In this post I am going to depart from my normal VBA based MS Office discussions to talk about a subject that is always relevant but, particularly so in these difficult times.  I had a conversation about money with a college junior.  I was surprised by the negativity and number of misconceptions he held regarding Budgeting, Savings, Investing to Build Wealth.  Bugeting is like taking control of your health the sooner you start the better.  I feel qualified to talk about budgeting because I was a successful controller and financial analyst for many years.  You might say money was my business.  And yes the Mrs and I have been successful savers and long term investors.

“You must gain control of your money or the lack of it will forever control you”

— Dave Ramsey

There’s a couple of truisms about money that successful savers know all too well. The first and foremost is if you are to have success building wealth your life’s financial plan must be intentional and executed over a long period of time. Decades really. While all too many people will fight it, building a budget is the first step to taking charge of your finances. The traditional budget requires you study prior spending and build your budget from there. Chances are if you are reading this you are interested in saving more and spending less. That why I suggest you adopt a zero-based budget.

Zerobased budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period. The process of zerobased budgeting starts from a “zero base,” and every line item is analyzed for its needs and costs.

A zero-based budget requires you justify every item you spend on. So, for example let us look at that Apple phone that is costing you over $50 a month. When comes time for renewal would a $200 Moto or similar budget phone do the job? I use my old, well off contract phone, for texts, calls, the weather and occasional directions. The basic models do all that and more. A good friend of mine purchased a few generations old Apple phone for just a few dollars. Apple and other phones have had all the key functionalities for many generations. Old ones work just fine. By the by just because a phone is off contract does not mean you need to run to the phone store for the latest model. I do expect my phones battery to “give up the ghost” eventually. I have looked up the cost and feasibility of getting a new battery and it is $49.99 installed. If you want to save money sacrifice may be the order of the day. You will hear people talk about the difference between Needs and Wants. You probably need a phone; you want the new model phone with its cool screen and the extra special gizmos, but the reality is you do not need it. I am not advocating totally denying yourself some joy, but you must be selective. In the words of Paula Pant “You can afford anything just not everything.”

“Do not save what is left after spending; instead, spend what is left after saving.”

― Warren Buffett

For me, the best way to save was to do so first. You will hear the expression ‘pay yourself first’ it means having savings taken out from your pay first and then lived off the rest. The adage “We don’t miss what We don’t see” is very true. I signed up for pretax 401k deductions many years ago and I joined my companies the stock purchase plan. $50 twice a month. Over the years I upped the percent going into my 401k plan.  When I reluctantly retired I did so very comfortably and well after I could afford to.

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently.”
— John C. ‘Jack’ Bogle, Founder Vanguard Group

Unfortunately, savings is not enough, you need to do something with the money. In the beginning I bought and held individual stocks. Index funds although available since Vanguard introduced them 1976 had not yet caught on in a big way. Over time more and more of my investment are in low cost index funds. (I prefer the liquidity of ETFs) ETFS (Electronically Traded Funds) are like mutual funds but are traded in the market. In my experience they ‘are set it and forget it’ instruments for long term investing.

“Successful Investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time”
― Warren Buffett

Over the course of your investing life there will be temptations to ‘chase returns’. There will be no shortage of ‘Snake Oil’ salesman dangling the carrot of quick wealth and returns. Remember: if it sounds too good to be true is almost certainly is. Run away, no fooling run no one can sell you something if you choose not to listen. Investing is one of the few things in life where boring and steady are good things.

Finally, I leave you with a quote from Mark Twain the sooner you get on track with a zero-based budget the sooner you will get to your destination Financial Independence. Oh, and you can retire early if you so choose.

“The secret of getting ahead is getting started.”
– Mark Twain

If you want to take control of you life-, build that budget and start being deliberate with money.  Years from now you think back and smile and be glad you did.  I guarantee you it will change your life forever.

Should you want a jump start please see my free Budget Builder Tool here : 
Excel VBA Budget tool – Free 

Wikipedia Links for Financial / Sages I respect and believe you should know of and make a point of reading about.
John C Bogle
Warren Buffet
Dave Ramsey
Mark Twain

If saving more and spending less money interest you may I suggest my other another post:
10 Steps to Build Your Freedom Nest Egg

If you enjoyed my blog and would like to comment or share a similar experience please send your comments  Here.
If you would like to say hello and Buy me a cup of coffee please follow the link.

Raymond Mills, M.B.A., M.S.  has spent over 20 years of his career as Accountant, Investment Bank and Credit Card Technical Auditor/ Data Analyst.  His specialty was using Excel to get Big Databases including Teradata, Oracle,  Squel Server and Sybase to give up their secrets. Ray has said “I love nothing better than using VBA to unleash the power of Microsoft Office.” You can contact Ray @ 484 574-3190 or by emailing him Here

If you have a challenge with Excel, Access or Word and would like to speak with Ray,   You can get his contact details by clicking here: Contact Me