Black Friday

It is Black Friday 2013.  I simply do not get it.  It is the beginning  of the Christmas shopping season and that certainly is something to be joyous about.  The holiday season is always fun.  What I don't get is the consumer mania that it creates.  The economy today has been a bit slow, which is a concern for the nations retailers.  In order to save the season stores have extended hours in  the hope that more shoppers will come and therefore spend more money.
The sad reality is this shopping day is supposed to be the beginning of the shopping season, not the pinnacle of it.  I don't believe that this so called "Thanksgiving Creep" that caused stores to open earlier is going to make for increased sales or revenue.  I believe that it will lead to protracted sales.  History has shown  us that there are better bargains to be found on other days.  History has also shown us that the Friday shopper is finishing making major purchases.  So therefore additional purchases after this event will probably not be significant. 
The large issue here is the economy.  It continues to lag as we try and fix some major financial missteps of our past.  The average consumer does not have the same income to spend.  People will continue to buy things for Christmas and I wish them well.  The reality is people can't spend what they don't have.  Forcing people to miss a family tradition of Thanksgiving is not the answer.

Financial Workshop: The Budget

By now you are working your plan and have a fairly clear understanding of your spending patterns.  You have seen how much you spend on coffee in a week and just how expensive it is to park in the city.  Hopefully this information can now be put to work to benefit you.  By projecting your pattern forward  you can plan better for future events.   Maybe you want to save for a vacation, maybe you want to pay off debt and maybe you just want better control of your money.  This is what a budget will do for you.
Take a look at your financial records and specific categories that you have listed.  The more categories you already have established means that more precise the budget will be.  First take a look at the overall total expenses you have had over the past few months.  Average this amount.   Now do the same for your income.  Now, cross your fingers; hopefully your average expenses is lower than your average income.  If it isn't then this is the first point that has to be fixed in the plan, but you have to know how to fix it.  Take a look at your categories ( rent or mortgage, food, entertainment) and average those expenses as well.   Looking at the numbers will give you some direction on where changes can be made.  IF you had more expenses on average, then this difference (your deficit) has to be balanced.   You need to find places where you can cut back.  If you have a more income than expenses, this is a surplus.  Start paying down debt and start saving money.  Balancing your budget allows you to control your money and not let it control you.
For any more specific questions feel free to comment or email.

Financial Workshop: Work the plan

It has been a while since the last update, but let's assume you have stayed on task.   By now you are tracking your finances and getting better at monitoring your expenses as well as your income.  Whether you are using a paper form bank ledger or computer software you should have a system listing your transactions.  It won't be perfect, but that only comes with time.  There will be times when you forget to list that Saturday night gas purchase.  There will be times when you get the math wrong.  It is okay.  Your monthly statement is the opportunity to fix it.  By balancing your account you review your accounting records and begin to see a spending pattern.
This is a great start to gaining financial control, but it is not full control of your money tool.  Reviewing your finances is one part, the other is future planning.  This is where a budget is used.  Unfortunately, the word budget has come to mean something bad.   "I can't have that, because I am on a budget." is a common  sentiment.  It is used to imply restriction.   Actually, everyone is on a budget.  Some budgets are larger than others.   A budget is simply a financial plan.   By examining your spending patterns, knowing your income and expenses, you can develop a plan for future expenses.  It also is a way of finding where excess in one area can be used to pay for items in another area.  Maybe by giving up the vending machine will give you money for parking.   Giving up fast food lunch will pay for your cable bill.   A budget gives you a picture that is easy to see and sometimes even pretty (that is with a color printer and a couple pie charts).
Continue to work your plan and use your money tool.   Next update, I will take you through basic steps to make a budget so that you can begin to have full control of your finances.
As always feel free to leave comments, questions or your point of view.

Financial Workshop: Fair and Balanced

I've been told by more than one person that it is difficult to balance a checking account.   As such, I must accept the fact that more than one person has been intimidated by the task.  In urging people to take control of their finances balancing that is a necessary step.
Simply put, balancing your account is a way of knowing what is exactly taking place with your account.  For those of you using the ledger in your check book to track transactions, you'll need to compare your record with the listing on your monthly statement.  Hopefully you have already been making notations for all the transactions you have done, checks, point-of-sale purchases and deposits.  By comparing your records with those on your statement  you validate your records and ensure accuracy.  If you find a missing transaction  it is just an addition or subtraction problem.   When you have accounted for all the withdrawals and all the deposits your account records will match those on the statement.  Now you know what is available to you.  
An even better method is to track your finances on a personal computer using Microsoft money, Quicken or Quickbooks.  I mention these programs because they are readily available on most computers, and are fully compatible with online banking systems.  Tracking with a computer is convenient simply because it does the math for you (which is often where mistakes come from).  When reviewing your banking online you can verify transactions at anytime to keep the account up to date.  Some banks even provide for a way to go paperless at a discount.
Either way, you are now monitoring your account activities and developing a good habit of knowing what your money is doing for you.  Knowing that is going to make you conscious of where your money is going.  Your money tool now has direction and you are on the right track to controlling your finances.

Financial Workshop: Know what you got....

Step one in managing your accounts is simply knowing what you got.  Take an inventory.  Do this so that you can get your financial bearing.  Unfortunately people fail to start with the very basics.  Too many people have money come in and go right back out.  Make it work for you, for the little time that it visits.  First, monitor your checking account.  If you don't have an account, get one.  Yes, I know banks charge fees, but that is because they provide a service, like a barber or a gas station.  Chose wisely, not everyone needs a bank that has a branch in Turkey.   Once the account is established, balance it.   Balancing an account does three things: it helps you to know exactly  what is in your account, it verifies transactions to minimize fraud, and helps you to monitor your spending patterns.  Balancing you account is simply comparing your records with the statement received from your financial institution.  (If you need hep in this area contact someone you trust or you may contact me directly for simple steps to get it done.)  You should be getting and keeping your monthly statements.  Take some time this week to review your records and make sure your tool is working for you.

Financial Workshop: The series

Money is a tool and some people are better at using it than others.  Fortunately, a tool can be learned and eventually mastered.  Banks, accountants and investment firms all make their services available to those already blessed with significant assets.  In a way, I guess that is fair, after all one does not need  a shepherd when you only have one sheep.  The problem with this is the flock will never grow beyond one sheep. 
People with money have more money and those who don't are never given the opportunity to learn effective ways of managing and growing  their assets.
It is my hope that a few hints and guidance can help turn the tables.  As I said, money is a tool and I am tired of watching people struggle to manage it.  Once a week, I will present information on managing money.  It is my hope that it helps those people who always said I can can't afford an accountant and don't have enough money to invest.  It is also my hope that those who are reading this provide input and commentary in order to meet needs, answer questions and ultimately change lives.
Please be sure to read the Monday Update for the first step in mastering the money tool.

Update

To my loyal followers, I thank you for the support and will do better about regular updates.   I hope that you are willing to just be patient a little longer.  I want this to be of significance and not simply some random comments from a person desperate for attention.   I will be doing a real update soon.  Stay tuned.