Your Budget: 5 Factors That Will Determine What It Looks Like

By 2 Cents on January 18th, 2010 | Category: Budgets | 8 comments

Success consists of going from failure to failure without loss of enthusiasm .

~ Winston Churchill

There is no single right way to make a budget. Like most other aspects of personal finance and life we just need to figure out how to make the one that works best for us. Usually, this will mean trying a bunch of different things before arriving at the one that suits us the most. The only thing that is certain is that we do need some type of budget. The key is not to give up after the first few tries. Persistence pays. Here are 5 factors to think about as you prepare your budget:

1.  Your Income Structure

The way in which money comes into your income statement is critical for planning cash flow. Here are some [...]

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Evaluating Your Balance Sheet

By 2 Cents on December 14th, 2009 | Category: Planning | 3 comments

In the middle of the journey of our life I came to myself within a dark wood where the straight way was lost.

- Dante Alighieri (1265-1321)

Having answered the “where are you” question by drawing up your balance sheet, it’s time to ask yourself the next question:  Are you happy with where you are? For some of you, the answer will be a proud yes. For some it will be a big fat no, and for many more it will be something in between.

If your debt levels are very high, and especially if they are higher than you thought, I’m guessing you are pretty uncomfortable with your position.  Maybe you are happy that you have minimal debt, but you’re not sure about some of your investments. Again, discomfort means change is needed.

Take a good look at each line item on your [...]

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Your Balance Sheet and Net Worth

By 2 Cents on December 11th, 2009 | Category: Planning | 6 comments

Knowledge is power.

- Sir Francis Bacon, 1597

Yesterday, we started to answer the “Where are you?” question by doing some research on ourselves. I obviously don’t think you’ve got that done already, but I’m going to move on to what to do with it. If you’re in the habit of reading financial blogs, you may already have a pretty good grasp of your finances. This series on Balance Basics will hopefully act as a reinforcement to some and as new information to others. The end of an one year and the beginning of the next is a great time to revisit the basics. I’ve found that if I don’t revisit them a few times a year, it’s easy to let other things (like life) distract me and before I know it, I lose my way again.

Your Balance Sheet & Net Worth

Your next [...]

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Research Yourself

By 2 Cents on December 10th, 2009 | Category: Planning | One comment
You Are Here

A journey of a thousand miles begins with a single step.

- Lao-tzu

This post begins a series on Balance Basics that will provide some tips to start improving your balance sheet. If balance is a journey, you need a map. We’ll construct our map using the Shampoo Cycle as a guide, so the first task is to answer the question “Where are you?”. This isn’t as easy to answer as it first appears, so let’s get started.

To understand your current financial situation, you need to do some homework on yourself. Take your time with this process and do the best job that you can. Your success with future steps depends on it. Gather any and all documentation you can find pertaining to your finances. It’s all organized in a filing cabinet at your fingertips right? Don’t worry. I’m still working on getting my [...]

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