Wealth: Equal to Zero Budget

Making more money each month is hard. Saving more money is easier. When one is trying to put together their own dividend scythe or simply just trying to put away money, the easiest way to do so is to learn how to budget effectively.

A budget can come in many forms. I'll be detailing many different budgets on the blog soon but first I wanted to start with one of the most common - the "Equal to Zero" budget. If any of you have ever read anything by Dave Ramsey, you've likely become very familiar already with this type of budget. If you haven't, I'll try my best to walk you through how you could create and use this type of budget for the very first time.

Don't worry if you have never put together a budget before. They aren't as scary as everyone talks them up to be. They simply require a little time and a good bit of control in order to work. The particular budget that I want to talk about today requires only two columns that pretty much anyone could emulate.

Wealth: Budgeting

Budgets; everybody has one, has had one, wants one, or never wants one. Whatever your feelings on the subject, I personally feel that having a budget can benefit absolutely everyone. Budgets can assist with tracking assets, liabilities, payments that you’d forgotten about that have actually been burning a hole in your pocket, and much more. To not have a budget is to invite holes into the bottom of your pristine life boat.

Sure, there are those out there that are perfectly fine out there without having a budget. They however are very likely the type of person that already has a very controlled manner of spending habits but even they could learn a thing or two by keeping track of their finances with a budget. A budget can have so many positive side effects.

One of the most important things that a budget provides is a sense of security. A budget gives you a deeper sense of security by reminding you constantly about how much you can spend without getting yourself into trouble. If you are checking it as one should, you will always have a good idea of where you stand each day of the month. You’ll know immediately if you have the funds available to go a little wild. You’ll also know when you should take a pass and not join the guys on the night on the town and instead opt to meet up with them the next morning for a cheap breakfast.

Another important role of a budget is to show you where you are spending the most money. Hell, it was only a year or so ago that the wife and I were bleeding money through our eye balls through random trips to the local Walmart. Thanks to the budget however, we were able to zero in on it quickly and now we hardly spend anything besides our once a week grocery trips. It’s allowed us to save an extra $300-500 per month. That’s an extra $300-500 that go directly towards our investments that can help us retire even earlier.

I'll Start Saving Tomorrow

It's a statement that I feel that a lot of us hear quite often from those in our company. I'll start saving tomorrow. It's easy to say, isn't it? And it sounds good! If only it were true.

What is the difference between us and them though? Why were some of us actually successful when we put our saving ahead of our over indulgences? It's a tough question to answer but I've been thinking about it a lot lately because in the recent past I have been approached by a much larger handful of people than normal that have asked me how I have been doing it.

For me, the answer is simple. Living at a deficit is what creates wealth. It's been proven time and time again by those who stay wealthy. The way that I myself create this deficit for my wife and I is that anytime we are about to buy something, I ask both of us,

"will we actually use this or will this be used once and then forgotten?"

One would think that it would be easy to overcome this statement. After all, you can justify just about anything if given enough time to think about something. The very act however seems to bring out a purpose for not buying. This is the purpose that I am forever grateful for. Where buying gives the purpose of gaining something new, the act of asking whether or not you should seems to give a greater outlook.

I ask myself again then, how am I any different than so many others who have asked for my help but ultimately failed to apply it? Is it a change of mindset brought on by the consumerism that has been bred in them their entire life? Or is it something different that I just can't seem to see? The fact of the matter is that it seems to work for me. Then why should it not work for others? 

I then pose this question to my readers; why is it that others find it so incredibly hard to live at a deficit? Do people internally just not want to retire? Are they running away from their mortality? Can they really not stop themselves from over indulging? Why do you think this is the case? 

Savings Down, Spirits Up!

Some months are better than others. That month is not this month. I've just finalized the budget from June so I could see how much could be transferred to the various accounts that the wife and I hold and let's just say that this month was a little slim on the transfers. That's life though I suppose.

We can't go backwards in time currently so I have to simply accept that we had a bad month and analyze why and how we came to be where we are. Once the analysis is complete, we can attack the problem and hope to change some habits so that moving forward we do not find ourselves in such a position. That being said, there were quite a few problems this last month when it came to saving money.

First off, we were part of a wedding. Normally this doesn't mean too much but my wife was the matron of honor. This means taking the bride to be out on her bachelorette party (funded by us) and of course hosting the bridal shower, and not be forgotten is the task of buying the necessities such as a dress for each occasion and bringing food as well. Couple this fact with the fact that June was my birthday month where I bought an electric guitar (used - that way I could save money and get more for my purchase) and also that I was a groomsman for the very same wedding and you've got some money flowing out of the bank account.

Las Vegas on a Budget

I feel that most of the posts that I make on this blog are dedicated towards the stock market and the inner workings of my portfolio but I want to remind myself that the blog wasn’t just meant for that purpose. It was also made to discuss topics of personal finance that can lead to better money handling which then translates to more to invest with. That being said, there was a post on Mr. Money Mustache’s message boards today that was discussing frugal people’s views on Las Vegas.

Most of the replies were centered around “oh my God, I hate Vegas! (insert silly reasoning about how expensive it is or how bad some of the people can be there)”. On the other hand, there were a few who replied that saw it in a different light – a much more positive one. I myself am of the positive stand point on Vegas. In fact, in the last year, the wife and I have been several times (me three times and her twice).

Where some have found the city to be a money pit and the land of bad decisions (the capital?), I have found Vegas to be one of the most unique cities in the United States and I think that it would be a crime for anyone to not experience it at least once. I write this post today then to describe how one can go about visiting and enjoying Las Vegas without dropping thousands of dollars on the trip.

When Discounts Dry Up

Going hand and hand with my last article, I wanted to take a deeper look into what one should be doing when the market isn't showing many deals. In addition to spending that time looking and waiting at new opportunities in the market, one should also bring saving to the forefront of their minds. This ensures that when that deal hits, you'll be prepared for it.