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HOW TO SPEND MONEY

One thing I've observed, over more than three decades of operating on a budget, is the difference between spending money, and spending money well. Money spent well evinces a higher degree of satisfaction. It stands to reason, then, that satisfying one's pre-eminent need with each expenditure virtually guarantees the highest degree of satisfaction, the biggest bang for the buck.

Coincidentally, on the subject of pre-eminent need, there is perhaps no greater authority than Abraham Maslow.

HOW TO SPEND MONEY

CREDIT CARDS

Most credit card companies allow you to choose a different

due date.

Credit Cards So, the amount in the dedicated credit card sub account should always match the current balance. However the amount transferred for auto pay to the checking account, in advance of the due date, should be the statement balance. There’s no point in depriving oneself of the interest income on the recent activity amount. And there’s no point in expanding the extra effort required to re-edit and re-edit the scheduled transfer amount, after the statement arrives.

Forms of Payment But if you don’t have an unlimited supply of money, you have to plan ahead to make sure that you get the things that are important before you spend it on things that are not important, because at some point you’re going to run out of money, and you want to make sure that your most pressing needs are met: your bills are paid, your kids have clothes, your family has food, housing, heat, you’ve have the gas to get back-and-forth to work, to medical appointments, etc. (cont.) But even with the best of plans, things happen that you cannot anticipate - things that you may have the money to pay for. (cont.) For example, let’s say you move from one house to another. Your old house had natural gas heat. Each month a statement would arrive, and you would have set money aside in advance to pay the bill. (cont.) But the new house heats with propane. Now, they’re not going to come out and give you a month’s worth of propane. They’re going to come out and fill the tank to 80% of capacity. And you’re going to get a bill for 200 gallons, say $615, that you have to pay in 30 days. How do you handle that situation? (cont.) Simple. You use a credit card. (cont.) A credit card is a valuable budgeting tool for two reasons: they provide a due date where none exists, they deferred payment, so you have time to make arrangements, and they provide automatic record of expenses including storage and retrieval of documents, so you don’t have to keep a filing cabinet.Why do you use a credit card? Two reasons. One: to provide a due date where that exists. In short, convert random - even unanticipated - expenses to a budget-able monthly payment. (cont.) In the above example, you can string out the payments over the next six months, and, in effect, pay for the propane as you use it. (cont.) No now, the correct way to use credit cards is to pay the statement balance in full, on the due date, every month, without fail. And when using credit cards, this should be the cardinal rule. The standard. (cont.) But if an emergency expense comes up, and it is a large one, a credit card enables you to absorb the shock, even if you have to pay off the entire balance over the next month or two.

Forms of Payment If you could create money out of thin air, you could pay for everything with your debit card. When you made a purchase you could just transfer that money from thin air into your account to cover it.

You'll love having automated your finances. If ever there is a disruption to your normal routine - an emergency, incpacitation, or death - automation keeps chugging along, taking care of your bills, until things right themselves.

I would like to see the transformation my life has gone through happen for other people who sometimes find it difficult to make ends meet. If you are already in financial trouble - I won't lie to you - there is no quick fix. But your circumstances will improve every day when you handle your money the way I do. And you'll find that doing so provides the necessary incentive to keep going.

So there you have it. Relief is 32 steps away. Most of the steps take about a minute. All involve basic spreadsheet skills, like opening, naming, and saving workbooks. You'll need to know how to add and delete rows and columns, format row height, column width, and text color. You'll format a number for two decimal points and the comma separator. You'll enter a formula into a cell, and copy it down a column; all basic spreadsheet cells. No matter your skill level, you'll be able to do these things because "how" will be right in front of you.



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