Glen The Goals Guy

One of my goals “teaching teenagers to trade in a fun and exciting way” is now being achieved through a new web site that I have developed http://TheGrandExchange.com My audience use a popular adventure game Runescape to trade in using its automated item trading system.  Thanks to Jagex for providing a well balanced trading system that is simple enough to use and the profits can be used to have more fun in the game.  Runescape has in excess of 100,000 players online on their 122 web servers at any time of the day or night and have more than 1 million regular players.  Other games in the same genre include World of Warcraft which also has its own item trading system.

99.5 % of all video content produced is given away for free and about 0.5% of the content can be purchased for a fee.

Building of this web site demonstrates how I have applied a passion of mine in a way that benefits the community substantially and is somewhat self-funding moving forward.

 Spring is finally on it’s way and it’s reminded me of the importance of planning for success… Last year I got out in the garden and did a complete overhaul. I watched several of those garden DIY shows, drew myself a little plan and then followed it.

I took quite a bit of time creating my plan and it included year round plants as well as seasonal flowers so that the garden would be enjoyable all throughout the year. It was hard work but really great fun! Our garden had been a little neglected over the years so out came all the old weeds and out came the big dead tree. We then carefully tended to the remaining healthy plants and implemented our garden makeover. A lovely little water feature went in along with quite few plants and a dozen or so bulbs. Quite a bit of work later and it was done.

Now months later I’d completely forgotten we even planted bulbs but sure enough a few tulips started poking their heads above ground a little while ago and now they are in full bloom. That lovely splash of colour reminded me strongly of the importance of forward planning. The successful entrepreneurs of the world didn’t get there by accident. They planned to get where they are. Some of them have had a bit of good luck along the way but all of them dared to dream of success and then put steps into action to get there.

If they hadn’t followed their dreams up with planning and action they wouldn’t have got where they are. Simple as that. If you want to reach your goal turnover or your magic number of regular clients, you need to follow their lead. Decide clearly what it is you want then go for it. Make a plan of how you are going to get there. Where is the extra income going to come from? Exactly how many new clients do you need per week? And where are you going to find these people? Then go out and follow your plan. The plan might change or evolve as time goes on but just get started and then follow your plan with determination. Tulips don’t just magically appear, you need to plant the bulbs that create them and you need to make sure you do that in the right type of soil. The same goes with clients. Sure some of them will just rock up on your doorstep but they are few and far between.

To get a large and loyal client base that regularly book and buy from you, you need to learn what works then create plans that will make this happen. If you just sit and wait for a horde of people to arrive at your door, you might be waiting a while. But if you get out there, give your potential clients a reason to want to find out more and then spend the time build a relationship with them, you will find your business growing quickly in exactly the direction you want it to.

ABOUT THE AUTHOR: Rebecca Kepple specializes in helping business owners massively increase their client base and profits. To get instant access to her free insider secrets seminar ‘The Top 7 Secrets for Massively Increasing Your Client Base’ visit: http://www.wellbeingbusinesssecrets.com. © Copyright Rebecca Kepple 2008 Want to use this article on your site or in your newsletter? This article may be reprinted provided no part thereof is edited in any way and this resource box is included.

Firstly, what do I mean by a financial goal? For most of us, that would generally be a goal to either increase income or reduce consumer debt. Of course there may be times in our lives where we want to increase consumer debt to acquire goods and services sooner or to reduce our income as a trade off to have more time but in this article, let’s set those situations aside. In particular, let’s look at the scenario of reducing consumer debt by 50% in six months.

My standard formula for goal setting is to select a coach, have the required resources in place and to have a plan-A and a plan-B in place so let’s see how a financial goal fits in with this.

Selecting a financial coach these days is difficult indeed. Most financial advisors will only try to sell you products, thereby limiting their own risk in a highly litigious environment. If your goal is to reduce your personal debt by 50% in 6 months the financial advisor might be dismissive if there is no chance of selling a product into your situation.

Similarly, a debt financer will try and sell you a product that appears to reduce your debt but in fact does very little. Finally there are educators, who provide information but are prohibited by law to give financial advice. While they can give illustrations or tell you what they did, they cannot specifically advise you what to do and therefore cannot really be your coach.

I am aware, however, of some wealth creation companies that provide ‘integrated’ solutions providing all of the required professionals in a single meeting. By nature, however, the cost of this service is out of reach of many. One solution might be to use self-help websites and software to help resolve this situation, in conjunction with education and perhaps a visit to a financial advisor if necessary.

What resources do you need to reduce personal debt? Well first of all, you must be able to measure and control what you are spending. Yes, I am talking about the dreaded budget. With internet banking and plastic cards, it is relatively easy to download transactions from all of your banks and put them into a spreadsheet. I believe that the most important tool, however, is the banking system itself. With high interest-earning no-fee accounts available it is possible to use the banking system and the utilities to do a lot of the budget accounting for you.

The Plan-A is what you will do if you are on track to achieve your goal. Is there some kind of reward for achieving your goal? Clearly to reduce personal debt, you must have a system to control what you spend, so at a minimum a separate card account and bills account but more likely around 9 high interest no fee accounts and one card account per partner, preferably a debit card (or secured credit card).

The Plan-B is to identify the biggest risk and what to do if it happens. If, for example, you think that your car might need $1,000 of repairs but you can’t set aside that much money over the next 6 months, what will you do? Will you change the deadline, or cut costs in other areas? Can you do without a car?

Finally, tracking a financial goal and measuring the level of success is straight-forward when you have the right tools in place, such as internet banking.

Description

Probably the most significant goals a person can set generally fall into two areas: Either financial goals or relationships. This article sets out the challenges faced when setting a financial goal.

About the Author

Glen Smith aka Glen The Goals Guy has been running both goal-setting and budgeting workshops.
Visit http://QuickStartGoals.com or http://BillBanisher.com

There is no excuse today for you to not prioritize your goals and to put them into some kind of electronic calendar, with Google Calendar, Microsoft Office and many more. 

For your big goal, block out at least 4-6 hours per week to work toward it by spending 2-3 hours working towards achieving your goal.

For your regular chores, set up automatic reminders in your calendar software but don’t just stop there.  If you have set balanced goals, then you may have decided to spend family time once a month for example so put a recurring reminder in your calendar for fun activities as well.  That doesn’t mean that you have to plan every single activity in advance.  After all, some spontaneity is nice.  It does mean, however, that your big goal doesn’t take over your whole life.

Particularly for big business goals and to some extent community or sporting goals, the activity can totally take over your life in the long run leaving you with nothing else apart from your goal.  This can make it hard to relate to people generally. 

When I say this, some people think that I mean you should strictly divide your time up on a regular basis and this would never work.  For example, the six months before I graded for my black belt in karate I was totally focused on that goal and I spent every spare minute focused on achieving that goal.  Once I had achieved that goal, however, I was able to relax a bit and catch up on social and other aspects of my life

There has to be time set aside to do menial tasks, like opening mail, paperwork and filing taxes.  They are almost never urgent yet important.  Another key factor is organizing your finances.  The more that you can automate regular bill payments and setting aside funds for your big goal, the less time and effort you will need to spend down the track attending to these things.  To achieve that, however, you need to start off with a fairly well balanced budget.  It is virtually impossible to prioritize unfunded goals as is the case when no time is set aside to work towards the goals either.

Finally, check with your coach if the amount of effort is sufficient to achieve your goal and that all items on your critical path of success have been planned for.

Fear of rejection was the thing that held me back from making friends and achieving what I want to do. Fear is an instinctive emotion designed to protect us from dire circumstances. In some cases it may be totally instinctive and in others it may be learned.

Fear of rejection was the most debilitating fear that I have ever experienced. It was the most challenging to overcome. Imagine that you think you might have something in common with people but you are just frozen in trying to speak to almost anyone that you don’t know. The fear prevented me from asking for help, making new friends and getting the information I needed, such as feeling scared to ask people for directions, so I didn’t want to ask people for help. In particular, I was paranoid of approaching a total stranger and making conversation for the first time. I would rather have had people throw punches at me instead - it would have been a lot more comfortable. I should have seen a therapist. I know that but I had a very strong fear of approaching a psychologist to talk about my problem! However, it was overcome.

The best thing that I ever did to overcome fear of rejection was to work on a stand in an exhibition where I had to actually approach people about a product that we were promoting. The nice thing about that scenario is that the people were expecting me to approach them approached. If you are on a stand they are expecting you as an exhibitor at an exhibition to actually approach them and talk to them about your products. I knew that it was totally irrational that I should have this intense fear. I’m not even sure why it was such an issue. Perhaps there was something relating to my childhood but I was more interested in how to fix it rather than why it happened!

I would have jumped off a building with a rope attached to me I would be less scared to do that and certainly less scared to stand up in front of a bunch of people with a microphone - it is quite safe in front of a crowd relatively speaking, but that personal one on one was a real issue for me and I just have to watch myself now as I can still slip back into old habits if I am not careful. I still have to manage this and in particular breaking the ice with strangers used to be very difficult for me. So if you see me not talking to anyone you will know that it is nothing to do with you - it’s all about me.

I just wonder how many other people have that same sort of fear and the thing is you might say OK well should you go and see a psychologist or some sort of therapist and if you can, do it, absolutely. Generally that fear in particular is self-perpetuating in that you don’t want to go and talk about your fear of approaching someone you don’t know, to someone you don’t know. That was part of the dilemma I had and the other one was I wasn’t balancing my budget so I was spending all my money and I didn’t really set aside money to do that seeing I was having so much fun running around doing all these activities.

I also had was a fear of confrontation - the fear of getting into a situation that I couldn’t handle and the first goal that I had of going to do karate, was an attempt to overcome my fear of confrontation. Doing martial arts did improve my self-confidence in confrontation but it didn’t really solve my fear of rejection.

I have to say also to try and overcome my fear of talking to people I also go to the pub quite regularly, except that all that happened was I got drunk. For me anyway, I think it actually reinforced a negative pattern- it didn’t actually help at all. Probably it made it worse. People say that if you have a drink you will loosen up but my fear was so strong that alcohol did nothing for it until I was dead drunk and by that stage nobody wanted to talk to me anyway so that was self-defeating.

I figured it was better to overcome any fear I could as a process to overcoming the biggest one. So I confronted my small fear of heights by learning to fly. I challenged myself to do public speaking. Actually I found it easier to talk in front of a bunch of people I had never met than meeting a single stranger for the first time.

If your fear of rejection is as strong as my fear was, do whatever you can to get yourself professional help but if your fear is very mild then there are plenty of non-confronting ways to practice being friendly such as online multiplayer games, social websites but if you have any doubts whatsoever then get a professional opinion. Stay away from getting drunk to overcome you inhibitions. It’s counter-productive. Develop an interest in something and then share your knowledge and experience widely using blogs, videos and social sites.

You might think that some people are just naturally successful and others are not.  Perhaps that is true but I have discovered that achieving success is a skill.  It cuts across  most areas of human activity including health and fitness, gambling and investments.

I already have a black-belt in karate but I am now training in a mixed-martial arts style and my instructor wants me to attempt my black-belt grading in this style in about 2 months from now.  I received a syllabus of what I must be able to do for the grading.  At about line 2 or 3 it reads ‘100 push ups’ then ‘100 sit ups’ and there are 2-3 pages of specific skills required.    Three weeks ago I would have been lucky to do 10 pushups.  So I thought to myself, “how can I set myself up for success to do 100 pushups?”  I’m 44 years old so it’s not as easy as when I was in my 20’s.

The first thing I decided to do was to practice achieving the goal of 100 machine ‘bench presses’ using a very light weight.  Not 99.  Not 101.  Exactly 100.  I wanted to practice succeeding at the goal, not practice trying to get to 100 repetitions and failing.  On my first attempt I could not complete 100 rep’s but after a week of training I could accomplish the task on the lightest weight.

After I could do 100, my emotional response was to do more until I failed.  Wait – what was that?  I am successful at my goal, now train until I fail?  Is this not reinforcing a pattern in life to work at something until it fails? 

I had to think carefully – “how can I still achieve my goal of 100 push-ups and increase the intensity?”  I chose to do about a third on the next level up, then do two thirds on the lowest level.  I am training my mind to make the distance every time. 

What about gambling?  I don’t gamble with poker machines but I do trade on the stock market and on an online multiplayer adventure game.  I consider trading as a form of gambling.  This is why I train myself to stop when I reach my goal.  It is very tempting when I gamble to continue on “until I fail”.  I know it is an emotional response to want to continue.  If my goal is to make $1k in a day, or a week – it doesn’t matter.  It takes discipline to stop when I hit the goal and not keep trading until I fail.

What about a diet?  I find that if I set a goal to lose 1-2 pounds of body fat a week that this is an achievable goal but if I’m on track, isn’t there a temptation to try and do more?   Of course a smarter goal would be to replace a pound of body fat with a pound of lean muscle, in which case the scales are fairly useless anyway. 

What about earning extra income?  If I spend 40 hours a week at work and I discover that I can work an extra 10% after tax by doing another 4 hours a week, isn’t there a temptation to extend the goal a bit and maybe work an extra 8 hours?  In the short run this might work but it’s not a long-term pattern for success.  It would set me up to fail as a father and husband as it eats into time meant to be for other areas of my life.

When setting a goal to pass a grading, complete an education, get a business venture off the ground, move into a new house or some other big goal, it requires you to put most of your resources and focus into that goal to achieve it.  Once you hit your goal, relax just a little and think about your big picture before raising the bar and going for an even bigger, more audacious goal.  Enjoy the moment.

It was around 1990, I had recently moved from my hometown of Canberra to Sydney, Australia.  

I felt like it was time to move on.  I seemed to have very few ties left in Canberra, so I moved to Sydney seeking career opportunities.  Still, I wasn’t certain that I wanted to stay in Sydney either.  I wanted to travel overseas and have a look around but I didn’t have the money to do it.  I was working in a computer company that sourced its product from Montreal, Canada and so I arranged to go overseas for 2 weeks, one week in Canada and another in California.

The first week was ok.  I went to train and work with the Canadians.  It was early January so the weather wasn’t too bad.  I went out of my way to try and meet people in Montreal but no one would speak to me, apart from when I was at ‘work’ or being served.

I tried to get in to watch an ice hokey game but they wouldn’t let me in and wouldn’t sell me a ticket and the place wasn’t full.  Very strange but I guess I should have planned ahead and bought my ticket earlier - right?  I also tried to attend a martial arts class but the guy wouldnt take my calls.

Next Stop: California.  Venice Beach.  I booked about 3 days in an expensive hotel but spent the rest of the week in the Marina Pacific.  It was a bit of a dive off memory but suited me fine. 

I was there all by myself.  I hired myself a car.  A Yugo or something like that.  It was very cheap and a very ordinary car!

Here is the car I wanted to be driving lol:

I drove from Venice Beach to DisneyLand.  On the way I got lost.  I noticed that there were alot of african americans around.  After a while I realised that I was the only white person anywhere, including cars schools, houses etc.  I had heard stories of people going to the ‘wrong part’ of town and I had no way of assessing whether it was a good or bad area but now I think it was fine.  At the time I was scared - irrationally I guess.  Finally I got to Disneyland.  I found that going there alone was not alot of fun.

Another day I went to one of the studios on a bus tour from the hotel.  Again I didn’t really meet anyone.  I didn’t really try that hard to make acquaintences though.  It was nice.

Staying at Venice Beach, I hung out at the beach a fair bit. 

I remember seeing a lady sitting on the grass, crying.  A gardener wanted to turn on the sprinklers and he kept saying to her ‘Lady, please get off the grass so I can water it’.  I wish that I had the courage to walk up to her and comfort her but I didn’t.  I could see that she was distressed but I did nothing.

I also checked out some restaurants - very nice food but I was getting sick and tired of my own company if you know what I mean!  It felt strange sitting in a restaurant alone.

It would have been alot more fun if I could have shared the experience and time with someone else.  I know that I was searching for something but I didn’t know what.  I still hadn’t settled in to Sydney.  I went shopping and ended up buying 2 x suits for about $1.5k.  They were very nice but I think I paid too much.  Yeah, they saw me coming lol.

I’m not really sure what I was expecting to see or do when I got there.  After that I did set a goal to live and work in USA but that hasn’t happened yet anyway.  What I know is that for 3 or 4 years after that, I dealt with the stuff in my past that needed dealing with.  It wasn’t an overnight fix or change of scenery but it took time and consistent effort on my part to resolve the issues and make peace with my past. 

My next trip to USA is different.  I’m going there to meet friends that I have made and to do some training as well.   I am very excited because we all have a lot in common.

Do you have a burning desire to achieve in a sport, hobby, talent or business venture but you never seem to have the time or money to achieve it?

Today I am going to talk about the importance of budgeting in relation to goal setting. For years and years I have set goals but I never used to fully fund the goals.

Before I had a home loan it was pretty easy actually, I would make a list with my family of all the things we wanted the following month. The purchases were prioritized and purchased as funds became available each week. Once I had a home loan, which obviously was one of the goals on our list, I found that our finances were a lot tighter than what they were before and it became a lot harder to set aside funds for the other things our family wanted to have and do.

So what tended to happen was the money was consumed immediately and for longer term goals there was no funding whatsoever. One of my goals was to go motor-racing, and there always seemed to be something more important to do than to put aside money for a go-kart, for example.

It took me years and years to get around to actually buy a go-kart; we would buy this or that or there was something else which needed doing. To actually have a lump sum available, $4000 or $5000 to buy a go-kart never seemed to happen. I think I ended up getting it from a tax refund.

However, what we do now is set aside some money on a regular basis for our longer term goals. Even if this does not fully fund your goal, let’s say you wanted to buy a go-kart for $5,000, maybe you put aside $100 a week and in a year, you’ve got your $5,000; maybe you can’t afford $100 a week, maybe you can only afford $50 a week, then at the end of the year you’ve got $2,500, and then you go and finance the balance of $2,500 some other way.

Without putting aside funds, things go from bad to worse and your goal will never happen. Let’s say your objective is to get to the national championship of your sport and that every week without balancing your budget you find that you run out of money. Most people will start doing overtime for example, to make more money. If you start doing more overtime, then you might have less time to put towards your sport or your hobby. So instead of training five nights a week on your sport or talent, all of a sudden or it could be practicing a musical instrument or that, you find that you start cutting your time down and spending less and less time on your goals and more and more time on trying to make ends meet.

Wouldn’t it be better to have a balanced budget in the first place, to make sure that you have got enough money coming in to cover your expenses, and sure you might have a national trip coming up and say I need $6,000 to go on an overseas trip to go to the international championships and maybe you debt finance a part of it. Still, we are talking about planning and spending as opposed to spending and planning.

Since we’ve started having a balanced budget, I have found is that it is a lot easier to hit those goals that we’ve been aiming for, and still have enough for all those things like Christmas and holidays and replacing cars and all that sort of thing.
In fact, my wife told me the other day that she’s made $500 of interest on the money she’s spent this year. It goes to show that once you get your budget balanced, that money can start working in your favor instead of against you. Now that’s not an overnight thing and I don’t promote the idea of just going to try and pay off your credit card all in one hit, or pay off all of your debts in one go.

It is more important to get the habit right than to get the actual debt paid off because it really takes some discipline and practice to establish the habit and you really need to set aside the funds that you need so that when your bills come in, you can afford to pay for them.

Once I set up my automatic payments for my big goal, I also set up high yield interest earning accounts and set aside funds for other known events such as holidays and gifts, car registration and repairs and I set up automatic payments for those things that my family uses weekly such as utilities. My wife and I have separate card accounts for day to day things and I know that I can spend all of the money in the card account without blowing the budget and my big goal.

Disclaimer: This document is educational and should not be considered advice. If you are in financial difficulty please get professional advice.

If you are stressed in almost any situation, chances are you need to relax more.  Before we go there, let me talk about relaxing under pressure in sport and then we can talk about business and family situations.

I was down at the Martial Arts center the other day and I was training, doing a new drill that I haven’t done before.  As I was practicing the routine, one of the Black Belts came up to me and said ‘relax’ and I’m thinking ‘I am relaxed’.  So I thought I had better relax more. What was he talking about?  How can you relax when you are trying to fight, how can you relax when you are trying to fight for your life, how can you relax when you are under pressure?  Under intense pressure you do need to relax, you need to relax so much so that you can actually deliver your technique at high speed and effectively.  On the other hand, when you are tense and all tight, it is actually harder to deliver a technique and your reactions are slower.

One of the biggest challenges I had in flying an aircraft was to relax when I was coming in to land.  Just like when you jump into your car as a learner driver and hold the steering wheel really tight at first, and you have sore arms.  Once you are a bit more experienced you start to loosen up and your hands are a little bit looser on the steering wheel and it’s not that hard to drive when you are relaxed but it is quite hard to drive when you are tense and the same with an aircraft when you are coming in to land.  If you are tense you tend to push the controls down too hard, you pull back too hard; the plane takes about 2 – 3 second to react to your control so you tend to do jerky movements and it takes time for the plane to react, so the plane reacts and then you are jerking the other way to try and correspond, you are pushing down too hard and it takes a while for the plane starts to go down so you pull back, and the plane slows down so you give more power and flatten it out, so it just goes round and round and round. By relaxing, you are controlling it and anticipating what is going to happen next through controls.

I went in a motor racing competition once and Racing Car Driver Alan Grice was talking about relaxing under pressure and that when you are trying to do your best lap you are not 100% focused you are actually about 80%-90% focused on the task with about 10% allowing for learning mode if you like – learning about what’s going on around you in the environment.  It was really easy to tell the people who were relaxed when they were coming down the main straight as they take one of their hands off the steering wheel to change gears and if you saw the car flinch at all, it meant they had too much pressure on the steering wheel and when they took their hand off the car flinches a bit. Alan Said that it was the people who were relaxed that do the best lap times.  My brother used to be a jockey and he said the same thing about riding a race-horse - it is important to stay relaxed on the horse and not pull on its bit too much.

Enough about sport - what about in relationships?  How do you relax enough and I don’t mean relax so much that they go and do what they like – how do you stay relaxed enough to get what you want in the situation the way you want without over reacting without over controlling, without making the life around you a living hell? 

People become tense because of anticipation of

1)      Pain,

2)      Loss of control,

3)      Embarrassment,

4)      Financial ruin,

5)      Death (but let’s just leave that one alone!)

Ok, there are probably more but let’s leave it at that for now.  In martial arts, I think about loosening my muscles, particularly during the technique.  Flying was a lot harder because you can’t just loosen up too much otherwise you might splat all over the runway!  The way you learn to relax under pressure is to practice at about 80% of your maximum agility for 80% of the time or at least 3000 repetitions.  By this time the technique is then patterned and becomes a ‘reflex’ reaction.  If you practice 3000 times tense, then you will pattern yourself to tense behavior and it is challenging to change patterned reflexes.

The first is to ‘say back’ what the other person is saying, without parroting.  It doesn’t mean that you agree with it but it sends a clear message to the yeller that you understand them. 

The second is to change the subject.  My wife is particularly good at this as a reflex to either answer the question she wants to answer instead of what was asked.  Also off reflex, she responds with something I have done wrong when I criticize her.  So the subject is now about me not her.  Another change of subject might be something else all together

The final technique is to make a joke or to tell a joke.  This could be to point and laugh (“you want me to do what?”). 

All of these techniques revolve around staying in control and remaining relaxed.  Each needs to be practiced at least 3000 times so we are working towards that goal.

When I have faced financial ruin, there was an intense fear to call my creditors and to make arrangements to pay.  A big deal of that fear was totally unjustified.  I decided to prioritize what was important to me and I made it clear to my family that they were more important to me than all of my financial possessions and that family relationships, general health and fitness are more important than the material things.  If you are stressed about a financial decision, don’t just consider the risk of a certain course of action.  Also consider the risk of not taking that action, because sometimes the risk of doing nothing far outweighs the risk of doing something.

Author: Glen The Goals Guy

Have you ever had an argument with your partner about money? Has he or she spent more than they should? Have you over-spent and tried to cover it up to avoid a fight? I have developed a system to stop the arguments over money. I have been married for nearly 14 years and we never ever fight about money.

I will provide some simple steps for you to take to stop the arguments over money permanently but before I get to that I will make a disclaimer. If you are deep in financial trouble, go and seek professional help immediately. And for everyone, I don’t know your personal situation so seek advice from your bank or financial advisor before doing anything. This article is education and should not be considered advice.

What causes fights over money anyway? Is it the lack of money? Perhaps if you just make more money, then the arguments will go away? I believe that this is never the case. In business, clubs, churches, community groups and even government there are always arguments over the allocation of money. Bringing in more money might fix things in the short-term but once your lifestyle adapts to the new income level, the same issues will arise.

There must be a way to allocate money so that money is set aside for those things that are important but not so that you have to walk around with a check-list on how much you have spent. Of course I am talking about a budget but don’t switch off just yet! there are two fundamental kinds of budgeting:
(1) Accounting for what you spent
(2) Providing for what you need in future.

The most common form of budgeting is accounting for what you have spent. To me, this is like driving your car along the road only using your rear view mirror. Every time you see that the car has hit the dirt, you start adjusting the steering wheel to get back on track. Analogies aside, 1-2% of analytical people and accountants love this style of budgeting and no one else can stand it!

The other form of budgeting is implemented by larger organizations where they make provisions for future expenses. I am not talking about accounting tricks to save money on tax either. I mean that cash is deliberately set aside in a bank account to be used at a later date, for a specific purpose.

So how do I implement a forward-looking budget that provides for future needs and will stop arguments about money at home?

Firstly, I accepted the fact that both my partner and I must have a certain amount of “mad money” that is not accountable at all. We both have our own separate card account that is our own responsibility respectively. This might be ten dollars a week or it might be a hundred - that will depend on one’s circumstances but the amount is regular and agreed to by both of us. No one should have to account down to what one did with a few dollars of change in your pocket.

Secondly, there might be regular things like purchase of food and is common sense that this would be the responsibility of one partner or the other and this would go into their card account as well. In our case, my wife is responsible for groceries, so that goes to her account. I pay for the children’s sport from my card account.

Thirdly, there are regular expenses such as electricity, telephones and utility expenses. It may include rent or loan payments. Consider the bank fees and charges before taking the next step and shop around if possible but pay for all of these regular expenses out of a clearing account. I use a no fee, high interest bank account for this purpose. I call this a clearing account and that is where my pay goes (not my card account).

Finally, I use about 10 no fee, high interest bank accounts for other savings goals (or provision accounts). I transfer regular amounts from my clearing account into these Let me tell you about some of them. As an example I will also show how much I put aside each 2-weeks into these accounts and the annual goal.
Holiday Account - $40 x 26 = $1040
Car Registration and repair - $57 x 26 = $1500
“New Car Account” - $40 x 26 = $1040
Electrical, computers etc $20 x 26 = $520

The list goes on. I also have accounts saving towards a new home, gym fees and so on. I have a separate account for our investment property, with sufficient funds to provide for minor repairs and unexpected property expenses. The total above is $4100 and with a quick bit of math, the average balance would be $2050. At 7%, that is $143 of interest to me as a reward for setting aside the money that I am going to spend anyway.

Why does this work for me? It still takes negotiation to decide how much to put aside for holidays and so on but once I set up the payments I found that I have always had the money set aside for the regular bills. After Christmas, I had no credit card debt at all because our family didn’t over-spend on what was set aside in a separate account. Right now, it is a little tough for us with unexpected medical bills coming in. I am negotiating with my partner where this money will come from.

When I go to the automatic teller (or use internet banking) I can see how much is in my card account and I know that I can spend it guilt free and consequence free. I know not to go over the amount in my card account. So if I want to take the family on a treat, then I know how much is available and so I can choose accordingly.

In a sense, I guess, I have turned the banking system around to do my budgeting for me. After all, isn’t that what technology is meant to do for me?