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Posts Tagged ‘spending plan’

Estimating the Vacation Budget

I will be on vacation this summer, and although we thought we might go to Washington, DC or some other location, it simply won’t work out to be gone for long given all the other activities that the kids have going.  Our daughter has a soccer game on Sunday of one weekend and something the following weekend.  We didn’t want to drive all day on Friday and expect her to have to be somewhere on Saturday, so we would have only had from Monday to Thursday at best.

Of course, wanting to pay off debt and keep costs reasonable is another consideration so only taking a few days away should help on that front as well.  Ultimately, we decided that we would head to Cedar Point in Ohio and enjoy the roller coasters for a few days.  So, with that in mind, I want to estimate what the cost might be for the trip.

Outlining the Costs

The plan will be to leave after the soccer game and drive to Cedar Point, so gas expenses will be one cost.  We will need to have a place to stay Sunday night.  We plan to spend two days at Cedar Point and won’t want to drive home on Tuesday late, so that means Monday and Tuesday night lodging as well.  Since we have 6 kids, that either means two rooms or a large enough suite.  We will have to look into suite options.

Of course, entry into the park is an expense as is food.  Breakfast will be at the hotel before leaving for the park.  Dinner can be had after leaving the park with either lunch or snack type foods in the park.  It might be possible to pack some sandwiches or something as well.  We will have to see how that works out, but will budget otherwise.

The final cost will be to have someone staying at our house to watch the dogs and the two puppies that are there.  This shouldn’t be as costly as boarding them, but will have to be considered as well.

Estimating Costs

Knowing what I know about hotels and where we might end up, I am estimating $150 per night per room or $300 per night for 3 nights of lodging.  We will probably stay somewhat close to the park so will be in a resort area which is why I have added some cost.  Plus, I have to figure that there might be some sort of special hotel tax or something.

I am estimating $50 per person per day to get into the park so that would add up to $800 for admissions.  Hopefully, there might be a way to snag a discount.

Knowing the cost to feed 8 people on the road, I am figuring $200 per day for food or $600 total.  Breakfast can often be the hotel breakfast.  We will probably eat a little in the park and try to find something better afterwards for one good meal each day.  Hopefully, this is an over-estimate.

Gasoline prices have come down (I saw it at $3.45 per gallon this morning), but I will still use 15 miles per gallon and $4.00 per gallon cost in my estimates.  It looks like it is 300 miles one-way.  Of course, the soccer game will add some miles so let me figure 800 miles.  That means I would need 53 gallons of gas so fuel costs will be $220.

Finally, I will be having someone stay at the house with the dogs and caring for them.  It will be easier than boarding them.  That will cost $150 or so.

Total for Trip

Lodging:  $900

Park Tickets:  $800

Food:  $600

Gas:  $220

Dog-sitter:  $150

Grand Total:  $2670

That is about what it might have cost to rent a house for a week had we gone elsewhere.  And the good news is that I won’t be putting it on credit.  I may use a card for convenience, but I have the funds available to pay for the trip whereas it might have been a stretch to do something bigger.

I will keep the receipts and update you on the actual cost of the trip when we return.

In the meantime, do you have any vacation plans for the summer?  Any big trips?  Feel free to share in the comments.

 

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8 comments - What do you think?  Posted by Cash Flow Mantra - June 2, 2012 at 11:42 am

Categories: Spending   Tags: , , , , , , , , , ,

Working on Improving Monthly Cash Flow

There is no doubt that cash flow is one of the most important aspects to managing personal finances and building long term wealth.  It is only when one spends less than one earns can the excess cash be put to good use and be used to make additional income.  If you are constantly spending more than you make, then it becomes impossible to begin to build wealth.

It took me a while to realize the importance of cash flow, but now that I am trying to focus on this aspect of personal finance, I feel that I am beginning to turn the corner and will see marked improvements over the next several years.  Cash flow is much different than net worth.  It is possible to have many assets that do not yield much cash and to even have a positive net worth and be in danger of bankruptcy if those assets cannot be sold in a timely fashion.

Two Ways to Improve Cash Flow

The concept of improving cash flow is simple and yet can be difficult to implement.  You can either make more money, spend less money, or work on a combination of the two.  I am working on a combination of the two simultaneously.

Saving Money

First, I am saving money by using extra cash flow to pay off debt.  I have managed to pay off a business credit card and a business credit line in the past 6 months.  This freed up almost $200 per month minimum that I no longer am obligated to pay each month.  I am now working on paying off my Discover Card.  My goal is to get it paid off by the end of the year at the latest freeing up another $200 per month out of my spending plan.

Just these small moves make it possible to restructure some of my debt to create a reasonable plan for becoming debt free over the next 6-10 years.  That may seem like a long time, but I do have a lot of debt so I would be pleased to have it done in that time frame.  The net impact to my monthly cash flow will be negligible and easy to manage while relieving a large debt burden off my shoulders.

Earning More Money

I am also trying to pick up extra shifts at work when possible and using my blogging income solely for debt repayment.  There is a limit to how much I can work, but there is plenty of room for income growth from blogging.  The longer I am online, the more traffic and earnings that become possible.  As debt payments are made each month, more goes to principal.  There is a virtuous cycle that is created as I mentioned above.

I have other debts that will be paid off naturally over the next few years which will only continue to improve monthly cash flow.  I have been paying close attention to the debt balances and the minimum monthly payments.  Each month, they are declining leaving more room in the budget although I am committed to paying more than the minimums and creating more and more breathing room.

Looking for More Ways to Improve Cash Flow

There are other places that I could be saving money so I will be constantly reviewing these areas as well.  Looking at costs for insurance, trying to get lower interest rates for debts, eating out less and more frugally when we do are just some of the ways to save money.  I am also doing what I can to grow my online earnings through expansion of blogging opportunities.

I am trying to increase my focus on dividend stocks, but that doesn’t help me in the near term because they are in retirement accounts.  However, the experience and knowledge gained is invaluable for when debts have been retired and cash producing assets could be purchased.

Blogging has provided a great opportunity to focus the mind and to actually accomplish tasks.  The accountability is awesome.  When I started this blog, I had just come to the conclusion that cash flow was one of the most important priorities on which I needed to focus for a while.  Hence, the name of the blog.  Focusing on cash flow has been a great idea, and I will continue to do so documenting my progress as I move forward.

Thanks for reading and joining me on this journey.

 

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10 comments - What do you think?  Posted by Cash Flow Mantra - February 27, 2012 at 9:21 am

Categories: Earning, Spending   Tags: , , , , , , , , , , , ,

Measures of Fiscal Fitness

My wife and I are going on a cruise at the end of this month to help celebrate a friend’s 50th birthday.  This was decided in February, and so at that time I decided that I wanted to lose weight before leaving.  I weighed 218 pounds at the time and wanted to lose about 30 pounds or so.

I did well for awhile but during the summer months got stuck at 208.  I can tell you that it was because I stopped counting my calories.  In the spring, I was using an app on my phone and tracking every calorie I put in my mouth.  I was diligent and did not go over my 2,000 calorie allotment.  As I lost weight, however, I thought that I could figure it out on my own.  Yeah right.  You know how that ended up.

I met with my trainer on Saturday and told him my renewed enthusiasm for getting down to 200 pounds by the end of the month.  I told him I had stopped tracking my calories which was the reason that I had been stuck for a few months but that now I had to limit myself to 1500 calories per day.  He wisely offered me what I consider the quote of the year if not longer:

“When we stop tracking, we start slacking”  —Vee Furgeson

One time each week, I spend 20 minutes with Vee doing about 5 or 6 exercises in a high intensity training fashion, meaning that each repetition is designed to take from 20-30 seconds in a controlled fashion.  The exercise is completed to failure which should take from 1-2 minutes and then you move on to the next exercise.

Vee and the other trainers keep a record of every exercise their clients have ever done with the weight and time.  For me, that is about 6 years worth of data.  I can look back to see that I started the leg press at about 200 pounds and am now at 625 pounds.  Each week,  I look at my time from the previous sessions when I did that particular exercise and try to beat my time if only by 1 or 2 seconds.  Eventually, Vee will add 2.5 pounds to the exercise and I will establish a new time for the new weight.

The bottom line is that Vee knows tracking.  Here is Vee doing some high intensity training:

High Intensity Leg Extension

So what does this have to do with finances?  Simple.  If you are not tracking some measure of fiscal fitness then you are slacking and not getting the biggest bang for your buck.  A dollar here and a dollar there will add up just like those calories did for me when I got stuck at 208 pounds.

Various Fiscal Numbers to Track

Here are several ideas of measurements that you can make regarding your finances that will allow you to improve upon your financial situation.

  1. Spending–If you are just getting started in your fiscal fitness, then you should really be tracking spending.  It is impossible to improve anything without knowing where your money goes each month.  I will be tracking spending by only spending with a debit card and limiting the amount of cash that will be allowed each week.
  2. Income–Of course it is always useful to know how much money you make each week or month, but it can be especially useful to track income from a side income like blogging.  It can also be useful when trying to grow passive income like dividends from stock investing to set a goal and strive to achieve it.
  3. Cash Flow–Combine income and spending into a monthly spending plan (budget is a dirty word) and you can track your monthly cash flow.  You want that number to be positive on a consistent basis to use that excess cash flow for investing in assets or paying off liabilities.  If the number is negative, then it is time to decrease spending or increase income.
  4. Net Worth–Net worth is the sum of all assets minus all liabilities.  It is a nice number to know.  If cash flow is positive month after month, then net worth should be growing.  It is possible, however, to have a positive net worth and a negative cash flow.  Of the two, I think cash flow is more important.
  5. Debt–I included this as its own category because it is very important to monitor and track debt.  I have done this over the years but haven’t been as diligent about eliminating it just like I have been weighing myself and knowing my weight but doing little about it.  Ultimately, it doesn’t work.  I will begin targeting specific debts with the goal of eliminating them for good.
  6. Return on Investment–This is great information to have especially when deciding what to do with excess cash flow.  Should you pay off debt or buy some real estate?  What about investing in stocks?  Is the return guaranteed or is there some risk involved?  Knowing the expected cash on cash return on investment can help make those decisions easier.  It can also help if you know your track record of making these decisions in the past.

These are just of few of the financial numbers that I think are important to track and use to set goals for improvement.  It is certainly not all of them.  I will be focusing on increasing my tracking of several of these numbers over the next 15 months to see what I can accomplish.  I will be sharing from time to time on my progress as well to maintain some accountability.

Readers:  What fiscal measures do you use to track your progress?  What other measures would you add to the list?

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14 comments - What do you think?  Posted by Cash Flow Mantra - September 5, 2011 at 8:00 pm

Categories: Basic   Tags: , , , , ,

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