Posts Tagged ‘budget’

Fixed Income In Budgeting

Thursday, October 8th, 2009

Continuing on in our mini-series about budgeting, we have talked about fixed expenses and variable expenses.  Now we add to our budget talk with fixed income. 

Fixed income can consist of any of the following items:

Net income from salary – that is your income after all your deductions have been taken out for taxes, medical, social security, etc.

Dividends and interest – these are the proceeds paid as a repayment for an investment you have made in a savings account or other investment vehicle.

Bonuses that can be reasonably relied on.  Most of the time these days bonuses are not reliable because of the economic times and we already talked about them in the previous entries that they are generally one shot sums of money.

Pensions – these are retirement plans that you may have by virtue of working for a long period of time with an employer.

Social Security – the payments that you receive after contributing the Federal program throughout your life.  Social security kicks in when you hit retirement age and the amount that you receive varies based on your age and income.  That is a separate book in itself and the tax implications have to be taken into account as well.

Alimony or child support received – these are the amounts court ordered that you receive for keeping the lifestyle that you had while married and/or to take care of your children.

Income from sources outside of your salary- these are income streams such as distributions from businesses, freelance work, royalties, and any self-employment income that you are receiving.

 

The way that the formula for budgeting works is that you take your fixed income that we have talked about, subtract out your fixed expenses.  Anything left in fixed income can be used to pay for your variable expenses.  Anything left in cash you save or apply for something else – like extra bill payments.

If there is no cash leftover or you are short, you need to make changes to your budget and make the income that you receive fit.

That means that you need to cut back on expenses and see where you can trim wherever you can.  Remember that you are still living in a decent country where you are not in the streets (hopefully not yet) and that you should have some wiggle room in terms of adjusting what your outgoing costs are.

If things are in very dire straits, you are not alone and you need to talk to your creditors and set up some adjustments to your payment plans.  You also may have to make more of a concerted effort to cutting out expenses and expenditures.  That is very hard to do but all bad things don’t last forever just as all the good things didn’t last forever.

Everything in one way or another has a price in this world and if your budget is askew, you need to get things back in balance for your sake, your family sake and for your sanity.  Once you are on a path to keeping and getting things squared away you should be feeling a little bit more in control of your life (as best as any of us can) as well.

Oct 08 2009

Kim Isaac Greenblatt

Fixed Income In Budgeting

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Variable Expenses and Dealing With Them

Wednesday, October 7th, 2009

In our third part of making a budget we need to talk about variable expenses.  For the purposes of this explanation, a variable expense is one that can be delayed or postponed when expenses are exceeding income.  For a lot of people these days, that is the case and the blog entries are to help you get back on track.

 

Some variable expenses that you can postpone (though you may not want to and that is where your discipline comes in):

Vacations – instead of spending 3-5 thousand dollars to fly to Australia or China and travel, spend time cleaning your house or take local trips to parks (before they get closed if city/county/state govts keep going the way they are) and save some big cash.  Knock down some credit card payments instead with the cash.

New car – if you aren’t planning on driving 80 miles back and forth for a commute, what is wrong with an older car?  It doesn’t matter if you have a clunker if the transportation is reliable and you don’t have to spend a lot on repairs or maintenance.

New furniture – I would suggest looking for used furniture at fire sales, swap meets, garage sales.  You can find some great stuff just down the block and hopefully for pennies (or dimes) on the dollar in a lot of cases.

Entertainment – I am not suggesting that you don’t entertain yourself, just watch your expenses.  Money for movies, books, music, restaurants, cable, etc can be budgeted down and kept at relatively managable levels.

Gifts- Go easy on the big and smaller ticket gifts to keep costs down.  You are working at making and keeping a budget, not impressing your friends. 

Club memberships – It may be time to temporarily let things go for your golf membership or country club.  Do it for a year and see if you can keep doing without unless the social connections help you with your day job.

Charitable contributions – Lower or discontinue the amount that you are giving if you are deep in debt.  Charity begins at home so take care of yourself first.

Elective medical procedures – Do you really need that tummy tuck?  Can it wait a year or two where the prices for procedures might go down?  If you have the extra cash for the surgery, can you use it instead to knock down some of your debt.  That is what a budget is all about.

 

My next entry will deal with Fixed Income.  Stay tuned!

Oct 07 2009 

Kim Isaac Greenblatt

Variable Expenses and Dealing With Them

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How To Budget Your Money For the End of the World

Wednesday, February 25th, 2009

The most important thing in planning for the future, even for the end of the world as some Mayan doomsayers, is having the appropriate budget so you can have money for any end-of-the-world last minute sales and anything else that you might need.  If you are having an end-of-the-world party, and sure it is several years before the Mayan prophecy (which I think isn’t half as scary as the number of people that are unemployed these days), but it pays to plan ahead.

If you are running a business, make sure that you have a lot of water for sale, blankets, and canned foods.  Nothing will be great for business better than last minute purchases for water and sundries.  Sure, money will be meaningless at that point but as people use to say, people who have the most cash or toys when they die win.  Either that or they are still dead.

What if the end of the world doesn’t come?  Ah, well then how about a more practical budget where you can actually save money and keep living?

Make sure that you have enough money for food, water, shelter and warm clothing.  If you are in winter climates, if you can, think about leaving for warmer climates or make sure that you have energy.  If you are on unemployment or have Cobra payment plans, make sure that you are current with your reporting and payments respectively.  You need to keep the income stream flowing (even though it is a small one, it is better than nothing) and you need to have medical coverage.  The nationwide Federal Stimulus package should help with that.

Keep your sense of humor, even if it seems a bit on the dark side (like this blog entry) but deep down be like me and be the eternal optimist.  Yes, things are bad and yes it is hard.  There is still a lot of money staying stuck in constipated mode in the banking system and it needs to make it’s way out to people who need it.  Even though everybody is planning on saving all their money, people still need to eat, sleep and stay warm.  Also habits are tough to break and everybody has some addiction or vice that they are using to cope through things so try and insure that you are placing money in our budget for things like that.  It may be a great time to give up smoking, but if you are doing it at the same time you are a nervous wreck, you may be jeopardizing your health.

Keep food on hand for six months if it is canned – I wouldn’t go survival end-of-the-world nuts only because things expire.  It makes sense to keep a few gallons of water around the house, especially if you live in desert areas such as parts of the Western United States.

Be prepared still to pay taxes.  I suggest that for overkill that you have a third of your income put aside for tax liabilities for people who are working and making good money.  That should cover the Federal income taxes and a portion of any State taxes.  We don’t know how long AMT (the Alternative Minimum Tax – see some of my other blogs) will be “on hold”.  There are so many people who need money that I wonder what the IRS will be doing to go after people who are in the extreme wealth tax brackets.  I have no idea.  Make sure that you are saving your receipts and if you are making donations for charity that you are getting letters from the organizations and you are paying by check to keep a paper trail.  I know that Fat Tuesday is over but it doesn’t hurt for some Not So End of the World advice to make it through to an awesome financial afterlife.   Or at least you might get a bigger tax refund at tax time.  It is one or the other I guess.   It is very easy to get caught up in hysteria – and there is a lot of it and some of it justifiable – but you still have to pay your taxes.  I have been getting a lot of comments and e-mails and my advice is pretty much the same.  Vote with your pocket book and at this coming election in March.  Vote in State elections and if you have problems with people in office, vote them out or run yourself.  Do not try to avoid paying taxes.  Not only is it against the law, it will get you in trouble in other ways down the line as well.  If you are planning on buying a home, a boat or anything in the future or even getting a business line of credit, you will possibly and in some cases certainly need to show your tax returns.  That is the way it goes.  Okay, I am off my soapbox on that point.

If you are looking for financial investments all I can tell you is that for right now, cash is still king (I’ve been saying that for months now) but I am honestly looking for something that isn’t a con to put money in to get a reasonable rate of return.  No, I am not talking about Forex or other deals that are being hyped on the Internet.  I am talking about practical things.  Any investment that is genuinely in the infrastructure, if it applies to actual construction, may or may not be considered “green” has the potential not only for making money but being politically correct (whatever that means in this day and age).

So, sorry if the end-0f-the-world isn’t going to be with giant monsters, aliens or explosions.  It isn’t going to happen other than you maybe running out of cash or going deeper into debt than you would like to.  For whatever reason it is worth, you are not alone and historically tough times don’t last forever. 

Be safe, happy (for your sanity and it helps you make clearer decisions), healthy and try to hang onto your wealth.

 

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax”?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

 Kim Isaac Greenblatt

 

How To Budget Your Money For the End of the World

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California Budget Passed To Be Signed Friday

Friday, February 20th, 2009

Finally!  It is the coming of the Messiah!  Wait, that isn’t it.  It is the end of the world.  Nope, that isn’t it either.  Ah, the California Budget debates are over and the State Legislation has approved the budget and is passing it to the Governor for his signature.  Well, the budget may be balanced and we may be getting some help with the stimulus package from the Fed but we are still in for a long, slow ride to recovery.

Interesting note in the news today about California and housing.  Homes are affordable enough for about 60 or so percent of the people in California and that includes parts of Los Angeles.  The bigger issue is can people qualify for the homes if they are laid off or don’t have the higher down payment requirements which are in the neighborhood of 20%. 

I am inclined to think that once all the noise about the Depression is over and if we all aren’t all sleeping under the trees or fighting for a dry spot under a freeway overpass we will find that the average price for homes will float down about 6% a year for the next few years and maybe in five years it will be bottomed.  I am going on record with this after conversations with some people in the bank repo business and of course, there are exceptions to every rule.  One major exception is any place where there is a killer school system.  People will do what they can to keep themselves in a neighborhood where it is safe and their children can go to school.  There are still a lot of places like that in California and of course all about the nation.

What do the super rich do about things like that?  They don’t worry about it because they live in gated communities and they have their kids either tutored privately or they go to expensive private schools, or at least until their stock portfolios are dried up.  Speaking of which, I don’t expect any kind of super rally for a long period of time and I sold my CAT stock and took my losses and my lumps.  Sometimes you win and sometimes you lose and the important thing is to have enough cash to be able to invest (or speculate) another day.

Now that I have been rambling all over the place let’s get back to talking about California.  From what I have heard, a lot of services will continue the way that they are meant to and that hopefully will be good for those of us with special needs families.  The reason isn’t though because of California.  It is because abou 9 billion dollars in Federal stimulus money will be heading our way.  Hopefully that will continue to fund school supported special needs programs.  Be vocal people.  If we don’t talk, nobody else will.

What about Hollywood?

The motion picture industry starts to get some incentives in 2011 (if I got the year right from what I read)  with the following three items in the package that will be signed tomorrow:

1. Studio film projects shooting for less than $75 million can apply for a tax credit amounting to 20% of all “qualifying production expenses” — essentially below-the-line costs.

2. Independent film productions of $1 million-$10 million and all TV series relocating to California will qualify for a 25% tax credit.

3. Productions must locate in the state for 75% of shooting days or spend three-fourths of a project’s budget in California.

It is just enough to keep middle or average productions in-state so that the cast and crew can go home and sleep in their own beds in their Valley homes or condos.  Some other states have some lavish incentives but those will draw super blockbusters only if they also fit their location needs.  State estimates suggest that every $100 spent on production in California returns about $285 in economic output.  The state projects the program should be cost-neutral because of benefits in business retention.   Others think it will add more.  Hey, I think anytime you can keep jobs close to home you are doing local economies a blessing.

Considering California is about the equivalent of the eighth largest economy in the world (according the State itself) we are probably also one of the most cash broke economies.  We need to work on generating state income to support state programs so we can continue to function and try to recapture being the world trend setter in making money as well as style.

No word on State refund checks.  I am hoping those will start going out as soon as possible.

Be safe people!

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale. If you like poker, Heroes (the TV series), comic books, Watchmen, etc, there may be some fast links to get you to what you are looking for.  Have you read my book, “Bad Tax Idea, Good Tax”?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

 Kim Isaac Greenblatt

California Budget Passed To Be Signed Friday

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California Budget Is Weirdsville

Monday, February 16th, 2009

Preliminary reports on the California Budget are really, to put it in beatnik talk from 48 years ago, weirdsville, daddy-o. It looks like the state budget will actually cancel out potential benefits the Federal stimulus bill was suppose to help the state with.  Ouch and yuck.  Here is what I have heard so far:

 

1950stime

 

The California budget will extract about $30 billion out of our state economy through higher taxes and reduced spending.  That is something to annoy both Democrats and Republicans.  The vote would (and by the time you are reading this the vote may have already taken place) knocking some of the $80 billion that California is expected to receive when President Obama signs the stimulus package into law either Monday or Tuesday. 

Higher taxes mean that California will be less attractive to investments and for business development. Bad idea and bad tax idea.  Good idea and great tax idea would be to introduce some incentives to get companies to come back into California instead of have reasons to leave the state, right guys and gals?  We are turning the clock back on the state from the year 2008 to 1950 and early.  Again, yuck.

To be fair, some analysts think that overall it will be good for the state of California and that business will come to California as we try to balance the state budget.  Folks, I’ve lived in California and we use to be able to balance the state budget.  We have a lottery that is suppose to help the school systems here and our schools are still suffering.  We need some of that change that is trying to get through at the Federal level to come down to the state level.

The White House has tenative projections that the stimulus plan will save or create about 421,000 jobs.  I have no idea where the came up with that number at this point and to be fair can’t comment on it other than 421,000 is a small amount compared to the hundreds of thousands of shadow unemployed people who have already rolled off of unemployment and the underemployed people who are starting to get nailed with not being able to make home payments or pay the bills.  This holds true in other states as well but California is a big state and it has things here magnified a little bit larger.

 Howard Roth, of the State Department of Finance, says that the number of dollars that will be added churning through the economy will be closer to a 100 billion dollars.  As one of the State of California’s economists, he should be in a position to know and I hope that it is true and the money churns into the hands of the people that need it and not back and forth between banks to generate interest for them.

In more news from Weirdsville the Federal government is proposing to roll back sales taxes or something similar and the State of California is proposing adding a 1% sales tax.  The net effect would be to cancel each other out but I don’t think the changes would be at the same time and it looks like the California sales tax addition would be a temporary one though taxes have a tendency to stay on for a long time (like the phone tax from the Spanish American War that was finally repealed a few years ago).

More on this and other California and Federal Budget news as it develops and as I see details of the State of California budget.  Please post your thoughts and ideas and remember to fire away any tax related questions.  I am looking for clients as well.  If interested, drop me a post through the website.   Be safe, healthy, and happy!

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale. If you like poker, Heroes (the TV series), comic books, Watchmen, etc, there may be some fast links to get you to what you are looking for.  Have you read my book, “Bad Tax Idea, Good Tax”?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

 Kim Isaac Greenblatt

 

California Budget Is Weirdsville

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Posted in Business | 3 Comments »