Free Budgeting Tool with Business Budget

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I‘ve created a new Excel zero-based budgeting spreadsheet that’s very similar to the original spreadsheet found here that’s been very popular. The main difference is that it now sports integration with a simple business budget. This allows you to get a more complete picture of your finances from month to month while keeping your personal and business budgets separate.

Zero Based Budget tab Business Budget tab

The business portion of the budget is not a zero-based budget but a more conventional one with the ability to indentify and predict multiple income types. To make things easier for you I recorded a screencast that takes you through the basics of how to use it.

It is not a fancy spreadsheet by any means. It is a simple and straightforward way to keep track of what you hope to achieve. I have found that despite all the fancy budgeting solutions available today I keep coming back to my tried and true Excel spreadsheets.

Check out the YouTube overview below or view it on YouTube.

Download the Zero-Based budgeting with Business Budget spreadsheet here

The hardware store, a young boy and a bike. A lesson in saving.

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Bike Junkie. (Explore!)
Creative Commons License photo credit: confidence, comely.

The hardware store window, a young boy and a bright red bike with chrome shining brightly in the sun.
Wide eyes stare and the boy wonders how he can possibly posses this marvelous “machine”.
A talk with the owner of the store and the boy has his solution. He becomes a very young employee, sweeping floors, hauling out garbage and doing any other odd job that is available.

It is with great joy and pride when he finally wheels that bike out of the shop…paid in full!

We have become a society of instant gratification. It is so easy to get “our wanna/gotta haves”. A drive to the mall, our credit card given to the salesperson and away we go with our purchases. What if we were to actually save for what we want? Is it possible to contemplate anticipation being half the fun? Maybe it is the idea of how badly we want something we absolutely need! Would it be worth brewing coffee at home instead of a morning and afternoon latte for a few weeks or even months? How about taking lunch from home instead of that deli purchase?

And on a more radical level, perhaps we don’t need so much stuff! Ok, that is just dumb right? What would we put into our storage units? There are always exception to any rule, but honestly, don’t most of us just have too many things?

I would like to suggest that we do a major scale down. Let’s build smaller homes, repair those items that break instead of replacing with new ones and spend our resources on the simple things in life. Parks are free as are walks on the beach (my personal favorite), our libraries contain a world of knowledge just waiting to be read, the list could go on and on.

And following the boy with the bike example, let’s encourage our stores to reinstate the layaway plan. There are a select few stores that have already decided to bring back this great idea. I appreciated this way of purchasing when my children were getting ready to go back to school. No interest rate to pay!

It is my belief that if we decide to “save up” for our purchases, follow the rule “Can we live 3 days without it?”, and look for simple ways to enjoy life, we will have a less stressful life and enjoy all that we have now.

So….

  1. Don’t buy anything on credit if it can be helped.
  2. Spend less money on things and enjoy what’s free and simple.

Economics for dummies – Planet Money

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I want to understand the world economy. I want to understand the United States economy. I think it’s really important to understand why we’re in the global economic crisis we’re in, how it affects the U.S., and our role in the debacle. The problem is that trying to learn what I want to know from the typical resources is akin to eating sawdust or yanking my teeth out very slowly and with a rusted pair of pliers. Ouch!

This is where NPR’s Planet Money podcast comes in.

First off, let me say that I’m not a raving fan of NPR. I mean, I appreciate the effort they put into their news and weekend programming but idealogically I differ in some key areas. I’m only telling you this so you don’t think I’m some sort of shill for NPR. But this program, Planet Money, is excellent for us non-uber-economist types.

With Adam Davidson at the helm the Planet Money team tells the “story” of our economies in an engaging, entertaining and easy to understand way. They use clever auditory props that simplify convoluted topics like Credit Default Swaps and Credit Default Obligations, how the central bankers spend the world’s savings, and what the current banking crisis means to the little guys like you and me. Before long you’ll have an amazingly informed view of how and why we’re in our current situation and what the result of our government’s economic machinations may produce.

So don’t walk, don’t mosey, RUN to Planet Money’s website and/or podcast page in your itunes application on your computer. Then come back here and tell me what you think.

Planet Money Podcast

You can also listen on page at the Planet Money website

Least affordable U.S. real estate

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Frisco Forbes put out an interesting article about the least affordable real estate in the U.S. When I see these articles I always wonder where we’re going with all this. I mean, when do the fundamentals come back if ever? What I mean by this is when do average incomes allow for 30 year fixed rate mortgages on the average house? Perhaps those days are gone…

“Forget coffee when it’s time to sober up. Instead, check out the real estate listings in New York or Los Angeles.There, buyers pay $1 million for a property that might fetch half that elsewhere. The disparity illustrates how affordability has been spiraling out of control in places on the East and West coasts…”

Full article here

10 money habits – the nasty ones

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Here’s an article worth mentioning off Bankrate via MSN. (Confused)
Anyways, it contains some good “not to do’s” regarding your money. In a nutshell you shouldn’t do the following…

Spending without a budget.
Carrying a balance on credit cards.
Ignoring interest rates.
Not investigating disability insurance.
Failing to see how little purchases add up.
Not matching employer’s contribution to retirement.
Waiting until the last minute to fund IRA.
Paying everyone else, saving “what’s left.”
Not managing your investments.
Getting emotional about your investments.

The article describes each no-no in depth so go check it out.

Full Article at MoneyCentral

Subprime crash – What’s next?

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Images-1

Many of you have already heard the news, Subprime loans are going to be the death of many a lender. Many subprime borrowers are beginning to default on their loans and there too many defaults for the market to absorb.
Other reasons are rising interest rates and declining home prices. This makes it difficult for those with ARM’s that need to refinance to do so.
Here’s a short article from MSN that summarizes it all pretty well…

Subprime lenders, or lenders to people with poor credit ratings, were slammed Monday, with the top five each losing more than 25 percent. Recently, major financial institutions such as HSBC Holdings PLC have been taking writedowns on mortgage loans as a growing number of subprime borrowers are delinquent or in default…. full article

The truth about real estate investing

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There is a whole lot of “noise” about real estate investing. Will it make you rich? Will it make you bankrupt? How about, “Will it help you just barely get by?” Believe it or not, it will do all these things. You can take my word for it, I’m a full-time real estate investor. Yes, that’s what I do for a living aside from make periodic posts in this blog and invest some time in some other web ventures. And I’ve made a fair amount of money doing it.

Quickly, let me break down what I’m saying:

Will it make me rich?
It can. If you make the right decisions. (which I will outline below) This is the most promoted aspect of a life of real estate investing. I don’t, however, think this is the reality for most people who get into real estate. We’ve all heard stories of the family member or friend who purchased a home and sold it six months later for significantly more money than they paid for it. We’ve seen Donald Trump’s – ahem, gaudy – penthouse and the bevy of buildings named after him. We believe the mythos of the “rich as king Midas” real estate investor who wipes his rear with the hoards of cash he generates from every flick-of-the-wrist deal he does. This is all part of the average person’s understanding of what real estate means to us. But don’t get me wrong! I’ve never seen so many people get “rich” so quick as they do in real estate. But here’s the rub: It’s just not (and I mean this) as easy at it might seem. It is a real business that needs to be run like a real business! Most people will become real estate agents to get into the game. Did you know that in one of the hottest real estate markets in the history of the universe (Phoenix, AZ) over the last five years, that the average agent’s commission actually went down? Yes, it’s true. A plaque on the wall does not a rich person make. (The average commission in 2005 for an agent with two years of experience was approximately $13,000!)

Will it make me bankrupt?
Well, maybe. But don’t focus too much on obvious downside of being entrepreneurial. Here’s a typical bankruptcy scenario: Joe goes to a real estate seminar. Joe learns that rental properties make people rich. Joe buys 5 properties at market value assuming they are going to appreciate in value. (He’s even willing to lose $50 per month per home) Joe’s interest only loans adjust up or one of his properties needs a new roof but he’s completely leveraged out. Joe goes bankrupt.
There are, of course, numerous ways to lose your shirt in real estate but that’s the most common.

I’m going to skip the “will it help me just barely get by” to outline my secrets (wink, wink) to real estate success.
They are very simple:

PAY NO MORE THAN 65% OF TODAYS REALISTIC VALUE FOR THE PROPERTY
This means that if a property is worth $100,000 to everyone else you’re only going to pay $65,000
Sounds impossible doesn’t it? People usually give me a blank look at this point.

ESTABLISH DEMAND EVEN IF YOU GET THAT KILLER PRICE
It doesn’t matter if you can get something for 65% of the marketable value if there’s no one to buy it. Another important parameter is “absorbtion rate”. For example: If 100 homes sell a year in an area and there are 300 on the market in that same area, I’m probably not going to add to the mess by putting another home on the market.

HAVE A SOURCE OF PATIENT FINANCING
If you can find those 65% deals you should have no problem at all lining up financing. But here’s the important point: Try to ensure that they’re not going to come knocking if the deal goes long or the market changes on you. You want a financial partner instead of a pure play lender. (Even if all the contracts and documents suggest that they are just a lender.)

I have made a lot of money following these basic rules. Successful ventures should not be mysteries. They are usually a product of following some basic rules like those outlined above.

I’m going to offer an hour or two of free consulting to the first 3 people that respond to this post with a comment.

Why are you in debt?

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I know this is a sensitive question, but why are you in debt? More specifically why are you in debt with credit cards and other non-mortgage debt? I know why I was in debt. I wanted more than I could pay for. And once I had more than I could pay for I found myself making payments on my debt with more debt. A death spiral and one that many, many people find themselves in.
Here’s the great things that consumer debt can do for you:
1. Take away options – When you’d rather (fill in the blank), you have to work instead to keep your head above water.
2. Increases stress in your life and the life of your friends and family.
3. Create all sorts of headaches (and heartburn) when you finally can’t make a payment or two and the creditors start calling you.
4. It can cost you everything: your home, your possessions, your marriage, and in very extreme situations, your life.
5. It can keep you from getting a great job. Employers are increasingly checking credit reports before hiring.
6. Steal your retirement – Every dollar in interest paid is potentially one less day of retirement.

The negatives of consumer debt could go on and on. But the question is a very valid one because it tells us about financial motivations. Once again, why are you in debt? And, do you want out?