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REDDITCareful money management is the bedrock of financial security. Those who spend with reckless abandon tend to end up in dire straits. The only way to effectively build a bankroll and establish a portfolio is budgeting. The simple act of budgeting is a balanced allocation of funds towards multiple categories of expense items, grudge purchases (medical and life insurance), savings and retirement initiatives, investments, et al. The concept of a budget is well known, yet poorly followed by too many people.
Budgeting is more than an allocation of funds; it is a strategic blueprint of where finite resources are being disbursed, for more efficient financial management. Businesses and their finance departments routinely allocate funds towards different management functions such as human resources, research and development, sales and marketing, production and operations, et cetera. These funds are necessary to grease the wheels to allow operations to continue from day-to-day, week to week, and month-to-month.
Money management is frightening to many of us since it evokes a set of guidelines which we may not have the requisite discipline to follow. Budgeting numbers are not carved in stone; they are flexible and malleable to reflect the current reality. A person who is employed part-time invariably struggles to maintain any modicum of normalcy vis-a-vis a budget. When money is tight, budgeting becomes even more important. The flipside of the coin also holds true. Higher income earners typically spend more of their income as their lifestyle preferences change.
Greater earning potential is associated with a bigger food budget, a bigger entertainment budget, a bigger home, a more expensive car et cetera. It’s not outside of the realms of possibility for a high-income earner to have near zero disposable income at the end of the month. Consider all the celebrities, sports superstars, or high-profile people who spend as much as they earn, if not more and end up bankrupt.
What Leading Experts Say About Money Management?
The greater the positive difference between income and expenses, the better. It is preferable to live beneath one’s means and be able to put aside money for exigencies, rather than wanting for money and not being able to take care of things. There are several ways to manage money like a business mogul, and many of these methods can easily be set up in a stress-free way.
For example, automatic monthly investments in a 401(k), Roth IRA, or personal investment account are a great way to have funds removed from personal disposable income and invested for the future. More importantly, it’s essential to understand the basics of tax laws. Deductions are a case in point. What deductions are you eligible for? How can you reduce your personal tax burden? How can you defer tax? How can Homestead exemption help you?
The Panacea to Poor Financial Management
Too many of us get stuck in life. Our fears overcome us and we resign ourselves to a miserable fate. Our passion takes a backseat and we accept that success belongs to others – not us. Such thinking, pessimistic though it may be is the norm. Only a handful of people realize their aspirations of true financial success. Why is this? Success is an idea that anyone can embrace. If you believe it, you can have it. The pathway to success is laden with obstacles, but the right mindset can create an atmosphere conducive to financial independence. Visualization techniques truly work, and Russell Ruffino is evidence of this. This bartender was stuck in a dead-end job for years, but the notion of success was alive and well, fomenting in his mind’s eye.
He had an idea to create a business that would solve challenges faced by other businesses. That’s when Clients on Demand was born. With an initial revenue stream of just $500 per month, his business rapidly blossomed and delivered gross profits of approximately $500,000 per month. Clearly, Clients on Demand is a winner. Ruffino too is a firm believer in budgets, but not in the conventional sense. He allocated significant budgets to growing his business. By spending big on the right investments, he was able to leverage the power of his brand to become even more successful at his craft. Budgetary allocations are part and parcel of a broader strategy. The ultimate goal can be greater liquidity, greater profitability or simply enhanced financial stability. The rest they say, is history!
