3 Ways to Construct a Company Budget

3 ways to constuct a company budget
Everybody needs a Budget
This is a Guest Post.
Having a company budget is like creating a map. It will help you see where you’ve been and where you’re going. You can use that map to decide where you can cut costs, where you can and should expand the business, and to confirm that you’re staying within the financial constraints of your business.

Analyze Where You Came From

Image via Flickr by 401(K) 2013

When constructing a budget for your company, the first step is to analyze past expenses. If your company has been in business for a year or longer, use invoices, receipts, and other results to create a clear idea of where your money is coming from and going to.

You can track this information in a few different ways. The best way is to group together similar items. For example, for expenses group together overhead, raw materials, staff, utilities, etc. For incoming cash flow, group together sales of specific products or types of products, similar services, etc. Do this for each month so that you can see how the numbers change throughout the year. Look for causes of dips and peaks of money.

If you haven’t been in business long enough to do this, use research in place of experience. Talk to vendors, estimate costs, and interview other business owners, preferably ones within the same industry. Many websites can offer you tips and tricks which will tell you about investments strategies in order for you to find more information about your finances.

Decide on Where You’re Going

Once you’ve determined what you’ve spent in the past, or researched potential costs and sales, next you’ll want to start filling in the blanks. Using a spreadsheet or budgeting software, create a finance budget that includes fixed expenses, variable expenses, and estimated income. You’ll want to do this for every month for the next 12 months so you can get an idea of where you’re headed for the next year. Remember that each month will be different. There will be changes that vary throughout the year, like having increased sales because of Christmas.

Once you have a clear picture of what your budget will be in the coming year, create a plan for the two years beyond this with a general guideline per quarter. Set goals for your company that may include increased sales, expanded line of products or services, and increasing your workforce.

Track It, Each and Every Month

Once you’ve created the budget, you’ll want to keep track of projected expenses and income with real expenses or income. By knowing what the differences are and then analyzing why there’s a difference, you can use it to decide what needs to change. It could mean cutting out unnecessary expenses, moving to a smaller or larger office, or focusing more on a product that is doing better than expected.

This should be done at the end of each month to see where your company is at. Then use it to revise the next month’s budget. As you use these checkpoints to determine where you’re at, you can be sure that your company is moving in the right direction.

It’s easy to deal with business expenses and income as they come in, but by having a plan, your business is more likely to succeed and thrive.

Comment if you have other company budget ideas?

Life is a Beach

Lifeisabeach
Life is a Beach

 

 

 

 

What do you think of this mantra, Life is a beach. I grew up seeing this phrase on hundreds of T-shirts as a kid. I sort of got the message, but now that I am an adult I get it with complete conviction. It is a modern version of the phrase that goes like this, Life is what you make it.

But what some people cannot see is that we control, if our life becomes a beach or if life becomes a desert. Imagine trucking along life in the Sahara desert trying to reach the imaginary pool of drinkable water? Well that is what happens when you do not take money management coupled with a dedication towards investments seriously. The destined plan for you will be a life of always playing catch up while working for the benefit of others. Who are the mysterious others you are giving your paycheck too? Well it’s really simple to answer, just open up the random bills sitting on your desk. The companies who hold all of your debt are your new bosses, on top of bosses you already have at your day job. I personally do not want to be told what to do by anybody, and that message goes directly to Chase and MasterCard. Every time you consume junk on debt, you are adding new bosses that then get to take your extra dollars every month.

When you think of things in this new light then you will realize that it is just not worth it. Buying a product on credit card debt that you could not afford is the end of freedom. Hey buddy do you know you just signed up for a new boss to tell you where to send you’re hard earned cash. This is the sad reality that we are facing in this society. I will do anything in my power to cut ties with all these fake bosses who control my wallet. Now the million dollar question is will you do the same given the opportunity. Can you really say good-bye forever to American Express and Capital One. This year alone I cut up two credit cards I have not used in over a year. Why did you do that you think to yourself, because maybe you can use the credit card for a rainy day emergency? The final answer to the question is because having it is an added level of temptation I do not want or need in my life. I live on cash baby and so should you.

I think when you reach a certain point in life, that all those added risky money moves should be abolished forever. The habits you choose here and now will make or break you. By having an emergency fund in place and 2 debit cards to cover you in case you ever need emergency money, these are the proper steps needed to live life stress free. No debt is the equivalent of life is a beach instead of life is a bitch. Get it good; now get things in check my friends.

To put it in prospective see below for an example:

Weekly Restaurant Bill of $50 dollars X 52= $2600 X 10 years = 26,000.

Plus costs of putting it on a Credit Card with interest

Plus costs of losing out $$ in opportunity cost with investable gains on money

 

Comment if you believe that your life is a beach or if life is a bitch?

 

Rich Uncle EL

How to Become a Money Maven

 

How to become a money maven
Spend Less than you Earn

I appreciate being here in this blog space talking about how everyone can improve on the complicated issues regarding personal finance. I hope to enlighten you today / this weekend with some fun quotes and posts about life plus money. If you keep motivation and positivity at a high level you will achieve goals and succeed. It’s safe to say that you may possibly become a money maven. I come up with these quotes for myself, but they turn out so good that I have to share with all of my readers. If after reading them you do not understand them, leave me a comment and I will elaborate further.

Anyway back to the topic at hand, life and money will always be intertwined as long as we have a capitalist economic system. When you fully understand both of these topics, and the importance of managing money to make life more peaceful you will see the point for all of this talk about becoming an expert with money management aka Money Maven. If you do not take this advice and embrace it, then you will stay a novice for a long time. If you want to be better than the average person, then it is best to listen while absorbing any information that will help you. See below for the best quotes and posts on how to become a money maven:

Continue reading How to Become a Money Maven

Why you should consider Dividend Investing

Why you should consider dividend investing
Dividends grow quarter by quarter

 The average savings account pays only .50 percent interest with traditional banks and 1% with online banks. When you compare these paltry rates to that of dividend stocks the average is closer to 2.5  – 3%, wouldn’t you want to make your money work harder for you? The only reason money should be placed in a savings account at a traditional bank is if the money will be used within 1 year to buy something you are saving for, otherwise dividend stocks are very liquid and provide you a premium above any other alternative.

Take for example a stock like AT&T (T) depending at what price you purchase this bad boy, your yield will vary from 3-6% and is protected as long as AT&T is in business. If a number like this does not intrigue you or make you second guess why you have your money earning so little yield, then something is wrong. My example in  this post is AT&T, which has been in business for over 25 years, but believe me they are not the only dividend stock out there giving away 3% plus in interest.

Continue reading Why you should consider Dividend Investing

Rich Uncle EL Random Facts II

Rich Uncle EL Random Facts II
One Random Fact – I love Bridges

What’s up! I think it’s time to give you a refresher on my random facts. I did one way back in February (Link – Here) of this year and I want to do this at least 2 – 3 times a year. I want to break up the seriousness of money management with all the trials and tribulations about that topic.  What better way to switch it up than to get a little personal with you guys, sort of like an online journal I am keeping for myself. One day I can go back and read how awesome I was to make a record of all the random facts I am sharing with all of you today. We as humans tend to forget almost everything, so why not reminisce a little from time to time. Let me know what you think in the comments below.

Continue reading Rich Uncle EL Random Facts II

Quotes about Life

Quotes about Life

The best part of blogging is that I can create quotes about life to add something to this world. My words might never make it to a NY Times or a Huffington Post article, but I am happy to express what is inside of my mind. That freedom to express what I want is priceless, and I do it by coming up with all original quotes. I want to pose a question for all of you today. How do you see the future? Do you look forward to leaving a mark in this world or could you care less about something like that?

Continue reading Quotes about Life

Money is not the problem, it’s Patience

Money is not the problem, it's patience
Patience is a Virtue

When you look at your checking account and you see a big fat zero, you may think to yourself dammit I am feeling broke. The next few days you mope and complain that you can never make enough Benjamin’s in this life. The last few months the bank account incurred several overdraft fees. Why is all of this bad misfortune happening to you? One Simple answer to the myriad of complaints listed before, because of the reflection in the mirror. You Have No Patience! People wake up, as the lack of money is not the problem. When you lack patience it makes you do things on impulse, which results with spending above your limit.

Let’s do a big picture exercise, multiply your income X the number of years you have been working. What does that equal? Then add up how much of that you have saved? Kind of low when you compare it to all the income you have made in your entire lifetime.

Example: Average US Income 35 thousand X 5 years working history = 175, 000 dollars. How much of this have you saved? KEEP YELLING YOLO HUH!

Pick up your jaw off the floor now because this is the truth and now you must face it. Many of you want things now, and you will not take no for an answer. If that is how you want to live life then expect to be broke. Also expect to work forever, why because that impatience is taking away from the years you can retire early. I will propose something right now to help anybody struggling out there. Relax and take time to do things. The new summer wardrobe you have to have, it can wait. The new flashy Audi you have been desperately seeking for, it can wait. The yearly 4 thousand dollar vacation you have to take, it can wait. When can the time come to enjoy some fruits of our labor? See below for two very important money equals patience guidelines.

Money is Not the Problem, it’s Patience Checklist:

–          Get Patience in Check. Control it now

–          Do a Simple Budget, Income Minus Expenses should = Surplus

–          If No Surplus cut things immediately

–          Save up for raining day fund aka to avoid adding new debt

–          Revisit budget to constantly improve upon it

–          Track Net Worth Monthly

–          Systematically Remove Debt and Increase Net Worth

–          Stalk your checking account, from home computer or Cell Phone App

–          Keep improving on patience to not fall victim with Money Issues

 

When can the time come to finally do what you want and not have to worry about money? Simple Solutions:

  1. When you are debt free (Excludes Mortgage)
  2. When you are consistently saving for retirement 15% or better(401K and Roth IRA)
  3. When you are giving / generous $$ without hurting your budget 5%
  4. When you have ample surplus to do what you want with cash
  5. When you can invest in stocks for a retirement back up plan 5% or better

 

Patience is just as important as the ability to earn money – Rich Uncle EL

Comment if you agree with money is not the problem, it’s patience?

Rich Uncle EL

Strive for More

Hey friends thank you for stopping by and giving me some free time to motivate your life. The theme this week is how we all can strive for more. Yes I know after reading Facebook and Instagram for 10 minutes everybody and their mothers (Yes really people’s mothers) are reposting quotes about how good they are doing. But are people really doing as good as they say or are they exaggerating. Nobody knows and I do not care, the message that I want to send to you guys today is that we all should continually strive for more. How can you actually do it and stop talking like you guys hustle from day to night. Well that is a whole other post in the making and please stay tuned.

Below you will find my quotes on getting you to strive for more in effective yet simple ways. Granted I take this stuff seriously because I am constantly looking and thinking of ways to improve.  The areas of life that are important and we all can take focus to those parts of life listed below.

Strive for More areas of your life:

Career

Family – All Relationships

Health

Appearance

Skills

Leadership – Mentor / Coach

 

Strive for More Quotes:

Constant Optimization is another way to say you strive for perfection – Rich Uncle EL

Please keep all bragging talk below the level of your success – Rich Uncle EL

They say money doesn’t grow on trees, then what do you call compound interest – Rich Uncle EL

When change happens naturally, then you evolve naturally – Rich Uncle EL

Self-Control is important to change bad habits – Rich Uncle EL

 

These are the quotes that I want you to read in order to figure out what areas of your life you can strive for more. Think for a second which areas of your life you need to improve upon? Then make a list of the things you need to do to make things 100% better. After doing this exercise a few times I noticed we all have the answers on what we need, we just have to put them to action.

The first quote’s meaning is just as it is expressed with no filter. The second quote is basically about many people talking the talk but not really walking the walk. I feel if you are going to talk then take steps to do something for yourselves, and not just to fake the funk. The third quote is basically explains if you invest your money it begins working for you by compounding and it will strive for more every day. The secret is to actually begin investing. The 4th quote is by far the best because if you are constantly striving for more than you are constantly improving. When you are stuck in a routine it feels like the wheels are spinning and you are not moving forward. The 5th quote is about looking deep inside of yourself and changing those things that constantly bring you down.

Comment if you enjoyed the quotes above and if you strive for more?

 

Rich Uncle EL