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October 20, 2012


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Reason #7 - If you are in the financial service industry, and trying to sell me your product, you lose all credibility the minute I find out you don't have a budget, yourself.

Thanks for the caveat at the top! Many personal finance bloggers hound people to have budgets (perhaps because they themselves need one) as if it is not possible to be financially responsible without one. I think a budget is a great tool for being able to learn about your own financial habits, weaknesses, and overall picture, and using one is a great way to learn to modify your thinking of money and its purposes. But once you've learned to stop thinking of available cash as needing to be spent and shift toward a saver's or investor's mentality, the budget can quickly become a form of financial shackles that is counter-productive to leading a well-managed life (i.e. Oops! I used too much electricity the first 3 weeks of the month, I'd better use candles from here on out to meet my electric bill budget!)

Everytime that I make a goal a priority that is when I have success whether it be a short, intermediate or long term goal. That is #1 in my book.
I know retirement looked so far away 30 years ago and now I am within 15 years to the finish line will more than my fellow coworkers.
College is a big expense which we are hyper focused on with savings right now and not neglecting the others.
Shorter term is vehicles for us to add to our need.

People don't like them me inculded but think about me when I am retired and you are not because I tried my hardest to have a plan.

I've never seen a better explanation of why one would want to budget. Very well thought out post!

I don't have any kind of Spending Plan. At age 78 and having been frugal my whole life it isn't necessary.

I should have had a spending plan when I was 29 when we bought our first ever new home in 1963. I made a mistake going overboard by spending way too much on carpets, drapes, furniture, and landscaping, and airfares to bring my parents here from England for a vacation, leaving us with a fairly small emergency fund. If I had been forced to sell the home and move out of state to a new job, with our two small children, (and a third on the way), we could have been really hurting for money but as fate would have it my job was never threatened and I kept it from 1960 to 1992 when I retired.

We let our pride get ahead of our good judgment and learned a lesson. Many years later after I got to know my boss really well he confided in me that he always gave married men priority over single men if layoffs had to be made. He also did the same when it came to raises.

Very great informative post! Yes you need to be in total control of your money and know what comes in and what goes out. You need to learn how to effectively Create, Preserve and Enjoy your money.

Most people tend to skip or neglect the preserving part of money and this usually cause financial problems later on in their life. The majority of people cannot seem to retire comfortably, because of how they have been conditioned as to how to think and act towards money and finances.

The trick of course is to equip yourself with the right knowledge and skill-sets in order to optimize your finances and improve your chances for financial freedom.

One more need to take full responsibility for your finances. Be careful with the so-called financial 'experts' and trusting the financial institutions with your money. They will usually show you the "pages of the book" that you want to see that seems enticing, but they cannot guarantee the expected growth on your money.

While I am one of those people that has taken full responsibility for my finances there are a few caveats.

1) It was very hard to do in the days before the Internet (prior to 1992), that's when I used a stockbroker.
2) You have to be very interested in the mechanics of investing if you want to be very successful.
3) You have to have abundant time to spend, that's why being retired is ideal.
4) You have to have some basic mathematical skills.
5) You need some very good software that allows you to rank, chart, and compare mutual funds.
6) You need a comprehensive database that is updated daily, accounts for all dividends and distributions, and that has all of the available mutual funds arranged into families.

Only then can you do a superb job of managing your investments.
Here's my data from 12/28/1992 through 10/19/2012.
Vanguard's S&P500 fund -- ANN= 8.15%
Old Limey's results ----------- ANN=16.94%

I left out one caveat that's probably the most important one of all.

I am always very suspicious of any one that is offering to give me some very valuable information FOR FREE!

Plan is basic and most important step of everything you cannot survive for a long time without a proper planning. Your all points are motivational about spending money with a plan but the problem is making a plan is easy, but the difficult part is adhering to it. As people make plan for a month or a year but they don't have patience while the plan needs time and commitment. One needs to be determined to follow a plan of anything.

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