Save And Spend

Save And Spend


Maybe you’ve got college debts to pay off. Maybe you’re debt free but are a forward looking individual preparing for financial freedom well before you hit the half century mark.


Wherever you fall on the personal finances continuum, if you want to save and get ahead, the first thing you need to do is create a budget.


Why budget?

Without a budget you really can’t accurately judge where your money is going, how much you can afford to spend on a Saturday night out, if bringing your lunch everyday is enough to get you closer to your financial goals.


There are lots of ways to go about creating a budget. Here are a couple of straightforward ones you could try.


Pre-budgeting homework

Before you can create that budget you need to have an idea of how much money you actually spend. Make a list of all your expenses, groceries, gas, monthly bills, gym membership, pet costs – everything you can think of.


Some of those expenses are fixed. Like your gas bill and your phone bills. There is no wiggle room. Some of your expenses are flexible, like groceries and clothes. Divide all your expenses into two columns, fixed and flexible. Now you have a concrete idea of exactly what you’re working with.


Subtraction budgeting

With this extremely straightforward method, all you do is add up all your monthly bills. Subtract that from your take home monthly income and see what’s left for savings. If there is nothing left or not as much as you were hoping to put away then where you can skim from that flexible column. Maybe cut back on groceries and movie nights.


50/20/30 budgeting

50% goes to your fixed costs. Rent, utilities, bills you see month after month go here


20% is allotted to financial goals. This is money that goes towards savings or towards paying back debt or towards creating an emergency fund.


30% is for your flexible spending. This is where the grocery money comes from, hobbies, clothes, entertainment.


By doing a thorough examination of how much you have coming in and where it’s currently going out it’s much easier to create a budget you feel comfortable sticking to as you work towards achieving your financial goals.

Workday Hours Are Not All Created Equal

workday hours_edited-1


Some people are morning people, some night people, some 2:00 in the afternoon people. All of us have times of day when we feel most energized, most clear headed, most capable of getting the most done. Obviously that’s the time of day you should reserve to get your most important tasks done. The problem is, some of us haven’t taken the time to figure out exactly when our most productive time is. Sometimes we get so caught up just trying to keep up we don’t realize we’re frittering away our most productive hours of the day.


Your most productive time of day can change over time

You might think you’re a night person because you always found yourself burning the midnight oil while you were in school, but that may have been a consequence of the lifestyle you were leading at the time rather than a reflection of your true nature. Also as our lives evolve our most energetic, productive time of day can change too. To determine your current most productive time of day you just need to spend some time looking for patterns.


Take a week (including the weekend) and write down how you’re feeling at regular intervals throughout the day and evening. When you’re getting things done. When you have long stretches of easy concentration. Even though you’re not working, weekends can be really good for helping you figure this out because there are less defined time constraints on weekends. You can do things according to when you have the energy or the inclination to do them rather than because someone just told you that you needed to get it done yesterday.


Were there certain times of day when you found yourself steadily on-task without getting distracted by emails or Facebook or the need to get up and check out what was going on around the water cooler? If you consistently feel energetic at a certain time of day, that’s going to be your most productive time.


The link between energy levels and productivity

There’s a direct link between energy and productivity. The more energetic you feel the more productive you will be. So once you’ve figured out your most productive hours, one of the keys to getting the most out of them is ensuring you’re getting enough sleep.


90 minutes of focused work

Carve out 90 minute periods to take advantage of that productive energy. Over fifty years ago Nathaniel Kleitman, a sleep scientist discovered our sleep patterns cycle through 90 minute periods where we move from deep sleep to light sleep and back again. He also discovered our bodies cycle through a similar 90 minute pattern throughout the day, moving from higher to lower alertness every 90 minutes.


Meaning, although we can work for as many hours as we make ourselves sit there working, we work really well for 90 minute stretches. So to work optimally, we should recharge every ninety minutes. We’ve talked before about the importance of breaks. Getting up from your desk, stretching your arms over your head, going for a short walk, doing some deep breathing exercises. By focusing your efforts within two ninety minute cycles or even three during your high productivity hours, you won’t believe how much you’ll get done outside of the tired zone.


Do most demanding things during high productivity. Save more mundane or rote things for your less productive hours and watch yourself get so much more done every day.


Determining Salary Expectations

salary expectations

If you want to be satisfied with your salary, you need to be satisfied when you start the job, not with what you see as potential down the road. A lousy salary isn’t suddenly going to come up to your expectations once your employer gets a load of your spectacular, shining personality. If you want or expect a certain salary, it’s best to have that in place your first day on the job. You can certainly move up from a starting salary, but you should not be working up TO the starting salary you were hoping for.


What is the job worth?

To start with you have to know what the job is worth. If the going rate for the position is $40K then no one is going to offer you $60K no matter how exceptional you are.


Your first job is to figure out what that job is worth. If you know people in the industry ask them. Best not to say, “Hey Jan, so how much do you make in that job of yours?” Better to try, “Jan, can you tell me about current market trends for a person in your position?” Use the Internet to research salaries in the industry – sometimes the Internet needs a break from showcasing cute cat pictures. As well as online salary calculators you can check out websites and directories of professional associations.


What are your expectations?

You are going to be giving a huge chunk of your time and commitment to this job. What is that worth to you? If that number isn’t in the same vicinity as the amount people are earning for the job you’re applying for then either the job or your expectations are going to have to re-locate.


If you were buying a house you’d have a top number you couldn’t go beyond, a bottom most happy number and a number in the middle. For salary expectations it’s like buying a house, but the numbers are upside down. The lowest, bottom number is the one you could get by on, the top number the one where you would dance all the way to work everyday and a middle Goldilocks number.


By having clear expectations going into the interview, when the time comes to start negotiations you’ve got a number to start with.