- Jan 8, 2016
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This is my field. I have letters and numbers reflecting my credentials but I don’t want to come off as giving solicited financial advice. I also have a background in accounting. It sounds like you may have owned a business or were pretty close to the top. In my experience people fail for two reasons.
1. Failure to plan sufficiently for the future. Whether it’s far enough in the future or for initial success. This is not something you will be able to see or plan clearly. You need someone to help you here. Don’t be afraid to take good advice from someone who is qualified to do so. Hopefully not anyone you are friends with. Being friends with that person will cloud his or her judgement.
second, that bad things can and will happen. Markets won’t always be as good and the key is to mitigate risk so that if you are taken by surprise you so you aren’t wrong by a whole lot. Only wrong by a little. And always keep an eye towards the long term so as not to sacrifice your future for the sake of today.
In short, know where every penny is going. Get control of outflows first then work in increasing income. If you need to make a settlement for debt to pay less than what is due then do it. Eliminate any consumer debt or payments like cars and the like. Remember a car is just a tool that is considered a wasting asset. Meaning at some point in the future it’s worth is zero. Work out better terms for your mortgage if you can since interest rates this low can also benefit you. Lower lower you monthly expenses as much as you can.
And here is the most important part. Your wife must buy into this 100%. It’s all or none or you will be in this position again the first time you show signs of building wealth.
And no matter what always live below your means. I graduated college after being on scholarship luckily with no debt and $1600 in my pocket in 2003 and living in a crap apartment with a minivan on its last leg. Now the only debt I have is my mortgage on our dream home that will be ours in less than 8 years. I do pretty much what I want when I want. Yet that was after being unemployed for almost a year and making several mistakes along the way. I just had a plan and when I got off it I got back on it ASAP.
I made the following chart back in 2012, when I had more energy after work to do things. The yellow lines were my paydays, and with having a variable income, I would write down the amount due the payday *before* the due date located at the top of the column... That would ensure that payments would be paid a week early...
...Do you think this was a good budgeting method? Or is there easier, more efficient ways of doing this?
...My wife thought this was too complicated, and was unable to use this method for on-time bill paying. My primary goal is to make this as *simple* as possible, so that she will be able to take part.
...The second problem we faced with the chart was that, in having a variable income, some weeks were much tougher than others, not having money in savings... I guess that was the main point of failure, aside from just being "complicated".
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