TIP OF THE WEEK - Create a budget and stick to it

Create a budget and stick to it

Jason Brizic

December 2^nd, 2011

Sticking to a realistic budget will allow you to save for retirement or to create an inheritance.  You will need capital to start your side business or to start a new career that will fund your retirement.  Social Security and Medicare are the biggest ponzi schemes in the history of the world.  You can’t rely on them to fund your retirement at all if you are under age 55 right now.  So, you must budget for success later in life so you don’t end up a ward of a dying nation-state.

If you create a realistic budget and stick to it, then you will accumulate saving/capital to achieve your life and retirement goals.  You will reduce your stress levels when you stop living paycheck to paycheck.  Marriage is hard enough without the additional pressures of monthly money problems.  You will also be able to buy goods on sale for cash when you have accumulated savings.  People sell quality assets online (Ebay, Craigslist, the local classifieds) for pennies on the dollar when they get into financial troubles.  The role of the capitalist entrepreneur is to buy these assets cheap and to put them to profitable use by satisfying customers desires.

A generic goal should be to save at least 10% of your pretax monthly income for retirement.  Some people will need to save more and some will need to save less to fund their goals.  However, there are several tasks to complete first before you begin saving for retirement that some people skip.

1.     Use this money to pay down credit card and other high interest debts now (this doesn’t include your house mortgage).

2.     Once those debts are extinguished you can save this money each month to build up your 3-6 month emergency fund.  Let’s face it – there ain’t no job security in corporate America or in the government sector either.

3.     After the emergency fund is filled up you can begin saving for retirement.  I discourage the use of 401(k) plans, IRAs, and other schemes that limit your access to your own property and that the government can confiscate easily to shore up their ponzi schemes.  Here is a taste of things to come: http://www.sovereignman.com/expat/how-the-us-government-will-seize-your-retirement-account/

4.     Use your savings to capitalize your business, purchase precious metals, buy positive cash flow real estate, invest in safe high dividend stocks, and/or buy stable foreign currencies

Go to www.mint.com and create a free account.  You can easily create a budget there and monitor your progress.

P.S. Here is a link to budget for living in California on a $46,000 per year income (now that is some austerity, but considering the median household income in the USA as of 2009 was $50,221 about half of Americans are in this boat) http://www.mybudget360.com/the-perfect-46000-budget-learning-to-live-in-california-for-under-50000/ .

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