Life st les y

APRIL
Lifestyles
COMMUNITY NEWS MONTHLY
How to Live Within Your Means
by Ann Marosy
Planning and goal setting are critical to your
success if you want to become wealthy. The two
key traits of people who do not become wealthy
are, firstly, they tend to spend all of the money
they have and, secondly, they do not know what
they spend their money on. The lack of goals is
the main culprit. Ric Edelman, author of The
Truth About Money and Ordinary People,
Extraordinary Wealth, calls this
"spending unconsciously." He
says the reason why people
spend without giving it much
thought is they have no goals.
Without goals, we live
unconsciously from moment to
moment, we never plan for the
future, we spend all of our money,
and as a result, we are unlikely to
ever become wealthy. "Unconscious spending" is
more prevalent in our society than we realize. I
would estimate approximately 80% to 90% of the
population spend unconsciously. The vast majority of my clients had no idea what they spent
their money on until I asked them to prepare a
list of their total expenditure and outgoings
before our first session. In fact, many were too
frightened to do the initial exercise and waited
until they arrived at my office, so I could help
them through the ordeal. Money matters simply
scare people. They are terrified to know how out
of control their finances are. Yet, this is precisely
what needs to be done before we can start working on a solution.
While it is important to become relaxed and
carefree with our financial matters, this does not
mean careless. We become carefree with money
when we know that it is not a scarce resource, we
work on increasing our income, we invest a little
time on a regular basis to plan and review our
finances, and we systemically set aside part of
our earnings regularly to build our savings and
investments for the future. We are careless with
money when we don't keep track of what we are
spending and squander money on things that are
wasteful, extravagant and not needed. I often
compare money to water, another important
commodity in our lives. Both are essential and critical to our survival, however, we rarely worry about water
in the same way we do about
money. We systematically set
aside water when it rains in
dams and reservoirs to provide
us with water 'on tap' when we
need it. We are careful not to waste
water, however, at the same time we
can relax and not have to worry about it on a dayto-day basis. When we apply the same reasoning
to managing money we are well on the way to
becoming wealthy. After we resolve our beliefs
about money and realize that becoming wealthy
is a possibility, the next step is to put aside a little
time to set goals and do some planning. Planning
does not have to be an arduous affair. It takes
approximately one to two hours upfront to prepare your plan and, thereafter, an hour a month
to review or revise it.
The first part of your plan is to set some
goals. Goals will help you focus on the future
and increase your willpower to prevent overspending. The more concrete you make your
goals, the more committed you will be to achieving them. Set timeframes and break them down
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into manageable steps, to make your goals more
realistic and attainable. Along the way, however,
we also need to manage our day-to-day spending
to ensure that we set aside the required savings to
achieve our goals.
In designing the Money Program, I used a
simple, effective formula that everyone can apply
to easily manage their finances. I call this the 40%30%-20%-10% rule. This formula is used to measure your expenditure and cash outflows. You
divide your expenditure into four categories and
calculate the total of each category as a percentage
of your net (after tax) income. The four categories
are Fixed Costs, Variable Costs, Discretionary
Costs and Savings. Fixed Costs are your essential
costs that are known and have to be paid on a regular basis. For example, rental payments, personal loans and credit card repayments, and insurance. These costs are usually determined by your
lifestyle choices, the size and cost of your apartment, cars and major possessions, and therefore
difficult to change without making major adjustments to the way you live. However, because
fixed costs are comprised of debt and committed
payments, they are critical in determining your
ability to create wealth, as well as your capacity to
lead a stable financial lifestyle. If your fixed costs
are too high, you will probably be living from
payday to payday worrying about the next large
bill that arrives. If your fixed costs take up too
much of your weekly pay packet, there will be
less to spend on other essential costs, and often little for luxuries - unless you go further into debt.
Variable Costs include our essential living
expenses, which can vary from week to week, yet
you have some control over what you spend.
These will include food, clothing, groceries,
mobile phone expenses, medical and motor vehicle running costs, such as gas and repairs.
The previous two categories relate to essential costs that we cannot live without. Some are
controllable (variable costs) and some are set
(fixed costs). Discretionary costs are expenses
that are non-essential and highly variable. These
costs are very much in your control and where
most choice is possible about how much is
saved each month. For example, entertainment,
F
Earth
Remember Earth Day
Want to make your corner of the
Earth more beautiful this Earth
Day, April 22nd? Organize a
project to clean up or beautify
some area in your town. Make sure to
have a plan for how to take care of the spot after
you've made it nice. To read more about what
other earthlings have done for their planet visit
the kids domain web site at: http://www.kids
domain.com/holiday/earthday/activity.html
Save
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
t Conserv
irs
e&
dining out, presents, holidays and all luxury
items that we love but can live without. I affectionately call this part of our budget, our 'play
money.' The problem with most budgets is they
often exclude this significant element and this is
why most people fail. We all need a little play
money and a few luxuries in life.
The Money Program 40%-30%-20%-10% rule,
then is fixed costs are roughly 40%, variable costs
30% and discretionary costs 20% of net income.
The most critical category is fixed costs. If you
want to be wealthy, you have to be committed to
dropping these costs below 40%. The key to good
financial management is managing and controlling your fixed costs. Remember, it is all done by
measuring your fixed costs: if your fixed costs are
40%, you are living within your means, if your
fixed costs are above 40% you will be putting
yourself under financial strain, and if they are
below 40% you will be in a surplus position. If
excessive debt is keeping your fixed costs high,
formulate a debt-free plan and do not go deeper
into debt. Learn to live with cash. It is far more
finite and when the cash runs out, you know you
definitely cannot afford to buy those extra purchases. If low income is your problem, consider
all alternatives to increasing your income. These
may include: part-time work, turning hobbies or
crafts into cash or investing in additional training
to further your career prospects. Also, to decrease
your fixed costs you may have to make some difficult decisions about what you can afford.
Remind yourself that you can have the bigger car,
toys, etc - later, when you can better afford them.
By keeping your fixed costs as low as possible,
you will accelerate your progress to becoming
wealthy. Your plan should always aim at decreasing your fixed costs below 40% by either increasing your income or decreasing your debt, or both.
Once you have achieved this, use the extra
money to add to your savings and investments.
This is the guaranteed way to accelerate your
path to wealth.
To find out more about the Money Program
visit http://www.moneta.com.au or contact the
author at [email protected]
Fatigue: Tips to Help You
Recharge Your Batteries
by: QualityBooks.com
Re-energizing yourself will help you put
fatigue to bed for good. A little effort and a positive attitude will perk you up in a flash. These
simple energizing tips will give you new life.
1. Eat properly. Nutritious meals are number
one in the battle against fatigue.
Make sure to eat high-protein foods, such as
meat, cheese, eggs, beans and whole-grain breads
with each meal. Munch on fruit when you need a
snack. Avoid too much caffeine.
You may want to try perking yourself up with
a high potency vitamin B complex.
Cayenne pepper is another natural stimulant.
You can mix in a teaspoon in hot water or take it
in capsule form.
2. Get your proper rest. If you are not getting
enough at night, take a break and nap during the
day. Or perhaps before you head out at night if
you’re a late-night partygoer.
3. Keep in shape with
exercise. A good daily walk
will get those tired muscles
moving.
4. Meditate. Any form
of meditation can be a real,
natural healer. Just sit quietly,
breathe deeply, and let your mind
forget your daily hassles. Think of pleasant
things.
Above all, you can fight fatigue best by keeping a positive mental attitude. Try the tips mentioned, and pamper yourself; take a break when
you need it.
Now You’re
1/2 teaspoon salt
COOKING
1/8 teaspoon freshly ground black pepper
6 cups water
Minted
Vegetable Medley
April through June is peak season for sugarsnap peas, and they're wonderfully sweet in
this simple three-vegetable medley. There's no
need to shell the peas; whole sugar snaps are
delicious.
Source: Ladies' Home Journal
1 tablespoon butter or margarine
1 pound sugar-snap peas or green beans,
trimmed
1/4 cup chopped fresh mint
1. Melt butter in large skillet over medium
heat; add carrots, bell peppers, salt and black
pepper. Cook until vegetables are tender, 8 to 9
minutes.
2. Meanwhile, bring water to a boil in large
saucepan. Add peas; cook until tender-crisp, 5
to 6 minutes. Drain.
1 pound carrots, cut into 2x1/4-inch
matchsticks
3. Toss carrot mixture, peas and mint in medium bowl. Makes 6 side-dish servings.
2 yellow bell peppers, cut into 1-inch
squares
APRIL 2004
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