Bills (140) + Monthly Living Bills (845) + Credit Payments (50)] = Personal Living Money (345)
***Personal Living Money includes food, gas for car, entertainment, toiletries, lunch money, you get the picture. While you’re paying off your bills, you are going to be on a pretty strict budget, but believe me it is worth it.
Now let’s look at how to pay off your credit cards and improve your credit score.
Additional payment = 10% of Income ($140)
Balance /Payment=#Payments (500/10 = 50 months)
Order of Pay= order in which bills are paid, lowest number of payment first.
New Payment= Payment + Additional Payment ($140 + 10)
# Payoff payments= Balance/New Payment (500/140=4)
Example:
1. Discover
Balance: $500
Current Payment: $10
# Of Payments to pay off: 50
New Payment: $150
# Of Payments at new amount: 4
Months to payoff at New Payment: 4
2. Visa
Balance: $1500
Current Payment: $10
# Of Payments to pay off: 150
New Payment: $160
# Of Payments at new amount: 10
Months to payoff at New Payment: 14
3. MasterCard
Balance: $2000
Current Payment: $30
# Of Payments to pay off: 67
New Payment: $190
# Of Payments at new amount: 11
Months to payoff at New Payment: 25
In 25 months these three bills will be paid off.
By paying just the minimum payment and not even taking into consideration the interest added, it would take at least 150 months, 12 years and 6 months to pay of these three bills. Using the example above, it will take 18 months, 2 years and 1 month to pay off these same three bills.
You can make this grid to contain as many items as you want to incorporate. Your home mortgage or home equity loan can also be added.
Start actively managing your finances. Food is going up, housing cost are climbing and gas prices are skyrocketing. The way I see it you can’t afford to not implement this plan.
Try it and let me know what you think.
Article Source: www.articledashboard.com
About the Author: Lela Goodwin is an editor of the website www.gottahavedeals.com
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