How to develop your PLAN

[Russ H]

Hi Russ- Part 2 is pretty uneventful for me! So far this weekend I have spent $24.79 on dog food, and meds for my dog.

Seriously? You haven't pulled out your wallet/purse for ANYTHING other than this? No coffee? No credit card purchases? No food purchases, at ALL?

If your current expenses are 3103/mo, does that mean you took in only 3103 x 12 = 37,236 in post-tax income, or do you have other sources? (apologies if this is too nosy).

My reason for asking: Before I started doing the day to day expenses, what I thought I spent vs what I actually spent in a year was off-- by more than DOUBLE!

(in other words, when I drew out what I thought were my total expenses, say, 28K a year, I found that I was spending close to $60K a year-- So $32K/yr worth of things I didn't realize! (like fast food, eating out, clothes, bridge tolls, car repairs, vacation/trip expenses, etc). By far my biggest "unconscious" expense was going to the grocery store, or to the hardware store, or Target, for some specific item and buying other items that sometimes totaled as much-- or more-- than what brought me into the store originally!

Once I realized how much money was going out the window for some of these things, my spending habits changed.

-Russ H.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[yveskleinsky]

Seriously? You haven't pulled out your wallet/purse for ANYTHING other than this? No coffee? No credit card purchases? No food purchases, at ALL?

If your current expenses are 3103/mo, does that mean you took in only 3103 x 12 = 37,236 in post-tax income, or do you have other sources? (apologies if this is too nosy).

My reason for asking: Before I started doing the day to day expenses, what I thought I spent vs what I actually spent in a year was off-- by more than DOUBLE!

(in other words, when I drew out what I thought were my total expenses, say, 28K a year, I found that I was spending close to $60K a year-- So $32K/yr worth of things I didn't realize! (like fast food, eating out, clothes, bridge tolls, car repairs, vacation/trip expenses, etc). By far my biggest "unconscious" expense was going to the grocery store, or to the hardware store, or Target, for some specific item and buying other items that sometimes totaled as much-- or more-- than what brought me into the store originally!

Once I realized how much money was going out the window for some of these things, my spending habits changed.

-Russ H.

I haven't done anything this weekend that required money- unfortunately! I was all geared up to go to this beer fesitval, and then my handsome little prince (my dog) got really sick. So I stayed up with him all night. Poor guy. If I had gone to the fesitval I would've blown about $30. ...Overall, I work weekends and come home for lunch. I bring my coffee to work in the mornings, as there is no coffee shop nearby, and there is no night life here...plus my husband is deployed- so I haven't been doing much. ...Now granted, if I did this excerise for 1 month, there would be much different results. I do tend to piss away probably about $500/month on stuff I don't need. ...Keep in mind that I live in a small town with not much going on. I have a lot of "free" fun. I have or go to dinner parties weekly, I crash my neighbor's pool often, I spend way too much time on this forum, time fixing up my house with relatively inexpensive projects ( you should see my kitchen!) and time outside.

As far as total debt, I bring in around $45k a year. (not including rental income which I will find out what is going on come Wed, when the bookkeeper helps me get it all figured out!) My husband, Kyle, has his "own" money as my investing makes him nervous. He pays for all expenses relating to our primary house, and I pay for the two cabins, plus my car, student loans, etc. I don't count his money as my income as it really is his to do what he wants with.

 

[wildambitions]

Russ-
Here are my results for the Taking Action exercise (after having done the exercise and implemented an actual budget that we stick to, for more than a year).

Total expenses per month (rounded up) $3000.00
Passive income (before taxes and rounded down) $2300.00

My husband I both work jobs that we could do forever, just because they are fun-mine is actually high paying.

 

[Sid23]

My CORE values:

-LOVE
-Health
-Family & Friends
-never ending personal growth
-happiness
-tolerance / acceptance
-freedom of choice = lifestyle, individualism, freedom of thought, religion, schedule
-personal reflection & rejuvenation
-Home
-financial security
-personal safety for myself and friends/family/world
-leaving the world a better place than when I found it (make a contribution / leave a legacy)
-honoring my commitments, responsibilities
-being really "good" at my chosen path

Things I like to be around:

-My fiancee
-Friends & Family
-Accepting, open-minded, non-judgemental people
-Water (lakes, oceans, etc)
-Any type of athletic event / sports game (baseball, football, soccer, hockey, etc)
-Kids & dogs
-Homes
-Cities / neighborhoods with a lot of energy
-Nice people
-Sunshine
-motivated and successful people

Things I like to do:

-Go to restaurants and eat great food w/fiancee
-Take vacations = see the world
-Meet new people
-Chicago Cubs = watch on TV, go to games
-Watch professional and college football on TV
-Read (business, bio's, history, fiction, magazines)
-Go to live music shows
-Listen to music
-Spend time with my family
-Spend time with my friends
-Read / look at pictures of home magazines
-Driving around looking at homes (and stopping at open houses to look inside!!)
-Walk around downtowns / cool neighborhoods
-Sit outside in busy areas and people watch
-Watch / listen to inspiring stories (I don't think I've ever watched Extreme Home Makeover and not cried)
-Play sports
-Exercise
-Wear stylish clothes
-Attend personal therapy
-Sit alone for hours at bookstores
-Go to movies
-Play trivia
-Mountain bike

**I plan to add to this list from time to time as I think of more things.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Sid23]

Expenses this weekend:

(borrowed pen & pad from office)

Friday
$56.74 - Bar/restaurant bill with friend in town, fiancee (friend and I both spent $56.74)
$10.01 - 6 pack of beer for fridge for friend weekend

Saturday
$20.01 - Gas
$1.64 - 7 Eleven Coke (fiancee stomach ache)
$50 - my portion of a dinner with a different friend who was in town
$385 - purchased flight home to Midwest for 5 days for Thanksgiving

Sunday
$5 - laundry
$47 - groceries for week (fiancee and I each spent $47)
$41.05 - food from Thai restaurant for friend / her hubby who just had baby (we took food over since we know they've been dying for some Thai food but haven't been able to leave house with 3 week old baby)


$206.44 food
$20.11 gas
$5 laundry
$385.00 flight

$616.55

Wow, this was considered a SLOW, uneventful weekend for me. This is quite the eye-opener.

 

[Russ H]

Wow, this was considered a SLOW, uneventful weekend for me. This is quite the eye-opener.

Exactly.

It was for me, too.

There were weekends that I spent in excess of $5,000 without realizing it (no joke).

-Russ H.

 

[LazyPenguin]

Uh oh. . Im not even 18 and i already have a car payment on a car i dont NEED. Its more of a WANT. Good news is - My weekend spending was only $44

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Russ H]

Good news is - My weekend spending was only $44

Wow, exactly $44? How did that happen?

Where is your list?

-Russ H.

 

[LazyPenguin]

I took $30 out for party "donations" :banana:

Then it cost me $14 dollars for pick up hockey on Sunday, so $44 even was my spending.
But now that i think about it, thats not too good, because I dont make nearly as much as people with a salary.. $8/hr :bgh:

 

[Russ H]

LazyPenguin-

And you never, ever went into your pockets or wallet for any other $$?

No fast food, coffee, sodas, gas, snacks, nothing?

-Russ H.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[BeingChewsie]

In the past 3 days I have spent:

$73.52 on my electric bill today online and gave my son 50 cents for milk at school. We stayed home all weekend.

 

[nomadjanet]

Friday night we went out with friends for steak at a little place in the country, we didn't drink so it was a cheap date about 40.00
Saturday I was a baby sitter for grand kids most of the day. 0.00
Went to a benefit that night at our church bought a table at the event $120.00
Bought an item at the auction (fresh sausage for my freezer) $ 60.00
Sunday went to church & made donation (undisclosed amount)
Came home & relaxed all day $0

Total non essential spending for the weekend $220.00

Never realized how little we spend. Next week end we will have to try harder

 

[Russ H]

this weekend's funnies . . .

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[LazyPenguin]

Russ

suprisingly not. I usually would, but I told myself before this weekend that I had to start spending my money more wisely, since atm I have limited "spending" cash, since most goes to my car (payments/insurance)

total expenses/month- $379 Total income: (since it varies upo hrs) roughly- $510/month after taxes

p.s. I filled my gas tank Monday

 

[Russ H]

LazyPenguin-

Do you get room, board, clothes, etc. covered by someone else?

-Russ H.

 

[LazyPenguin]

Russ

Ya im only 17 so I still live with my dad in SoCal. so thankfully all that is covered.. for the most part, unless i want extras like more clothes he doesnt want to pay for.
Basically i can start off on the right foot here soon, little to no debt, just have to find a better job so i can have more "excessive cash"

be back on later, gota go to school >.<

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

Kudos to Russ... he is really hitting it on all cylinders with this thread and there is lots for all of us to learn.

This imported list for one weeks activity from online account does not include cash purchases made ie lunches and little deli stops... also does not include any major household expenses. Most of the money spent is on food and clothing for kiddo. Could we have saved some money? You betcha.

but, I have stopped fighting my wife on trying to reduce expenses and instead I am focused on how to produce more income.

My planning included shifting the energy and focus diligently to increasing revenues and cutting expenses in my businesses. I have also reduced expenses in my maintainance with real estate holdings and have made deliberate attempts to increase rents where allowable. I have also spent more time learning about institutional debt and mortgage holdings and have profited nicely in the markets as a result.

The mental perception in developing and executing a plan has allowed this incredible shift in paradigm has prevented me from expending energy on futile efforts ie fights about how much the card is swiped at Target... anyway, this list looks different than it would have if we did not have a young child. We used to travel to NYC often and visit Philly for nice dinners with friends at minimum $100 per couple. But the list below includes a couple of dinners out, some ToysRus visits, CVS, Target, BJs, Supermarket and I think we are actually not spending as much money on ourselves as we have in the past...


Date Amount
9/24/2007 $(303.20)
9/24/2007 $(42.10)
9/24/2007 $(20.83)
9/24/2007 $(114.72)
9/24/2007 $(62.79)
9/24/2007 $(41.72)
9/24/2007 $(16.26)
9/21/2007 $(65.00)
9/21/2007 $(19.08)
9/21/2007 $(8.07)
9/21/2007 $(145.15)
9/20/2007 $(13.75)
9/20/2007 $(58.00)
9/19/2007 $(7.16)
9/18/2007 $(20.50)
9/18/2007 $(41.82)
9/17/2007 $(64.44)
9/17/2007 $(61.28)
9/17/2007 $(41.38)
9/17/2007 $(12.00)
9/17/2007 $(128.06)
9/17/2007 $(23.20)
9/17/2007 $(14.62)
total $(1,325.13)

 

[Sid23]

So Russ, what's the next step?

 

[Sid23]

Bump...

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Russ H]

My apologies for delaying this next segment. I did it on purpose, to help show the process we all get ourselves into. I made lots of excuses for not posting this next part-- but you all are about to learn why I waited one month.

OK, everyone, two hours from now marks exactly ONE MONTH since I posted the first part of "Taking Action".

Time for the big eye opener:

How many of you have taken action?

The first, and most critical part, of taking action is taking a HARD look at your expenses.

Tracking expenses is the #1 stumbling block for anyone seeking financial independence.

So, you knew it was important. Did you track all of your expenses this past month?

We all have our reasons for not keeping track of our expenses:

-Too busy
-Don't have that spiffy bookeeping software installed
-Had too many other important things going on
-Family/work/personal obligations
-Emergencies, projects that needed to get done, etc.

Ask yourself this question:

Do I know exactly how much I spent this past month?

Have you kept track and been mindful of your "out of pocket" purchases? (fast food, coffee, drinks, small indulgences, etc).

Do you know this-- to the penny?

If you answered "no"-- I have just one question:

If financial awareness is a #1 or at least a "Top 10" life priority for you,
how come you are not taking the most basic step to be aware of your finances?

***********

I know some of you have been keeping track of your day to day expenses already, for months or years.

This post is not for you (and we will be getting to the next step, very soon-- promise!!)

This post is for all the people out there who truly want to work at developing their PLAN and becoming financially free.

If you haven't kept track of your expenses, why not?

***********

Some history:

I read dozens of financial books. I'm guessing many of you have done the same.

Intellectually I "knew" what to do, since I had read it lots of times: Keep track of my expenses.

Did I do it?

Nope.

Why not?

I told myself I was too busy, I needed some special software, I had projects due, etc.

BUT- it wasn't until I actually started keeping track of my expenses that my life started to change--in a big way.

I started to actually see my spending patterns. Some days, I'd forget I was supposed to keep track, and when I started writing down all the things I'd spent money on just in the past few hours, I was just blown away by my spending habits.

Money was running through my hands like sand.

************

So, I ask this in all sincerity:

How can you develop a financial PLAN that takes care of your needs, if you don't know exactly what those needs cost?

************

If you haven't figured out what you spent on yourself this past month-- or year-- you need to do this.

Tomorrow is October 15, the deadline for all extensions on personal income tax returns.

Chances are, by now, you've figured out how much you spent last year.

Perhaps not.

************

If not, now is the time to put together a list of expenses.

And my sincere apologies to any of you who feel "hoodwinked" or tricked. This was not, not, not my intention.

What I wanted to do with this exercise (and the delay of 1 month) is have all of us identify what's important to us-- and-- then--- take the first step by tracking our expenses.

In other words, identify the things that mean the most to us.

Then, take the very first ACTION step and track personal expenses.

Because if you don't know where you are now, you won't know where you're going (or how fast).

BTW, it's not too late to start tracking expenses, if you haven't already started.

It's never too late!

Start, if you haven't already!

*********

I'm hoping that if you worked on the first parts, and really kinda "skimmed over" the "track all my expenses" part, that this post is a wake up call to you-- to get over the anger you may feel at me right now, and deal instead with the WHY of WHY you didn't do this part.

Because truly finding the answer to WHY may bust this whole thing wide open for you.

-Russ H.

 

[yveskleinsky]

Hey there Russ!

..I just thought that your "delay" in posting was due to surgery recoop time- which often leads to pain pills which may lead to zoning out to Elmo on TV! ...Good to know you are back up to full speed.

I have not recorded all my expenses this month, but am starting today. You are totally right about excuses. I created a binder with sheets for each day with the intent to write everything down- and I haven't. Why? No real reason outside of laziness, and I suppose I had a glut of unnecessary expenses this past month that I really didn't want to face. (Husband came back from deployment and I spent a lot on fixing the house up.) You are 100% correct in that if we want to plan on where we want to be, we need to know where we are. Sorry to let you down for this month- and sorry that I let myself down. ...Consider this done for next month!

 

[Russ H]

yveskleinsky-

Rep speed to you for being the first person honest enough to admit this. Many would read this thread and just pass on, p*ssed off that I was asking them to do something that they hated/didn't want to do.

Change is often hard to do. Especially if it's not "fun".

(secret is, once you start doing this, it actually does get easier, and fun on much deeper, very soul-satisfying, level).

******

RE: Hernias and Elmo :banana:

Yes, I had my share of weirdness this month (talking about the surgery, not Elmo! ), but after the first few days post op, my 'excuses' for not updating this thread were just delay tactics-- to give everyone the time to really start taking action, or sliding back into old non-productive habits. And as a side note, besides getting the general anasthesia out of my system, I only took NSAIDs (ibuprophen). Have a whole bottle of Vicodin. Never took a one (I hate pain pills-- if my body is in pain, I feel like I should be listening to it, not hiding the pain. Just the way I am)

I also wanted to see if folks reading/following this thread would just be doing *some* of the exercises and not others.

Because I did that, too--- for years. Read the books. Did parts of the tapes/workbooks/CDs. Skipped the financials.

Never got me anywhere.

Until I started tracking my finances, on a micro-scale,
I did not realize or appreciate what being financially unconscious really is.

To anyone reading this who has *not* tracked their expenses yet: You won't necessarily have to do this forever. Just long enough to work through the exercise, and see what happens as you become financially *conscious*.

Conscious is the perfect word for this process. It really is an awakening. :smx7:

-Russ H.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Sid23]

I'm also guilty as charged. I didn't track the expenses for the month.

Initially, I thought of tons of excuses (got engaged this month, had extra work trips,etc) but Russ, it is all BS.

Tomorrow is October 15 and on November 15 I will post a detailed list of every expenditure I have in that time.

 

[Russ H]

Initially, I thought of tons of excuses . . .got engaged this month . . .

Hey, that doesn't happen every month. :smxB:

Congratulations, Sean! :banana:

And glad to hear that you're going to track the $ and ¢.

-Russ H.

 

[Bilgefisher]

I was able to cut expenses this month, but they are still much higher then they should be. There were three things that I could have done to cut expenses by over $130/mo and I didn't do them. On my budget that is pretty significant.

btw Russ I like the accountability in this thread, nice setup.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[yveskleinsky]

btw Russ I like the accountability in this thread, nice setup.

Yup. I friggin love this place. Coming here is like taking a mental vitamin.

 

[LazyPenguin]

>.< starting today i already have spent 15.50 on stuff i really didnt need .. ugh..
im going to carry a little notebook everyday. and write all my expenses.

 

[Russ H]

Keep at it.

This is where things get interesting. :smx9:

-Russ H.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[bflbob]

Damn you for catching me Russ!:smx8:

Your 'excuses' remind me of Les Gee's example with Brenton a couple of years ago.
"Try to pick up that pencil."

You either do, or you don't. Trying is a 'don't'.

 

[Sid23]

Hey, that doesn't happen every month. :smxB:

Congratulations, Sean! :banana:

-Russ H.

Thanks Russ! Those expenses can definitely be classified as a "one-time" expenditure! But it was well worth it. We had a great "engagement" weekend.

Thanks again!