A Short (13,100 word)
E-Book on:
New Perspectives and Tools For
Money and Budgeting
Free software-based financial
calculators, and information on financial challenges and budgeting
By David Alderoty August, 2009
If you want to go directly to the Table of contents of
this website left click on these words.
This website is under
construction, and it will be finished sometime in August, 2009.
To date, it contains over 13,100 words a
hyperlink table of contents, and many financial calculation devices, in the
Online, Excel, and OpenOffice.org formats. The online format
works directly from this website, and the Excel and OpenOffice.org versions can
be downloaded.
●Section 1) Introduction●
●●The Purpose of This Website●●
The primary purpose of this website is to provide
assistance with financial challenges and budgeting, for individuals and
families. The website provides budgeting
tools, and new perspectives, general information and referrals to help you
obtain your goals and improve your financial situation. For those who have financial problems the
goal is solutions, and for those who are doing well, the goal is to do even
better. To help you achieve this, the
website provides the following (all free of charge):
●●●A Description of the
Material on This Website●●●
·
In section 2 there are a number of
online budget and balance sheet calculators that work directly from the
Internet.
·
Also in the second section there are
several financial calculation devices in the Microsoft Excel and OpenOffice.org
formats, which are provided as free downloads.
These devices do more than calculate; they can help you keep permanent
financial records.
·
In addition, section 2 contains information
on a number of financial topics, with a focus on the calculation devices.
·
Additional information on
budgeting and budget problems is presented in section 3. This includes a discussion on psychological
aspects of budgeting problems.
·
In section 4 there are a series of
special questions, and related information, designed to stimulate your creative
thinking and help you develop insight into money and budgeting.
·
In section 5 there are links to
other websites for additional information, and points of view on financial
matters and budgeting.
·
Also in the fifth section there
are links to agencies that provide various types of financial assistance.
●●Information and
Calculation Devices for Business●●
The calculation devices on this website are designed for individuals
and families, but some of them can also be used for a business. However, if you need information and
calculation devices for a business you should left click on the following link,
which will take you to a website that is focused on the financial aspects of
business: www.Tech-For-Text.com/Budget-B
●●●Scroll down for more
information or examine the table of contents●●●
Table of Contents Of This Website
The blue words in this table of contents
are hyperlinks. Thus, to go to the text
that you want to read, left click with the mouse on the corresponding blue
words. Alternatively, you can scroll down,
and browse for material that interests you.
●●The Purpose of This Website●●
●●●A
Description of the Material on This Website●●●
●●Information and
Calculation Devices for Business●●
●●●Scroll
down for more information or examine the table of contents●●●
●Section 2) Financial Calculators●
●●The Software-Based Calculators on This Website●●
●●●If
You Do Not have Excel, Use the Free OpenOffice.Org Software●●●
●●Look for Calculators that are Helpful for You●●
●●Whenever You Use Any Type Of
Software-Based Calculation Device Always Check Them For Accuracy. ●●
●●The Limitations of the Online
Calculators●●
●●Calculators in the Excel and the
Openoffice.Org Formats, Can Produce Permanent Records●●
●●●Calculators
For Adding With The Double Check Feature●●●
●●●The Shopper’s Calculator For Sales Tax, Percentage
Discounts And Addition●●●
●●A List of Budget Calculators in the
Online, Excel, and Openoffice.Org Formats●●
●●●The
simplest budget calculators●●●
●●The Budget-Date Calculator●●
●●Daily Budget Calculators to Make You
Aware of Your Daily Expenses, and Unnecessary Purchases●●
●●●
Feedback Correction
Budgeting ●●●
●●●
Two Challenges Of The
Planned Budget Method ●●●
●●● In precise mathematical terms what is a correction factor? ●●●
●●● Correction factors correct inaccurate estimates ●●●
●●●
Methods to Improve a
Planned Budget, and Budgeting in General ●●●
●●●
Feedback Correction
Budgeting Method Cam be Applied to a Planned Budget ●●●
●●●
Delay purchases that are
not on your budget, for the following budget period●●●
●●●
Budget Calculators, With
Correction Factors functions, to Plan and Carry Out a Budget●●●
●●Useful information on Balance Sheets●●
●●●Sometimes
Balance Sheets Give A Distorted Picture●●●
●●●A
balance sheet as a measuring device for wealth or poverty●●●
●●●A
More Accurate Assessment than A Simple Balance Sheet●●●
●●Links To Balance Sheet Calculators●●
●●A Hybrid of a Bounce Sheet & Budget
Calculator●●
●●●The
utility of understanding rate and time in relation to money●●●
●●●Rate
is a concept that we consciously or intuitively use in everyday life●●●
●●●Applying
the concept of rate to money and budgeting●●●
●●●
Defining Cash flow, in terms of rate of income and expenses●●●
●●●What
is a cash flow problem? ●●●
●●●Rate
a return on a bank account, or other investment●●●
●●●The
symbols used in the mathematical formulas●●●
●●● Rate income multiplied by time
equals the sum of money●●
●●● Rate of expenses multiplied by
time equals expenses debts●●●
●●●Rate of Loss, going into debt●●●
● Section 3 The Behavioral and Emotional Aspects of
Money and Budgeting ●
●● How to Improve Your Purchasing
Decisions ●●
●●● Delay the purchase, to give yourself time to think ●●●
Delaying a
purchase for too long can be counterproductive
●●● How long should you wait before you buy ●●●
●●● Questions to ask yourself before you buy ●●●
●●● Consider the following questions when planning to buy a product or
service ●●●
●● How to Develop more Self-Control or
Willpower to Reduce Unnecessary or Unhealthy Purchases ●●
Links For Financial Assistance
●●A Note From The Author,
To The Readers Who live Outside Of The United States●●
I live in the
The calculators I created for this website have the
US dollar sign ($), but they can be used with any currency. Whenever I use the word dollars, in this
e-book, think of the currency used in your locality.
The search phrases, and links in section 5, are for
the
●Section 2) Financial
Calculators●
●●The Software-Based
Calculators on This Website●●
There are many types of financial calculators on this
website, in the form of software. Some
of these devices calculate a simple budget.
A few of these devices perform calculations based on money and time (in
terms of days and weeks). There are also
devices that calculate your assets, liabilities and net worth. There are calculators to help you check bills
from merchants, such as grocery bills.
Some of these devices will provide an insightful view of how you spend
your money.
The calculators are in three formats, which are listed below:
·
Online Calculators that work
directly from this website
·
Calculators in the Excel format,
which is a free download (Requires Microsoft Excel and Windows)
·
Calculators in the OpenOffice.org format
(Requires the free OpenOffice.org software package, and Windows.)
●●●If You Do Not have Excel,
Use the Free OpenOffice.Org Software●●●
If you do not have Microsoft Excel on your computer,
you should use the calculators that are in the OpenOffice.org format, because
the required OpenOffice.org software packages free. This software is very high quality, and it
has almost all of the functionality of Microsoft Office. You can download this software, and use it
without charge at www.OpenOffice.org. If you left
click on the above link it will take you to the website that provides the
software. (This may save you a couple of
hundred dollars, which is one of the goals of this website.)
If you do not have the Windows operating system on
your computer, you can still use the online versions of the calculators. They will work with most computers and
operating systems, as long as you have a modern browser.
●●User-Friendly
Calculators●●
Most of the calculators on this website are easy to
use. You will probably master the
calculators with a few minutes of trial and error learning. However, most of the calculators contain
detailed instructions. Some of these
instructions are written directly on the calculator, or underneath it, or on
top of the device.
●●Look
for Calculators that are Helpful for You●●
Your goal should be to experiment with most of the
calculators, and choose a few that you find helpful, and want to use on a regular
basis. Everyone has different needs, and
what is useful for one person, maybe of little value to another.
●●Whenever
You Use Any Type Of Software-Based Calculation Device Always Check Them For
Accuracy. ●●
All methods of calculation present a risk of
error. This applies to calculations done
with pencil and paper, handheld calculators, and software-based calculation
devices, including the devices on this website.
Thus, the user must always take the
responsibility to evaluate the software for accuracy, as well as usability in
relation to personal needs and skills.
In general, software-based calculation devices
present the least risk of errors, when compared to other methods of performing
calculations. However, errors are
possible with software as a result of all of the following:
·
Errors resulting from In accurate
data entry
This type of error is very common
and very significant, with all methods of calculation. However, when you are using software it is
relatively easy to double check the data you entered, because numbers and words
are usually retained by the software temporarily or permanently.
·
Errors resulting from in proper
use of the software
This is also fairly common. However, this usually does not cause
calculation errors, because when software is incorrectly operated, the user is
likely to be aware of this, and the software might not function at all.
·
Errors from Malfunctioning
software, bugs, viruses, etc.
This type of problem is
unusual. However, you should always
double check software for accuracy, as well as its utility, in relation to your
needs and skills.
·
Errors resulting from
malfunctioning computer hardware
This type of problem is very
unusual, but it has happened in some cases.
Malfunctioning computer components usually cannot cause mathematical
errors, because it often makes the computer unusable.
●●The
Limitations of the Online Calculators●●
The online calculators are interesting, but they do
not always provide the same practical utility as the Excel and OpenOffice.org
versions. The online versions cannot
save the numbers you enter and your calculated results. That is as soon as you leave the website, and
close your web browser everything you entered will be lost. You can partly get around this by taking a
screenshot of the calculator after you entered numbers and obtained your
results. How to do this is explained
below.
The following instructions apply to computers that
are running Microsoft Windows. There are
probably similar techniques that apply to other operating systems.
To take a screenshot of an online calculator, or
anything else, carry out the following steps:
·
Step 1 Press the F11 key This
step is optional, but it temporarily removes the toolbars and other clutter on
the top and bottom of the computer’s screen.
After completing all of the following steps, you can return the screen
to normal, by pressing the F11 key again.
·
Step 2 Press the Print screen key.
The print screen key is usually, on the left side of the keyboard near
the scroll lock key. This takes a
picture of everything that is on your computer screen.
·
Step 3 Open
a document from your Word processor software,
such as Microsoft Word, Microsoft Works, WordPerfect, or whatever you have.
·
Step 4 Left
click with the mouse on the word processor document that you opened in step 3.
·
Step 5 While
holding down the Ctrl key, press the v key (Your finger must be pushing
down on the Ctrl key when you press the v key.)
This will paste a picture of the calculator in your word processor
document.
·
Step 6 Save your word processor document. To do this, enter a convenient file name for your
document, and then hold down the Ctrl key, and press the s key.
The following is a good example of a screenshot of a calculator, with words, numbers,
and calculated results. The screenshot looks identical to the actual calculator, but
it is only a picture and it cannot perform calculations.
The above is a screenshot of a calculator, after data was
entered.
●●Calculators
in the Excel and the Openoffice.Org Formats, Can Produce Permanent Records●●
With the calculation devices that are in the Microsoft
Excel, or OpenOffice.Org formats, you can create a limitless number of
calculation documents, and they can be saved as permanent records. This allows you to easily keep records of all
your financial calculations. In
addition, you can change the numbers in these records at any time, and the
software will automatically recalculate the results.
However, you must always remember to use
a different filename for each calculating document that you want to save. The most convenient filename is usually the
date you started a budget, (or perform the calculations) such as Jan 1 2009,
1-1-09, or 1-1-2009. You cannot use the
conventional format for a date as a filename, with Microsoft Windows, such as
1/1/09.
One of the simplest problems that most of us
occasionally face is calculating how much a list of items cost. Sometimes, our bills, especially grocery
bills, seeing suspiciously high, and we want to check the addition to see if
there are any errors. At times we may
want to make calculations before we make purchases to see if we have enough
money available. We may want to check
prices involving sales tax. Sometimes
merchandise is sold at a percentage discount, and we may want to determine what
the actual price is, or should be. For
example, how much would an item cost if it normally sells for $100, and there
is a 16% discount, as well as 7% sales tax.
The
following list of calculators can solve all of the above problems for you. The simpler calculators are listed first,
followed by the more complex devices.
●●●Calculators For Adding●●●
If you want an online calculator for adding a list of items, left
click on these words.
If you want a calculator for adding a list of items in the Excel
format left click here.
If you want the above calculator in the OpenOffice format left click
here.
●●●Calculators For Adding With
The Double Check Feature●●●
●●●The Shopper’s Calculator
For Sales Tax, Percentage Discounts And Addition●●●
If you want a printer friendly
version of the Shopper's-Calculator left click here.
If you want the Shopper's-Calculator in the Excel format, left click
here.
If you want the Shopper's-Calculator in the OpenOffice.org format click here.
●●A
List of Budget Calculators in the Online, Excel, and Openoffice.Org Formats●●
The following blue words are links. When you click on them they will open an online
calculator, instructions, or activate a download of an Excel or OpenOffice.org
calculation device.
(Note, when an online calculator opens it might
not open at the very top, so remember to scroll up when you open an online
calculator.)
●●●The simplest
budget calculators●●●
For a simple online budget
calculator, left click on these words.
For an Excel version of the above
left click here.
For and OpenOffice.org version of the above, left click here.
For an Excel version of the above,
left click here.
For and OpenOffice.org version of the above, left click here.
●●●Budget Calculator●●●
For an Excel version of the above
left click here.
For another
variation of the above in the Excel format left click here
For and OpenOffice.org version of the above, left click on these
words.
●●The
Budget-Date Calculator●●
One of the best calculation devices is the
Budget-Date Calculator. It calculates the
number of days and the amount of money you have for your budget. It does this based on the expiration date of
your budget. The user sets the last day
of the budget, (the end date) and the calculator provides daily feedback
on the number of days and amount of money left in the budget. It also provides daily feedback on the
maximum amount of money that can be spent per day, on the average, without
going off your budget.
This Budget-Date Calculator comes in three versions,
as presented below.
For instructions on how to use the
Budget-Date Calculator left click on these words. These instructions apply to
the three versions presented below, except the sections that deal with saving
documents do not apply to the online version.
For the online version of the
Budget-Date Calculator left click on these words.
For the Excel version of the
Budget-Date Calculator left click here.
For the OpenOffice.org version of
the Budget-Date Calculator left click here
●●Daily
Budget Calculators to Make You Aware of Your Daily Expenses, and Unnecessary
Purchases●●
Under this heading there are four Daily Budget
Calculators for 7 days, 14 days, one month, and 65 days. One
of the primary purposes of these calculators is to make you more aware of daily
expenses, and unnecessary purchases.
Most of us, at
one time or another, purchased goods or services that we really did not need. For some
individuals this is an ongoing problem, and it may involve impulse buying. Items purchased on impulse, might be
inexpensive, but they can add up to a sizable sum of money at the end of the
month. Some of these items are also
quite unhealthy. Some typical examples
of unnecessary purchases are eating in restaurants that you cannot afford,
consuming unhealthy junk food, cigarette smoking, drinking alcoholic beverages,
and buying unneeded items because they were on sale.
Of course, what is unnecessary for one individual,
maybe essential, or a major source of pleasure for another, and thus the
concept (of an unnecessary purchase) is a relative one. The Daily Budget Calculators can help
you decide what an unnecessary expenditure is FOR YOU. These calculators provide a place to list
daily expenses, and they provide daily feedback on the amount of money you have
been spending per day, and the amount of money you have spent since the start
of your budget.
You can periodically examine the resulting records
from these budget calculators. This can
be very insightful, when you see how much money you have been spending on
unnecessary items. This should help you
make a list of purchases that you want to reduce or stop entirely.
The records created by the calculators, are also
useful in charting your progress. You
can see if the number of your unnecessary or unhealthy purchases are going
down, remaining the same, or getting worse.
Links to the specialized budget
calculators, designed to make you aware of your daily expenses, and unnecessary
purchases are listed below:
For an Online version of a 7 Day
Budget Calculator left click on these words. Note: the online version is
primarily for demonstration purposes. It
cannot save the data you entered, unless you print your work or take a
screenshot of the calculator. This can
be inconvenient to do on a daily basis.
Thus, you should use the Excel or OpenOffice.org versions for a
practical budget.
For the Excel version of the 7 Day
Budget Calculator left click here.
For the OpenOffice.org version of the
7 Day Budget Calculator left click here.
For a 14 day budget calculator, in
the Excel format left click on these words.
For a 14 day budget calculator, in
the OpenOffice.org format left click on these words.
For a One-Month Budget Calculator,
in the Excel format left click on these words. (This software calculates a
budget that expires after the last day of the month, no matter when you start
your budget.)
For a One-Month Budget Calculator
in the OpenOffice.org format left click here. (This software calculates a
budget that expires after the last day of the month, no matter when you start
your budget.)
For a 65 day budget calculator, in the Excel format, left click on
these words.
For the 65 day budget calculator in the OpenOffice.org format left click
here.
●●● Introduction and background
information ●●●
This subsection is primarily focused on planning a
budget using specially designed budget calculation devices that calculate
correction factors. To optimally present
this material it is necessary to present some interesting background
information first, about budgets and related concepts.
●●● Three Budget Methods ●●●
In this subsection three budget methods (or strategies) will be
presented, which I am calling intuitive budgeting, feedback
correction budgeting, and a planned budget. These strategies can be used independently of
each other, or in combination.
Note: I created the above
terminology to explain the concepts in the following paragraphs.
●●● Intuitive Budgeting ●●●
Intuitive budgeting is a method that involves intuition, common sense, and
estimations. Most of us use this method
in various forms. Intuitive budgeting
essentially involves estimating available funds and the cost of necessities,
and other potential and actual purchases.
This is done on an ongoing basis, such as daily, or every time a
purchase is contemplated. The arithmetic
involved is usually carried out in the mind, in terms of rough
estimations. This is generally coupled
with a more precise examination of funds periodically, such as counting
available cash, or examining the funds in a checking account. The user of this method will generally adjust
his or her expenditures based on the estimated or actual availability of funds.
Intuitive budgeting is a good method if it works for you.
It consumes very little time, and it is relatively easy. Intuitive budgeting is likely to be
most useful for people that have significantly more funds than expenses, or
relatively few expenses, and adequate funds.
However, this budgeting method can be problematic for some
people, and it can lead to financial problems.
This is likely to happen when the individual's estimates are influenced
by emotional states, when the income is barely adequate to cover expenses,
and/or when credit cards are used excessively.
●●● Feedback Correction Budgeting ●●●
Feedback Correction Budgeting involves entering income and expenses, into a budget calculation
device, throughout the budget period.
The user periodically checks the figures to assess the availability of
funds, and adjusts his or her expenditures accordingly. This essentially involves a feedback and
correction process, with the goal of maintaining a balanced budget, so that the
available funds will cover all expenses.
Feedback Correction Budgeting is a more precise method than the Intuitive budgeting
discussed above. Feedback Correction
Budgeting offers some margin of financial safety, and the user of this
method is likely to be aware of money shortages, before the problem becomes
severe. However, the planned budget,
discussed below, offers an even greater margin of financial safety.
●●● A
Planned Budget ●●●
A planned budget involves precise calculating and/or estimating of
income and expenses before the budget starts. A planned budget can be divided into
two steps, which are planning the budget, and carrying out the budget according
to plans.
The planning stage takes place before the budget starts, and it
involves assessing the quantity of income and expenses for the upcoming budget
period. Some of this may involve precise
calculations, but usually expenses and sometimes even income, must be partly or
totally estimated.
A planned budget provides
the opportunity to make adjustments in the budget before it starts. For example, if during the budget planning
stage, it becomes apparent that income is not adequate to meet the expenses,
the budget can be modified before the budget is started, such as by postponing
nonessential purchases, and/or by obtaining additional funds, and then
recalculating to see if the budget is balanced.
The above is the first step of a planned budget. The second step involves starting the budget,
and carrying it out according to plans.
This involves entering the actual income you obtain, and your actual
expenditures, into a budget calculation device during the budget period.
●●● Two Challenges Of The Planned Budget Method ●●●
The planned budget method requires the ability to assess and estimate income
and expenses, with a reasonable degree of accuracy. Another challenge is sticking to the budget
plans, when the budget is actually carried out.
All of this can be improved with practice and trial and error
learning. The specially designed budget calculators,
discussed below, can reinforce this practice and learning.
●●●
Your Ability to Plan and Carry Out a Budget Can Be Calculated, In
Terms of a Correction Factor ●●●
The ability to plan a
realistic budget and successfully carry it out can be calculated with the
specially designed budget calculators presented at the end of this
subsection. These calculators compare
your actual budget (the way you actually spent your money) with your planned
budget and calculate a correction factor.
A correction factor of 1 or 100% means you planned and carried out your
budget perfectly. A correction factor
that is greater than 1 means you underestimated. Underestimating income might not be
problematic, but underestimating expenses can sometimes lead to significant
financial problems. When the correction
factor is less than 1, it means you overestimated. Overestimating expenses will probably not be
very problematic in most cases. However,
an overestimate of income might lead to financial difficulties, especially if
it encourages additional expenditures.
●●●
In precise
mathematical terms what is a correction factor? ●●●
Note: the following
mathematical principles are carried out automatically by the calculation
devices provided at the end of this subsection.
Thus, if you do not understand this material, or are not interested in
it, you can skip it.
As the term is used in
this text, a correction factor is a mathematical definition. It is a factor that will correct an
inaccurate number, such as an inaccurate estimate, measurement, or calculation,
by multiplication. That is if an
inaccurate number is multiplied by an appropriate correction factor, the result
will be accurate. In mathematical
notation this is as follows:
E =
an inaccurate estimate, measurement, calculation, (or any inaccurate number)
C =
correction factor
A=
accurate result
Then
CE=A. This equation is true by
definition.
It is
obvious, with simple algebraic manipulation that a correction factor is equal to
the accurate result divided by the inaccurate number. This is a theorem. In mathematical notation this is as follows:
Let us
apply the above ideas to a planned budget.
A=
the total actual expenses calculated after the budget period has expired.
E=
our estimated expenses, calculated before the budget period started.
Thus,
the correction factor for expenses, for planned budget, is the total actual
expenses divided by the estimated or planned expenses.
The
same idea applies to income. (Income
means here any money that was planned or allotted for the budget.) That is the correction factor for income is
the total income received, divided by the estimate of total income that was
made before it was received, or apply to the budget.
●●●
A Simpler and Less Technical Explanation of Correction Factors then the Above ●●●
This discussion is
simpler than the above discussion of correction factors, and it does not
require any knowledge of formal mathematics.
With the correction
factor calculators, if you estimate inaccurately, correction factors are
calculated that can be used to correct the estimate. This involves, multiplying
the estimate by the appropriate correction factor, which will result in a
perfectly accurate estimate. This might
sound somewhat mysterious to some people.
However, when you examine the simple mathematics, which is carried out
by the calculator, it will probably seem obvious.
For example, if your
estimate for expenses was $3000, but after the budget period was completed, you
found that you actually spend $6000, then your correction factor for expenses
would be 2, ($6000/$3000=2). If you
multiply your inaccurate estimation of $3000 for expenses, by the correction
factor, 2, you would obtain $6000, which was the actual expense with this
example.
Obviously, there is no
way to obtain a precise correction factor, until a budget period has expired,
and you complete all the calculations for expenses and income. However, if you constantly
find that your estimations are off by approximately the same amount, you can
apply the correction factor calculated from previous budgets to the budget that
you are planning.
Some of the calculation
devices in this subsection have an input box to enter a correction factor to
compensate for less-than-perfect estimations of expenses and income. This is useful only if you have an estimate
of an appropriate correction factor, which ideally can be obtained from
previous budgets. The following
paragraph provides some additional suggestions in this regard.
●●● People, Organizations and Governments Often Underestimate Expenses,
and Sometimes Overestimate Revenue ●●●
People, organizations
and governments tend to be overoptimistic with finances. They frequently underestimate expenses, and
they may also overestimate revenue. It
is not unusual to have estimation errors that range from 25 to 50% if not
more. This often results the need to
borrow money, which may result in substantial accumulation of debt, and
financial problems.
The above raises the question, what causes the over optimistic
estimations? There are probably many
contributing factors including the following:
1)
It is difficult to anticipate all of the
hundreds or thousands of expenses that we may be faced with throughout a budget
period. Attempting to figure every
expense can be very time-consuming.
2)
The availability of the many types of
credit can reduce awareness of financial problems, and it might temporarily
reduce the necessity to precisely figure every expense.
3)
It is difficult or impossible to
anticipate all the unforeseen outcomes that have a financial impact. For example, accidents, illness, loss of
employment, natural disasters, wars, and problems with the economy, cannot
always be predicted, and can result in additional expenditures, and/or lack of
funds.
4)
Many people are brought up with the idea
of positive thinking, which can result in financial problems, if it is not
coupled realistic assessments of reality.
5)
In the case of organizations and
governments, under estimating expenses, or overestimating revenue, can
sometimes be a political strategy. This
can involve underestimating the cost of a major project, and after it is half
completed requesting more money. This
can happen inadvertently as well as intentionally. Companies that want to get a contract, can
make overoptimistic assessments of their ability to fulfill a contract at a
given price.
There are a number of
ways to deal with the overoptimistic financial assessment tendency described in
the following paragraphs.
An awareness of all of
five difficulties presented in the above list, coupled with careful evaluations
of overall circumstances, can reduce or eliminate financial problems stemming
from underestimating expenses, or overestimating funds.
Overoptimistic financial
assessments can also be dealt with by estimating a correction factor, or using
correction factors calculated from previous budgets. This can be done by downloading one of the
budget calculators with input boxes for correction factors. Then you should change the correction factor
in the input box for expenses from 1 to at least 1.25. If you know from experience that your
estimations are off by 150 to 200%, you should use correction factors of 1.50
or 2.
If you are dealing with
an irregular source of income, such as business profits you can neutralize any
overoptimistic estimates, with a correction factor that is less than 1. A good correction factor to start with for
income might be 0.75. With experience,
and trial and error learning, you will probably be able to determine the best
correction factors for your budgets.
There are additional
methods that will be helpful for all types of budgeting problems in the
following paragraphs.
●●● Methods to Improve a Planned Budget, and Budgeting in
General ●●●
The planned budgets and
the correction factor calculators can be quite helpful. However, in most cases you will find at least
some discrepancy between your budget plans, and the way you actually spend your
money. Thus, combining other budgeting
techniques with a planned budget, can improve its functionality. Some of the most useful methods of improving
a planned budget are presented below.
●●● Allocate money
for miscellaneous expenses ●●●
One of the simplest ways to improve a planned budget, or a budget of any
kind, is to enter the words miscellaneous expenses into the budget calculator,
and allocate related Funds. In some
cases, entering multiple categories of miscellaneous expenses might be an even
better approach, such as miscellaneous medical bills, miscellaneous
entertainment expenses, miscellaneous repair bills, etc. The money allocated for the miscellaneous
expenses, should be sufficient to act as a safety margin for underestimated or
unforeseen expenses.
For most people the miscellaneous expenses should probably be at least
10% of all the expenses, or perhaps 10% of the income. In some cases, the percentage should be
significantly higher. A history of many
unplanned purchases, and unexpected expenses would suggest the need for a high
percentage.
If the money allocated for miscellaneous expenditures is not consumed,
it can be used for future budgets, or placed in a savings account.
●●● Feedback Correction Budgeting Method
The feedback and correction method was discussed above, and it can be
applied to a planned budget. Of course,
if the budget was perfectly planned before it was started there would be
nothing to correct. However this is
usually not the case. Thus, when you
start a planned budget, you should frequently check your budget calculator to
determine the availability of funds, and see if your expenditures are
proceeding as planned. With this
information, you should adjust your expenditures accordingly.
●●● Delay purchases that are not on your budget, for the
following budget period ●●●
Whenever feasible, postpone unplanned purchases, for the following
budget. This will allow you to enter the potential purchase into the new
budget, if there is enough funds. This delaying
tactic prevents impulse buying, and it gives you time to evaluate and determine
if you really need the product.
●●● Budget Calculators, With Correction Factors functions, to Plan and
Carry Out a Budget●●●
One paragraphs below, there are download links for
the special budget calculators discussed in the preceding paragraphs. Note these calculators have two sections,
which I will call the PLANNING SECTION, and the ACTUAL SECTION. The PLANNING SECTION is for planning
your budget, and carrying out related calculations, such as anticipated income,
and expenses that will come to during the budget period. The ACTUAL SECTION is used during the
budget period, as defined by the start date and end date you enter. In the ACTUAL SECTION, you enter
actual income you have received, and the actual expenses that you have paid, or
expenses that you will pay before the end date of the budget. The ACTUAL SECTION should be updated
on a daily basis, or whenever you spend money or obtain funds that will be put
into the budget. However, the PLANNED
SECTION should not be changed once the budget period has started.
If you want the above in the
OpenOffice.org format, left click on these words.
If you want to download both of
the above, (Excel and OpenOffice.org formats) left on
these words.
If you want the above in the
OpenOffice.org format, left click on these words.
●●Useful
information on Balance Sheets●●
This website has a number of balance sheet
calculators, but before I present them, I want to explain some useful concepts
and the limitations of balance sheets.
Under this heading, I am providing information, and under the following
heading, I provide the links to the balance sheet calculators.
Balance
sheets are used in business to calculate assets, liabilities, and owner’s
equity. The total assets minus the total
liabilities, is equal to owner's equity.
In simple language this means: the dollar value of everything that is
owned (including real estate, motor vehicles, cash, bank accounts,) minus all
the money that is owed to banks, credit card companies, and anyone else, is
equal to owner's equity. The owner's
equity is the money that would be left over, if all the property was sold to
pay off the debts. (In actual practice,
the money obtained from property that is sold in this way, maybe less than the
value estimated on the balance sheet.)
The balance sheet is often called a financial picture
of the business, but it can also be used to provide an image of your personal
financial situation.
That is the concept of a balance sheet can be applied
to the financial situation of an individual or family. In fact, a bank might calculate your owner's
equity in terms of property that you own, such as your house, or other real
estate. This is done if you want to
borrow money, and use your property as collateral. However, even if you do not have any
significant financial assets, you still might be able to get a loan. The bank will consider your credit rating,
and how much money you are earning, not just figures on a balance sheet.
●●●Sometimes
Balance Sheets Give A Distorted Picture●●●
There are many people that are very heavily in debt,
and have little or no assets, but they are really in good financial shape, if they
are earning enough money to easily meet their monthly expenses. For example, some students after graduating
from college have over $25,000 in student loans to pay off, and they have
little or no financial assets. There
situation would look very discouraging on a balance sheet. They would have a negative net worth. However, if the college graduate obtains
reasonable employment, there will be no problem in meeting expenses for
necessities, some luxuries, and the monthly loan payments.
Just the
opposite of the above can also be true.
An individual can have several hundred thousand dollars in assets,
practically no debt, and look great on a balance sheet initially but they can
still be in serious financial trouble.
This can happen if they do not have enough money coming in to pay their
expenses over a period of months. Real
life examples of this type are relatively common. They often involve individuals that were
doing well financially, but they lost their job, and they were unable to obtain
new employment quickly enough to avoid financial disaster. Problems of this nature can also involve
illnesses that prevent reemployment.
This can result in the loss of all the assets that the individual
accumulated, in less than one year, including savings, stock, bonds, and the
house they live in.
●●●A balance sheet as a
measuring device for wealth or poverty●●●
In spite of the limitations of a balance sheet, working
towards a healthy financial situation, with a favorable balance sheet, with
many assets, and few liabilities can be a very favorable objective. When this is done successfully, your balance
sheet will improve year-by-year, and it will show an accumulation of
wealth. A balance sheet of this nature
can provide financial security, social prestige, and it may help you obtain
loans to buy a house, and to start a business.
A balance
sheet that reveals an unfavorable financial situation can also have very
practical utility. It can help someone qualify
for various types of financial assistance from the government. It can also be helpful in situations that
require Bankruptcy.
●●●A More Accurate Assessment
than A Simple Balance Sheet●●●
The use of a simple balance sheet does provide some
useful information. However, in many
situations you can obtain a more practical financial assessment by evaluating
what will happen over a period of months.
That is instead of calculating all of your liabilities, and assets,
calculate your liabilities and available funds for several months or one
year. For example, let us assume that
you will have over the next 12 months, bills totaling $36,000, to pay debts and
for Living expenses. This is your
liabilities for the next 12 months.
The next step is to calculate your assets for the next 12 months. However, you do not want to include
everything that you own. For example,
you would not want to include your house and car, unless you were planning to
sell these items to pay your bills. Your
assets for the next 12 months would include your income, and any other funds
that you have available to pay your expenses.
If these assets exceed the $36,000 in liabilities, you are in good
financial shape, at least for the next 12 months. This would be true even if your financial
situation did not look good on a balance sheet, and your total liabilities greatly exceeded your total assets.
In
general, it is necessary to use any type of financial assessment, including
conventional balance sheets, and the methods suggested above,
intelligently. This means common sense
must be applied to obtain an accurate financial picture.
Using a balance sheet based on the assets and
liabilities for several months to one year, as suggested above, can sometimes
provide a more accurate picture, then other assessment methods. This is similar to the cash flow concept, and
it is based on predictions, such as maintaining employment, which
may involve much uncertainty.
Cash flow and
financial uncertainty are very important topics, and they will be discussed in
detail under separate headings.
●●Links To Balance Sheet Calculators●●
The balance sheet calculators on this website are
provided in three formats, which are online, Excel, and OpenOffice.org. The complexity and utility of these calculators
vary. The simpler balance sheet
calculators closely resemble some of the budget calculators, except the wording
for the input fields are different.
Hyperlinks for the simpler devices are presented first, which are
followed by links for the more complex calculators.
Scjdirac@aol.com
For a simple online balance sheet
calculator, left click on these words.
For an Excel version of the above,
left click here.
For an OpenOffice.org version of
the above, left click here.
For the Excel and OpenOffice.org
versions, in a single folder, left click on these words.
●●A
Hybrid of a Bounce Sheet & Budget Calculator●●
There is little difference between a Balance Sheet
and a budget calculator. The difference
is primarily in the wording, and the way
the balance sheet and budget calculators I used. The calculators presented under this heading,
(Balance-Sheet-Budget calculators) can be thought of as a hybrid of the
bounce sheet and a budget. The
Balance-Sheet-Budget calculator can be used to calculate a balance sheet or a
budget. However, it is primarily
designed for calculating a balance sheet for several months to a year, or
longer. As explained above, a
conventional balance sheet does not always give the most accurate and useful
financial picture. The Balance-Sheet-Budget
calculators, calculate what will happen (or probably happen) over a period
of weeks, months, or years. Links to the
Balance-Sheet-Budget calculators are presented below.
For an online version of the
Balance-Sheet-Budget calculator left click on these words.
For an Excel version of the above
left click here.
For an OpenOffice.org version left
click on these words.
For all three of the above (Excel,
OpenOffice.org, and Excel with database), in a single folder, left click on
these words. This requires
Microsoft Excel 2003 or later.
●●Rate Multiplied By Time,
Is A Very Useful Mathematical Concept, For Evaluating Budgets And Financials
Stability●●
●●●The
utility of understanding rate and time in relation to money●●●
In this section, and the one that follows, a number
of useful concepts for budgeting and finance will be discussed in detail
involving RATE OF: income, expenses, gains and losses. After this material is presented, calculation
devices that perform these mathematical functions will be provided on this
website.
An understanding of the basic principles of rate and
time will help you see budgeting, financial challenges, and goals in a new
way. This new insight may help you find
better methods and solutions to deal with your financial situation. This is the primary goal for this section.
●●●Rate is a
concept that we consciously or intuitively use in everyday life●●●
Rate is a concept that is used in science and
engineering, but it is also commonly used in our daily lives. When we are driving a car, we controlled the
rate of speed of the car, such as 30 mph.
Many of us get paid by rate per hour, such as $25 per hour. Some of us get a fixed salary based on the
rate per week, per month, or per year, such as $500 per week, $$3000 per month,
$36,000 per year.
From the
above, the concept of rate will seem simple and obvious to most of us. Now we can advance the concept by considering
rate and time. Some common everyday
examples will make this easy to understand.
When dealing with a moving object, such as a car, rate multiplied by
time equals distance. For example, if a
car is going 50 miles an hour in four hours it will be 200 miles from its
original starting point. That is 50 mph
multiplied by 4 hours equals 200 miles.
When dealing with wages, rate multiplied by time, equals a sum of
money. For example, if you get paid $20
per hour, and you work 10 hours, you earned $200. That is $20 per hour
multiplied by 10 hours equals $200.
●●●Applying the
concept of rate to money and budgeting●●●
When
dealing with budgets, and evaluations of financial stability, we can consider
the rate of income, such as $500 per week.
Some people get paid monthly, such as $3000 per month. This is their rate of income. For some people, it is necessary to consider
the average rate of income, because they do not get the same amount of money
each week, or each month. This is
usually the case for people that own their own business, and individuals that
work on a commission basis.
We can also apply the concept of rate to
expenses. For example, if you spend $400
each week, your rate of expenses is $400 per week. If you spend $2000 each month, your rate of
expenses would be $2000 per month. When
dealing with the rate of expenses it is usually necessary to consider the
average rate, because expenses almost always very each month.
However, most of us have fixed expenses that usually
do not change each week or each month, such as rent, mortgage and
insurance. Fixed expenses, involve a
fixed rate of expenditures, per week, or per month.
There are also variable expenses that tend to vary
each week or each month. For example,
most of us do not use the exact same amount of electricity each month, so our
electric bills vary. The same applies to
food, clothing, and transportation costs.
With variable expenses it is always necessary to consider an average
rate of expenditures. When variable
expenses are calculated together with fixed expenses, it is also necessary to
think in terms of averages.
When evaluating financial stability, we can apply
three concepts, which are rate of income, rate of expenses, and rate
of gain or loss. The first two
concepts were explained above.
What is the rate of gain or loss? It is your rate of income, minus your rate of
expenses. For example, if your income is
$3000 per month, and your rate of expenses is $2500 per month, your rate of gain
is $500 per month.
When your rate of income is more than your rate of
expenses, you have a rate of gain, such as with the above example. However, if you have a rate of expenses that
is greater than your rate of income, you will have a rate of loss. For example, if your salary is $3000 per
month, and your average rate of expenses is $3100 per month, your average rate
of loss will be $100 per month.
●●● Defining
Cash flow, in terms of rate of income and expenses●●●
There are a number of ways that cash flow is defined.
For this discussion, it will be defined in a precise mathematical way, in terms
of rate. Based on this perspective, cash
flow is the rate that you get money, and the rate that you spend it. In more general terms, it is the rate that
money enters and leaves a system. The
system can be your pocketbook, the family budget, or the funds from a business.
From the perspective of rate, cash flow can also be
thought of as the rate of income minus the rate of expenses. When the rate of income is greater than the
rate of expenses the cash flow can be defined as positive, because more money
is flowing in than out. When the rate of
income is less than the rate of expenses the cash flow is negative, because
more money is flowing out than in. When
income and expenses are equal the cash flow is at equilibrium, because the same
amount of money that flows in flows out.
●●●What is a
cash flow problem? ●●●
People often talk about cash flow problems,
especially in business, but the concept applies equally to individuals and
families. What is often meant by a cash
flow problem are situations where the yearly income is adequate to meet the
yearly debts, but variations in the rate of income and/or expenses per month,
results in a shortage of funds during certain months. In more technical terms, this problem
consists of a cash flow that is in equilibrium on the average, but it
fluctuates from a negative to a positive cash flow, over a specific period of
time, such as one year. This type of
problem is usually not serious because the expenses can ultimately be met. The solution can involve appropriate types of
short-term credit.
In some
cases, a cash flow problem is based on time periods less than a year, such as
monthly, biweekly, or even weekly. Some
people that get paid monthly, run short on money at the end of the month, but their
average monthly income is adequate to meet their expenses. This problem can also happen to people that
get paid biweekly or weekly, but the difficulty may be less severe, because of
the shorter time periods involved.
Sometimes
people confuse consistent or chronic shortage of funds, with the type of
cash flow problem discussed above. This
type of difficulty involves expenses that exceed the yearly income. It can be called a negative cash flow
problem. This type of problem cannot be
solved by obtaining short-term credit.
In fact, credit might make the problem worse, because there may not be
enough funds to pay back the money. The
solution must involve a reduction in expenses and/or an increase in
income.
●●●Rate a
return on a bank account, or other investment●●●
Rate, as discussed above, is not very often applied
to money, in spite of its utility.
However, the concept of rate is commonly used to calculate the return on
an investment. An example is a bank
account has an annual rate of return of 5%.
It is also used to calculate interest on debts, such as bank loans and
credit cards. This is usually called the
rate of return, or rate of interest, and it based on the percentage of the
money per unit of time. For example, a
savings account with $100, at an interest rate of 5%, would result in five
dollars of interest in one year.
However, the concept is a little more complicated here, because there is
interest on the interest. With the above
example, of $100, the rate of return for the first year would be 5% to 100, and
the second year it would be 5% of $105, and the third year it would be 5% of
$110.25, etc.
●● Rate of Income, Rate of
Expenses, and Rate of Gain or Loss, Summarized from a Mathematical Perspective ●●
Summarizing the concepts discussed above in terms of
mathematical formulas, coupled with verbal examples, should provide some
additional insight about these ideas, especially for those who are
mathematically inclined.
If you find the following summary interesting or
helpful, study it, but if you find it confusing, skip it. If you have a basic understanding of rate of
income, rate of expenses, and rate of gain or loss, that is all you really
need, because calculation devices will be presented in the next section, to
perform these calculations automatically.
●●●The
symbols used in the mathematical formulas●●●
The following symbols will be used for the formulas
that follow.
RI= Rate of income
Re= Rate of expenses
RL = rate of loss (this is the rate of
accumulation of debts)
T=Time
$I=Money gained (money that is not
consumed by expenses)
$e= Money consumed (money lost or money
used for expenses)
Note, the asterisk (*) will be
used in some of the following examples to represent multiplication.
●●● Rate income multiplied by time equals the sum
of money●●
RIT=$I In words, this means: Rate of income
multiplied by time, equals a sum of money.
For example, if you earn $10 an hour, and you work 40 hours you will
earn a total of $400. That is $10 per hour
multiplied by 40 hours equals $400. In
terms of the formula:
(RI=$10 per hour)*(T=40 hours)=($I=$400)
●●●
Rate of expenses multiplied by time equals expenses debts●●●
ReT=$e
This means: rate of expenses multiplied by time equals total
expenses. For example, if you spend on
the average, $300 per week, your yearly expenses would be $15,600. That is $300
per week multiplied by 52 equals 15,600.
In terms of the formula:
(Re=$300 per week)*( T=52weeks)=($e=$15,600)
Another example is if you spend $3 per day on
cigarettes, by the end of the year, (based on a 365.25 day year) you will spend
$1095.75. With the formula this is as
follows:
(Re=$3 per day)*(T=365.25 days)=($e=$1095.75.)
When RI > Re then RI − Re=Rg In
words this means: When the rate of income is greater than the rate of expenses:
income, minus rate of expenses, equals rate of gain. For example, if your income is $ 2000 per
month, and your expenses is $1900 a month, your rate of gain is $100 per month. With the formula this is:
(RI =$ 2000 per month)−(Re=$1900
a month) =(Rg=$100 per month)
If the rate of gain is multiplied by time, it equals
the amount of money gained, or saved.
With the above example, the rate of gain was $100 per month, in 12 months,
this would equal $1200. In terms of the
formula:
(Rg=$100 per
month)*(T= 12 months)=$1200
●●●Rate of
Loss, going into debt●●●
When Re > RI, then Re - RI = RL In words this means when the rate of expenses
is greater than the rate of income, the rate of expenses minus the rate of
income, equals the rate of loss. The
rate of loss means here the rate that debts are accumulating. For example, if the rate of income is $1900
per month, and the rate of expenses is $2000 a month, the rate of loss would be
$100 per month. In terms of the formula
this would be:
(Re=$2000)–(RI =$1900)=(RL=
$100)
Rate of loss multiplied by time equals a sum of money
representing accumulated expenses, or debts.
With the above example, the rate of losses $100 per month, and in 12
months this would represent an increase in debt of $1200. In terms of the formula this is:
(RL=$100)*(12 months)=$1200 in additional
debt.
Cash flow from the perspective of rate and
the above formulas
RI − Re= Cash Flow In words this means the rate of income minus
the rate of expenses equals cash flow, based on the definition I am using.
Specifically, the rate of income (RI) is the rate that money flows
into your system, and your rate of expenditures is the rate that money flows
out of your system. When RI −
Re =0 the cash flow is in equilibrium, when the result is positive,
the cash flow is positive, and when the result is negative, the cash flow is
negative.
All of the calculations discussed above can be
performed automatically with the Budget Rate Calculator. This calculation device is available in four
versions, as listed below.
For a printer friendly version of the online budget rate left, click
here.
For an Excel version of the budget rate calculator
left click here.
For the
Budget-Rate Calculator in the OpenOffice.org format, left click on these words.
For all
three versions of the above, in a single folder, left click on these words.
I am still working on this section. However, most of it is
readable, but there are sections that are incomplete or are in a rough draft
format.
● Section 3 The Behavioral
and Emotional Aspects of Money and Budgeting ●
●●
How to Improve Your Purchasing Decisions ●●
●●●
Delay the purchase, to give yourself time
to think ●●●
When you want to buy something, try to delay the
purchase, whenever feasible, to give yourself time to think. The thinking, should involve an assessment of
the utility and value of the product or service. This can also include an evaluation of the
happiness and pleasure that the purchase might provide.
Delaying a purchase also gives you time to evaluate
any risks or adverse consequences that can be associated with a product or
service. The most obvious risks in this regard are buying something that you
cannot use, buying an item that wears out or breaks very quickly, and/or buying
something that is not worth the money.
However, there can be more serious risks associated with the purchase,
such as running short of funds, (example: buying products you cannot afford)
health problems (examples: cigarettes, or alcoholic beverages), and accidents
(examples: automobiles, skis, and fireworks).
This does not imply that you should totally exclude all products that
have associated risks, because there are some risks associated with
everything. The idea is to delay the
purchase so you have time to determine the risks, and decide if you want to
take the risks associated with the purchase.
Learning about the risks that are associated with a product, can also
help you reduce the possibility of accidents and other adverse consequences.
Delaying a
purchase can provide additional benefits that were not mentioned above. When we delay a purchase our needs may
change, or we may find a better alternative.
For example, if we have an urge to buy some junk food, a few minutes
delay might change our desires, or we may find a healthier source of food. If we want to buy a new electronic device, we
might find a better alternative if we delay the purchase for a few weeks. Technology, in the electronics field appears
to be improving continuously, and waiting can result in a better and perhaps
also a less expensive product.
Delaying a
purchase of a complex product or service provides the time needed to learn and
study the related literature. For
example, if we want to buy a computer, gathering information and studying it,
may give us the knowledge needed to make a better purchasing decision.
In
general, if we give ourselves enough time by delaying a purchase, we will have
time to determine all of the following:
·
Alternative brands or providers of
the product or service
·
The facilities that sell the
product or service at relatively low prices
·
Practical information about the
product or service
·
Technical information about the
product or service
·
Alternative products or services that
may or may not be better than the product you routinely plan to buy
Thus,
delaying a purchase is one of the most important methods of avoiding problems,
and saving money. In some cases it can
also save your health, and prevent your house from being cluttered with
products that you do not need.
Delaying
a purchase for too long can be counterproductive
In spite of the benefits associated with delaying a
purchase, you can delay excessively, which can be quite problematic in some
cases. Delaying excessively can waste
many hours or even many days, if you spend excessive amounts of time,
window-shopping or reading about the product.
●●● How long should you wait before you buy ●●●
A useful delay time, before making a purchase, can
range from a few seconds, to several months or longer, depending on the nature
of the purchase. For a low-priced item,
such as a snack, a delay of a few seconds to several minutes might be
appropriate. For an expensive item,
delays of days, weeks or months, or longer might be required to give you the
time to evaluate the purchase. For
example, if you plan to buy a house, or even a car, several months, or longer
might be appropriate. Complex items
generally require more time to evaluate, then simple items.
●●● Questions to ask yourself before you buy ●●●
Delaying a purchase can produce even better results
and savings, if you ask yourself the right questions. A list of questions to help you evaluate
potential purchases is presented at the end of the next paragraph. You should add your own questions to this
list. Your questions can be focused on
your specific needs, circumstances and the product or service that you are
thinking of buying. When dealing with
complex products, it may be better to answer the questions in writing, ideally
on a computer screen with word processing software, such as Microsoft
Word. With word processing software, you
can think and write, and then rethink and rewrite a number of times, until you
get the best answers.
●●● Consider the following questions when
planning to buy a product or service ●●●
·
This can result in rethinking, and
it is appropriate to return to the same questions and change your answers.
·
but getting there opinion after
you answer the questions might be helpful.
·
If I decide not to buy this
product, will there be any adverse consequences, in the following, hours, days,
weeks, months, and years.
·
If I buy this product will there
be any benefit or pleasure, in the following hours, days, weeks, months, or
years.
·
Will I be faced with any risks if
I do not buying this product or service?
·
What are the risks associated with
buying the product or service?
·
If you decide to buy this product
or service, will it have an adverse effect on my health?
·
Will this purchase make you
healthier stronger, and more productive, or will it have the opposite
effect.
·
How does this purchase compare
with similar or alternatives?
·
Are there any alternative brands
or alternatives products that are more durable, bettering functionality, and/or
less expensive?
·
If I buy this product the service,
where can I obtain the best deal, and
When you answer the above questions, you should keep
in mind that the goal is to evaluate a potential purchase in relation to your
own needs, and financial circumstances.
Thus, asking someone else to answer the questions for you might not be
very helpful. Very often products or
services that are useless for one person might be a sensible and very essential
purchase for another. However, asking
someone else's opinion, after you answer the questions yourself, might be
helpful.
●●
How to Develop more Self-Control or Willpower to Reduce Unnecessary or
Unhealthy Purchases ●●
The techniques in this subsection are primarily for
people who frequently feel an urge to buy either unhealthy or
unnecessary items, and/or they purchase products or services that they cannot
afford. Some of these individuals are
impulse buyers, and they do not give themselves time to evaluate many of their
purchases. If you often feel you spend
your money unwisely, or if you believe you have an unhealthy habit, such as
cigarette smoking, this subsection is for you.
In listed below there are several practical ways of
increasing your self-control, to reduce your unhealthy, unnecessary, and
excessively expensive purchases. You may
know of or find additional methods that work well for you, and you should use
them, along with the following techniques.
·
One of the simple ways of
controlling yourself, was already discussed, which is delaying a purchase that
is unhealthy, unnecessary, or excessively expensive. When purchases are delayed, sometimes the
urge to buy diminishes. During the
delay, you should follow the other steps listed below.
·
Silently talk things over with
yourself, or perhaps another individual, in regard to the purchase. If you realize that you should not buy
something, you can resist the urge better, the more you talk, and think about
the reasons why you should not make the purchase.
·
When you feel a desire to buy
something that is unhealthy, unnecessary, or excessively expensive for you,
distract yourself, with something pleasant, interesting, and challenging.
·
Try to make your daily routine,
and your entire life, more pleasant, interesting and challenging, in a healthy
way. This can reduce the urge to carry
out many bad habits, including dysfunctional buying behavior, but it must be
combined with a deliberate effort to control behavior.
·
Developing healthy eating habits,
and engaging in regular exercise, might help you feel better, think better, and
make better buying decisions.
·
Learn relaxation techniques, and
develop strategies of preventing conflicts with others. Some people buy unhealthy food, cigarettes,
alcohol, and unneeded products when they are upset or nervous. Most people find it easier to control their
behavior when they are relaxed and alert.
·
Keep yourself away from stores
that sell unhealthy, unnecessary or excessively expensive items. For example, if you do not want to buy junk
food, stay way from fast food restaurants. The same applies to cigarettes,
alcohol, and anything else that you want to avoid. If you feel the urge to just go shopping, go
to stores that have economical products that you truly need.
·
When you feel the urge to buy an
unhealthy, unnecessary, or excessively expensive product, tried to substitute a
healthy and economical alternative. For
example, if you feel the urge to buy junk food, or cigarettes, because you are
hungry, try buying healthy low-calorie food.
·
Get rid of your credit cards. If this is not feasible do not carry your
credit cards with you when you go shopping.
It is very easy to lose track of how much money you are spending when
you use credit cards. The same problem can
happen with debit cards and checks, but perhaps too a lesser extent. and
perhaps they should be left at home also.
·
When you go shopping, do not take
anymore money than you need to buy the items you truly need. Carrying excess amounts of money, can make it
difficult to fight the urge to buy unnecessary, unhealthy, or excessively
expensive items.
·
Practice all of the above on an
ongoing basis. If you find other
techniques that works for you, include them in your practice. The longer you practice the above techniques,
the easier things become very.
I am still working on this section. However, most of it is
readable, but there are sections that are incomplete or are in a rough draft
format.
Some of us are overweight, some of
us are addicted to cigarettes, some of us drink too much alcohol, and some of
us eat excessive amounts of junk food.
All of this is the result of poor purchasing decisions, which can be the
result in poor health habits, lack of knowledge and lack of willpower and
determination to avoid unhealthy products.
In relation to the purchases.
Some of us, our addicted to
cigarettes, and some of us are of us are
Are you overweight,
From the perspective finance and
budgeting, excessive body weight is the result of poor purchasing
decisions. This can involve a lack of
willpower and/or knowledge when buying food, coupled with poor purchasing
habits.
To deal with willpower problem to
all of the following:
Make sure your refrigerator and
closets do not contain fattening or unhealthy food, because that will increase
your temptation. This means you should
develop the habit of not buying fattening or unhealthy groceries.
Make sure your refrigerator and
closets contain healthy food that is low in calories. This means buying plenty of fruit,
vegetables, low-fat dairy products, and lean meats.
Do not buy fattening or unhealthy
food
Do not buy fattening or unhealthy
food and unhealthy and fattening
Try to delay unhealthy food
purchases,
in relation to the purchase of unhealthy
excessive body weight is poor purchasing decisions,
The cause of excessive body
weight, is poor purchasing decisions.
I am still working on this section. Most of it is incomplete
or in a rough draft format.
A popular way of saving money is
to buy products that are on sale. This
strategy can result in significant savings, if you are buying products on sale
that you would normally buy at a higher price.
If you were planning to buy an expensive item, such as a television set,
and you hear about a sale, you might also save money, and/or get a better
product.
However, buying things on sale may
cost you more money than you save, if you end up buying things you really do
not need.
It can be very difficult to determine
the true value of certain items, such as clothing, shoes, electronic
appliances, computers, television sets, radios, furniture. When these items are on sale, it may not be
any real savings. The difficulty in
determining value is partly the result of constant changes in technology. For example, a computer that was selling for
$1500 a couple of years ago, might be on sale now for $$700, but this may not
be a true bargain.
You can sometimes determine the
value of an item by comparing it with similar items. However, it can be very difficult to make
such comparisons, because there can be unseen weaknesses in a product, that
reduces its true value. For example, an
expensive looking pair of shoes, maybe stitched together with thread and glue
that is relatively weak.
Store closings, can sometimes
result in legitimate sales. For example, when a large store closes, the
merchandise may be reduced in price, day by day, until everything is sold. This
can sometimes lead to savings that are as much as 25 to 50%.
To sum all this up, you can save
money by buying things on sale, if you normally buy that product at a higher
price. If this is not the case, you may or may not save money. If you
One of the best ways to save money
on products is to buy from large stores, especially discount stores. When you buy electronics devices, clothing,
shoes, luggage, backpacks, from a small store, expect to pay more money. The large stores by in huge quantities
directly from manufacturers, and they pay less money than the small stores that
have to buy from wholesalers. In addition, the large stores sell in huge
quantities, and they can sometimes make a good profit, by selling an expensive
item for a few dollars above what they paid for it.
I am still working on this section. Most of it is incomplete
or in a rough draft format.
F,or example, it can be very difficult to tell the true value
It can be very difficult to tell
the difference between shoes that are selling for $100, and are marked down to
$50.
Sometimes it is very difficult to
determine if you are really getting a bargain by buying
Sales can sometimes also result in
savings, when you find an alternative product on sale
For example,
This can result in significant
savings, or it can cost you a significant amount of extra money
saving money by buying things on
sale can be a good strategy,
I am still working on this section. Most of it is incomplete
or in a rough draft format.
Are coupons a good way to save money, or poor time
investment
Saving money with coupons, might
be counterproductive, because of the small amount of savings, and the time and
effort required to collect them. Coupons can also influence us to purchase
unneeded items. However, some people like to use coupons, and perhaps some
enjoy collecting them from magazines and newspapers. If this applies to you,
coupons might be a good way to save a few dollars a month.
● Section 4 Introduction ●
● Section 5 Links to Other
Websites for a Different Perspective, Financial Assistance, And More
Information ●
Direct links and search page links
in this section you will find many
links for information, resources, and financial assistance. There are two types
of links in this section, direct, and search page links. The direct links will take you directly to a
website. The search page links will take
you to a search page, which will have many links to large number of links to
=7877-7279 =w
7886
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links to credit card companies
links to deal with credit card
debt
links for financial assistance
Li for bankruptcy
links for credit card problems
credit agencies
Links
For Financial Assistance