31 Days

31 Days To Fix Your Finances http://www.thesimpledollar.
com/
Table of Contents
Introduction 1
Stage 1: Figuring Out Your Goals And Values

Day 1: Your Five Main Values Day 2: Defining Your Goals From Your Values Day 3: Create A lan For !ac" Goal 4 6 8
Stage 2: Evaluating Your Situation

Day #: $o% Muc" Did You !arn &ast Year' Day (: $o% Muc" Did You )or* &ast Year' Day +: Your ,rue $ourly )age 11 13 1
Stage 3: Building Your O n !ife Budget" #ot Follo ing So$eone Else%s &res'ri(tion
Day -: )or* For Your Dreams. /ot Your Money Day 0: 1rea*ing Do%n Your !23enses Day 4: Cleaning 53 Your !23enses Day 16: Fitting Your !23enses Into ,"e 1igger icture Day 11: Dividing 53 ,"e 7est and Finis"ing 8ur ,ime 1udget Day 12: A Fle2i9le :1udget; ,"at 7eflects Your 7eality 1! 1" #1 #3 # #!
Stage ): !oo*ing At Your !ife" &ie'e B+ &ie'e

Day 13: ay For Your Dreams First Day 1#: Get 7id 8f De9ts <=lo%ly 1ut =urely> Day 1(: Coming In 5nder 1udget and An !mergency Fund Day 1+: !valuating Your !23enses ? $ome and Auto Insurance Day 1-: !valuating Your !23enses ? &ife Insurance Day 10: !valuating Your !23enses @ !nergy Day 14: !valuating Your !23enses @ Automo9iles Day 26: !valuating Your !23enses @ Food Day 21: !valuating Your !23enses @ $ousing Day 22: !valuating Your !23enses ? Mont"ly =ervices Day 23: !valuating Your !23enses ? 1an* Fees Day 2#: !valuating Your !23enses ? !ntertainment and $o99ies Day 2(: !valuating Your !23enses ? Credit Cards #" 3$ 31 3# 34 36 38 4$ 41 43 44 46 48
Stage ,: Setting T-e Stage For !ifelong Su''ess

Day 2+: 7efining Your 1udget Day 2-: Aee3ing Good 7ecords Day 20: re3aring For ,"e Inevita9le Day 24: aying Cas" Day 36: &ive )"at You &ove Day 31: Aee3ing It 53 4" 1 3 4 6 8
31 Days To Fix Your Finances http://www.thesimpledollar.com/
Introduction
31 Days To Fix Your Finances is a month-long series of acti ities that ena!les you to impro e their financial status !y centering your financial life around your own core alues. "nstead of supplying a !unch of !udgeting sheets and as#ing you to commit yourself to a program$ this program is a!out figuring out what you want out of life and reorgani%ing your finances so that you can ha e that dream. &ach acti ity in this series is designed to ta#e roughly an hour$ so you can do one acti ity each day and fill an entire month with the acti ities. 'f course$ you can tac#le as many of these steps as you would li#e in a single day$ !ut it(s often worthwhile to allow a day to pass !etween acti ities so you ha e time to reflect on what they taught you ) and what they mean to you. This plan was written in *anuary +,,- and was originally posted at The .imple Dollar / http://www.thesimpledollar.com 0. "f you want personal finance ad ice on any topic$ The .imple Dollar is a great place to get started. This plan is !ro#en down into fi e main sections$ or stages:
Stage 1: Figuring Out Your Goals And Values

The underlying challenge that most people ha e with their finances is that they see money as distinctly separate from the rest of their life. 1oney is an antagonist$ an enemy that #eeps you from doing what you want to !e doing. The truth is that money is merely a tool$ and when you find yourself feeling as though money is an antagonist$ it is no different than a person attempting to learn how to use a hea y sword2 it(s unwieldy and dangerous. The first step for learning how to integrate money into your life and use it successfully as a tool is to figure out what exactly you wish to !uild with that tool. 3ithout underlying alues$ goals$ and plans$ money is no different than swinging a hammer around without !uilding something. Thus$ this first stage is crucial: what exactly is most important to you$ and what will it ta#e to ade4uately support those alues5
Stage 2: Evaluating Your Situation

'nce you( e figured out what is central in your life$ it(s time to ta#e a serious loo# at what you ha e to wor# with. 6ow much do you ma#e$ and how much time do you spend ma#ing it5 This seems li#e an easy 4uestion$ !ut it(s not. 6ow much of your income do you spend maintaining your 7o!$ ia transportation$ career de elopment$ clothing$ and so forth5 8nd how much time do you spend doing things de oted to your 7o!$ such as going to wor#$ coming home from wor#$ attending wor#-related functions$ and so on5
3hen you calculate these new num!ers$ you might !e shoc#ed !oth at how much time you actually spend wor#ing in an a erage wee#$ as well as how little you actually earn. You can dri e this point home especially clearly !y calculating a num!er that we(ll use throughout the month$ your true hourly wage. 6ow much do you really ma#e for each hour that you spend de oted to your 7o!5 "t(s not nearly what you might thin#$ and that alone might shoc# you into considering some different a enues.
Stage 3: Building Your Own Li e Budget! "ot Following So#eone Else$s %rescri&tion
'nce you( e ta#en a hard loo# at what you actually earn$ you can !egin to set up the !asic framewor# of how to spend that money that is in line with your personal goals. This isn(t a!out printing out wor#sheets and trying to 7am your life into the pigeonholes that someone else has created for you2 instead$ this is a!out defining how you spend money and wor#ing from there. "t(s almost unfair to refer to this as 9!udgeting$: !ecause !udgeting carries with it some ery !ad connotations$ much li#e putting on an uncomforta!le suit. This process is much more li#e going to a tailor$ who uses you as the !asis to construct a custom suit that fits you. This process will create a custom !udget that fits your life with your alues and goals as a !asis. 3e(re not tal#ing a!out restricting you to spending ;+, a month on 9dining expenses$: !ut instead creating a structure where you can decide what(s appropriate !ecause you can see how it relates directly to your dreams.
Stage ': Loo(ing At Your Li e! %iece B) %iece

'nce you( e got a !asic !udget in place$ it(s well worth spending some time carefully e aluating those num!ers that represent you and see if there are any places where there is excess fat - and simply trimming it away. "s your electricity !ill pretty high5 1ay!e there are a few simple ways to reduce it. <etting tired of paying that life insurance !ill5 1ay!e you don(t need it at all - or can utili%e something less expensi e. <etting dinged o er and o er again with !an# charges5 =oo# at what they(re charging and do something a!out it. >redit card finance charges eating you ali e5 There are some easy ways to reduce them. 3e(re loo#ing for ways to trim away fat /things that ma#e you uncomforta!le when you loo# at them0 so that the meat /your goals$ dreams$ and alues0 ha e room to thri e. You don(t ha e to eliminate that daily latte if it !rings you 7oy 7ust loo# for the many things you can do without or that you can reduce without significant pain and you(ll ha e the money to chase your dreams.
Stage *: Setting +,e Stage For Li elong Success

?ow that the complete pac#age is coming together$ there are some !asic methods for #eeping the momentum going. 3hat do you do with the fat you( e trimmed away5 6ow do you #eep trac# of all of your financial information so that it(s not chaotic and incomprehensi!le5 6ow do you ensure that you(re not ensnared in loan de!t o er and o er again5 6ow do you #eep this good thing going5 "f you follow this plan and #eep these principles in mind$ you can easily li e your dream. "t(s all up to you$ and it ta#es 7ust an hour a day for a month to get things going.
-an I s,are t,is docu#ent wit, ot,ers.

@lease$ !y all means$ send this document freely to anyone who may !e helped !y it. "f you would li#e to gi e than#s to the author$ you can send a freewill payment of ;+ ia @ay@al to trentAthesimpledollar.com$ !ut all " really as# is that you distri!ute this wor# freely. "f you wish to post this @DF on your own we!site$ you may do so as long as you include a lin# to http://www.thesimpledollar.com/ on the same entry or page.
I$# turning #) su&&ort0 1el&2
inancial li e around! /ut I need #ore
"f you( e read this document and are see#ing more answers as you turn your finances around$ please isit http://www.thesimpledollar.com/. That site is loaded with personal finance ad ice on countless topics and is updated se eral times daily. Feel free to po#e around$ search for topics that you need ad ice on$ and as# 4uestions. "f you prefer offline reading with a !oo# in your hand$ my highest recommendation goes to a !oo# entitled 9Your 1oney or Your =ife: !y *oe Domingue% and Bic#i Co!in. "t was one of the most powerful !oo#s " ha e e er read and it singlehandedly inspired me and helped me to fix my personal finances. &nough with the introductions. =et(s get started.
Day 1: Your Five Main Values

You might have expected that we would start out fixing your finances with a pencil and a calculator. n fact! it will "e a few days "efore we have any need for either of these. #hy$ %efore we can define a plan that wor&s for you! we need to sit down and figure out what really matters in your life. 'll of us wor& hard for a reason. #e go into wor& and come out of wor& "ecause we want money! right$ (oney "uys us things and allows us to live in this modern world. %ut what do we mean "y )live*$ #hat exactly is this )living* that we are focused on$ The real truth is that we live according to a set of values. #e continually perform actions "ased on values: our values mixed with the values of others. For example! my top value is my family. want a good! fulfilling life for my wife and my son so that they can easily define and follow their own values. +very person has a set of "etween four and six primary values that underline their life ,we may have other values! "ut those values are secondary to the primary ones-. Financial pro"lems occur through distortions of those values: we come to "elieve that some things are vital to these values when they really don.t matter. /enerally! this is what advertising see&s to do: it tries to express a core value that some people have and ma&e their product seem essential to achieving that value. 0o! our first step is to define exactly what our values are. #e are not defining goals here1 /oals are specific actions! li&e )retiring at age fifty five* or )paying for my son.s graduate school.* #hat we are loo&ing for are values. Friends. 2ove. Freedom. Truth. #hat are the fundamental items that ma&e you tic&$ 't the end of this post is a list of thirty potential values that one might list3 you can loo& at these if you.re an example4oriented person. 't first! this seems pretty difficult! so here.s a procedure that will help you get in the right mindset. First! get calm and relaxed. For me! this usually comes after a nice meal with a glass of wine or a great craft "eer. can clear my mind and thin& a"out my life. Do whatever gets you relaxed: have a massage! lay down in "ed! or anything that increases your calmness. 0econd! e honest. 5o one has to see this list! so write down what really comes from inside of you. You might write down things li&e )power* or )excitement* that you might not want to show other people! or you might "e tempted to write down )family* "ecause your significant other would expect it 4 "ut it.s not really important to you.
Third! close your eyes and as! yourself what is really important in your life. f nothing comes immediately! don.t worry a"out it. Thin& a"out the moments where you feel most whole and fulfilled and that feeling stays with you! not a temporary! passing feeling. "s you discover values# write them down. 7ust ma&e a list on a sheet of paper. t doesn.t have to "e ran&ed in any way. 8nce you.ve discovered a value that.s important to you! 9ust add it at the "ottom of the list. You.ll &now when you are done3 don.t worry too much a"out how many you.ve written down. $f you have more than six values# as! yourself if any of them are actually the same value. :uite often! if you get a"ove six values on our list! you.ll reali;e that two of the values are actually the same thing. f they are! 9ust com"ine them! or cross off one of them. $f you have fewer than four values# thin! a out them some more. (ost people have at least four central values in their lives! so spend some more time to ma&e sure you.re not missing anything. %nce you have this list! save it. #e.ll not only refer to it in later steps! "ut it will pro"a"ly "e valua"le to you. 0ee you tomorrow1 f you need some help getting started! here is a list of thirty values that you might have in your life. 5ote that this isn.t a list of all possi"le values! 9ust a selection of some values to help you get started. 'dventure %alance %eauty <leanliness <onfidence <ontrol <reativity ,music! film! food! etc.+ducation +xcitement Family Friends Freedom Fulfillment Fun /rowth =appiness =ealth ndependence 2eadership 2ove (a&ing a difference (arriage >eace of mind >ower 0ecurity 0ervice 0haring 0pirituality The environment Truth
Day 2: Defining Your Goals From Your Values

Yesterday, we defined five main values that define our life. These values are what we live for they drive us to wor! and "enerally "uide us in how we spend our lives. Yet so often we find ourselves #etrayin" these values $everyone does this at some point%, and it is when we choose to #etray these values that we find ourselves in financial trou#le instead of in financial sta#ility. &e either spend money on thin"s that don't match or even oppose our values, or we spend money on our values #ut in a mis"uided fashion. &hy do we do this( The biggest reason that we spend money out of accord with our values is that we dont sit down and define our goals )oals are merely the specific em#odiment of our values * tan"i#le milestones that are clear indications of lives lived in tune with our values. You're pro#a#ly thin!in" to yourself, +, have values and "oals already * this is a waste of my time.- .efore you lo" off, , want to as! you one simple /uestion: first, do your goals actually match the values in your life! 0et me "ive you an example. 1ne of my ma2or short term "oals is #uyin" a house, somethin" many of you can identify with. This is a "oal related to one of my primary values, my family. Thus, ,'m #uyin" a house for my family. 3nderstandin" this connection lets me clearly define what type of house ,'m loo!in" for $it doesn't need to #e shiny and new, #ut it does need to have space for my son and my future children * a lar"e !itchen, a family room, and four #edrooms are what , see!%. Thus, every time , thin! a#out the home purchase, , reali4e that ,'m wor!in" for my family. ,f you can honestly match ever sin"le "oal in your life with one of your central values, you're more well*ad2usted than almost everyone in the world. The truth is that we all have central values without any associated "oals, "oals without any associated values, and "oal*value pairin"s that are really unclear and muddled. 5eople that are financially successful find ways to minimi4e all of these. 6ow do they do this( They define all of their goals based directly on their personal values" and they live their lives to meet these goals above everything else ,f they "o to spend money, they as! themselves whether that money directly leads them to one of their "oals. ,f the answer is no, they don't spend the money. Thus, when they actually spend money, it doesnt fill them with guilt. They can immediately see how that money is "oin" to reali4e their "oals, which are fundamentally connected to the values that define their life. 6ow do we "et there( 0et's ta!e an hour, sit down, and define ten "oals in our life. ,f you went throu"h yesterday7s exercise, you will already have a list of the five values that are central to your life. 8ow, we ta!e these values and use them to define ten concrete "oals.
First, forget what you believe your goals are right now You mi"ht end up comin" #ac! to these "oals durin" this process or you mi"ht not. The intent is to define your "oals in direct harmony with your core values. For each value on your list, as# yourself where you want to be in terms of that value in twenty five years , mentioned that one of my main values is my family $specifically my children%, so in twenty five years, , would li!e to have two colle"e*educated children startin" sta#le lives on their own, and perhaps a third in colle"e. 8ow, turn that dream into a goal. For my children to #e a#le to start out their own lives on their own, , want to minimi4e their colle"e de#ts and set a "ood example for their lives. :o, my "oal is to be able to pay for at least part of their education. You mi"ht #e tempted to start writin" a plan for that "oal ri"ht now, #ut don't. &e'll "et to that later. ;i"ht now, we 2ust want to ma!e a list of lon"*term "oals that match your values. For those curious, here are my "oals for twenty five years down the road: < , want to #e a#le to pay for a si"nificant part of my child's colle"e education < , want to have a fully paid for house #i" enou"h for my "randchildren to visit and feel comforta#le < , want to #e a#le to travel the world with my wife < , want to have three #oo!s in print < , want to #e a#le to live off the interest of my non*retirement investments 1nce you've made the lon" term "oals, go through your values again and as# yourself where you want to be in terms of that value in one year =ust li!e #efore, fi"ure out where you would li!e to #e in relation to that value in one year and don't worry a#out definin" a plan for that "oal. >"ain, here are my one year "oals: < , want to dou#le the value of my son's ?@A colle"e savin"s plan < , want to #uy and move into a house < , want to select and #e"in learnin" a forei"n lan"ua"e < , want to /uadruple the readership of The :imple Dollar < , want to reach B1CD in my non*retirement mutual fund account 8ow that you have these "oals, we're ready to #e"in definin" some plans E #ut let's sleep on it first.
Day 3: Create A Plan For Each Goal

Yesterday, we made up a list of ten goals that deri e directly from our alues. !ow "and for some of you, finally#, we start tal$ing a little %it a%out num%ers. &et's get right down to %usiness. Take ten sheets of paper and at the top of each sheet, write one of the goals you defined yesterday (n each of these sheets, you're going to define some specific milestones for each of your goals. For each of the short ter! goals, ) want you to define fi e specific actions: I will do this in the next three days. I will do this in the next week. I will do this every week. I will do this in the next month. I will do this in the next six months. *ome of these will %e information gathering and ha e no cost. (thers will actually re+uire some in estment, usually the one that happens e ery wee$. For example, yesterday ) mentioned that one of my short term goals is dou%ling the alue of my son's ,-. college sa ings plan in the next year. /ere's what my fi e specific actions loo$ li$e: In the next three days, ) will get the %alance of my son's ,-. account, along with the data on the annual returns of each of the in estment options in the plan. In the next week, ) will determine how much ) need to in est in the coming year to dou%le the account %alance and also estimate what the return for the coming year might %e. Every week, ) will in est -0 of what ) calculate is needed to dou%le the %alance in the coming year. In the next month, ) will e aluate all of the different funds a aila%le for my son's ,-. and choose a fund that ) feel is the %est match for him. In six months, ) will chec$ in on the account and see how he's doing for the year, see how the arious funds are doing for the year, and reconsider my in estment choices. 1enerally, the model outlined a%o e wor$s well: gather information in the next three days, plan a %aseline amount you'll need in the next wee$, sa e an appropriate amount e ery wee$, in estigate the details in the next month, and re iew things in six months. )f you do this, you'll almost always meet your annual goal.
!ow, for each of the long ter! goals, ) want you to define fi e specific actions: I will do this in the next week. I will do this in the next month. I will do this every month. I will do this in the next year. I will do this in three years. *ome of these will %e information gathering and ha e no cost. (thers will actually re+uire some in estment, usually the one that happens e ery month. For example, yesterday ) mentioned that one of my long term goals is completely owning a wonderful house in twenty fi e years. /ere's what my fi e specific actions loo$ li$e: In the next week, ) will gather information a selection of potential houses that reflect what ) plan to %uy immediately and what ) plan to %uy in fifteen years. In the next month, ) will calculate how much ) will ha e to spend per month on mortgage, insurance, and taxes on the lower3end house, and also calculate how much the nice house will cost in fifteen years. Each month, ) will sa e -,0 of a mortgage payment for helping me get ahead on payments when ) purchase the first home. This will ena%le me to 4trade up5 more effecti ely when the time comes. In the next year, ) will %uy a home that is in the lower house %rac$et and switch the extra -,0 from a sa ings account to a direct payment on the mortgage. In three years, ) will sit down and re3e aluate what my 4dream home5 is li$e and refactor my plan accordingly. 6y doing this, ) %rea$ down something that seems far3off "a %eautiful %ig house to retire in and for my children and grandchildren to en7oy# into smaller pieces that ) can do right now. ) also find it useful to find an i!age that captures a long" ter! goal and place it in a place that #$ll see regularly This way, the end goal is always in sight8 it's a constant isual reminder of where ) need to go. !ow that you' e defined these plans, you ha%e specific things that you$re sa%ing for and spending your !oney on that are in line with your %alues and goals. 9hene er you go to spend money, pause for a second and thin$ a%out your alues, goals, and plans, and as$ yourself if that money expenditure is really helping you reach your goals or is really reflecting your alues.
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You should strongly consider !aking up a schedule that co!&ines all of your plans together 9hat will you do in the next wee$: 9hat will you do e ery wee$: 9hat will you do in the next month: 9hat will you do e ery month: ; schedule that $eeps you following your plans will help with this. (ne wee$ from now, you should ha e some num%ers that will show you what you need to %e doing to reach your goals. The amounts might trou%le you, %ut don't worry. )n one wee$, we'll ta$e these num%ers and use some techni+ues to carefully e aluate what they really mean 3 and how you can ma$e them count for more than you thin$. 6efore ) did this exercise, ) often found that, e en though ) often reali<ed it wasn't a good idea to spend, ) would still spend money anyway. 9hy: ) didn't ha e any sort of concrete plan for what to do with my money, especially not one that was larger than sa ing for a new gadget or toy. !ow, whene er )'m tempted to spend money in a fri olous way, ) thin$ a%out what's important to me, and it directly connects to a plan for spending my money. Tomorrow, we'll start loo$ing at your money.
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Day 4: How Much Did You Earn Last Year?

Yesterday, we developed some very specific plans to achieve aspirations that fit within the context of our personal values. These plans provide the asis for what we should e doin! with our money" not only do they !uide us towards a !oal, ut they also serve as a reminder that we#re off trac$ if we do thin!s that oppose the plan. %ow that we have these plans in place, we need to di! into our finances a it. The first step is to see what income you actually have with which to chase your dreams. This will provide a aseline with which to fi!ure out how we can re uild our finances. &s efore, take out a sheet of paper. &lon! the top, ma$e a list of each of your employments. For me, ' (ust listed one (o )ri!ht now, The *imple Dollar is a very involved ho y, not what ' would call a +(o ,-. .n the ri!ht hand side of the paper, write how much you ma$e per year at your (o )minus only income taxes / include all enefits, includin! any employer matchin! for retirement-. %ow, underneath that, make a list of every single e tra cost you have specifically !ecause of your "o!# 0hat does the commute cost1 2ow much does lunch cost if you don#t rin! your own lunch from home1 0hat does your wor$ wardro e cost1 0hat do you spend on !oin! out with cowor$ers1 .n small professional !ifts for others1 .n a nicer car or (ewelry or other items for +wor$ ima!e,1 0hat a out child care1 3ach of these are expenses related to your (o . 4ust ma$e a list of them" don#t worry a out amounts yet. 2ere#s my list, if you#d li$e somethin! to compare it to: child care, drivin! to wor$ )!as and extra maintenance-, wardro e, meals, !ifts, and office supplies. %ow, for each item on your list, figure out how much it costs you per year# First, fi!ure out how many days a year you wor$ )this is useful for the automotive calculations-, then fi!ure out how lon! your daily commute is. 5ultiply the two to!ether and you !et an estimate of the milea!e you put on the car. ' drive a out 6,677 miles a year for wor$, so that amounts to rou!hly 877 !allons of !asoline, at 9:.67 a pop )on avera!e-, which comes out to 91,777. ' also fi!ure that '#ll have to spend a out half that much on other maintenance )oil chan!es, filter chan!es, and increased ris$ of ma(or pro lems-: 9677. Then ' loo$ at child care: 96,;77. ' usually uy a out 9377/9367 a year worth of extra clothes for wor$, and ' eat out pro a ly once a wee$ with cowor$ers, so tac$ on another 9<;7 )916 a meal, estimated-. ' also uy !ifts for our !ift exchan!es at wor$ and some of my office supplies, addin! up to nearly 9177 a year. . viously, your calculations will e far different.
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0hen you#ve determined annual amounts for each entry, su!tract them from your salary# This will e sort of painful, particularly if you wor$ in an office at the 91:/916 an hour ran!e. The amount you#re left with is your true ta$e/home salary for your (o for a year. 0e used the post/tax num er ecause youre paying for this extra stuff after taxes. ' $now some people who claim to e ma$in! 936,777 a year, ut when they ta$e their post/tax num er and su tract out their (o expenses, the num er left ma$es them feel rather worried. It should. *ome people even reali=e that this num er ta$es them down to near the poverty line, and they !et >uite sic$ when loo$in! at this num er in comparison to other thin!s. .ver the next few days, we#ll ta$e a deeper loo$ at this num er and fi!ure out what it really means in terms of your life values.
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Day 5: How Much Did You Work Last Year?

Yesterday, we calculated the actual cost of our employment over a iven year ! and were surprised to discover how little it actually is. "nce you remove all of the wor#!related expenses, such as the commute, the wardro$e, the extra meals, and the child care, the actual income you et from your %o$ is ominously low. Today, we&re oin to loo# at our wor# from a different an le: time. 'e need to et an accurate picture of how much time you spend in a year chasin the money you ma#e. (t first lance, this seems almost automatic, $ut let&s loo# at it a $it more closely. (s usual, take out a sheet of paper. (lon the top, ma#e a list of each of your employments and, alon the far ri ht, write how many hours you actually spend at wor# )include your lunch $rea#* in a iven year. Don&t include vacation time. +f you wor# overtime some of the time, %ust estimate what an avera e day loo#s li#e, then calculate how many days you wor# in a year )total days minus holidays and vacation*, then multiply the two num$ers to ether. ,ow, underneath your time spent at wor#, list every other activity you do in relation to your work. The list you made yesterday mi ht help, $ut ive the -uestion some thou ht. .ist everythin that you do that you wouldn&t otherwise do if it wasn&t for your %o$. For example, if you travel, you can list almost all of your nonwor#in wa#in hours. You can list the time it ta#es to travel to and from wor#. You can list the time you have to deal with child care. You can list the time you spend shoppin for wor# clothes, or time you spend oin out for $usiness dinners, or time you spend doin /optional0 trainin . For example, here&s my list: Child care Commute Working outside the office Business travel Business dinners / parties +f you haven&t already, for each of these activities, list the nu !er of hours you spend on the in a year. 1ut these in next to each item, $ut over on the ri ht hand side of the pa e under the time you spend at wor# in a year. + find that for many of these items, it&s easier to fi ure out how much you invest in these thin s each day )li#e the commute or the child care connection*, then multiply it out $y the num$er of days you wor# in a year.
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,ow, total all of the nu !ers on the ri"ht. That&s how many hours you actually spend wor#in in a year. Divide it $y 23 to et your wee#ly total, or $y 342 to et your daily total )reali5e that this daily total does include wee#ends6 if you want to exclude them, divide it $y 347 to et only wee#days, or $y 327 to exclude ten holidays ! you may also want to su$tract your vacation days from that total, too*. For me, this num$er was a real eye!opener, as + $e an to reali5e how much of my time really is ta#en up $y my chase for more money. 8pend some time thin#in a$out this exercise and what it means. You spend all of this time wor#in your tail off and yet you still find yourself in financial trou$le. + spend an avera e of 97 hours a wee# wor#in %ust to #eep my %o$. 'hat thin s could + do if + didn&t have this time investment: 'hat sort of thin s could + do if + did a low!wa e %o$ %ust down the $loc#: + leave it up to you to draw your own conclusions, $ut it is a -uestion worth thin#in a$out. Tomorrow, we&re oin to see how much your time is worth ! and what that really means.
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Day 6: Your True Hourly Wage

Two days ago, we determined your true annual salary. Yesterday, we determined the number o hours you truly wor! in a year. Today, we combine the two numbers " and consider what exactly that means about you, your employment, and your time usage. #re you ready or the big calculation$ Take the total salary you calculated two days ago and divide it by the total hours you calculated yesterday. You%re going to be le t with a number that you%re going to ha&e to ponder 'uite a bit. This number is how much you actually bring home each hour you do something for your employment. For some o you, this number is going to be shockingly low. There are many seemingly decent"paying (obs that wind up with an hourly wage below minimum wage when loo!ed at in this ashion. For example, i you come up with an hourly wage below minimum wage and you spend )* hours a wee! in&ol&ed in wor! acti&ities, you might actually be better o wor!ing at +ome Depot with a much lower responsibility and stress threshold. ,any o you might bal! at the +ome Depot idea, but hear me out. # relati&e -and riend. o mine wal!ed away rom a situation where she was ma!ing between /0*,*** and /1*,*** a year to ta!e a (ob wor!ing the loor at a local +ome Depot or /2 an hour. 3he wor!ed orty hours a wee!, rode public transportation to and rom wor!, and came home rom her (ob without the baggage o additional stress. 4hat happened$ 3he was rein&igorated to ollow her passions. 4hat about her inances$ 4ithout all o the extra costs o her (ob, she was only slightly worse o than be ore, plus with the extra energy to ollow her interests, she actually wound up doing better than be ore within six months. pend some time considering what this number actually means. There are a lot o truths about our li&es that are re&ealed by this number. !f you buy a frivolous item for "#$ consider how many hours you had to work to have the money to buy it. 5et%s say you calculated that you are actually earning /1 or each hour o your time in&ested in wor!. 4hen you go to buy a new pair o shoes that cost /6*, loo! at them and as! yoursel whether or not they%re worth 1) hours o your time spent wor!ing. 4hen you go to buy a new electronic gadget or /3**, loo! at it and as! yoursel whether or not it%s worth )* hours o your time spent doing things you don%t want to do.
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When you pay a loan bill$ figure out how many hours you have to work just to pay for the finance charges or interest. 7 ind this one to be a real eye"opener. 4hene&er you pay a bill, loo! at the amount you%re paying in inance charges or interest that month, then con&ert it to hours o your li e spent at wor!. 4ith the example abo&e, a /1** inance charge amounts to twenty hours o wor! (ust so you could ha&e some ri&olous item be ore you could actually pay or it. 3ome people consider this exercise rightening8 others ind it incredibly upli ting. The maxim that time is money is pain ully true8 by translating the things you spend money on directly into hours o your li e spent toiling in labor, you o ten disco&er that maybe you don%t need a lot o things a ter all. 4hen you start doing that9 well, that%s tomorrow%s exercise.
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Day 7: Work For Your Dreams, Not Your Money

During this past week, we identi ied our primary !alues and used these to create clear goals and plans that deri!e rom those !alues. Then, we spent some time disco!ering what our work time is actually worth. Today, we"re going to com#ine these two together. $ you"!e #een ollowing the plan, you"re pro#a#ly working on the num#ers or your plans right now. %e won"t e!aluate them yet &a ter all, you"!e got a ew days to go #e ore you ha!e some real num#ers', #ut you should reali(e that you"re going to ha!e to sa!e some money to meet these goals. The #ig secret, though, is the realization that you can in fact work for your dreams instead of working just to get y! Yesterday, we calculated our true hourly wage, so you know how much you"re making or each hour you"re in!ol!ed with work)related tasks. *et"s trans orm this hourly wage into something that has more meaning. "ake out a new sheet of #a#er and list your ten goals on it! Today, we"re going to make a ramework that will ena#le you to go to work with renewed !igor, #ecause you"ll see the connection directly #etween your time at work and your dreams. $nder these goals, make a list of each of your de ts as well! +art o the ,ourney to your dreams is paying o these de#ts, so we want to put them each on the list, too. -nder that, add one last item: li%ing e&#enses. .#!iously, e!en as you work towards your dreams, you"ll still need to co!er your daily expenses, such as electricity, ood, water, and whate!er else is undamentally important to you. /t the !ery #ottom, write "'"() and then o!er on the ar right, write the total amount o hours you work in a week that you calculated the day #e ore yesterday. %hat we"re going to do is see how many hours we can s#end at work each week on each of these items! .nce we ha!e this irst dra t written, you can use it as a li e #aseline until we re ine it later on in the month. *o let+s get started, First thing, until you"re sure how your li e will #e re#alanced, include 012 o the total hours under the item 3li!ing expenses.4 For example, let"s say your total hours or a week is 51. You should then include 65 hours next to the li!ing expenses. This may need to #e more7 we"ll e!aluate it more care ully in the next ew days.
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9ow, let"s handle the de#ts. -f you ha%e de ts, you should s#end ./0 of your hours on #aying off the de ts! For example, i you ha!e 51 hours, you should igure that :1 o them should #e used on paying o de#ts. 9ote that this is extra de#t payments7 your #asic minimum de#t payments are included in the li!ing expenses. %hen &or i ' you ha!e no de#ts, all o the time going into your de#ts can go straight to your dreams. "he remaining 1/0 should e assigned in e2ual #ieces to your dreams! $ had 1: hours le t, so $ ga!e 1.: hours to each o my dreams. *o, what+s the #oint3 There are two points. First, i you multiply your hourly rate #y the amount assigned to each element, thats how much you can spend each week on that element. $ you"re thinking that this is something like a #udget, you"re right in a way, #ut rather than a list o month)to)month expenses that demand things o you, this is a 3dream #udget4 ) a de!ice that lets you ollow your goals to achie!e your dreams. ;econd, it lets you find real goals in your work! This is the truly power ul part o this. ;o o ten, we wake up in the morning and trudge into work wishing we were doing anything else. $ you reali(e that some portion o your day is spent working speci ically or your dream, it #ecomes easier. For me, the hardest part o a day is getting ready in the morning7 $"d much rather sit down with a cup o ,oe and check my email than take a shower, get dressed, and take my son to daycare. ;o or me, the irst hour o a gi!en day is an hour $"m working towards one o my goals. %hile $"m showering or out in the truck on the way to daycare, $ remind mysel o!er and o!er that $"m working solely or the purpose o one o my dreams. $ imagine that dream and somehow $ eel #etter a#out it. There are two !ital lessons that this exercise teaches. First, the %arious as#ects of your life are all connected: your work, your pay, your dreams, and your goals. They"re all tied together in one #ig picture. <any people o ten compartmentali(e these things and ail to see how they all relate to one another. ;econd, it re!eals that you can directly connect the work you do e%ery day to your dreams! This is the real power o the exercise, $ think. =!ery single day you go into work, you can tie some o your least a!orite tasks directly towards achie!ing a li e goal. $t can #e the parts that you like the least, or it can #e the commute. >ust pick a portion o it and, while you"re doing it, remind yoursel that you"re doing this action so that you can li!e in that #eauti ul house or so that you can tra!el to $taly with your wi e. Tomorrow, we"ll start #reaking this picture down piece #y piece, starting with the li!ing expenses. The goal is to create a picture o your li e, with the li!ing expenses as merely the rame around a #eauti ul picture o your dreams.
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Day 8: Breaking Down Your Expenses

Yesterday, we worked out exactly how the hours you spend at work break down into three areas: your li in! expenses, your debts, and your dreams. "ince this was only a thumbnail sketch, today we#re !oin! to look more care$ully at the breakdown in li in! expenses. %et#s !et started. Take out a sheet of paper and start another list. This time, we#re listin! e ery expense you ha e in a !i en year that do not directly relate to your employment. &e#re not !oin! to worry about amounts yet, 'ust a list o$ all o$ the thin!s that we spend money on in a !i en month. (ere#s a samplin! o$ the expenses that ) listed when ) did this exercise: Rent Electricity Telephone Cable Student loans - minimum payment Health Insurance Car Insurance Clothing Food Entertainment - Books Entertainment - Music "pend some time thinkin! about this. &hat do you spend money on each year* (ouse insurance* +hristmas !i$ts* (ousehold items* +ar repair* (ome decor* Toiletries* ,ust keep listin! thin!s as you think o$ them. )t mi!ht be use$ul to lea e this list out somewhere you can see it and add thin!s as you think o$ them. Don#t worry about amounts yet- we#ll worry about those in a bit. .ow, lets figure how much you spend on each item in a gi en year. For the amounts you know on a shorter time$rame, multiply them out. For amounts you don#t know, use some estimation o er a shorter time$rame /and estimate on the hi!h side0 and multiply it out. The point is to !et a rou!h thumbnail sketch o$ what you spend in a year on arious thin!s. .ote that e!re not making any "alue #udgements yet- we#re merely tryin! to see what#s there. This will take some time, and durin! that time, think a!out each of these expenses a little. Do they brin! you 'oy when you look at them now* Do they really $eel essential to your li$e, or when you think about them, do you $eel like you#d be better o$$ i$ you spent money on the list o$ !oals you created earlier this month*
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&hen you#re done with this list, total up e erythin!. Then calculate 123 o$ that and add it to the bottom, labeled 4incidentals.5 6dd that into the total. That number is rou!hly what you spend on your li"ing e$penses in a !i en year. You can di ide it by 17 to see how much it is a month, then di ide it by 87 to see how much it is in a week. .ow, let#s see how many hours you work in a week 'ust to meet these expenses. Take the weekly amount you "ust calculated and di ide it !y your true hourly wage. 6 typical 6merican usually winds up with a rather lar!e number here. "pend some time meditatin! on this 9 you spend that many hours a week at work 'ust $or the expenses you listed. &hat does that mean* &hat could you do with your li$e 9 with your %uture 9 i$ you trimmed away some o$ the extra $at* Your debt could be !one 9 and you could be workin! towards a better and bri!hter $uture $or yoursel$.
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Day 9: Cleaning Up Your Expenses

Now that youve uilt a list o! your non"wor# expenses$ youve pro a ly reali%ed that you do spend a lot o! money on !rivolous thin&s. Dont worry$ 'm not &oin& to say ()T*+ ,-Y'N. F/'0*1*-) T2'N.)34 5veryone #nows that !rivolous expenses are the thin&s that eat away at your lon&"term plans " and everyone #eeps uyin& them anyway. 'nstead$ you should evaluate the areas where you feel comfortable cutting down. 'n some ways$ it is li#e a diet: i! you diet too stron&ly$ it wont e lon& e!ore youre layin& prostrate on the couch$ )ara 1ee poundca#e in one hand and a 67 ounce ottle o! 8ountain Dew in the other. 'nstead$ dietin& wor#s when you ma#e little choices throu&hout the day$ li#e not super si%in& a meal or choosin& to ta#e the stairs. 1ets &et started. Ta e out that list of expenses that you made yesterday alon& with a lan# sheet o! paper. 9hat youre &oin& to do is &o throu&h the entire list and thin# a out each item a little it$ then note how much you thin# you can save per wee# on that item. 2eres what you do. Copy the first item to the new piece of paper! then close your eyes for one minute and thin about that item" Do you spend too much on it: 's there a way you could easily cut down on that expense without really !eelin& the crunch: ;ould you eliminate or drastically reduce that expense without !eelin& too ad a out it: <eep in mind why youre doin& this " youre tryin& to !ind money with which you can chase your dreams. 2ere are ten =uic# su&&estions a out how to cut various #inds o! expenses with minimal impact> i! you want more$ spend some time han&in& around The )imple Dollar ?http://www.thesimpledollar.com@ and youll !ind plenty.
Conserve energy y installin& ener&y e!!icient items li#e ;F1s ?compact !luorescent li&hts@$ pro&ramma le thermostats$ and intelli&ent power strips. #uy fewer boo s y spendin& more time at your local li rary. 9henever ' have a ad desire to &o to the oo#store$ ' Aust consciously &o to the li rary instead almost all o! the time. #uy less music y listenin& to music in your collection that youve never spent the time to appreciate. 'nstead o! uyin& a new ;D$ !ind an older one that you only listened to once or twice and put away. #uy fewer clothes y selectin& items that &o well with much o! the rest o! your wardro e. B modular wardro e creates the appearance o! a lot o! clothes without the need !or a lar&e clothin& ill. Eat out less y uyin& a &ood coo# oo# that starts out at a e&inners level ?try 8ar# ,ittmanCs (2ow To ;oo# 5verythin&4@ and stoc#in& your #itchen well.
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$educe insurance y callin& your insurance carrier and loo#in& at raisin& your deducti le. $educe your credit card payments y callin& your credit card company and re=uestin& a reduction in your interest rate. $educe your ban fees y loo#in& into no"!ee or low"!ee options at your an# " or at other an#s. $educe your cable bill y eliminatin& unwatched premium channels or loo#in& at other asic pac#a&e options " or even consider eliminatin& it alto&ether. $educe your car payments y endin& the leasin& cycle and uyin& late model used cars instead.
For each item that you decide you can e!!ectively reduce the cost o!$ estimate realistically how much you might save in a year doing this" 5stimate your savin&s low> youre always etter o!! with !lexi ility. *nce youve done these estimates$ rewrite your overall cost list with the spending reductions calculated in$ then divide each element y D6 to see how much that is per wee#. You should see a decent reduction in your livin& expenses. 9hat will that translate into: 8ore money that you can spend on your dreams " and !ewer years until you &et there. Tomorrow$ well see how much time weve saved " and what that means !or the i&&er picture.
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Day 10: Fitting Your Expenses Into The Bigger Picture

Yesterday, we took a look at our livin expenses and tried to !ind places where we could easily make some reductions. The oal was not to make hard cuts, "ut to !ind ways to reduce spendin that !it within our li!estyles. Today, we want to see how this revised personal expense "alance !its within our overall li!e plan. Pull out the overall plan you built a fe !ays ago along ith the esti"ates you calculate! yester!ay# You#ll notice that your older plan is calculated in terms o! hours, which is a reat way to see what your expenses are really costin you, so let#s do the same conversion !or your expenses. Ta$e out a fresh sheet of paper an! "a$e three colu"ns on it, with the le!t one takin up a"out hal! o! the pa e and the two on the ri ht takin up a"out a $uarter o! the pa e each. %n the !irst column, write each expense down !rom your sheet !rom yesterday, then in the second column, write the amount per week that you calculated yesterday. %! you skipped that part, &ust take your annual estimate !or each item and divide it "y '(. )ot that* %o & in the thir! colu"n& !ivi!e each secon! colu"n nu"ber by the true hourly age that you calculate! earlier# This is the num"er o! hours that you spend workin each week to pay !or that expense. For me, this exercise really opene! "y eyes. % !ound lots o! places where % !elt almost uilty !or what % was doin + thin s such as workin eleven hours a week &ust !or my entertainment expenses. % was workin a lot every week &ust !or silly little thin s, when that time could "e spent workin !or somethin "i er, somethin that rea!!irms my li!e. ,nce you#ve converted all o! these dollar amounts to hours, total the" up# -nless you have some ma&or spendin pro"lems, this total should "e less than your total hours you spend workin in a iven week .which you !i ured up earlier in the week/. %deally, it#s around 012 o! the total hours in a week .mine is a"out ''2 ri ht now, "ut when % !irst did this, it was at a"out 3(2/, "ut you don#t really need to worry unless it#s pushin 3'2 or so. %! it#s over 1112, you need to make some cuts in your spendin or you will never et ahead, as your spendin will row as your income rows. 4t this point, it mi ht "e use!ul to start a 5real6 "alance sheet. Ta$e the overall plan an! recopy it ith the sa"e ite"s as before& but !on't "ove the nu"bers over# %nstead, &ust put in the total num"er o! hours in a week and the total num"er o! hours you spend on livin expenses. The di!!erence "etween the two is what you will use to "e in "uildin your !uture.
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(hat if I'" left ith only a 10) sliver* +o can I ,buil! "y !rea"sith that* First o! all, even a small amount o! money can et you started and, with the power o! compound interest, can "uild up $uite well over time. 7econd, this process of evaluation is not a one-time process. %t#s use!ul to o throu h this on an annual "asis, &ust to re+evaluate where you#re at and where you#re headed. ,nce you et started and watch thin s "e in to "uild to !ul!ill your dreams, the !eelin is o!ten so power!ul that you !ind new places to trim your spendin + you pay o!! de"ts, cut down on your nonessential purchases, and so on. Tomorrow, we#ll look at what to do with that remainin !raction.
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Day 11: Dividing Up The Rest and Finishing Our Time Budget
Yesterday, we figured out exactly how much of your money and your time you spend with !asic li"ing expenses. From this, we determined what was left the amount that we can use to pay off our de!ts and !uild our dreams. # great rule of thum! applies here: you can reach your short term goals with de!ts, !ut you can$t reach your long term goals with de!ts. %n other words, focus on your short term goals and for your long term ones pay off your de!ts first" &hy do it this way' % call it the (dream) factor. *aying off de!ts isn$t romantic at all, !ut dreaming a!out the great things you can do in the future is romantic. +ince you$"e defined fi"e short term goals ,and plans to execute them- that match your core "alues and also line up with your long term "alues, e"ery step towards these short term goals is a step toward success and li"ing your dreams. #it do$n $ith a piece of paper and ma.e a list of your fi"e short term goals along with a list of all of your de!ts/ you should already ha"e these ready to go. 0"ery step you ta.e towards your short term goals should !e matched with a step towards your long term goals, so you$re going to di"ide up your money and time in"estment e1ually !etween your goals and your de!ts. 2ow, ta.e the amount of hours you ha"e (left o"er) after yesterday3s calculations and di"ide that in half. You$re going to spend half of them on de!ts and half of them on your short term goals. %t$s important to remem!er here that these de!t payments are extra debt payments/ in other words, you$re going to pay an extra amount each month to get the !urden of de!t off of your shoulders so you can wal. freely and confidently into your future. %hy am & dealing $ith hours instead of dollars' For many people, dollars are an a!straction: they ha"e a hard time directly associating money with the wor. that they do. 4oney comes in, money goes out, and that$s life. The truth of the matter is that every dollar $e ma(e is the result of some amount of time spent doing something for someone else" Time is something we all understand from our earliest days, and these hours are merely something much more tangi!le to hold onto. )o$ do & decide $hich de!ts to pay first' There is a lot of merit in the (de!t snow!all) concept, which ad"ocates paying off the smallest de!t first. For now, put the entire amount you ha"e allocated for de!ts next to the smallest de!t !alance. &e$ll worry a!out dollar amounts tomorrow.
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%hat if & have no de!ts' %f you$re luc.y enough to !e de!t free, you can in"est all of your extra money towards your goals. Ta.e that half that you would ha"e !een using to pay off de!ts and apply them to your long term goals as you see fit. %hat a!out my short term goals' You can pro!a!ly determine for yourself how to split things up among your short term goals. 7oo. at your plans and decide which ones need more of your wor.ing time to ma.e them come true, and which ones need less. &rite them down. 8nce you$"e figured this out, assem!le a ne$ !ig picture using the one you created three days ago, along with the indi"idual expenses ,and the hours you spend on each of them- yesterday. #dd in the hour expenditures you created today ,including the ones with 9 hours assigned to them-, and do a final chec. to ma.e sure the hours add up to what you figured that you actually wor. each wee.. #it !ac( and loo( at this sheet" %n some ways, it$s a !udget, !ut it$s something more than that: it$s actually a picture of you. This is what you wor. for each wee., hour !y hour. 4ay!e you wor. three hours a wee. so that you can .eep your ca!le turned on, !ut you only wor. an hour a wee. towards a college education for your children. Do you feel comforta!le or happy with this' &hether you do or don$t, there are so many things here to thin. a!out in terms of how you choose to spend your time. Tomorrow, we$ll ta.e this (time) !udget and con"ert it all into real dollars !egin the process of con"erting all this planning into some real action. and
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Day 12: A Flexible Budget That Reflects Your Reality

Today is something of a culmination of the first part of the 31 Days program: it !asically ties up all of the goal"setting and e#aluation to date into a single document. This document isn$t a set of rules to li#e !y% !ut a financial picture of who you are and where you can go. &ound exciting' (et$s get started. Take out a bla k sheet of !a!er" the ti#e budget you !re!ared yesterday" a d the a!!roxi#ate hourly $age you calculated earlier% )e$re going to use these two pieces to assem!le a true !udget. &hat do ' #ea by true budget( *ost of the time when people prepare a !udget% it has no connection to their life experiences and their goals. The truth of the matter is that e#ery person is uni+ue% thus e#ery !udget should !e uni+ue. ,eople fail at following traditional !udgets !ecause they aren$t aligned to an indi#idual$s lifestyle% goals% and dreams. The !udget you$re a!out to complete is a true !udget: you$#e !uilt it yourself% composing it out of your daily life% your hopes for the future% and your dreams for the rest of your life. *ost traditional !udgets expect you to change your life for it- a true !udget as.s only that you don$t forget to plan for your dreams while li#ing your own life. /n the !lan. sheet of paper% ma.e three columns: one for each !udgeted item% one for hours% and one for a dollar amount. )e$re going to prepare a monthly !udget here% so ta.e each item from the time !udget prepared yesterday% then multiply that wee.ly hour num!er% multiply it !y 01 2for the num!er of wee.s in a year3 and then di#ide that !y 11 2for the num!er of months in a year3. This is the num!er of hours of wor. time in an a#erage month that you$ll de#ote to each element on your !udget. 4ow% for the final piece: #ulti!ly each hourly a#ou t by your true hourly $age a d e ter it% This is exactly how much money you$re alloting to spend on each category during the month. For regular !ills% this num!er should !e #ery close to what your monthly !ill is- for your extra de!t payment and your goals% this is how much you$re going to !e setting aside each month for these. The total should add up to a num!er that is less than your monthly ta.e home salary 2remem!er% you ha#e some extra that you !ring home that you use for 5o!"related expenses3. )hen 6 first did this% 6 read through the items and actually shivered. )hy' 6t was the most accurate picture of my financial life that 6$d e#er seen " and it made it clear to me where 6 was doing things right and doing things wrong. 6 had ne#er felt such a connection !etween a sheet of paper and my life as a whole.
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)hat will it mean for you' )!e d so#e ti#e readi g o*er the sheet carefully a d thi ki g about it% There are countless different conclusions you may draw: may!e you feel that this whole thing is spot"on and is putting you in a position to li#e your dreams. *ay!e you reali8e how much of your life is spent in the now and how little you$re actually spending for the !ig things tomorrow. *ay!e you !elie#ed you were planning well for the future% !ut you see some huge areas for impro#ement. 6t$s up to you to figure this out. Tomorrow% we$ll discuss how to .eep trac. of this !udget each month% starting !y ensuring that you$re meeting your goals.
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Day 13: Pay For Your Dreams First

Yesterday, we put the finishing touches on a true udget ! one that reflects your own dreams and your own financial realities, not someone else"s concept of what you should e spending and sa#ing. Today, we egin the process of seeing what that udget actually means. $ost people ne#er really achie#e their dreams ecause they ne#er get started. They %eep elie#ing that they"ll sa#e tomorrow for their dreams, ut when tomorrow comes, nothing changes. Because of the budget you just assembled, you"#e now seen that it is possi le to sa#e for those dreams. Now do it. &efore your next paychec% arri#es, o e! u a sa"i!gs accou!t at a !ew ba!#. '"d recommend choosing one of the online offerings such as ()&* Direct +,.-,. /0Y1 or '23 Direct +4.,. /0Y, ut if you loo% online a it you can find a referral code that will gi#e you a 56, signup onus1. Their rates are stellar and their customer ser#ice is incredi le. $hy use a !ew ba!#% (a#ing an account at a new an% means that it"s not already part of your normal routine. $any people open a sa#ings account at the same an% as their chec%ing account, ut whene#er they see something they want at the mall or something, they %now they can stop at the /T$ and pull money from that sa#ings account. &y getting an account at a new an%, you can simply ne#er ta%e the /T$ card with you ! or, etter yet, not get an /T$ card associated with that account at all. This drastically reduces any temptation you might ha#e to spend that money. 3ot that new account7 2ow, whe! your !e&t chec# arri"es +or now, if you ha#e some extra cash right now in your chec%ing account1, create a! automatic mo!thly withdrawal from your rimary chec#i!g i!to that accou!t. The amount of this withdrawal should e e8ual to the sum of the money you"#e udgeted to spend each month on your goals in the udget we"#e created this month. &y doing this, you"re doing two things. 9ne, you"re getting started towards uilding your dreams. :#ery single month, your finances are mo#ing towards those goals you"#e defined for your life. Two, you"re learning how to sur#i#e with a it less money each month ! and soon you"ll see that you won"t miss that amount at all. Tomorrow, we"ll ta%e a loo% at the ;extra de ts< portion of the udget.
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Day 14: Get Rid Of Your Debts (Slowly But Surely)

Yesterday, we took our true ud!et" and set it up so that we paid oursel#es $irst throu!h an automatic in#estment into a dream" $und %or series o$ $unds&. Today, we're !oin! to look at the de ts section o$ the ud!et ( and see how we can !o a out payin! down our de ts, so that we ha#e more money to direct towards our dreams. The de ts" section o$ your ud!et should list a num er o$ de ts that indicate all o$ the money that you owe to others. This doesn't include the minimum payment $or each one) we are listin! those as expenses" until each one is !one. You should also ha#e a *ero alance in the de t section $or all ut one o$ your de ts. +ach month, when you !o throu!h your monthly ills, all you ha#e to do is pay that amount extra on that e pense! ,et's say the only de t you ha#e listed with an amount next to it is a credit card with the amount o$ -.// next to it. You also ha#e an expense $or that credit card, which has a minimum payment o$ -0/. 1hen you !o to write the check to pay $or that card, write the check $or -.0/. 2t will take se#eral months, ut soon you will pay off that first debt! 1hen you do, it's worth cele ratin!, ecause you can eliminate oth an expense %the minimum payment& and a de t %the extra payment& $rom your ud!et. 1hen you do that, take that com ined amount %the sum o$ the minimum payment and the extra you were payin! each month& and apply it to the next smallest de t amount. 3o, let's say that a$ter you paid o$$ that credit card, your next smallest payment was an auto loan. 2n your de ts" section, you would put in -.0/ next to that auto loan. You'#e already ud!eted $or it, so it will make no di$$erence in your day to day li$e other than the !ood $eelin! o$ knowin! your de ts are disappearin!. "his te#hni$ue is #ommonly %nown as the &debt snowball'( a term #oined by the popular radio host and author Da)e Ramsey! 2'm actually usin! a #ariation o$ the de t snow all in my own li$e, modi$ied a it to le#era!e risk. You mi!ht want to ta%e some time and #al#ulate how lon* it will ta%e for your &debt snowball( to roll throu*h all of your debts! Fi!ure out the month when each de t will e paid o$$, then add on that payment to the next de t and see how many months it will take to pay that one o$$. 4e$ore lon!, you'll ha#e a #ery solid idea o$ an approximate time in which you'll e de t $ree ( and de t $ree is a place where you can ta%e that debt snowball and apply it dire#tly to your dreams! Tomorrow, we'll look at what to do when you come in under your ud!eted expenses in a month %the system is set up so that you can do this re!ularly, in $act5&.
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Day 15: Coming In Under Budget And An Emergency Fund

When you get rolling under the plan you e de eloped! youll disco er that "almost always# youll come in under $udget %or the month i% you stic& to your guns on the nonessential spending. This is a good thing! o% course! as it means that youre $eing %inancially responsi$le. So what do I do with that excess? '$ iously! its not a $ig help i% your chec&ing account doesnt earn any interest and the $alance (ust $uilds up o er time! as it ma&es it much easier to simply spend it on unnecessary things. )nstead! you should mo e it somewhere where its accessi$le! it earns a little $it! and its out o% sight and out o% mind until you need it. *eres the game plan. First! don t gi!e into tem"tation and s"end it # yet$ +lthough it might seem that this money is a ,reward- %or $eing %iscally responsi$le! its actually (ust a result o% the %lexi$le $udget you made. The %lexi$ility actually has a purpose: protecting you %rom the un%oreseen e ents that can happen in the %uture. .econd! get a high#interest sa!ings account in which to "ut the money$ Why get another account/ .e eral separate accounts ma&e it easy to partition your money and &eep money %or di%%erent purposes separate %rom each other. This money has a ery speci%ic purpose! so well &eep it separate. 0ow! at the end o% each month when you ha e extra money le%t o er %rom your $udget! (ust deposit it into this new account. %his account wi&& ser!e as your emergency 'und$ 1 ery once in a while! li%e will deal you a hand that is ery di%%icult to play within the constraints o% your monthly $udget: a car $rea&down! medical needs! or so %orth. This %und will ma&e it possi$le to (ust roll through those emergencies without $rea&ing a sweat 2 (ust go withdraw the money you need to co er the emergency and its ta&en care o%. (ow )ig shou&d this emergency 'und get? You should let your emergency %und continue to grow with $udget le%to ers until you ha e six months worth o' ta*e#home sa&ary in it. +%ter that! you ha e some options: )d recommend paying o%% more de$t with your $udget le%to ers at that point. +emem)er, this is not an account 'or )ig#tic*et "urchases- )% youre tempted to use it to $uy an 34D tele ision! you should instead ree aluate what your goals are and perhaps change one o% those i% you %eel that a $ig screen tele ision is more in line with your alues. 3ea e this money alone5 some day! you will $e incredi$ly glad you did "li&e when your son comes home with a dented2up car! %or example#. Tomorrow! well $egin loo&ing through your expenses %or places to trim out more %at without altering your li%estyle.
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Day 16: Evaluating Your Expenses Home and Auto Insurance

During the first half of the month, we !e created a real "li!ing# $udget that is $uilt around your life, not forcing your life to li!e up to someone else s idea of a $udget. %ow that this $udget is in place, we ll use it to see where we can trim some of the fat from expenditures. The next se!eral days will focus on a specific expenditure area, with a discussion of things to thin& a$out when e!aluating those expenses, along with some tips for reducing those expenses. This is not a rule oo!" 'pend an hour considering these tips, gathering information, and deciding what wor&s for you, not what wor&s for someone else that you ll try to shoehorn into your life. (!eryone who owns an automo$ile faces auto insurance, and e!eryone who owns a home pays homeowner insurance. )t s a fact of life for most of us, so we *ust pay it and mo!e on. +hat we often don t consider, though, is how much we can sa!e on this insurance with *ust a little $it of legwor&. #oo! at other providers )t doesn t hurt to shop around a $it. Ta&e fifteen minutes and get a few ,uotes on your home and auto insurance from other carriers. ) was surprised how much of a difference there was $etween !arious insurance carriers - depending on the factors they used, the rates !aried ,uite a $it. $aise your deducti le The largest slice of .mericans ha!e a home insurance deducti$le of /011, $ut they !ery, !ery rarely ma&e claims on that insurance. )f you raise your deducti$le to /1,111, you can sa!e as much as 203 on your insurance. 4ow often do you ma&e claims on your home insurance5 )f it s rarely, you might consider raising your deducti$le to reduce your payment. The same goes for auto insurance6 if you don t ma&e claims !ery often, loo& at raising your deducti$le to reduce your payments. #oo! %or pac!age deals The ma*ority of .mericans ha!e different pro!iders for their home and automo$ile insurance. 'ee whether or not you can get a reduction in your premium if you ta&e all of your $usiness to one pro!ider. 7y parents did this a few years ago 8they mo!ed their home insurance to their auto insurance pro!ider9 and their o!erall premiums dropped a$out 1:3. Install a dead olt and smo!e detectors ;all up your insurance pro!ider and as& for their recommendations for dead$olts, smo&e detectors, security systems, and other e,uipment that might reduce your premium. )f they re cheap 8often, smo&e detectors are a great in!estment here9, go $uy them, install them, and get that reduction in your premium.
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&hec! %or other discounts 7any insurance companies offer reduced home insurance rates if someone wor&s at home 8or doesn t wor& at all9. .uto insurers will offer lower rates if you ha!e a sta$le, socially responsi$le *o$. <oth will offer a lower rate if you ha!e a good credit rating. (xplore these a!enues with your insurer. I% you have an insurer you're generally happy (ith) don't s(itch" This is especially true if you re approaching the three year or six year mar& with the same insurer, as they often reduce rates a $it 8039 at each point. That doesn t mean you shouldn t compare rates on occasion, $ut insurance companies loo& for sta$ility. You can e!aluate all of these points with *ust a few telephone calls and we$ site !isits, well worth an hour of your time if you can trim 113 8or more9 from your premiums. )f you pay /211 a month for insurance and can see that go down to /1:1 e!ery month, you re suddenly loo&ing at /2=1 extra per year for an hour of wor&.
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Day 17: Evaluating Your Expenses Life Insurance

Life insurance is a question that most of us simply a oid thin!in" a#out too much$ especially when we%re youn". &owe er$ if you ha e more than yourself as a dependent on your income tax forms$ life insurance is somethin" you need in order to ensure that if somethin" happens to you those dependents don%t wind up in the street. This is "oin" to #e the only expense e aluation where ' mi"ht end up encoura"in" you to spend more money than you already are$ #ut you will #e a#le to sleep #etter at ni"ht !nowin" that those who depend on you are secure e en in the e ent of somethin" terri#le happenin" to you. First of all$ your best option for life insurance is term insurance if youre under fifty Term insurance is the #est #et for youn"er people with their financial head on strai"ht. (n insurance salesman mi"ht try to coax you into whole life insurance or uni ersal life insurance) don%t let them* 'f you ha e one of the other types$ you s!ould strongly consider cas!ing it in and buying term insurance Term insurance is su#stantially cheaper per month$ enou"h so that it%s worth cashin" in the other policy$ remo in" the cash alue$ and instead start a term policy. You can ta!e that cash alue and use it to pay off de#ts) that%s more worthwhile to a healthy financial future for you and your family than uni ersal or whole life insurance +note that ' am not a professional financial advisor , ' am not lia#le for any choices you ma!e #ased on what you read here. Do your own research if you%re considerin" ma!in" a ma-or choice that you mi"ht re"ret... /!ay$ so !o" muc! life insurance do I need# 'f you ha e no dependents #esides yourself$ you dont need any at all. 'n fact$ if you see little chance at ha in" dependents in the future$ -ust s!ip the rest of this entry #ecause it really doesn%t apply to you. ' recommend "ettin" insurance that will co er you until you%re 01 +or close to it.$ #ut if you%re ery youn"$ you may -ust want to "et a 31 year term. 2hy3 (t that point$ if you%re financially responsi#le$ your estate should #e in "ood enou"h shape that your life insurance isn%t necessary$ and you can ta!e that premium and do somethin" else with it. If you !ave only adult dependents$ you should only need two or three years% worth of salary in life insurance. 'f you%re under 34$ a term policy for an amount equal to three years of your salary will #e a tri ial amount each month.
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If you !ave c!ild dependents$ thou"h$ that%s when you really need "ood life insurance co era"e. $a%e out a s!eet of paper& find your last 'ocial 'ecurity benefits statement& and do t!is calculation: calculate 617 of your salary$ su#tract your dependent 8ocial 8ecurity #enefit from that$ then di ide that amount #y 1.19. That num#er is rou"hly what you should ha e in life insurance if you ha e any dependent children. &ere%s an example. Freddy has a wife$ a child$ and an :94$111 a year -o#. &is 8ocial 8ecurity statement re eals that his dependent #enefit is a#out :11$111 a year. 8o Freddy calculates 617 of his salary +:0;$411.$ su#tracts his dependent%s #enefits +lea in" :;4$411.$ and di ides that amount #y 1.19 to "et :919$041 in term life insurance. 2hy so much3 You want any dependents to #e a#le to in est that money and ha e the proceeds match your current salary with some #reathin" room. This calculation assumes a small 97 return on in estment$ which hopefully they can #eat$ #ut that%s not somethin" you really want to #et on. 'f you don%t ha e enou"h insurance$ call your agent and discuss an increase in benefits <ost insurance companies will happily re ise policies upwards for you #ecause it means more money for them. 'f you don%t ha e any insurance +and need some.$ start doing some researc! =et some quotes on 31 year term policies and see which company has the #est num#ers. Then "o ahead and ma!e a purchase. This is somethin" well worth fittin" into your #ud"et. Tomorrow$ we%ll "o #ac! to e aluatin" expenses with an eye towards cutting some money.
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Day 18: Evaluating Your Expenses Energy

Im often surprised how many people are extremely inefficient with their ener y usa e! and when they thin" of fixin pro#lems! they put in tremendous effort to do thin s that arent much of a #enefit! li"e neurotically "eepin their li hts off while ha$in inefficient li htin which costs them more for one hour of use than efficient #ul#s would cost in four hours of use. In short! an hours worth of effort and a few small tas"s can cut a solid chun" out of your home ener y usa e. Replace your regular bulbs with CFLs %F&s are those #ul#s that loo" li"e small spirals! the ones most people s"ip #y #ecause theyre 'expensi$e( and theyre 'sa$in ( #ecause they #uy the cheap ones. The truth is that the 'expensi$e( #ul#s are the ones that sa$e a lot of money) if you ha$e 1* #ul#s in your home +many homes ha$e many more than that, and use them an a$era e of only four hours a day +a ain! some houses will use e$en more,! you can sa$e -1.. a year including the comparative bulb cost if you switch to %F&s. /$en #etter: %F&s rarely need to #e replaced once theyre installed. !nstall progra""able ther"ostats an# learn how to use the" &ettin the am#ient temperature ta"e o$er in unused rooms is a fantastic way to sa$e ener y) the only pro#lem is that its $ery easy to for et to do it if youre e$en doin it at all. If you replace your thermostats with pro ramma#le thermostats and spend the time to pro ram them appropriately! you can easily trim hundreds of dollars from your ener y #ill each year. !nstall surge protectors $or all o$ your electronic #evices 0ot only will these protect your de$ices durin a storm! they also pre$ent electrical 'dra .( 'Dra ( refers to the small amount of electricity +* watts or so, that all electronic de$ices continuously pull out of your soc"ets when theyre powered off! which can seriously add up if you ha$e a lot of electrical de$ices. %urn o$$ your ho"e co"puter 1eople who ma"e claims a#out how powerin up your computer uses tons of ener y are li$in in the 123.s. The truth is that modern 1%s dont use any extra ener y when powerin up! so youre #etter off powerin down your computer when its unused. 4ut if youre li"e me! you tend to lea$e it on and for et a#out it! so set up your 1% to turn off automatically. &ir seal your ho"e This will ta"e a few hours! #ut the Department of /ner y has a $ery nice uide +at http://www.eere.ener y. o$/consumer/your5home/ insulation5airsealin /index.cfm/mytopic61178. , for ma"in this process as easy as possi#le. 9a"e sure you dont ha$e any drafts that can :ust slowly drain the heat +or the coolness, out of your home and youll sa$e a lot of money.
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These four tas"s will reduce your ener y usa e si nificantly and any reduction in ener y usa e will #rin a#out some serious sa$in s in your monthly ener y #ills. In a lar e home! these tips can sa$e -*. a month easily! a pretty ood deal for thin s that you can do once and for et a#out them.
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Day 19: Evaluating Your Expenses Automobiles

Almost all of us have an automo ile. !any of us have two or more in our family. "e all #now that they$re money pits% re&uirin' maintenance% 'asoline% and repairs% ut we need them to 'et around% so we often (ust feed the easts without thin#in' a out it. Yet there are several simple thin's you can do that can reduce the monthly cost of your automo ile usa'e. The i''est #ey is raisin' your 'asoline efficiency% ut other tactics wor# as well. Ta#e a loo#: Go easy on the brakes. )ra#in' is incredi ly inefficient. *oast to a stop when you see a red li'ht instead of speedin' up to it and then ra#in'. *hoose routes that have fewer red li'hts. Try to time your drivin' so that you hit all 'reen li'hts% even if this means drivin' slower. You can easily increase your efficiency y +,y doin' this% which in a car that you drive 1,%,,, miles a year and 'ets 1. !/0 can save up to 1+., a year 2dependin' on your normal drivin' conditions3. Yeah% (ust y layin' off the ra#es. Dont spee . 4eep it at 5, !/6 or under% even if you feel li#e an old man on the interstate. "hy7 8very . !/6 over 5, costs a out 9- fuel efficiency. :f you normally drive 9. on the interstate% trimmin' that ac# to 5, not only avoids tic#ets% ut it also increases your fuel efficiency y a out +,-. !lean out your air "ilter. : do this once a month or so% ut : suspect this will e the one tip that most people will avoid. :t$s &uite easy% thou'h; for most cars% it$s simply removin' a nut% liftin' up a plate% pullin' out your air filter% lowin' the dust off of it and tappin' it a it to 'et rid of the dust% and then puttin' the filter% plate% and nut ac# into place. This increases your fuel efficiency y a out <-% which in a car that you drive 1,%,,, miles a year and currently 'ets 1. !/0 can save a out 111, a year. #n"late your tires up to the manu"a$turers re$ommen ation. :f you don$t #now what this is% 'o out and find out what tires you have% then research them on the =net. Airin' up your tires is really simple and can e done at most 'as stations for free. For every two />: that your tires are elow the maximum recommendation% you increase your fuel consumption y nearly a percenta'e point. !any people have tires that are 1, />: or more elow their maximum% which reduces fuel efficiency y at least a mile per 'allon. 6ow much will that save7 :f you drive 1,%,,, miles a year and your auto currently 'ets 1. !/0% (ust #eepin' your tires inflated will save 1?3.9. a year 2assumin' 1+.+. a 'allon for 'as3. %eep your $ar $lean. 8xcess wei'ht reduces your fuel efficiency% so cleanin' out your car 2especially of anythin' heavy3 will save money on 'as.
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&urn o"" your $ar uring long 'aits. >tuc# in traffic and nothin'$s movin'7 Turn off your car. :f it$s off for more than thirty seconds% you$re savin' money. :f it$s off for several minutes% you$re doin' really well. %eep an eye on gas station pri$es. >tations can vary &uite a it% even from day to day. 4eep an eye open on your way to wor# to see which is cheapest% then hit that station on the way home. This variation is especially true if you cross state lines% as most states have a pretty stron' variance in 'as prices. For example% :owa$s 'as prices are much cheaper than in :llinois% so if : 'o to :llinois% : fill up efore crossin' the order. : can save 1,.1. a 'allon or so y doin' this. :f you start addin' up these num ers% you$ll reali@e &uic#ly that you can save some serious cash% especially if you$re drivin' a fuelAinefficient vehicle. :f you$re a le to 'et your >BC from 1, !/0 to 1D !/0 usin' these tips% over a year of drivin' 1,%,,, miles and with 'as avera'in' 1+.+.% you$ll save 15.,. That$s more than 1., a month (ust for #eepin' an eye on your car and drivin' a it more cautiously. Tomorrow% we$ll loo# at cuttin' down on food costs.
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Day 20: Evaluating Your Expenses Food

For many of us, food eats a much bi er portion of our monthly bud et than we e!en reali"e. #e rab some fast food a few times a wee$, rab ta$e out a few more times a wee$, and dine out at expensi!e restaurants here and there. The thin is, thou h, that it is very easy to cut down on this expense. %ere are a few simple strate ies to employ. Eat out less; prepare more food at home. This is the sin le bi est $ey to reducin your spendin on food o!er any period of time. & tend to find that it's more worthwhile to find simple replacements for fast food (li$e homemade burritos that & can microwa!e on my way out the door) and to ma$e stuff at home rather than ettin ta$e out than i!in up a wee$end dinner out with my wife. If you don t !no" ho" to #oo!$ tea#h yourself$ starting "ith simpler re#ipes. There are a lot of boo$s out there that can teach you how to coo$ (trust me, &'!e read a lot of them). The three that stand out (for me) are How to Cook Everything (probably the best o!erall for learnin ), The New Best Recipe (probably the best recipes), and The Joy of Cooking (probably the best reference and easiest to find used). *et one of these three and ma$e a commitment to coo$. &n fact, if you stic$ around until February, &'m oin to somewhat i!e into my desire to ha!e a coo$in blo and do a four wee$ crash course on learnin to coo$ at home with an eye towards the poc$etboo$. %ive leftovers a try. & used to thin$ lefto!ers were the epitome of nasty, but then & fi ured out a few $ey secrets about ma$in lefto!ers better: $eep the foods rotatin and ma$e sure to spice the lefto!ers themsel!es. &f you prepare a bit extra at mealtime, lefto!ers ma$e for extremely cheap dinin . &uy a deep free'er. This allows you to buy some foods in bul$ at a !ery cheap rate. +nce you ha!e the free"er, chec$ with a local butcher to see what $ind of deal you can et on bul$ meat, you'll be ama"ed how much of a discount you can et on bul$ orders. You can also mo!e to a system of preparin many meals at once and free"in them for later use, it's a lot easier after a busy day to come home and pop a meal in the o!en than it is to stop at the ta$e-out place, especially when you reali"e how much cheaper the first option is, too. (rgani'e a series of potlu#! dinners. &f you ha!e a roup that re ularly dines out to ether re ularly, su est that you ha!e a rotation of potluc$s or bac$yard barbecues instead. &f e!eryone is on board with this, it can be vastly cheaper and often more fun. .ome of my best memories of dinin with friends are not from restaurants, but from sittin on bac$ porches watchin the moon rise and en/oyin a bottle of wine in the entle warmth of a summer e!enin .
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Day 21: Evaluating Your Expenses Housing

Most people, once theyre loc ed into a home mort!a!e or ha"e mo"ed into an apartment, #eel as thou!h that is an amount that they are simply down each month, with no real way to reduce that amount. $ts simply not true% its &ust a psycholo!ical tric within your mind. The real truth is that there are ways to e##ecti"ely reduce that amount each month without addin! any si!ni#icant ris to your situation. 'ere are #i"e a"enues to explore in terms o# reducin! your monthly housin! (ill. )pend some time considerin! each one and actually as yoursel# whether or not these thin!s are #easi(le #or you. Rent out a room. )ome people #eel "ery uncom#orta(le doin! this, (ut it is de#initely a !reat way to reduce your monthly housin! costs. $# you ha"e a close #riend or relati"e who is in need o# inexpensi"e housin!, o##er to rent them a room at your home #or a !ood rate% you could e"en o##er to !i"e them (oard as well #or a hi!her rent rate. *hen $ was in colle!e, a #riend o# mine used to pay +,-- a month to one o# his parents #riends in order to ha"e space in their (asement and #ree meals. *e are also considerin! rentin! out a room in our own home a#ter we ma e the (i! purchase. Consider a home downgrade. $# youre a married couple with no children le#t in the nest (ut a lot o# (ills to pay, it mi!ht (e worth considerin! (uyin! a smaller home or an e.ual si/ed one in a less expensi"e area. This is especially true i# you cah sell your current home and mo"e into a smaller one thats already paid o##% it puts you in !reat position #or the #inal push to retirement. egotiate. $# youre li"in! in a rental situation, ne!otiate with your landlord. 0##er to si!n a lon!er lease in exchan!e #or lower rent i# you now youre !oin! to li"e there #or a while. $# you ha"e a (it o# money in the (an , you can also o##er to pay se"eral months o# rent at once in exchan!e #or a discounted rate. 1 close #riend o# mine was a(le to write a chec #or a years worth o# rent at once and her landlord !a"e her a 2-3 reduction in the rent le"el, simply (ecause there was no ris on the landlords part. !ra"ti"e preventive maintenan"e. 'ometime.com pro"ides a !reat chec list #or home pre"enti"e maintenance at http://www.hometime.com/'owto/pro&ects/pre"ent/phm41.htm. $t can seem li e a lot o# wor , (ut its a !reat way to sa"e money. )et aside a #ew hours each month #or these routine tas s and thin!s will (e much less li ely to (rea down or cause ma&or unexpected expenses.
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Re#inan"e. This is a carrot dropped in #ront o# many people 5 and some &ump #or it without thin in! a(out it. )pend some time and run the num(ers to see whether a re#inancin! mi!ht impro"e your month5to5month #inancial situation. Dont &ust &ump on a re#inance (ecause it o##ers lower rates now, thou!h% only !et into a #ixed rate re#inancin!.
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Day 22: Evaluating Your Expenses Monthly Services

Most of us have a set of monthly ills that we pay as part of our re!ular routine. They constantly chip away at our monthly and annual ud!et" erodin! how much we can spend on a re!ular asis. #ome of these are essential $electricity%" while others are may e less essential $&etflix%. Today" we're !oin! to ta(e all of these monthly expenses and see whether or not any of them can e reduced or eliminated. First" make a list of every monthly bill you pay. )ell phone" ca le" internet" electricity" mort!a!e" rent" insurance" and so on. *rite the approximate amount you pay each month next to them" ut leave some space over to the ri!ht for some more calculations. +nce you've made this list" cross off the ones that are fun amental for ay to ay life. ,lectricity is fundamental" while internet access is not. The mort!a!e is fundamental" while &etflix is not. -oan payments are fundamental" while ca le or satellite television is not. &ow multiply each of the remaining elements by t!elve so that you can see how much the ill is costin! you in a year. You should also multiply that yearly amount y 1../0 $/.01 more" in other words%" ecause that's how much you'd have if you put that ill amount into savin!s each month. Multiplyin! out the ill amount li(e this can often ma(e a reasona le ill seem cra2y. For example" if you pay 314.40 a month for &etflix" that's 3/50.34 a year towards your life dream that's !oin! away. #pend 30. a month on ca le6 That's 3710 towards your dream !one forever. 8ot a 3/.. country clu mem ership fee6 3/"57. a year !oes poof. 9t this point" go through each item an ask yourself !hether it"s !orth !hat you"re paying for it. :t mi!ht e worth it to you ri!ht now" or you mi!ht reali2e that it's somethin! you rarely use so it's not really helpin! you uild towards your dreams. Most li(ely" you'll find ways to reduce that ill without eliminatin! it. May e you can !o to a cheaper plan on &etflix $371.0. saved a year%" or you could eliminate 310 worth of premium channels from your ca le ill $31;5.0. saved a year%" or you could !et a less expensive callin! plan from your cell phone provider. :t's important to remem er that even thou!h each cut seems tiny" if you've een followin! the plan this month" you've trimmed away a lot of fat from your ud!et without really affectin! your way of life all that much. Dependin! on your choices" you may have dropped ten percent of your expenditures already< if you ta(e that ten percent and use it to pay off de ts now and later invest it in your dreams" you've literally ta(en a dream that seemed impossi le and transformed it into somethin! possi le.
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Day 23: Evaluating Your Expenses Bank Fees

The vast majority of mericans do their primary !an"in# with one of several very lar#e !an" chains. $nfortunately% these lar#e chains are often almost insultin# in how they treat their avera#e customers% char#in# numerous fees and other cra&y char#es that% over a year% can add up to 'uite a lot. Today% we(re #oin# to ta"e a serious loo" at how your !an" )or !an"s* treats you. Pull out a blank sheet of paper and a opy of your last bank state!ent" +e(re #oin# to see what the fees are costin# you , and see if there(s anythin# you can do a!out it. First% opy every single harge that#s not a pur hase fro! your state!ent to your blank sheet of paper% alon# with the amount. -eave plenty of white space over to the far ri#ht so we can do a few simple calculations. .f you earn interest on the account% include that amount as well. +hen you(re done% total these char#es up )don(t include any earned interest , we(ll deal with that separately* and find out $hat your a ount is really osting you a !onth" The first time . did this% . discovered that . was losin# a!out /01 a month in small fees. 2ach fee seemed tiny% !ut when . spent the time to add them up% . was fla!!er#asted. +ant to surprise yourself even more3 %ultiply that total by t$elve to see ho$ !u h you#re being dinged for in a year" You should also fi#ure in another 0.14 !eyond that total !ecause you could easily earn that much in savin#s over the course of a year. For me% . saw a total char#e of over /355% meanin# for the opportunity to use my money for their investments% the !an" was char#in# me /355 in fees a year. &o $hat an you do' .f the char#es are appearin# in your savin#s account% loo" at #ettin# an .67 Direct or 89:; Direct savin#s account. :oth are !asically char#e,free and !oth earn a stellar interest rate )<.14 and 1.514 respectively*. . went from earnin# a!out 5.14 on my savin#s account with occasional fee char#es to earnin# <.14 with no fee char#es ever% puttin# a lot more money in my poc"et. .f the char#es are appearin# in your chec"in# account% take a look at so!e lo al redit unions" ;redit unions #enerally have very stron# chec"in# accounts with almost nonexistent fees% thou#h of course your milea#e may vary. . found a local credit union that doesn(t char#e me any fees at all while offerin# me all of the same services as my own !an"= the only time .(m ever din#ed is when . use an T> in a stran#e place% and even then the fee is very small. . now pro!a!ly spend /15 annually in fees versus /355.
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(f you#re $orried about the pro ess of s$it hing pri!ary he king a ounts) .(ve written a #uide to aid you in this process% availa!le at http://www.thesimpledollar.com/055?/10/0?/how,to,switch,to,a,new, chec"in#,account/ . .t ta"es less wor" than you thin" and over time the savin#s can !e tremendous )if you can save /355 a year li"e . am% it(s well worth the switch*.
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Day 24: Evaluating Your Expenses Entertainment and Hobbies

If you e !een followin" alon" with this series and ha e !een participatin" in the expense e aluations of the last wee#$ youre pro!a!ly feelin" pretty "ood a!out your financial direction. %ow we come to the part that is the hardest for people to "i e up & and the one that ma#es most people relapse: entertainment and ho!!ies. In other words$ all of the consumer 'oys you ha e in life$ from tele ision to "ad"ets to ideo "ames to clothes shoppin". Im "oin" to say somethin" shoc#in" here: if you really want to commit to this plan lon" term$ you should not give up most of these things. They !rin" a lot of day to day 'oy into ones life and the "uilt that they !rin" is due to excess$ not due to the spendin" itself. The key is not to trim out all the lattes you drink but instead trim ba!k a fe" lattes a month# That way$ you can still "et the simple pleasure of en'oyin" a latte$ !ut you also "et the pleasure of s#ippin" one e ery once in a while with the reali(ation that youre s#ippin" it for "ood reasons. It turns somethin" that can !e a !i" ne"ati e )and thus ma#es it ery easy to *uit and "i e up on+ into somethin" that is a net positi e. ,ith that !ein" said$ ta#e some time today and "o throu"h your more fri olous expenses in a "i en month. You !an start by digging out your last month "orth of !redit !ard and !he!king statements and highlighting everything you bought for pure entertainment simple pleasure or for a hobby# This mi"ht ta#e a little while$ !ut its worth the effort. -nce you e hi"hli"hted all of them$ go ba!k and make some approximate groupings# For example$ "roup all of your coffee shop isits to"ether$ or all of your !oo# purchases to"ether$ or all of your music purchases to"ether. Use groupings that make sense to you. if you try too hard to use what someone else thin#s should !e "rouped to"ether$ it will ha e no meanin" for you. %ow$ "o throu"h these "roupin"s one at a time and as# yourself whether it would detriment your life to trim !ac# spendin" in this area. /ets say you !uy a "rande latte each mornin" at the coffee shop. 0ay!e you could cut this !ac# to four times a wee#$ with two of them !ein" re"ular lattes1 That way$ you could still en'oy your !i" latte on 0onday mornin" and Friday mornin" and still ha e some on Tuesday and ,ednesday$ and 'ust dri e into wor# with a smile on Thursdays #nowin" youre wor#in" for a "reat future. You mi"ht also pled"e to "o to the li!rary and mill around e ery other time instead of "oin" to the !oo#store or the music shop. 2emem!er$ if !utting ba!k at all makes you feel really unhappy then don$t !ut ba!k#
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These little chan"es are the ones that *uietly ma#e a !i" difference. if you try to ma#e a !i" chan"e$ it will !e no different than a %ew Years resolution where you decide to diet and spend the first wee# eatin" salads. 5y the end of 6anuary$ youll !e #noc#in" !ac# the pro er!ial poundca#e and it will ha e all !een for nau"ht. The #ey is to find those pla!es "here you !an !ut off some fat "ithout damaging the meat# Tomorrow$ well loo# at credit cards$ their fees$ and what we can do to reduce them.
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Day 25: Evaluating Your Expenses Credit Cards

Today is the final day of expense evaluation before we be in to tie thin s up !the month is nearin an end" after all#" so today we$ll tac%le what is perhaps the bi est financial rou h patch in the &nited 'tates: credit cards. (s anyone who has ever faced a bi pile of credit card debt can tell you" credit cards are nefarious little devils that can snea% up on you and destroy all of your financial plannin if you$re not careful. Thus" here are some tips for mana in that month)to)month credit card debt* spend some time today implementin them to reduce your monthly credit card spendin . Look into moving your balance to another card +f your credit is stron " you can easily obtain a ,- (./ on balance transfers for as lon as 10 months. Doin this can transform hi h interest debt into no interest debt" meanin that each payment will o strai ht towards eliminatin the balance. 1e sure" thou h" that you have eliminated a lot of the balance durin this period" because it will be painful when the interest payments come bac%. !sk "or a rate reduction (nother potential avenue for reducin the monthly interest on a card is to call the number on the bac% of the card" et to a live operator" and as% to spea% to a supervisor. (t that point" tell them you$re tempted to ta%e a balance transfer offer in order to consolidate your debt and re2uest that they reduce your interest rate. 3uite often" they$ll be happy to obli e because earnin less interest on a credit card is better than earnin nothin at all. Look "or lo#er interest methods to consolidate your credit card debt You may have available to you a home e2uity line of credit that is at a much lower interest rate than your credit cards" so it mi ht be worthwhile to pay off the cards with the 45678. (nother possibility is discussin a personal loan with your local ban%* you mi ht be able to consolidate a lot of the debt into a relatively low interest loan. 4owever" these tactics don$t mean you have a clean bill to spend a ain9 .ut the credit cards up for a while and learn how to live on the money you have. $top using credit cards "or day to day expenses until you can eliminate the debt &ntil + ot my credit cards under control" + moved to usin chec%s and cash wherever possible" supplemented by a debit card. + treated the credit card bills as a loan that needed to be paid off" not as a tool to buy more stuff + couldn$t afford. + didn$t cut them up" thou h* + :ust put them in a place that was hard to access. ;hy< 8ancelin a bunch of credit cards all at once can be severely detrimental to your credit health. Tomorrow" we$ll be in to finish out the month by re)evaluatin where we$ve been and loo%in at ways to %eep the momentum oin .
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Day 26: Refining Your Budget

For the last several days, weve een !ocused primarily on di""in" throu"h our monthly expenses and loo#in" !or places to trim away some !at. $t will ta#e some time !or this to ecome clear, so today were "oin" to loo# at how you can re!ine your li!e ud"et each month as the expenses e"in to move downwards % and the availa le cash "oes upwards. First o! all, at the start of each month, you should refine your life budget a bit. &hat this means is that you should ta#e out the ud"et you prepared the previous month and use that as a startin" point to develop the next months ud"et. 'ince were nearin" the end o! the !irst month, $ll wal# you throu"h this process once so you can "et a !eel !or what should e done. (t the start o! the month, take out your budget from last month and all of the statements you got in the inter ening month. Youll also need a clean piece o! paper !or the ud"et !or the upcomin" month. The !irst thin" to deal with !or the comin" month is your overall income. !f your income this month is the same as last month, "ust carry the amount o er to the ne# budget. $! you "ot a raise that will start ta#in" e!!ect in the comin" month, enter that amount on the new ud"et instead. )ext, deal with the expenses. $o%y each e&%ense 'but not each e&%ense amount( o er to the ne# budget. Then, copy over each expense that you didnt "et a statement !or in the past month. These expenses will remain unchan"ed. )ow lets deal with the expenses with new statements. *ather than con!usin" you too much, $ll "ive you an example o! what to do to start with. +ets say your past ud"et had an electricity ill !or ,1--, ut in the intervenin" month, you installed .F+s and did a !ew other thin"s, and the new ill is only ,/-. *ather than cele ratin" and immediately writin" the lower amount into the new ud"et, hedge your bets a little. Ta#e the amount !rom the old ud"et and multiply that y 0, then to that add the amount o! the new ill. Divide that num er y 1. Thats the num er you should write in !or your ener"y ud"et !or the comin" month. )his trick is called #eighted a eraging, and it protects you !rom ma#in" si"ni!icant chan"es ased on one data point that may or may not e unusual. 2ver time, your ener"y ud"et will "o down. For example, lets say that !or the next six months, your ener"y ill stays at ,/-, and then summer #ic#s in and your ill "oes ac# to ,1--. $! you use wei"hted avera"in", the ounce ac# wont hurt you at all, ecause youll have a it o! a surplus !rom months o! sli"htly over ud"etin" and itll e no pro lem at all to pay the ill. 3owever, i! it ounces ac# suddenly, your ud"et will e dama"ed y this sudden chan"e.
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$! youve een dili"ent a out doin" trimmin", youll pro a ly notice that a!ter a !ew months, your num ers !or expenses are either stayin" the same or trendin" downwards. 5ven etter, youll pro a ly e seein" some surpluses at the end o! the month eyond your ud"et. Thats "reat6 7ust move those surpluses into a savin"s account so they can earn some interest, and then move them ac# out i! you need them. 5ven etter: your ud"eted total !or expenses !or the month is also lower than it was e!ore. &hat does that mean8 9ore money to eliminate de ts and dreams: )ow that youve seen a little drop in ud"eted expenses over the previous month, you can allot that money towards the de ts and the !uture plans on your ud"et. 9y advice is to channel them into more extra de t payments, ut you mi"ht also want to olster a lon"%term plan as well. (t the very least, ta#e hal! o! that extra money and add it into payin" o!! de ts, ecause the !reedom o! ein" de t !ree is incredi le. 'o 7ust co%y o er the debts and %lans from the %re ious month, e&ce%t add in the reduction in other e&%enses to the debt you*re focused on or perhaps also put part o! it into one o! the dreams. (nd youre done !or another month. $ li#e to kee% my current budget %osted in a %lace #here ! see it regularly, along #ith another big reminder: $ use 5xcel to create a chart showin" my expenses and de ts "oin" down each month. 'eein" oth o! those lines headin" south is a i" reminder that $m livin" a !inancially healthy li!estyle. Tomorrow, well loo# at some ways o! mana"in" your !inancial records.
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Day 27: Keeping Good Records

Now that youve uilt a value!oriented ud"et and evaluated your li#e in terms o# your rediscovered central values$ its time to ta%e care o# a little it o# house%eepin". The #irst part o# this is %eepin" "ood records$ somethin" that seemed overwhelmin" and unnecessary to me at #irst. &nce ' #inally ro%e down and did it$ thou"h$ ' #ound it to e a #antastic way o# #eelin" more in control o# my #inances and my li#e as a whole. Why keep good records? First o# all$ good records can protect you against errors. '# you have ade(uate #inancial records$ youre prepared #or an audit$ prepared to apply #or a home loan$ and prepared to veri#y anythin" that anyone mi"ht claim. )econd *and actually more interestin" most o# the time+$ good records enable you to analyze your financial life. ,ith everythin" or"ani-ed$ youre prepared #or any sort o# spendin" analyses you may wish to do. How do I organize them? There are several stron" or"ani-in" systems out there. spend some time loo%in" at several o# them and choosin" one that wor%s #or you. ,ant to %now what you should #ile/ Try this chec%list: http://cahe.nmsu.edu/pu s/0"/1!223.pd# What materials do I need? '# youre 4ust "ettin" started$ a pile o# #olders and a ox will do the tric%. later on$ i# the system is wor%in" #or you$ you mi"ht want to invest in a #ilin" ca inet. ' wouldnt invest in one$ thou"h$ until youre sure that youre actually usin" the system with re"ularity. I don t know where to start! Help! ,hen ' started$ ' was completely overwhelmed with all o# the papers stu##ed into dresser drawers$ des% drawers$ and oxes. ,henever ' thou"ht a out "ettin" it done$ ' would (uic%ly come up with somethin" else to do. 5ut when ' #inally sat down and did it$ the process wasnt too ad. 6eres what you do: Set aside a block of time to do it. This is a "reat a#ternoon activity$ so 4ust pic% an a#ternoon to "et your items in order. 7a%e sure you have a lar"e ox and plenty o# #olders e#ore you e"in. Find a place with plenty of space to spread out. ' used the livin" room #loor. Make a pile for each different type of record, and use the opportunity to discard everything inessential. Youll pro a ly wind up with a lot o# piles. Dont worry a out any sortin" within a pile$ 4ust "et throu"h all o# the thin"s you have uilt up. You should also e throwin" away all inserts$ envelopes$ and other unimportant thin"s. Sort each pile by date. ' li%e to have the newest on top$ so ' sort them in reverse chronolo"ical order.
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When youve sorted a pile, put it straight in a folder, label it, and put it in the bo . 9s you see the ox #illin" up with or"ani-ed records$ youll #eel a lot etter a out thin"s. For me$ it was rather exhiliratin" to watch thin"s slowly ecomin" ordered where there was only chaos e#ore. Tomorrow$ well loo% at a topic that no one li%es to thin% a out.
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Day 28: Preparing For The Inevitable

Today, were going to tal a!out planning "or your passing in the "orm o" a will or a trust, something that many people ha#ent done. The truth is that its not something thats necessary "or e#eryone $ !ut i" it is necessary, you need to set aside a !it o" time to get it done. First o" all, determine whether or not you need such a thing at all. % usually as two &uestions: do you have any dependents besides yourself? and do you have any relatives or friends that you wish to have your things or money when you pass on? %" you answer yes to either &uestion, then its time to get legally !inding plans set in place. %" you answer no to !oth 'many young people will, in "act(, then dont get one, as intestate 'the states de"ault method "or handling your le"to#er assets( will ta e care o" things "or you. %" you do need to ma e a plan, though, dont go cheap and get a it ! contact a lawyer and do it right. )s around "or re"erences to one who can handle your will or trust preparation easily and clearly and can ma e sure that it is in "act legally !inding in your locality. The "ee "or this is usually not too high, !ut nowing that the document is properly prepared ma es it worth all o" the e""ort. There are a "ew !asic things you should now !e"ore you go, though: First, a will is the actual document that lists what you wish to happen to your estate upon your passing. There is one !ig draw!ac to a will: in most *urisdictions, "or a will to !e legally executed, it must go through a legal process nown as probate to ensure that the statements in the will are actually carried out, which can !e expensi#e. Thus, some people choose to set up a trust 'o"ten called a re#oca!le li#ing trust(, a legal entity to which a person can assign all o" their assets while they are ali#e. This trust is legally !ound to "ollow the rules o" the trust, which usually ic in when the person who set up the trust passes on. +ince these assets are owned !y the trust and not !y the person, theyre o"ten not su!*ect to pro!ate. The only draw!ac is that it can !e expensi#e. )gain, to ma e sure that e#erything goes right, as "or appropriate legal advice to ensure that you now what youre doing and the document is in "act legally binding. For me, it was the !est money % e#er spent. +pend an hour piecing together what your wishes are "or your estate# then contact a lawyer. ,nowing that things are ta en care o" when you enter the a"terli"e is a huge relie" to many people.
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Day 29: Paying Cash

There is one final point that merits discussion before we close out this month, and that is the lo ic behind payin cash for any purchases smaller than a home purchase. This includes automobiles, appliances, furniture, electronics, and so forth. To most !mericans, this concept is almost alien, but if you ta"e nothin else away from this month, this is the concept to remember. Why pay cash? To put it simply, instead of payin some company an interest rate, you can in#est that money yourself and earn some interest. This mi ht seem li"e a minor issue, but in actuality it$s thousands of dollars that you$re throwin away, more than enou h to "eep companies li"e %&!' in solid financial shape year after year after year. How much can I actually save? (f you finance a late model used car costin )1*,*** for +, months, you can poc"et about )3,*** simply by payin in cash rather than financin the car. That-s how much you will pay in interest, plus the amount that you can earn in interest in a sa#in s account. Do that three times and you-#e literally netted a free car. How am I supposed to pay cash for a car? The next .uestion that many people as" is how they can possibly pay cash for a car. (f you-#e followed this plan from the be innin , the answer should be pretty clear: your emergency fund. (f you see that an auto purchase is comin , start rollin money into your emer ency fund instead of into other in#estments or uses, buildin it up to the point of ha#in se#eral months of salary in it. ( recommend ma"in car payments into the emer ency fund at this point, preferably for a couple of years. Then simply wal" into the dealership, ne otiate a price without sayin that you-ll use their financin , then write a chec". !fter that, you-ll probably need to build up your emer ency fund a ain, but you won-t be ma"in payments on your car. I can t do that right now! That-s true, you probably can-t do that immediately. /ut you can set it as a oal. 0ne bi step towards achie#in that oal is to stop leasing, because auto leases as they allow you to effecti#ely rent a more expensi#e car than you can afford, but lea#e you with nothin in the end. (f you already don-t lease, then "uy a late model used and drive it for years past the end of the financing# 1hile that-s happenin , continue to ma"e your car payments into your emer ency fund. Then, when the time comes, you can simply buy a car, no .uestions as"ed.
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$o what can I ta%e away? 3pend some time and plan out when your next auto purchase will be and what type of car you-re aimin to buy. Then, calculate the numbers and see if you can put yourself in place to pay in cash. 'an-t swin it4 'ould you swin it if you dro#e that car for another year4 5emember, this does fit into your bud et if you 6ust transform your car payment into payments into your emer ency fund, and in a few years the di#idends of seein interest build up on your car 7payments8 will really start to show. 9ow that the month is almost complete, we-ll spend the next two days tyin up some loose ends.
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Day 30: Live What You Love

If you e followed this plan all the way to this point! con"ratulations. # en if you e chosen to not follow e ery point! you ha e at least spent some serious time e aluatin" your finances and your spendin" and put them in the context of your o erall life! which puts you already far ahead of many of your peers. $owe er! the reality of the world leads many of us to for"et what our o erall "oals are in a desire to %e accepted and to feel good. &ur society tries to con ince all of us to spend endlessly. 'ere constantly %om%arded with enticements and reminders of how ("reat) it is to spend. $ere are se en useful tips that can help you *eep your mindset in the ri"ht place! ena%lin" you to li e what you lo e e ery sin"le day. +ome of these mi"ht not wor* for you, -ust use the ones that seem as thou"h they would %e a powerful moti ator. Wrap your credit cards in a slip of paper that lists your life goals that you defined at the start of the month. It shouldnt ta*e more than a little slip of paper. This way! e ery time you "o to pull out your credit card! you see your "oals ri"ht there . and it %ecomes a reminder that %y usin" this card! you are li*ely pushin" away those "oals. Reevaluate your social situations. Is an e enin" with friends always expensi e/ Is a day with the "irls in ol e a %i" pile of shoppin" %a"s/ If these thin"s are true! your social situations may %e causin" you %i" pro%lems. You ha e se eral options: su""estin" other acti ities and seein" what happens! "oin" alon" and cappin" your own spendin"! or simply (droppin" out) of the social clu% and instead in estin" yourself in new acti ities . and perhaps new friends that %etter match your life "oals. Engage in inexpensive activities that match your life goals. If you dream of %ecomin" a writer! dont spend your time at the mall %uyin" stuff. #n"a"e in online writin" communities and loo* for ways to spend your time practisin" your writin". For almost any life "oal or dream you ha e! there are inexpensi e acti ities you can %ecome in ol ed in that syner"i0e with that acti ity. For me! I e started this %lo" as a way to channel my writin" and also educate myself a%out financial issues instead of spendin" my time doin" the same old thin", its a "reat way to spend my time thats much more in line with my life alues! plus its ery inexpensi e. se the ten second rule. 'hene er you find yourself a%out to %uy anythin"! count to ten and as* yourself whether or not this purchase really meshes with your life "oals. 1uite often! youll find that it doesnt! and this will %e enou"h to cause you to put that item %ac* on the shelf or to close the %rowser window.
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!eep a laminated "life goals# card in your poc$et. This way! e ery time you reach into your poc*et! youll feel that laminated card. It will ser e as a constant reminder of your "oals and help *eep your mind on a stron" path. !eep yourself clean. This seems %i0arre to some! %ut a healthy personal appearance is well worth the money. 4y this! I dont mean in estin" money in clothin". I mean that in estin" ade5uate time in *eepin" yourself clean. Youll feel more confident and in control! and this will ena%le you to more easily resist the sirens call of spendin". Live %hat you love. # ery sin"le day! do somethin" that is directly in line with your lifetime "oals! and as you "o to sleep that ni"ht! thin* %ac* on it. 6ery few thin"s ma*e me feel %etter as Im "oin" to sleep than reflectin" on my day and reali0in" that I spent today not -ust doin" thin"s! %ut actually li in" my life.
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Day 31: Keeping It Up

Now that the end of the month has come, one final challen e remains: how does one !eep up the momentum once you start with it" The day to day challen es of life are difficult and uncertain, so how can this plan e#er deal with an e#er$ chan in life" %nli!e most financial plans, this one has somethin intimately familiar at its core: you. &ecause you're at the core of this plan and not some form that you fill in and try to constrain your life to match, this plan can easily row and chan e with you with (ust a few simple steps. Once a week, make sure youre making some sort of progress towards your short term goals You don't ha#e to accomplish somethin e#ery wee!, )ut !eep them in mind $ and re ularly ta!e the time to ma!e forward pro ress towards your dreams. Once a month, diligently update your life !udget You can do it with (ust money, )ut it's often useful to re$calculate the hours of your life spent wor!in for each item each month, as it is a healthy reminder of where your time oes. Once e"ery few months, e"aluate your progress towards your long term goals * li!e to do this on the first day of each season $ not only does this !eep me on an +e#ery three months, pace, it !eeps me in mind that time is passin and the seasons are chan in , so *'d )etter !eep up with it. This usually results in a flurry of new acti#ities for a short period with a radual slowin down $ )ut it does !eep me always mo#in towards my oals while many others stay stuc! in place. Once a year, ree"aluate each of your lifes "alues and ask yourself whether they match your life now -hen * first loo!ed into my child's eyes, the #alues of my life chan ed .uite a )it, and thus my oals chan ed su)stantially as well. From that, unsurprisin ly, my )ud et chan ed, too: * suddenly found reat #alue in )uyin diapers, )ut also reat #alue in )uyin )oo!s and educational toys for infants and toddlers. /y #alues used to )e such that )uyin software was in line with my life oals0 now, )uyin wooden alpha)et )loc!s for stac!in is much more in line with what * want to )e doin . #"en if you fall off, there is ne"er a day where its too late to get !ack on 1#en if you find yourself startin to fall )ac! into your old ways, that doesn't mean it's time to a)andon the plan. 2ld ha)its are hard to )rea!. Try oin throu h this entire process a ain to remind yourself where your #alues lie and what your oals are. 3ood luc!.

31 Days

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31 Days To Fix Your Finances http://www.thesimpledollar.

Stage 1: Figuring Out Your Goals And Values

Stage 2: Evaluating Your Situation

Stage ): !oo*ing At Your !ife" &ie'e B+ &ie'e

Stage ,: Setting T-e Stage For !ifelong Su''ess

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Stage 1: Figuring Out Your Goals And Values

Stage 2: Evaluating Your Situation

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Stage ': Loo(ing At Your Li e! %iece B) %iece

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Stage *: Setting +,e Stage For Li elong Success

-an I s,are t,is docu#ent wit, ot,ers.

I$# turning #) su&&ort0 1el&2

inancial li e around! /ut I need #ore

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 1: Your Five Main Values

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 2: Defining Your Goals From Your Values

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 3: Create A Plan For Each Goal

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 4: How Much Did You Earn Last Year?

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 5: How Much Did You Work Last Year?

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 6: Your True Hourly Wage

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 7: Work For Your Dreams, Not Your Money

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 8: Breaking Down Your Expenses

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 9: Cleaning Up Your Expenses

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 10: Fitting Your Expenses Into The Bigger Picture

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 12: A Flexible Budget That Reflects Your Reality

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 13: Pay For Your Dreams First

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 14: Get Rid Of Your Debts (Slowly But Surely)

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 15: Coming In Under Budget And An Emergency Fund

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 16: Evaluating Your Expenses Home and Auto Insurance

31 Days To Fix Your Finances http://www.thesimpledollar.com/

31 Days To Fix Your Finances http://www.thesimpledollar.com/

Day 17: Evaluating Your Expenses Life Insurance

31 Days To Fix Your Finances http://www.thesimpledollar.com/