Finance: Rules to Live By on a Daily Basis

There are certain rules, not necessarily “laws” per say, just personal and developmental rules to live by to succeed in having the lifestyle you and your family deserve. While finance may be an easy concept to some, the majority of people understand it; however, have a difficult time sticking to it. They give up too easily. That’s a loophole for making financial errors and erroneous spending. Here are some tips that we have personally come to understand as Finance 101 rules:

For Personal:

1. Use Mint.com. It is by far the best budgeting program and a “follow the money” program. People often wonder where their money goes and Mint.com can show it for you through a pie chart or a bar chart on a weekly basis or monthly basis. It will also make a list of your biggest expenses (ex: child support, mortgage, home improvement, etc). We highly recommend you PRINT these monthly charts so for each month, you can analyze the income v expense ratio.
2. Never buy a new car. Try to minimize your monthly outgoing bills. If you can make a cash payment on a $2,000 – $5,000 vehicle, it’s great news for you since you won’t be paying monthly plus extra interest on a new vehicle. While they are nice and luxurious these days, a simple car will still get you to Point B and that’s what matters most.
3. If you have a truly hard time budgeting, buy yourself those VISA gift cards and create a category for each card: “Groceries, Entertainment, Bars, Clothing, Coffee, etc.” When it is spent, do not replenish the card until the new month; unless, of course it is for groceries. The best two methods for grocery shopping are: 1) buy meals as you go, or 2) shop once a week and make a list before heading to the store. The app, Remember the Milk can help you with this.
4. Pay the utility and service bills the minute you receive them. Don’t wait and forget later. You end up paying a $10 late fee. You will also know your true value in your bank accounts when the bills are paid immediately. There’s no guessing on the amount left over. Write on the bills date paid and BillPay transaction ID #.
5. If you have monthly payments that are the exact amount month-to-month, such as mortgage or cell phone plans, sign up for a continuing payment on Bill Pay. Do it for a 6 month interval and then renew. You can always stop it anytime but it helps on forgetting to pay the bills.
6. Use coupons!! Either store or manufacturer coupons. This can save you $5-$10 per transaction you make! My favorite two are coupons.com and shopathome.com. These are great for personal products that everyone needs as well as business office supplies.

For Business

1. If you have a smartphone, use the free apps given to you to help you keep track of your finances. To name a few: Expensify, Craigslist (should you need to buy furniture at a discounted rate), DropBox, PayAnwhere, Bills for iPhone/iPad/Droid, Docusign, Notability.
2. Have a separate business phone aside from your personal phone. Don’t mix the two. Leave your work at your business place when it is time. If you are self-employed and work from home, use a Pay-As-You-Go phone.
3. Drive your most economical car to work as the commute (should you have one) adds up fast. Also pack a lunch. If you like to go out, limit it to once a week. Do not go “out with the girls/guys” every lunch.
4. Use a receipt or coupon organizer to keep track of all your receipts for each month. Filing it away in a general “Receipt” Folder will guarantee loss as well as ineffective when needing to find that specific receipt. Expensify, an App in the App Store or Online, is a great receipt tracker.
5. Don’t make investments within your first year of the business. Limit it to the absolute necessity: advertising effectively, cheap business furniture if required, etc. No need to buy a brand new car for the business or spend frivolously thinking it’s tax-deductible. Start-up costs are NOT tax-deductible. The business must actually be making money in order to be tax-deductible.
6. Have a separate debit card for business. Do not mix transactions. You will be slapped and fined by the IRS for mixing personal expenses with business. Keep everything professional and simple. You may only deduct dinner expenses if you had a business meeting with a potential client/customer/venture.
7. Stay true to your word. While this may not seem like financial advise, when you speak honestly and truthfully, money will follow.