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What if you could turn every dollar you have into $1.25 worth of stuff or value, regardless of the condition of our economy? What if every dollar’s worth of stuff you spend your money on only cost you 75 cents? What could you do with that extra money? How would the “extra” you receive improve the quality of your life and the lives of your family? Here are the initial steps to getting it done. Write a budgetThe first thing you have to do is create a complete and honest budget. My students learn that you have to use real numbers, not guesses, in your budget. If you can’t figure out what the real numbers are you need to read my page on recordkeeping. You have to know what figures we are working with, otherwise how will you know if you are getting your full $1.25 for each dollar in your wallet? Every other part of the program is built on this information. The budget 1) tells you how many dollars you are working with, 2) provides a base number for expenses, and if managed properly will 3) identify many areas that can be structured differently resulting in up to 25% less money being spent on most expenses! Open a small businessAnother powerful tool in squeezing an extra quarter
out of each of your dollar bills is operating a hobby based small business from
your home that will provide you many legitimate tax deductions. Here are some
trivial
Look at the federal tax rate tables and determine the rate you would pay. Most of my students pay between 15-25% of their income in federal tax. Some people pay more! Let’s say you end up paying 15% federal tax. That means you don’t take home a dollar. You take home 85 cents. Your purchasing and providing power is going to be 15% less than mine because I don’t pay federal income tax. The IRS allowed me to take business deductions that reduced my taxable income and saved me from paying federal income tax. My students turn $1 into $1.25 by eliminating or reducing their federal income tax. The worst thing you can do to yourself, other than not
having a budget and financial plan, is put yourself in a position where you have
to buy now. When you have to buy right now you are subjecting yourself to only
the offers that are available today. There may be a better deal tomorrow or
somewhere else, but for you it will be too late because you have put yourself in
a situation where you have to pay right now. What a great way to pay $1.25 for Having to buy right now is a result of poor planning and not following a budget. Yes, there are a few exceptions, but in my experience the vast majority of problems could have been addressed with much less cost if people would have been watching their personal affairs much more closely. Prepare for “emergencies” at the beginning of the year and work possible scenarios into your plan. One other area that so many people
overlook is the price they accept from sellers without question. My students
learn to 1) ask for more, 2) find more, and
3) get more for their dollars.
Generally, part of their program is to first determine,
through their budgets,
the total cost of all their expenses. Their first year’s goal is to reduce that
number by 25% while still receiving the same amount of stuff, or the reverse:
increasing the amount of stuff they get by 25% for the same amount of money. My
favorite stories are from students who find ways to do both! Even after they
have established their own small business they learn there are a variety of
tools left that can use in
You can find on this site learn how, when, and with whom to negotiate. You will learn that EVERYTHING is negotiable. The best weapon my students have against “retail” prices is their ability to walk or wait. Being able to walk away from a seller or waiting until a better value is offered is a strong negotiating tool. That is important to remember for those that to too shy to just ask for a discount. In order to negotiate powerfully you have to 1) be able to ask for a better deal and 2) give yourself options by keeping a list of alternative sellers and 3) be able to walk away from a deal when it just wont meet your goal. (One other note – when you follow this program there will be times you don’t have to negotiate because the deal you found exceeds your goal. The secret is being patient and putting yourself in a position of power to take advantage of opportunities.) You can do it! You can create $1.25 or more out of each dollar when you follow the guidelines listed above. The key is studying, creating options, and be prepared. Completing the preparatory steps of writing a budget and financial plan will give you a good foundation to build on when looking for opportunities to gain value in your purchases. When you are running your small business you will find lots of expenses that you can deduct from your taxes. Negotiating, for our purposes, is asking for more as well as finding more somewhere else. You aren’t always negotiating with a seller; sometimes, you are negotiating with yourself to justify a particular deal. Combine these efforts and soon you will hear that winning slot machine sound of quarters falling out of your dollars! For more information visit BowmansMoneyCollege. You are invited to join me at LinkedIn!
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