Day: January 21, 2020

Essential Tips for an Effective Budget Plan

Money makes the world go round. We work for money so we can afford a high quality of life; that’s just how it is. Given money’s importance, you don’t want to be blind to your own financial realities.

With proper planning and budgeting, you can get the most out of your hard-earned money, and you can attain a certain level of security where you are aware of your revenues, expenses, and general financial situation.

This quick guide will help you better understand how to create budget plans that work for
you.

Time and Money

Typically, you’ll want to budget on a monthly and yearly basis. Income and expenses are likely to change after a year, so longer-term budget projections aren’t very useful for much other than getting a very general idea of what the future may look like.

A budget plan template is a great way to visualize the complexities of your budget over time. Tools like budget planner books can help organize your monthly and yearly budgets in a way that makes sense.

Benchmarks of a Realistic Budget

Obviously, you want to earn more than you spend and save something, but that’s not as simple as it sounds. As you put your budget together, it is necessary to be brutally honest with your expectations.

At the very least, a realistic budget satisfies all of the following:

  • Accounts for all costs and revenues
  • Is not overly generous
  • Dedicates a certain amount of money to savings
  • Accounts for potential emergencies and surprise costs
  • Includes plausible costs for food, shelter, and utilities
  • Determine Your revenue

What are your income sources, and how much do you expect to receive? When and how often are you paid? Your boss may have promised you a raise in a month, but until that actually happens, you should not budget for the future as if you’re certain to get that raise.

Do you work full-time, part-time? Are you a salaried employee? If you work hourly and are not a full-time employee, assume that you won’t get the best hours at any job you work at. This way, you’ll have budgeted for the worst-case scenario.

If you end up getting more hours, that’s great! Just be sure to quickly cycle any extra money into your budget and put it towards something productive. The best way to get ahead is to invest in yourself by clearing your debts and adding to your savings.

Figure Out Your Costs

budget planning

To put it simply, your cost is your expenses. In order to better understand your costs in the context of your entire budget, it’s important to break your costs down into fixed costs and variable costs. With this information, you can better understand your cash flow and identify points where you can save.

Fixed Costs

Your fixed costs are the costs that are recurring and consistent.

Major fixed costs include:

  • Rent or mortgage payments
  • Health insurance payments
  • Vehicle payments
  • Property taxes
  • Car insurance (barring accidents or changes in rates)
  • Internet bill
  • Student loans and other loans

Your fixed costs are unlikely to change in the short-term, but may in the long-term. For a yearly budget, it’s safe to assume these costs will be stable. If you rent on a monthly lease, then your rent may change over the year, so budget for an extra 20% for your total yearly rent just in case.

Variable Costs

These are the costs that are set to change each month.

Variable costs are made up of essential and non-essential costs. Essentials costs are the things that you really need, and non-essential costs are the extra things that you can securely live without.

Essential costs include but are not limited to:

  • Gasoline consumption
  • Home heating
  • Phone bills
  • Vehicle maintenance
  • Home maintenance
  • Food and groceries
  • Medical treatment and copays

Here are some examples of non-essential costs:

  • Subscriptions
  • Extra clothing
  • Entertainment
  • Eating out
  • Snacks
  • Vacations and trips

See Also: How to Budget Using the 50/20/30 Rule

Don’t Forget to Budget for Emergencies!

No one prays for an accident, but accidents happen, and you want to be in a position where you’re financially covered. After initial and essential expenses, put at least 20% of your income into a savings account. If you total your car or get injured and can’t work for a month, you’ll be glad that you have some savings to fall back on.

See Also: 5 Financial Emergencies Everyone Must Be Prepared For

Cutting Costs

effective budget plan

Your non-essential costs probably bring you a lot of joy, but these things cannot take priority over your essential costs. It’s easy to cut some of these costs without sacrificing your quality of life.

Trying to save money? Instead of dining out twice per week, try dining out once every other week and cooking a luxurious meal at home. You’ll save money, and you’ll have a great culinary experience in the comfort of your own home.

Groceries are an essential cost, but by making adjustments to your habits and consumption, you can decrease these costs. Instead of buying canned soups and premade meals at the grocery store, you can cook these things cheaper. Instead of going for the name brand, buy the store brand. They’re almost like the exact same thing, but it costs less.

Streaming is all the rage, but those services can add up. Oftentimes, people have so many services that they go for days, weeks, or months without using them, but all the while, they’re still paying! Honestly examine your app and subscription use. If you find that you hardly use that streaming service, unsubscribe. That $15 per month will really add up.

Those are just a couple of examples, but you can use the same logic to cut most of your non-essential costs and some of your essential costs

The Bottom Line

Cutting costs is good, but try not to cut costs that will lead to poor health outcomes. You can reduce your grocery expenditures, but you shouldn’t starve.

If you’re cutting all of the costs that you can, but you still aren’t making enough money, it’s time to look at your options. Some government-assistance programs may be able to help. Family members, charities, or food pantries can ease some of your food costs if you’re in a rut.

Your finances can help you get the life you desire if you plan. What useful tips and tricks help you budget towards your life goals? Let us know in the comments.

The post Essential Tips for an Effective Budget Plan appeared first on Dumb Little Man.

Stephen Colbert takes apart team Trump’s legal arguments ahead of impeachment trial

Stephen Colbert takes apart team Trump's legal arguments ahead of impeachment trial

If having Rudy Giuliani as his personal attorney wasn’t proof enough that Trump’s not getting the best legal advice possible, dwell upon this clip from Monday night’s episode of the Late Show. 

Ahead of the president’s impeachment trial in the Senate, the House managers filed a brief calling Trump’s conduct “the Framers’ worst nightmare.” Team Trump’s response was to end the weekend insisting that “abuse of power” — one of the cited crimes in the articles of impeachment — isn’t, like, technically a real crime or anything, so it’s not impeachable.

“Yes it is!” Late Show host Stephen Colbert exclaims in Monday night’s monologue. “It’s the most powerful job in the world — that’s why abuse of power is the thing that a president is not supposed to do.” Read more…

More about Donald Trump, Late Show With Stephen Colbert, Impeachment, Culture, and Politics

Challenger business bank Qonto raises $115 million round led by Tencent and DST Global

French startup Qonto has raised a $115 million Series C funding round led by Tencent and DST Global. Today’s news comes a few days after another French fintech startup Lydia raised some money from Tencent.

Existing investors Valar and Alven are also participating in today’s funding round. TransferWise co-founder Taavet Hinrikus and Adyen CFO Ingo Uytdehaage are also joining the round. Qonto says that it represents the largest funding round for a French fintech company.

Qonto is a challenger bank, or a neobank, but for B2B use cases. Instead of attracting millions of customers like N26 or Monzo, Qonto is serving small and medium companies as well as freelancers in Europe.

According to the startup, business banking in Europe is broken. The company thinks it can provide a much better user experience with an online- and mobile-first product.

The company has managed to attract 65,000 companies over the past two years and a half. The product is currently live in France, Italy, Spain and Germany. In 2019 alone, Qonto has managed €10 billion in transaction volume.

With today’s funding round, the company plans to double down on its existing markets, develop new features that make the platform works better in each country based on local needs and hire more people. The team should grow from 200 to 300 employees within a year.

Qonto obtained a payment institution license in June 2018 and has developed its own core banking infrastructure. Around 50% of the company’s user base is currently using Qonto’s own core banking system. Others are still relying on a third-party partner.

Moving from one back end to another requires some input from customers, which explains why there are still some customers using the legacy infrastructure. Over the coming months, Qonto plans to launch new payment features that should convince more users to switch to Qonto’s back end.

Even more important, Qonto plans to obtain a credit institution license, which could open up a ton of possibilities when it comes to features and revenue streams. The company says that it should have its new license by the end of the year.

For instance, you could imagine being able to get a credit card, apply for an overdraft and get a small loan with Qonto.

Compared to traditional banks, Qonto lets you open a bank account more easily. After signing up, Qonto offers a modern interface with your activity. You can export your transactions in no time, manage your expenses and get real-time notifications. Qonto also integrates with popular accounting tools.

When it comes to payment methods, Qonto gives you a French IBAN as well as debit cards. You can order physical or virtual cards whenever you want, customize limits and freeze a card. Qonto also supports direct debit and checks. Like many software-as-a-service products, you can also manage multiple user accounts and customize permission levels.