Simplifying the way you manage your finances can make sticking to a budget much easier. Limiting the amount of time it takes to actually manage your budget will make it more likely that you will do it. With the right technique it should only take you 20-30 minutes a week to stay on track.

The most time-consuming part of the process is the actual setting up of the budget. So don’t try to do this with a house full of kids and other relatives over the holidays. Allocate the time and place, and stick to it. If necessary put a “Do not disturb” sign on your door, turn off your phone, and disconnect from the internet (eliminate distractions!).

While there is a plethora of software to simplify the preparation of a budget, a simple spreadsheet is all you need. Don’t complicate the process by having to learn a new program.

A good way to start is to assemble any bills and receipts you can get your hands on. A credit card statement is perfect if you charge most of your purchases. Begin your document by listing your monthly income and expenses. Estimate, in round numbers, what you spend on each expense every month. You don’t need to be precise, but err on the side of more rather than less with expenses.

Be sure to include:

* Mortgage/rent payments
* Utilities costs (electricity, gas, phone, water etc)
* Groceries
* Food
* Transport
* Car expenses
* Clothing
* Education expenses
* Entertainment
* Gifts

A Simple Budget – The 60% Solution

One of the simplest types of budget is called the “60 Percent Solution”. In essence, this budget aims for you to fit your monthly expenses within 60% of your gross income.

This will allow you flexibility for long and short term savings, spending money and retirement planning. These can be what often break a budget, because people fail to budget for them.

While the percentages will vary depending on your circumstances, consider the guidelines below:

Allocation of Income

60% – Monthly expenses
Housing, clothing, food, transportation, utilities, insurance, communication.

10% – Retirement
In some countries this forms part of a compulsory superannuation plan, but if it doesn’t for you, you should have this deducted automatically from your paycheck.

10% – Debt reduction or long term savings
A good financial adviser will recommend how to invest this money, which will also serve as an emergency fund.

10% – Short term savings
These are the funds set aside for those every now and then expenses: birthday and Christmas gifts, car maintenance or repairs, uninsured medical expenses, appliances, home maintenance.

10% – Pleasure
This will include recreation, eating out, movies or whatever you want, without the worry of breaking your budget.

Having a household budget with fewer categories will make it much more manageable and help you to realise your financial goals.

A Simple Household Finance Budget is a post from: Smart Money Mindset.com

From a financial perspective, Christmas can be an extremely expensive time and if we’re not very careful the season of good will, will put us in debt for the next six months or more.

Managing Your Money at Christmas

Therefore, managing your money becomes even more important at Christmas time since it has the potential to damage your financial health for most of the coming year. (You’re not still paying for last Christmas are you?)

Everyone Wants Your Cash

There’s just so much stuff to pay out for and it’s not just gifts! From decorations, luxury food and cards to new clothes, travel expenses and work parties, much of which we don’t budget for. We’re expected to buy presents at great expense for all of our nearest and dearest, leave tips for the dustmen, postman and window cleaner and have a good stash of booze in the drinks cabinet for any passing visitors , it just seems never ending!

So what can you do to limit the financial damage that Christmas can have on your bank balance? Managing your money at Christmas requires two main things:

1. A small amount of time
2. Work with the budget you have (not the one you wish you had!)

Budgeting for Christmas Money Management

The very first thing to do is create a budget sheet to find out what you can actually afford to spend and stick with it! It should take you no more than an hour to sit down and work out what money you have available for Christmas. First write down all of your normal monthly outgoings such as mortgage, groceries, utility bills, phone, TV, travel expenses, insurances, etc. and add them up.

In a separate column write down all the ordinary money you have coming in for that month , so wages, any benefits (such as child benefit or tax credits), rent from lodgers, any money you have saved for Christmas etc. Do this for the months November, December and January and promise yourself that you will not be paying for Christmas after January!

Being Off Work Saves You Money

Now comes the important bit: add to your incoming column any Christmas bonuses you will receive and any savings you might make because you are not at work (yes it’s often cheaper to be at home than at work!). Because you are off for a week or two, you might well be saving on travel expenses and parking fees. You might also save on paying out for lunches and coffees every day. Add all these savings to your income for the month(s); subtract the figure for your income from your outgoings and voila , this is what you have to spend. Take a bit from January if you must, but make a commitment to pay that off in January!

Managing your money at Christmas does take a little thought and effort, but by using just one hour wisely you can save yourself a lot of money and a lot of financial pressure in the new year.

Managing Your Money at Christmas is a post from: Smart Money Mindset.com

Are you living within your means? Do you know exactly what you are spending each month or are your outgoings escalating out of control? When was the last time you carried out a financial health check? If your answers are no, no and never then read on!

Managing Your Money – Take Charge of Your Finances

There are many important responsibilities to take care of as an adult – our health, family, work, friendships, hobbies and home – but how many of us devote as much time to our financial health, as we do to all the other tasks we have to perform? Not many of us! Yet managing your money successfully, underpins your ability to enjoy and make the most of all of the other aspects of your life.

Why not think about setting aside some time each week to go through your finances and make sure that you are on track for the month? It really will be worth the time and effort and you will probably find areas where you can save money.

Budgeting

The first thing to do is to set out your monthly budget including what’s coming in and what’s going out.

Incoming
It’s usually easy enough to work out what we have coming in – the list is often a lot shorter than for the one going out! You will need to include your wages or government benefits and any family assistance that you receive. If you have any other regular incoming funds add them also.

Working out Your Outgoings
Make sure that you include absolutely everything you are spending each month. It’s often the little things that add up and take us over our monthly budget. So apart from the big costs such as mortgage or rent payments, food and loans which you will need to list, don’t forget to also include:

* Lunches – (yours, your children’s and your partners)
* Travel
* Magazines
* Those little trips to the local shop
* Birthday Cards and Presents
* Children’s Pocket Money
* Meals Out/Take Aways
* Coffee/Tea
* Charity Donations
* Vet’s Bills
* Dentistry
* Children’s Clubs and Activities
* Wine/Beer
* Lottery Tickets

Once you have a figure for your incoming finances and one for your outgoings, simply take one from the other to see if you are over or under your monthly budget. You may be surprised at what you find!

If you are going over your monthly budget you are more than likely using your credit card frequently to pay for extras. This is ok in the short term as long as you can pay off your credit card debt each month, but managing your money in this way over the long term can lead to your debts spiralling out of control, especially when you consider how much the credit card companies are making out of you.

Look through your list of outgoings and see what you can cut down on or cut out altogether and start taking charge of managing your money instead of it managing you!

Managing Your Money – Take Charge of Your Finances is a post from: Smart Money Mindset.com

Like watching TV or movies? You could be programming your brain for financial suicide!

TV and movies are full of false values or beliefs, also known as “Memes”, that we pick up and believe in without even realising. Some of the worst are around money and wealth. By getting these into your head you could be sabotaging your financial success without even realising.

Movies Are Keeping You Poor!
Think about movies for a second. My favourite for this is Titanic (I’m not saying that’s my favourite movie by the way!).

“The Rich Are the Bad Guys”
Do you remember the dinner scenes? They show all the rich people being boring and stuffy, arrogant, and you get a sense of Kate Winslet (the heroine) being restricted, uncomfortable, and that the people around her are untrustworthy. And the main bad guy in the movie is here, her rich fiance.

“Poor People Have More Fun”
Meanwhile down below the poor people are partying like mad! Lots of smiling, fun, drinking, and a really warm and friendly environment, and our poor hero Leonardo di Caprio in the middle of it having the time of his life! The place our heroine would rather be.

Do you really think that’s what it was like on the Titanic? Where did you get that belief from? Who told you that?

Think about the movies you watch and you’ll find the above is usually true. There is a hidden message that being rich leads to unhappiness and being poor is somehow more honest and real, and even respected.

“It’s Romantic to Sacrifice Wealth”
And at the end of the movie what happens? Rose’s granddaughter and husband are spending thousands searching for treasure, the necklace with the huge diamond. And what does Rose do with it? Throw it in the sea?! So it can be with her dead lover?! How romantic?!

How about taking that diamond and giving it to her granddaughter so she can financially secure her and her descendants for years to come – so they never have to worry about money, paying for school, medical care if they get sick? Nope, it’s on its way back to Leo so he can do God knows what with it… because that’s the “right” thing to do? Give me a break…

Want To Be Wealthy? Don’t Watch Dallas!
If you watch a lot of television you’ll see the same values or beliefs within those. Take programmes like Dallas, Dynasty or even recently The O.C.

“Having Money Means More Problems”
In these programmes in the first episode everyone has money and all looks well on the surface… but before long the story lines take hold – like one character losing all their money due to a crooked business partner or accountant; kids out of control due to all the money their rich parents give them; those same kids taking drugs and needing to go into rehab; adultery; domestic violence; robbery; threats etc. etc.

What does that condition your brain to think? That being rich is all one big party? Not quite.

More like:

“Well if I get rich, I could lose it all, lose my wife/husband, my kids could become drug-addicted criminals, and people will come and try and steal my money”

… think about it, how many of those beliefs do you currently hold about becoming wealthy? What’s the conclusion?

“Well, maybe it’s better to have a little money, but not too much cause I don’t want to turn into an asshole and get my kids screwed up”

Really have a think about it – what beliefs do you have about becoming wealthy and where did you get them from? These beliefs are almost certainly holding you back from what you want financially.

Watching TV? You’re Committing Financial Suicide! is a post from: Smart Money Mindset.com

Learn how in only a 5 minute phonecall you could save double digit amounts on your credit card interest rate!

Credit card companies are keen to keep you as their customer – no matter how they may act. You are worth a lot of money to your card company and have a lot more power than you realise in your relationship with them. Use this fact, and the call scripts below, to your advantage to lower interest rates on your credit cards by simply asking them. You can save thousands using this method.

Credit cards and how they make money

Credit card companies make money from their customers in a variety of different ways. Apart from the interest rate they also make money from late payment fees, cash withdrawal or credit card cheque fees, or even from companies that want to put leaflets in your monthly statement letter.

However people aren’t aware that credit card companies also make money by you simply using the card, as retailers are charged a fee by the companies providing the card machines in their stores, and part of that goes to your credit card company. So credit card companies are very interested in keeping you as a customer – remember this in your call!

You must understand how call centers work

The majority of your interaction with your credit card company will be over the phone, and so will this negotiation, so you need to know how call centers work. I worked in a call center for over a year on various campaigns as they are called, on both inbound and outbound calls. My job was to monitor and train call center staff on making sales calls and dealing with customer cancellations – i.e. stopping them.

What you’ll find with call center staff is that they will have differing levels of authority to take actions depending on their experience and grade. So whilst one might not be able to change anything on your account, others will be able to make significant changes. The call center staff will also be under instructions to NOT lose customers – remember you are worth money to the card company and they will avoid losing you as far as possible.

The Negotiation and Call Script

For this I want to use some key negotiation principles. Firstly make it fun – negotiation is a game remember? So have fun on the call and smile (the person on the other end of the phone will be able to tell). Secondly use powerful open questions, and no questions with a yes/no answer. When asking questions put the pressure on the other person to come up with a solution – make it their problem.

So call your credit card company and follow these instructions:

After the introduction and security checks the call should go as follows:

Call center: “So how may I help you?”
You: “Could you tell me the APR on my credit card please?”
Call center: “It’s XX% sir”
You: “Please reduce that for me”

At this point the call center may be a bit lost, but will likely ask why you want the rate reduced or will say it’s not possible. In response do not say things like “Are you sure?” or “Why can’t you reduce it?” as these offer an easy way out to end the call there and then. Instead tell them that you are a good customer, have been paying your card on time and would like the rate reduced please. After your explaination use the line “So, please reduce the rate for me”. The use of the word “So” is important as it implies everything that been said before it is true and justifies what is said after.

If they refuse again use the argument that you have been offered better rates elsewhere, but you don’t want the inconvenience of moving credit card companies. Use the “So…” line again. A lot of companies have a three “No” rule which means around the third “No” from either person, a different approach has to be used.

If the call center representative says they are not authorised to lower the APR then ask to speak to someone who is, and repeat the above script.

You are most likely to be successful if you also bank with the card company, have a good history of making payments on time on the card, have regular use of the card, have a good credit score, or any combination of those.

What if they say no?

So what happens if you are unsuccessful? Just try again. Yes, it’s that simple. You will most likely get through to another advisor, and hopefully one with greater authority to change your rate. If they say “I notice you called earlier today/this week” just answer “yes” and stay silent. What if you called earlier? It doesn’t change anything about this call, although they will hope it puts you off asking them to reduce the rate again.

It’s worth trying this!

Changing your credit card APR can make a huge difference to you, especially if you are in the process of paying off your debts. For example if you have a balance of $1,000, and minimum payments of 2% of your balance per month, a change of APR from 20% to 15% could reduce the actual amount of interest you pay in cash by up to 56%! (I’ve made some nice spreadsheets that do all the calculations for me in case you’re wondering!). So it’s well worth trying it out!

Tell me how you get on

Please do try this out and tell me how you get on. I would love to hear from people who have tried the above technique and got their rates down – and try it on multiple cards if you have more than one. If you don’t mind send me the figures on your balance, the minimum payment per month, and the old and new APR so I can work out the impact it will have on your finances. Email these to info@smartmoneymindset.com.

Good luck and remember the customer is always right!

Reduce the APR on Your Credit Card in 5 Minutes! is a post from: Smart Money Mindset.com