Thousands of people start a budget, but quickly give up because they get discouraged. They feel like a failure because they went over budget their first week or they feel too constrained by their budget.
With no results, they toss their budget in the trash and think, “Budgets work for some people, but they don’t work for me.”
Budgets can work for anyone. But there are a few secrets you need to know to make them work for you.
3 secrets to Successful Budgeting
1. “Failing” to meet your budget isn’t failing
This may seem weird to think, but meeting your budget isn’t the purpose of a budget. In some ways, it’s good that your budget shows that you’re spending too much in an area.
Whenever you go over budget, it tells you something you didn’t know. Maybe you planned to spend $80 on groceries every week, but you end up spending $100 per week.
Don’t despair. This is an opportunity to learn.
What does this teach you? Maybe it means you underestimated how much money you need for groceries. In that case, you need to allocate more money to this category and lower costs in other areas.
Or maybe it reveals you spend too much money on groceries. If so, you need to research tips on saving money. Next week you can try off-brand products and couponing.
One reason we create budgets is to discover where we’re spending too much money. There’s no “failure” in not meeting your budget. It’s part of the process.
2. A budget is a mini financial advisor
We don’t know ourselves very well. We don’t know why we’re upset until we journal or talk to a friend. We don’t know our diet or sleeping schedule until we record the data and look at it.
That’s what a budget does for your finances. It helps you see your spending habits and makes suggestions for improvement. But your budget can feel like a financial prison if you think of it the wrong way.
Your budget isn’t a mean, old teacher wagging his finger at you. Think of your budget as a warm, friendly financial advisor. Picture Bob Ross or Mister Rogers explaining how you’re spending your money and giving you tips on how to save.
Let’s say you realize for the first time you’re spending $300 a month on streaming services. You slap your forehead — that’s where all your money is going. So you cancel a few subscriptions.
That’s your budget giving you financial advice.
3. Budgets are adjustable
Budgets can and should be adjusted. There are a lot of reasons why budgets need to be revised, especially if you’re just starting.
For one, you won’t accurately estimate your spending with your first budget. It may take a few months to get a feel for how and where you spend your money.
But even after months of adjusting your budget, you’ll still have to make revisions. You’ll quickly find that prices change in different areas of your budget throughout the year. For examples,
If you celebrate holidays or go on vacation in certain seasons, your budget will look very different during these months
Your heating bill is higher in winter than in summer
Depending on how you do taxes, tax season will have a unique budget
One of the simplest ways to prepare for these odd expenses is to be willing to change your budget.
Additional tips: Prepare for unexpected expenses by creating an emergency fund. And give your budget a “miscellaneous” category in case you need more wiggle room for higher costs.
Budgets can work for you if know the secrets to make budgeting successful.
Your budget is an ally who helps you know yourself better and gives financial advice. Be willing to make adjustments and don’t feel bad if you don’t make your budget every month.
Apply these secrets and budgeting will be a productive joy instead of a dreaded task.
Varney: Dems Bending Over Backwards To Help The Wealthy, Not Working Class
If you think the Democrats care about the working man, think again, says Fox Business host Stuart Varney.
He says the Democratic elite are bending over backwards to try and help their wealthy donors at the expense of the working class.
Just look at the breakdown in the negotiations for a new stimulus bill. The Democrats aren’t clamoring for another round of $1200 stimulus checks, they’ve let that fall to the side. Who benefits from another $1200 check? The working class, of course. The wealthy sure don’t need it.
The sticking point, says Varney, is a tax deduction. Specifically the SALT deduction that allows state tax payments to be deducted from federal taxes. President Trump put in a $10,000 cap on the deduction as part of his Tax Cut and Jobs Act. That’s not an issue for ordinary working class Americans, but does affect wealthy individuals in high-tax states, many of which are Democrat states likes New York, New Jersey, California and Illinois.
Varney says the Democrats clinging to this tax deduction for the wealthy at the expense of the working class tells you everything you need to know about their priorities.
“The Democrats are moving heaven and earth to help the rich. You heard right. The Democrats are running to the assistance of the top 1%. This tells you a lot about political change. If you thought the Democrats were all about working people, think again.”
He says the far left may want to tax the rich, but the Democrat establishment is looking to protect them.
“Maybe the socialist wing wants to seize your wealth, but the establishment is desperate to bail out their wealthy supporters. Specifically, they want to bring back the deduction for state taxes. Yes, that’s the SALT issue. It’s the big sticking point in the fight over the new virus package.”
He says for wealthy Americans living in Democrat states, it was a “major league” deduction. Without it, they are paying higher federal taxes.
“It was a major league deduction. It was a big tax saving. But that’s the old days. Now, no tax deduction. And the wealth, especially in high-tax Democrat states, are complaining bitterly. They’re paying more Federal tax, not less.”
Establishment Democrats are scrambling to get SALT repealed, says Varney, showing their true colors to their constituents.
“Oh, there is desperation. New York Senator Chuck Schumer, he is demanding a SALT repeal. So is Speaker Pelosi. She’s from California. So is candidate Joe Biden. The establishment is desperate to avoid even higher taxes in already high tax Democrat states which would make things even worse.”
“If SALT were to be repealed, the establishment helps its rich donors. It will be a Democrat gift to the wealthy. The main beneficiaries will be one-percenters. Forget ideology. Political self interest is what rules the Democrat elites.”
Ron Paul: This Is The Biggest Financial Bubble In History
Dr. Ron Paul believes that we are in the biggest financial bubble in history. He also said that when it pops, it will be very violent.
In a recent interview with Kitco News, Paul covered a wide range of topics. Some of these topics include the Federal Reserve, interest rates, and the economy.
He was asked about the Federal Reserve’s dual mandate of full employment and inflation control. To this, Paul said the Fed shouldn’t even be in the business of worrying about either.
“They shouldn’t even be in the business of pretending that if they want a good, healthy economy, and they want as best the employment possible, and the most balanced pricing system, you have to get rid of the system. You can’t have this artificial system from the Federal Reserve,” he said.
Free Market Should Set Interest Rates
Paul said the free market should be the one setting interest rates. Additionally, when the Fed thinks it has control over things is when problems start.
“You have to have a market rate of interest, and you have to have a money supply that’s determined by the market rather than by the politicians, because we are seeing the results of many, many years of this, especially since 1971 with what is happening now, it’s the runaway spending, we can’t have the runaway spending, if we continue to do this, and the fact that they pretend that they can control things, every time they think they have control then there’s a major correction, which we are in the midst of.”
He said the big event was when the Fed realized last fall that the bubble was starting to pop. He also mentioned that it began doing everything it could to keep it going. This meant cutting rates to zero.
“The big event that turned this whole thing on was in the fall when it was realized that the financial bubble was collapsing and they have destroyed for many, many years the most important function of the market, in the money supply are the interest rates. So we destroyed the pricing structure and that’s why we have so many mistakes, malinvestment, too much debt, too much government, and it wouldn’t happen if you didn’t have a Federal Reserve system that thinks they can manage the economy through monetary manipulation.”
Gold and the Market
Paul said the Fed can print as much money as it wants, but ultimately gold is what underpins the markets.
“I remember when gold was legalized in the 70’s, everybody thought the gold price would soar up, but it had already gone up, but at the time, our Treasury Department and the IMF (International Monetary Fund) dumped a lot of gold just to try and punish the people who knew that gold was a haven. So there’s a lot of monetary and gold manipulations, but ultimately the markets are determined by metals, not by paper money.”
He said we are getting close to a “cataclysmic” end to the bubble. The unfortunate result is that a lot of people will be wiped out financially.
“We are coming desperately close to a cataclysmic end to the current monetary system. I happen to believe it’s the biggest financial bubble in the history of monetary policy for the whole world. And the correction is going to be very violent, and it’s already pretty bad. People are going to get a lot poorer.”
“The bills have to be paid, the economy is going to turn down, and a lot of people have already gotten a lot poorer, but it’s going to get a lot worse unless we wake up and return to some sound economic and monetary policies.”
Wall Street Veteran: This Is The Biggest Stock Market Bubble In History
We are in the midst of the biggest stock market bubble in market history, according to Andrew Parlin, the founder and CIO of investment advisory firm Washington Peak.
In a recent op-ed for the Financial Times, Parlin says he’s experiencing “déjà vu” as he outlines the parallels between the Japanese real estate bubble of the 1980’s and today’s tech-driven bubble.
As a young investor during the real estate craze in Japan, he met with an analyst who claimed the stocks of a midsized and heavily indebted railroad company should be worth 5 times to 10 times more, because they could convert some of their land holdings into a giant condominium complex.
“Never mind that the land was desolate and inaccessible. Nor that acquiring the necessary permit would take years. He produced elaborate financial models showing how the stock was actually worth five to 10 times its current value. My head spun,” said Parlin.
“Back then, anything with a whiff of exposure to real estate was at the centre of speculation. Now, the hottest sectors in America are nearly all disruptive technologies. Stocks with real, or perceived, exposure to the cloud, digital payments, electric vehicles, plant-based food, or anything at all to do with the stay-at-home economy have shot up meteorically.”
But Parlin says the value of many of these “disruptors” is as unrealistic as what he saw during the Japanese real estate bubble.
“Bubbles are formed around individual stocks and sectors. As the concentric circles of excess widen, more and more stocks are infected. Wildly exaggerated stock stories force a delinking between fundamental analysis and share prices.”
He points to Tesla as an example of this phenomenon.
“That is how a stock such as Tesla commands a market capitalisation of about $400bn, up from $80bn in March, and $40bn one year ago. Tesla’s rise then engulfs the entire electric vehicle market in a frenzy of speculation.”
Companies Approaching the Market Bubble
Parlin’s reliable metric for a market bubble is the price-to-sales ratio. He says the number of companies with sky-high price-to-sales ratios is approaching dot-com bubble territory.
“Today, according to Bloomberg data, 530 out of America’s 8,513 listed common stocks trade at more than 10 times sales. This is 6.2 percent of all common stocks… Only at the very top of the dotcom bubble, in March of 2000, can we find a larger percentage of stocks (6.6 percent) trading in excess of 10 times sales.”
“The point is that price-to-sales ratios in the stratosphere do not stay there, any more than a tulip bulb in 17th-century Holland was able to maintain a price of $100,000. This gets at the troubling thing about bubbles. They do not simply undergo smooth and endogenous shrinkage until they disappear. Instead, they continue to expand until they burst. This is why their bursting is more often than not shocking, spectacular and disorderly.”
He says he doesn’t know when the bubble will burst, but we are all a part of the biggest bubble in history.
“When and how this ends is impossible to say. But with the Fed pursuing thunderous asset purchases and getting ever softer on its 2 percent inflation target, the bubble is firmly on track to be one of biggest in stock market history.”
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