Personal Finance 101

You may be feeling that nothing is working. And there is no hope.

But there is hope. There is always hope. New things can bring in new experiences, so don’t give up.

Get a part time job. I am not asking you to work at McDonalds.

What are you good at? Can you create simple websites? Can you create simple programmes? Can you cook? Can you proof read documents?

If you can do these things, head over to Craigslist.org <http://www.craigslist.org/> or Elance.com and advertise your skill. Dont charge too high. Find your neighborhood in Craigslist and offer your service there. Charge low prices in the beginning in order to get some jobs. Jobs creates referrals. Do a good job and ask for a referral. And keep a list of jobs that you have done, this becomes your portfolio.

Work part time about 3 time per week. Work more if you really need the money. Eventually, you might earn more in your part time job than you do in your full time job. More importantly, the income from your part time job is the key to your financial freedom.

Every successful person stated in this way. When the going got tough, the tough started going!

Tags: Craigslist, credit card, Elance, extra income, part time job

1. Repair Your Old Clothes

Don’t throw old clothes. If you get to see how people in poorer countries live, you’ll learn to appreciate the clothes that you have. Sew your torn clothes and wear them. Don’t rush out and buy new clothes every other week.

2. Ask for a Rate Reduction

Ask and ye shall receive. At the risk of having NPL’s (Non Performing Loans), banks would rather lower the interest they charge you than to have you default on your debts. So don’t be shy in asking. You wont lose anything by asking. I managed to get a 200 dollar reduction in my monthly mortgage repayment, which actually allowed to me to keep paying my old rates and reduce the principal amount of the loan quicker.

3. Say NO to Starbucks and McDonalds

While the coffee from Starbucks might be slightly better than a regular Java, is it worth the USD8 that you pay for it, compared to the USD2 for a regular Java? The USD6 that you save on a daily basis comes up to USD180, which can reduce your credit card interest charges by a considerable margin. And the Big Mac from McDonalds might send you to the hospital with a cardiac arrest. Say NO to FAT. And while you’re at it, stop smoking and reduce alcohol consumption. All these will add dollars into your pocket and increase your life span.

4. Switch Your Bulbs

Switch all the bulbs in your house into energy saving bulbs. You’ll start reaping your savings within 10 months. And besides, you’re doing your bit for the environment.

5. Swap Books with Friends

Check out Craigslist for people who want to share books. Swap books with them, or friends and family. You’ll end up reading a lot more books for a lot less dollars.

Tags: debt reduction, manage money, mcdonalds, save money, starbucks

1. Read More, watch Less TV

Read more, books teaches you more than TV ever will, unless you’re watching the Science channel. Read books that teach you skills that can help you earn more at work.

2. Sell Your Junk

Everyone has ‘junk’ at home. What you consider junk may be something another person wants. So try auctioning the things that you don’t want or haven’t used in a long time at Ebay. No point in throwing away something when it can earn you a dollar or two.

3.  Be Loyal

If you usually shop at a certain shop or fly a certain airlines, try to stay loyal and enroll in their loyalty programme. Pile up the reward points and used them wisely. I had a friend who forgot that he had close to 300,000 points on his airlines rewards programme and allowed nearly half of it to expire. What’s the point of painstakingly accumulating those points if you’re going to forget about them? Don’t make the same mistake. If you really cant travel or redeem the points, donate them to your loved ones.

4. Buy from a List

When you’re out shopping, go with a list of things to buy and a budget. Cultivate discipline. Stick to you list and our budget and you’ll soon have your life in control.

5. Eat at Home

Eating at home is so much cheaper than eating out. It’s all right to bring friends over and cook for them.  Or ask everyone to bring a dish. You can save a lot.

More tips the next time…

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Tags: maximize your dollar, saving money, wealth accumulation

By Paul Lawrence

Years ago, I worked as a bill collector for a major chain of jewelry stores. I was barely making enough money to live on, and the job offered no opportunity for me to make more. Yet, without quitting my day job, I was able to launch a new career that – within just a few months – doubled my income. And it took just $20 to get it started.

Ever heard the expression “It takes money to make money?” Well, guess what? That’s not always the case. And if you don’t have much capital to start a business, you have no choice. Being a “cheapskate” is a necessity.

Years ago, I worked as a bill collector for a major chain of jewelry stores. I was barely making enough money to live on, and the job offered no opportunity for me to make more. Yet, without quitting my day job, I was able to launch a new career that – within just a few months – doubled my income. And it took just $20 to get it started.

How did I do it?

You see, I happen to love ballroom dancing. So, while still working at my day job, I took a free training program at night that enabled me to pass the instructor’s qualifying test.

I began working at a dance studio, but soon realized I’d make a lot more by working on my own. So I invested $20 a week in little classified ads offering private lessons. And before long… I had my own dance instruction business.

My wife Blanca used the same cheapskate approach to escape from the “prison” of her first job as a nanny. Her idea was to start a home cleaning service. So she spent $10 to print up 500 flyers, and then hand-delivered them in upscale residential neighborhoods. When calls started coming in, she scheduled the work on her days off. Once she was confident that she could build up her service to a full-time business, she said goodbye to the nanny job she hated.

If you want to take the cheapskate approach to starting a business, here are three of the important steps:

1. Identify a business that won’t require much start-up capital.

Most low-capital businesses are in the service field. If you have a marketable skill – like teaching piano, doing bookkeeping, or writing sales copy – starting a business in your area of expertise should be your first choice. If you don’t have a specialized skill – or you’d rather do something else – consider a service like housekeeping, childcare, or running errands.

2. Figure out when you’ll be able to service your clients.

If you’re starting your own business while working at a regular job, you’ll have to schedule your clients around your work schedule. And it’s easier than you might think. There’s no need to tell them that you have another job. Just tell them when you have openings, and they’ll assume the rest of your time is booked with other clients.

When I was launching my dance instruction business, for example, I would check my voice mail while on break or at lunch, and return the calls. Most of those calls were from prospects with questions about my training, the kind of dances I specialized in, my fees, and so on.

After answering their questions, I’d suggest making an appointment for their first lesson – and I’d give them a few options: “Would you like to schedule on Wednesday at 8:00 p.m.? Or would Thursday be better?”

If they asked about getting lessons during the day, I’d say, “Unfortunately, I won’t have any daytime slots available for at least the next couple of weeks. Why don’t you start with an evening appointment? Then, when a daytime slot becomes available, I’ll let you know.”

They usually agreed to try it. And in almost every case, they continued rescheduling at the same time every week or two.

3. Create and implement your marketing plan.

By using a little “out of the box” thinking, you’ll be able to find many ways to promote your business without spending much money.

Remember, all it cost me to get my ballroom dance business started was $20 worth of classified ads. And Blanca got her cleaning service started with $10 worth of flyers.

So give it a little thought right now. What kind of side business do you think you’d like to start? And what ideas can you come up with to market that business on a “cheapskate” budget?

If you’d like some help with that, I’ve put together a free report you might want to take a look at. In it, you’ll learn one powerful secret for getting other businesses to help you attract new clients… without spending a penny. You’ll also get the skinny on 11 more cheapskate marketing tactics that can help you bring in new clients for less than $100.

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Tags: build a business, business, double your income, income, paul lawrence, success

By trent@thesimpledollar.com

Posted: 06 Nov 2008 06:00 AM PST

When you’re entrenched in a large pattern of bad habits and you’re challenged to escape those habits, it’s very easy to fall back on an excuse of some kind to “explain away” and justify your poor choices.

I know this from experience. I used many excuses to continue my poor spending habits and I still use them sometimes to talk myself out of exercise or other tasks that I know I need to do.

Excuses are the epitome of failure. Every time you come up with a weak or unjustifiable reason for not doing something you know you should be doing, you’re choosing failure over success. You’re choosing to be broke instead of financial healthiness.

Here are eight common excuses that people use – and I used many of them myself – to avoid taking charge of their money, and some thoughts on why each one is nothing more than a crutch used to avoid actually taking charge of one’s situation.

I WAS BORN POOR

I was born poor, too. I grew up in a house where the walls of the stairwell were falling in and eventually were covered up with plywood sheets. There were many times where supper came from what we caught or what we picked from the garden that day.

I carried that concept into adulthood, believing that there was no real need to plan for the long term future because I could quite easily return to those “born poor” roots if I needed to. So I spent. And spent. And spent.

What I was spending wasn’t just fun money, but it was protection against ever having to return to poverty. Instead of spending wildly on fun things, if I had merely paid off all my debts, socked money into retirement, and spent less than I earned, I would have lived a very happy and comfortable life while also creating some protection against ever having to return to a low income level.

Spending money under the badge of having been born poor ensures just one thing: you’re walking a tightrope that, if you slip just a bit, will take you right back to that situation you worked hard to escape from.

$$ YOU ONLY LIVE ONCE / YOU’RE ONLY YOUNG ONCE.

This excuse is absolutely correct, but it’s often used to excuse frivolous behavior when it actually should teach the opposite lesson.

You’re only young once, right? Well, let’s say Carl is 22 and he has a choice over the next eight years to put $1,000 away in his retirement account at an 8% annual return. He does that, but when he’s 30, he gets married and has kids, so he stops saving. Alexandra, on the other hand, spends her twenties blowing that extra $1,000 – she’s only young once, right? But then, at age 30, she realizes the mistake she’s made and starts saving $1,000 a year.

At age 50, Carl has only put away $8,000 of his own money, while Alexandra has put away $20,000 of her own money. But guess what their account balances are? Carl has $61,808.09 in the bank, while Alexandra only has $51,160.12 in the bank.

That’s right – Carl put away $12,000 less than Alexandra and has $10,000 more than Alexandra at age 50. The difference? Carl did it when he was young.

You’re absolutely right – you’re only young once. Don’t waste it.

$$ THE LENDERS TRICKED ME.

You made a mistake signing up for a loan you couldn’t really afford – and now you’re stuck. You’re facing payments bigger than you can handle and things seem scary.

You have two choices here. You can either stick your fingers in your ears and go “lalalalalala…” using your situation as an excuse for poor behavior or you can face your problems and try to fix them.

Call up your lender. See what you can negotiate. Look into owning less expensive vehicles. Sell off some of your extra stuff. Look for a second job. Try to sell your property and go with something cheaper, even if you have to take a loss.

You have options. Ignoring those options and using the situation as an excuse to spend does nothing more than dig the hole deeper.

$$ I HAVE NO IDEA HOW TO MANAGE MONEY.

I can’t do math. I don’t understand investing. I don’t know how to balance a checkbook. So I just won’t do any of it and hope things turn out well.

Ignorance is fine – it’s something that can be fixed. If you don’t know something but are open to learning it, you can find books and help for learning almost anything. Hit your local library and check out some books on the subject. Look for classes offered in the community on these topics. Search the internet for assistance (especially The Simple Dollar, using that handy-dandy search form on the upper right of each page). You can even ask smart people you know for help.

What’s not fine is choosing to be ignorant. No one knows everything – what separates those that succeed from those that fail is whether or not you seek out answers for the questions you have and seek out help for the things you don’t know how to do.

$$ I WORK HARD AND I DESERVE SOME REWARD FOR IT.

This is a crutch I used all the time. Books, CDs, DVDs, video games, golf equipment, expensive trips – all of these were my “reward” for my hard work. And I deserved it, right? I worked my tail off and that should mean I get to taste the good life.

There’s a few big problems with that, though. My desire to have the “good life” often meant that I didn’t have adequate time to actually fully enjoy the elements of that good life. DVDs would sit unwatched (or only watched once). CDs would sit unheard. Video games unplayed. Books unread. Golf equipment in storage for months. Trips hastily planned and not fully enjoyed.

Sure, I lived the “high life” with all the stuff I wanted, but I didn’t actually get to enjoy a lot of it.

Here’s a simple antidote to this crutch: scale back a little on what you’re spending. Instead of shopping for more things, spend some time enjoying the things you already have. Master that video game instead of buying a new one. Watch the DVD, then watch it again with the director’s commentary, and dig through the special features before buying a new one. Wear a new item of clothing a few times before adding another to your wardrobe. In short, thoroughly enjoy those things that you’re purchasing.

$$ GOD WILL PROTECT ME!!

Many people have a deep faith through which they find answers to many of their deepest questions. Some people, though, come to rely on this faith for everything, acquiring a deep belief that they will always be protected from everything because of their faith.

Most faiths agree, however, that one of the gifts God has given us is that of free will. We have the power to make choices for ourselves – we are not automatons.

God has already protected you. God has given you every single tool you need to protect yourself. You have the free will to choose whether or not to use them.

$$ I’M SO FAR BEHIND THAT THERE’S REALLY NO HOPE.

Undoubtedly, there are some financial situations that are simply disastrous, without any easily clear road out of the hole. It’s understandable how such situations can lead one to despair and a sense of hopelessness, and from that an adoption of dangerous behaviors and habits.

However, the truth is that no situation is hopeless. There is no situation that you can’t fix with proper focus and appropriate assistance from others. Perhaps bankruptcy is the right situation for you – contact a bankruptcy lawyer. Maybe the situation isn’t as bad as you think and can be solved through careful diligence and a strong plan.

The first step here is to talk to someone about it. Reveal everything and ask for their help in getting out of the situation. A true friend – someone you really trust – can be a lifeline in this situation.

But it is not hopeless. It is never hopeless.

$$ I DON’T MAKE ENOUGH MONEY TO MAKE ENDS MEET.

A final excuse that people use to keep themselves from taking action is the excuse that they don’t earn enough to make ends meet. They’ve cut away everything and it still seems impossible. A low income is certainly a big obstacle to overcome – and the solution to it is obvious. Earn more. Look for a higher-paying job. Start a side business. Do something to earn more income.

Many people will then claim that they don’t have the skills or knowledge to do that. Well, if that’s the case, what’s keeping you from building those skills? Take some evening classes. Teach yourself as much as you can. Be an attentive and serious student. You can learn the skills you need to succeed at a higher level.

Don’t let excuses tell you what you can and can’t do. “Rules” like those are made to be broken.

Source: < http://www.thesimpledollar.com>

Tags: excuses, financial success, thesimpledollar.com, wealth

Pay Yourself First

You may not believe it, and most wont, but paying yourself first is the key to financial freedom!

Ask anyone who had made it rich and they will concur.

I know what you’ll say because I said it myself 10 years ago when my dad told me this. I mumbled something about not having enough money to pay my bills at the end of the month, what more putting aside money which could help lower my credit card balance?

Most books recommend putting aside 10% of your gross monthly salary, which was crazy for me. I decided to put aside what I could and that was 3%. I opened up a savings account and used my Internet Banking facilities to automatically deduct a certain amount every month.

It was tough but I knew I could manage my finances with the 3% deduction. I had to cut down on certain items, like reducing the number of calls I make on my cell phone, changing my driving style (don’t be surprised at how your driving style can affect your car’s petrol consumption), reduced the number of times I went to McDonald’s to grab a bite and so forth.

And what’s the end result? I used up my 3% savings after 8 months. I used it to close my credit card. Now I have one less burden to carry. The result of closing that credit card allowed me to save nearly 10% of my monthly income. I know some of my colleagues save up to 55% of their income. It hurts me to think that their money is working so hard for them while I spend my day paying bills.

But I know I could come out of this huge, mountain of debt.

I am glad to say that putting aside a portion of your monthly income and other means of saving and investing, I managed to clear around RM450,000.00 (USD140625.00) within a relatively short time.

Discipline is the key. Starting is difficult but once you’ve started, you will do well. All I can say to you now is to just start putting aside some money, even RM10 / USD10 per month will help. Seeing money grow helps you to find ways and means to reduce your debt. I know because I speak from experience.

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Tags: financial success, pay yourself first, secret, wealth accumulation