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I’ve written about having to budget for your book marketing program. I wrote a bit about how to make that happen. Now I want to discuss the biggest part of any of this: the ‘why’. You are the only one who can supply that.
Why you want to control your money is personal. For me it’s about being a control freak. I just plain don’t like not having control of my life, and let’s face it, money is a huge part of that in our culture.
So think about your ‘why’. Envision yourself with the ‘why’ answered and you pursuing the things you want to do with your life instead of just the things that pay for your life.Write it down, post it on your bathroom mirror and your refrigerator and stare at it every morning you wake up. This is your reason for doing what you need to do to control your finances.
Okay. You got that implanted in memory? You getting impatient with me for blabbering on and on yet? Patience, I just want to talk about one more thing before getting into the things you can and should do to be in control of your money.
Psychologists are fond of defining human nature. I guess maybe because it’s their job. Go figure. One of the things Psychologists know about us humans is that habits are tough to break and they can be even tougher to make. This is why you need to think hard about why you want to change your habits.
Another thing psychologists know about human nature is that a lot of us tend to think in an ‘all or nothing’ viewpoint. We think once we’ve decided to change that we just change, and any failure means we are weak and need to beat ourselves up.
I talk about this because you are going to fail at some point. We are taught from a young age that failure is bad. Failure means we are weak willed and often this leads us to just give up. It’s too hard for me, we tell ourselves. I’m better off the way I am. I’m not so bad. I get by.
Success is a poor teacher. We learn the most about ourselves when we fail, so don't be afraid of failing. Failing is part of the process of success. You cannot have success without failure. – Robert Kiyosaki
What I want you to do is recognize you will fail at some of this. I still do. But if you quit you definitely will not instill better habits. You will just keep doing what you are doing. It’s the same as making the decision to give up on your ‘why’. You will think something like
‘It will never happen, so why put myself through the failures in trying?’
What I want you to do is to embrace your failure. It sounds counter to everything you’ve been taught but it is the only thing that will keep you going after being knocked down. You just have to get up again and keep going. Realize in stumbling you are taking another step to reaching your goal.
I said this in former posts, but one thing every successful person on the planet has in common is they believed they could change; that they could become successful. Every single one of them failed at some point. No one is perfect, and ‘all or nothing’ thinking is not realistic thinking. It’s a delusion.
Alright, I’ve armed you with your ‘why’, your determination, and a realistic view on failure. Now it’s time to talk about controlling your money.
Know where your money is going.
If you work for money, you give the power to your employer. If your money works for you, you keep and control the power. – Robert Kiyosaki
The first step in knowing anything is in documenting it. What I want you to do is record everything you spend money on. Every time you make a purchase, keep the receipt. If it’s electronic you put it in a folder, save it, and at the end of each day record all your expenditures.
Where you record them is your choice. There are several options available in today’s world. From buying a lined journal and a pencil, to downloading an app to scan or receive your receipts. You don’t have to stick with whatever you choose. Try different methods if you want, at this point you aren’t concerned with anything but accurately recording expenditures. Of course, you will forget something but remember this isn’t all or nothing, you keep at it until it becomes a habit and the misses are few enough that they won’t matter or you will develop a habit of recording what you spend and won’t have to think about it.
When you are making this record, you want to record the date, the company (or person) you spent the money with, the amount, and the category. The first three are straightforward, the last one is going to be a lot of personal preference. I would suggest you can start with a web search for ‘making a budget’. The federal government offers this https://www.consumer.gov/sites/www.consumer.gov/files/pdf-1020-make-budget-worksheet_form.pdf and it is as good a place as any to define your categories.
Whatever you decide to use, realize it’s not brain surgery or rocket science. It’s not carved in stone so you can’t change it. Just start somewhere and realize you will end up changing things as you go along.
Realize what you can spend and what you can save
Once you have started doing this, go over it on a regular basis and summarize your expenses in each category. Rent/mortgage will probably have one entry a month (unless you have multiple real estate holdings in which case why are you reading this? I want you to teach me!). Food expenditures may have multiple entries and you may want to separate ‘groceries’ from ‘restaurant’ expenses. You can lump your music and movie downloads with your subscriptions to Netflix and Amazon Prime if you like or you can separate them.
Do this for a month. I use a month as that is the typical financial cycle. We earn so much in a month and we have the same monthly expenditures like rent/mortgage, utilities, media, loan payments. Don’t try to analyze yet, just record. Sit down with your significant other if you have one at the end of the month and look at where your money is going.
I haven’t mentioned recording income here, because for the majority of us there is only one source of income and it’s usually a paycheck. If you have income from different sources beyond one or two paychecks then of course you will want to categorize those.
But whatever you use to summarize your expenses into categories, you also want to record your income. Make two columns. Record your income on one side and your expenses on the other. Total them both up and subtract one from the other. If your expenses total more than your income, you are negative for the month. You had to borrow money or dip into your savings to pay your expenses.
If this is the case you are in emergency mode and need to look at your expense categories with a hard line toward cutting out enough of them that you are saving a little money each month. Of course, you could also look at increasing the income side of the summary (balance sheet). Are there things you could be doing like overtime, selling your expertise in a certain area, taking on a part time job to increase your income?
If this is a temporary situation due to being in school, out of work, unable to work for some reason, then still look to cut expenses with the idea you can start spending again once you have increased your income.
If you aren’t in emergency mode and you have more money in income then you are spending on the expense side, you don’t need to be so urgent about it. I’d suggest looking for cuts that maybe uncomfortable but not painful.
The easiest thing to do at this point is find the subscriptions you are paying for that you are not using or are only using sporadically. Things like credit score trackers, people finders, news services you don’t read, etc. These should stick out and often, for me, they were ‘scratch my head’ expenses because I didn’t remember even signing up for them and had no idea what they were for.
If you see something on a credit card statement that you don’t recognize, there is always contact info listed with the expense, usually a phone number but it could be a company name. Look up the company, call the number, and cancel the subscription. You’ve just saved an expense and so added to your monthly savings without any pain! (except maybe thinking about all those months you paid for something you didn’t use, but let’s not go there!)
The summary is called a ‘balance sheet’ because the ‘income’ side should always equal the ‘expense side’ + ‘what you saved’. If they aren’t equal, you have forgotten to record an expense, your savings, or an income. For me, this happened most of the time when I would pay cash for something and forget to get a receipt. It’s easy to do. Unless it’s a large enough amount to really matter to you I wouldn’t worry too much about it. But it’s a preference kind of thing.
Set goals and record your progress
Do this for a few months until it becomes second nature. Sit down the same day every month with your significant other and go over the balance sheet together. If there are obvious things you can change, change them but at this point just get in the habit of recording expenses, summarizing them, and going over them together on a certain day every month.
I think this is a good time to talk about debt. Debt can be a good word or a bad word much like any tool can be. Going into debt to buy a house, a business, or some asset that will generate income for you is a good thing. OPM is an acronym you used to hear a lot. “Other People’s Money”.
If you can afford a mortgage and want your own house then that debt is a good debt. If you have a chance to buy gold really cheap and you know it’s going to be worth more in the future, that’s a good debt. Investing in the stock market with borrowed money, (if you know what you are doing) can be good debt. It could also be risky!
Any debt that only serves to buy something you don’t really need or for something that is not long lasting, say going to a movie or dinner at a fancy restaurant, then that is bad debt that is usually put on a credit card. This is the kind of debt that can quickly become an anchor trying to sink your dreams.
I’m not trying to tell you what to buy or how to live your life. I’m just pointing out the realities. I’ve been there! Believe me I’ve been there. It wasn’t a great place to be. If you have a large amount of credit card debt, there are things you can do and help available in terms of restructuring and paying off that debt. I won’t go into this here, it’s too long a topic, but if you want help, write me at email@example.com and I’ll share my strategies with you.
Once you’ve recorded and looked at your expenses for a couple months you will have a good idea of just what is left over once you have paid your bills and necessary expenses. Now you can start to look forward in time and use the power of accumulation to your advantage!
How much can you afford to put into savings every month? Make that a monthly target. Make a chart if you are into that sort of thing, or just record each month’s savings against your target in a spreadsheet. Turn it into a game and have a small celebration every time you exceed your target.
You are on your way now to achieving financial control over your life!
For more on balance sheets and what to do with them I highly suggest you read Robert Kiyosaki’s book ‘Rich Dad Poor Dad’. Learning from those that have done what you want to do is important.
On Barnes&Noble: https://www.barnesandnoble.com/w/rich-dad-poor-dad-robert-t-kiyosaki/1112255784?ean=9781612680194
On Amazon: :https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680178/ref=sr_1_1?dchild=1&keywords=rich+dad+poor+dad&qid=1613223712&sr=8-1
Defining your goal
There are thousands of books, maybe millions, that talk about goal setting. How to, what to, when to. I am going to be real specific here because I’m writing this for authors like me who want to promote their work to gain readers and make a little money. This section is written with that in mind.
If you have some other reason for wanting to control your money, and certainly they are legion, it doesn’t mean this section isn’t for you however. Anyone can use this as a template to coming up with their own goal.
I’m going to repeat what I said in an earlier post about the cost of getting your book published and selling.
So your budget goal should be between $4,000 and $15,000 depending on what you want and what you can afford. Of course, you don’t need it all at once. You could save up for editing and cover design and leave the rest for later. That is up to you.
Set yourself a reasonable deadline or schedule to come up with the money based on the work you did in analyzing your balance sheet. Remember to give yourself a break when you steer off course and, most importantly, don’t quit! Keep going even when you stumble. A great inspiration for those times is to watch ‘The Pursuit of Happyness’ with Will Smith.
It’s a real life story of a man who was homeless with a young son, his pursuit of his dream, the huge stumbling blocks he encountered on the way, and his eventual success. You’ll come away from the movie thinking ‘if that guy can do that, I can do this!’
Well, that’s it for the budgeting part of launching your work! I would love to hear from you either by posting a comment here, or you can write to me at firstname.lastname@example.org with any questions or comments you have.
If you want to know more about my services, you can find them here: https://www.mjalbertbooks.com/
My next blogs will cover the six steps I use to promote a client’s work to Amazon Best Seller status.
I wish you all the success you can handle!