How to develop your PLAN

[Russ H]

Bobbo-

Yes, I *loved* Les's example.

For those that weren't there, Les dropped a pencil on the floor and said to the class:

"Try to pick this up."

So someone picked it up.

"No, no," said Les. "I didn't say *pick* it up. I said *try* to pick it up."

We all spent a few minutes thinking about what he was saying.

In short, you either pick the pencil up, or you don't.

Or as Yoda says;

Do, or do not. There is no "try".

-Russ H.

 

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[yveskleinsky]

I think the word "trying" generally means "I'll stick with it until it gets hard or I lose interest". Either something is a priority or it isn't.

 

[nomadjanet]

Are we looking at all spending or at how we piddel our money away? Cause if we are looking at all spending, I just sent in my last tax return with my last tax payment. I know it should have been paid already but my estimate was off a little. So anyway are we talking bills & overhead or just frills?
Janet

 

[wildambitions]

I had a major expenditure error last month. (forgot to enter a large expenditure, knew about it, but completely forgot to enter it and I reley on what my numbers tell me). Set me back about 15 days. Thank God for good friends (Yves) to help out during quick needs. Caught up, paid back and am on track with expected and planned expeditures.

STILL, have not closed on the new house. :nonod: All in good time.

Realized that I don't like planned expenditures (for new home setup, can you say major doodads) and am looking forward to bringing them to an end soon. I'd much rather use those funds towards investments that can bring in more passive income which could be used to pay for the doodads! That way, it ensures that I don't HAVE to continue working instead of feeling like right NOW I have to work.

Looking forward to the next lesson. :love1:

 

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[No More Fear]

Wow, what a great post

I now have to track my expenses and I am not looking forward to that.

okay

CORE VALUES (what is important to me)

-God
-Love
-Health
-Family
-Being financially secure
-Learning new things
-Respecting others

Things I like to be around

-Nature
-Family
-Horses
-Children
-Positive people
-Church
-Friends
-

Things I like to do (activities):

-Fishing
-Cycling
-Reading
-Surf the web
-Travel
-Listen to music
-Eat great food
-Watch movies
-Exercise

 

[imirza]

Since all you guys are having so much fun I can't get left behind

CORE VALUES (In no particular order)

- Happiness
- Freedom
- Adventure
- Friendship
- Fitness
- Relationship with Self
- Relationship with Spouse
- Being in Control
- Taking Action
- Accomplishment


THINGS I LIKE TO BE AROUND

- Spouse
- Family & Friends
- Successful, Positive,Driven and Motivated people
- Entertainment - clubs, bars, nightlife, Vegas
- Luxury
- Bookstores
- Nature
- Gym


THINGS I LIKE TO DO
- Sports( various)
- Reading ( investment, financial, motivational, self help, psychology)
- Studying investments
- Thinking
- Visualizing success
- Hiking
- Running
- Chess
- Watch Movies
- Going to Vegas
- Eating
- Socializing ( friends, parties etc)
- Lying by the Pool
- Traveling
- Listening to Music

 

[Russ H]

Are we looking at all spending or at how we piddle our money away?

ALL spending in one month.

Every single penny.

Here's the hardest part: Try to spend normally, as you would before you started writing everything down.

How this part can get screwed up:

When keeping a journal, the very fact that you're writing things down causes you to change your behavior. Try NOT to let this happen.

If you normally go for a Latte at Starbucks, keep doing this.

If you buy a diet Pepsi at Taco Bell on the way home, keep doing this.

Just get in the habit of recording it somehow.

Ways to do this:

-ONLY use your ATM card, whenever possible (most fast food places around here take them, as well as VISA cards)

or . . .

-Make sure you have a written cash receipt for EVERYTHING, but just put the rects in a paper bag in your car, office, etc. You can do this for the entire month, and then add everything up.

While this last approach will require you to total all the receipts up at the end of the month, it does provide you with the ability to "stay unconscious" with your spending. In other words, most of us spend money without really thinking about it.

If you can continue to do this throughout the month (spending, but keeping receipts or using your card for everything), you will have a more accurate picture of your spending habits than if you consciously *think* about things before you buy them.

Post back here on your progress-- what is happening? Are you able to stay unconscious, or is the very act of writing things down affecting your spending decisions?

Remember-- no wrong answers here. Only enlightenment. :smxF:

-Russ H.

PS We're only doing this for a month, so no need to freak out about how much time this takes. The effort you spend doing this for one month will, over the course of your lifetime, pay you back a thousand times. Or in my case, it's paid back well over a 10,000x what it was worth.

 

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[imirza]

EXPENSES THIS WEEKEND

FRIDAY
Lunch - $17
Ate Dinner at home. Had an early night.

SATURDAY
- Java Monster (after gym) $2.32
- Property taxes on investment property $329 ( new build hence the low annual taxes)
- Protein shake for lunch at home.
- Box of chocolate chip cookies $6.15
- Spent the evening at a social event. No cost.
- Spent $2.15 at gas station for allergy medication
- Late night stopover at Arbys 5 for 5 special $6.32

SUNDAY
- Invited to friends house for lunch - no cost
- Dinner at home
- Spent most of the day reading + evaluating investment portfolio - no cost.

MONDAY
Ate all meals and snacks at home
-$76 telephone bill

Total: $438.94

minus property taxes one time yearly $329
minus monthly $76 telephone bill

= $33.94

Hmmm not bad. But this was an exceptionally low budget weekend. No grocery shopping or dinners.

 

[LazyPenguin]

Only IF eating at home was always free and you never had to grocery shopping, what a great life it would be

 

[yveskleinsky]

Man, my spending has changed Russ. I am trying to live normally, but I keep thinking what a pain it will be to write down a cup of coffee- so then I just pop into work say hi and grab a cup there! I think this will be a good exercise in the end. I will use my credit card for the rest of the 30 days (since I started mid-month).

 

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[Bilgefisher]

Yves,
I read somewhere else in here your husband just got back from deployment. Keeping spending low must be difficult at the moment. I have not met one single person that comes back from any deployment and does not have a hole in their pocket for the first couple weeks. Perhaps its easier for married folks, I dunno. After deployment spending is like an early Christmas for a local economy.

 

[BeingChewsie]

Man, my spending has changed Russ. I am trying to live normally, but I keep thinking what a pain it will be to write down a cup of coffee- so then I just pop into work say hi and grab a cup there! I think this will be a good exercise in the end. I will use my credit card for the rest of the 30 days (since I started mid-month).

It is a really good exercise. I had to do it for different reasons, I had to go from 48-56 hours week to 24 hours a week at work due to my son dx with autism last year...and I was out of control with my spending. It was all cash I have no credit cards, all I had was my BMW payment and the usual household stuff. My income dropped by almost 65%...and I was living 25% above my means before that.

Talk about financially unconcious, I never even looked at my checking account, my paycheck went in..I spent it. It didn't take long for me to piddle through my savings(from the sale of my home in 2003) at the rate I was spending. Fast forward...RE Taipan had me do what Russ is having people do...it woke me up. I cut my bills and spending until they were less than my income..I got rid of my BMW, pulled my kiddo out of private school, no more tanning, no more nails being done, no more starbucks, no more fast food, dumped the cable TV, and on and on.

I realize now if I could work full-time again..and if I kept living like I am...just off my earned income I'd have 30-40k a year to invest or more depending on how much I worked. I was working 40 hours a month just to make my BMW payment...great SUV, loved it... but I might as well have flushed that money down the bowl. My life isn't any different without that truck..well except I have an extra grand a month in my pocket. I was spending $12,000 a year on a car payment(plus insurance & gas)..a car that took me from point A to point B. I had that truck 3 years..imagine if I had invested that money in an asset and not a liability? Hindsight is 20/20 but this exercise really highlights where your money goes and gives you the opportunity to ask yourself if it really goes where you want it too. I'm committed to keeping my spending in check even as my income is slowly going back up.

I'm glad all of this happened to me, it gave me a perspective on money and spending that I don't think I would have understood otherwise.

I'm looking forward to the next part of this very much.

Sue

 

[Talkintoy]

-Beingchewsie-
That's exactly what i'm looking forward to in what i'm doing now. Only I had to get rid is my house instead of a car. My mortgage is eating me alive and i tried to cut down on small stuff but it was the big stuff that i have to concentrate on. I do understand those little stuff became bigger stuff as well down the road. Looking forward in having less things to pay for and kill my credit cards with extra money i hope. :smxG:

 

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[Russ H]

If I could work full-time again and kept living like I am...just off my earned income I'd have 30-40k a year to invest or more. I was working 40 hours a month just to make my BMW payment... I might as well have flushed that money down the bowl. My life isn't any different without that truck.. except I have an extra grand a month. I was spending $12,000 a year on a car payment (plus insurance & gas)

I had that truck 3 years..imagine if I had invested that money in an asset and not a liability?

Eggsactly.

Rep points for you.

This is one of the big "AHAs" I had when I started keeping track of all my expenses.

I was *floored* at how much I spent on meaningless little impulse items that came home w/me and were rarely used (to the tune of *thousands* of dollars a year). I'd buy them 'unconsciously', on impulse, b/c buying was fun-- and I enjoyed imagining myself using whatever it was.

Lots of dreams. But I rarely used my dream buys.

Now I use that money for investing.

So I use my "dream money" to make my long-term, real life dreams possible. :smx2:

-Russ H.

 

[Sid23]

I've already spent $989 since the 13th. WOW.

 

[czach41]

Russ,
Very interesting you posted this today. Ive been following this thread and doing whats asked. Today I figured out my monthly expenses again. Yikes. I thought I was on top of things, but it appears not.

A suggestion for people that forget to write things down. If you have a debit check card, purchase everything with this, no matter how small. Make sure its a check card, because some institutions charge you for debit purchases and not credit purchases. (Which is odd since it all comes from the same place). Yes it may seem weird purchasing your starbucks with your check card, but it works. Then pull up your account online and it will list everything you purchased. At the end of the month tally everything up by category and total expenses. Everything else, you can track either through your checkbook or writing it down.

Totally agree. I always use my Visa checkcard for EVERYTHING. Whether it be a subway sandwich, a pack of skittles, or new clothes (yes I know, unnecessary.) I hate having cash on me. I try to avoid having cash on me whenever possible. Why? Because then I am tempted to spend it on stupid doodads. I find when I have cash in my pocket, I am more susceptible to buy unnecessary food when I have pasta I can make at home. Online banking is awesome... allows me to stay on top of my expenses a lot better than if I didn't have online banking.

 

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[nomadjanet]

friday: lunch at home: $0
free car show $0
adult beverages at car show $30
dinner with friends, they paid
total 30

Saturday: stayed home for lunch & dinner $0

Sunday: Church donation $120
Bar B que $15.00
Groceries $75.00
Newspaper $1.60
dinner @ home $0
Concert tickets $100.00
beverages @ concert $30.00
total 341.60
Monday mailed in final 06 tax return with $2900.00
lunch at home $0
RX $40
sundries $40
dinner at home $0
total $2940
Tuesday
chinese food $15
total $15
Wensday
lunch at home 0
dinner at home 0

thursday
lunch at home 0
dinner at home 0

total 3326.60

without the tax bill = 426.60

we live on nothing! so I revise my estimated liquidity to 20 years

the plumbing company pays for my car, his truck, our other truck, all our fuel, all our auto insurance, all our cell phone & all our health insurance. next week we are going on another car buying trip so the car company will pay for the transportation & lodging for this trip, may spend more money on personal when we travel, will have to see what we spend that is not spent by the company.

 

[Russ H]

Hey Janet,

How long do the $75 in groceries last you?

And what do you *not* buy? Do you make decisions specifically what you don't buy, or do you just buy anything that suits your fancy?

-Russ H.

 

[nomadjanet]

Hey Janet,

How long do the $75 in groceries last you?

And what do you *not* buy? Do you make decisions specifically what you don't buy, or do you just buy anything that suits your fancy?

-Russ H.

$75 was just for the fresh stuff for that week, like milk, bread & fruit & veggies.
We buy what ever we want, it's just that this particular week we did not need to stock up on many things. We live in the country so I buy meat & things like that in bulk & freeze it. Also the $75 does not include sundries as you will see further down my list I spent another $40 on this stuff. One of the things about spending on little things is that when you live 15 miles from the nearest starbucks you aren't as likely to pop by everyday.
Janet

 

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[LazyPenguin]

Ive already spent 67.81 in less then a week.. I only get paid about 220/per 2 weeks.
this is without car payments too. i made the mistake of having 30 dollars in cash, and it disappeared in like a day or two... not good..

 

[MJ DeMarco]

Missed this thread .. Speed to Russ for running a good exercise in here.

 

[Sid23]

Russ,

If I've done the first few exercises and I'm now tracking my expenses religiously, is there something else I can do? I feel like I should be doing something else concurrent with tracking my expenses.

I feel like there is gold at the end of this rainbow. I'd like to get there as soon as I can.

Thanks again.

 

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[Russ H]

SeanS-

I truly appreciate your passion for this.

You could read a bit.

Have you already read Rich Dad Poor Dad?

-Russ H.

 

[Sid23]

Russ,
Thanks again for leading this exercise.

I've already read RDPD, but I could always re-read.

I'm also reading The Real Estate Game and Berges' books on How to Buy and Sell Apartments right now, but maybe I'm getting ahead of myself and should re-read RDPD and start from the beginning when thinking re my plan.

 

[Russ H]

A re-read of RDPD is always good. I find I learn new things each time.

The other book I read that really affected my way of looking at things was "Your Money or Your Life" by Joe Dominguez/Vicki Robin.

YMOYL is definitely not "fastlane", but it's not slowlane, either.

The take away I got from it was how to make your money work for you.

And how much of your life energy you devote to things that are not worth it.

A bit of a radical read-- many on these forums would have nothing but problems w/it.

Hmm . . . sounds like I should be doing a book review on this

-Russ H.

 

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[Talkintoy]

If I've done the first few exercises and I'm now tracking my expenses religiously, is there something else I can do? I feel like I should be doing something else concurrent with tracking my expenses.

I feel like there is gold at the end of this rainbow. I'd like to get there as soon as I can.

Takes time my friend. Being patient is part of this process. Saving everyday and watching your money is just a partial part of going to the fastlane. This is controlling your outgoing to be used in better things important in life such as expenses that may come ahead. Excess later on to be used on money making things like you buy low and sell high etc... Your next process is to build your asset part incoming from excess money and business, stocks etc... Im not rich yet but will be as i dont want money to be always the reason on a lot of things. Im finally figuring out my trigger thats making me move. This is important as this is the drive within yourself. Im in the same boat as you and almost same location since im just 1 1/2 hours away form you.

 

[Sid23]

A re-read of RDPD is always good. I find I learn new things each time.

Great suggestion. I'm almost done with my re-read and I can't tell you how many small points I've picked up, even though this is my 3rd read of the book!

 

[yveskleinsky]

Yves,
I read somewhere else in here your husband just got back from deployment. Keeping spending low must be difficult at the moment. I have not met one single person that comes back from any deployment and does not have a hole in their pocket for the first couple weeks. Perhaps its easier for married folks, I dunno. After deployment spending is like an early Christmas for a local economy.

Our only big expense was a mini-vacation to my cousin's wedding in Chicago. Although I don't know if spending time with family really constitutes a vacation!

 

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[Talkintoy]

Our only big expense was a mini-vacation to my cousin's wedding in Chicago. Although I don't know if spending time with family really constitutes a vacation!

Whenever your away from home to getaway is always a vacation, unless otherwise you dont get along with the family, relatives you stayed in then its not? You can never replace memories and fun with money but then again it always easier to create memories with money.

 

[cynabyte]

Just curious is more going to be added to this or is it just about the two exercises mentioned?

so far it has been GREAT


I will add my contributions shortly


-Andrew