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Watching Every Cent

Watching Every Cent

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    If you’ve been working on getting your personal budget balanced, going offline can make some sense. There are plenty of web applications and other tools that really do well at interpreting your spending patterns and other information just by taking a look at your monthly bank statement. But there’s really no substitute for doing some financial tracking on your own.

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    Every Little Cent

    One reason many people seem to struggle with building a budget that actually works for them is a lack of understanding when it comes to telling where their money really is going. Between cash, debit cards, credit cards, automated payments, one-click purchases and all the other myriad ways we can pass our money along to someone else, is it really any surprise that creating a spending plan that works longer than a week is a difficult proposition?

    Building a budget that is truly effective requires a very thorough understanding of your own spending. There is a relatively simple approach to getting the necessary grasp on your typical spending — tracking every cent you spend.

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    It isn’t a long term approach, of course, but if you’re working on getting your finances under control, a good first step is to spend a week or a month simply observing where you’re actually spending your money. It’s a matter of making a note every time you pull out your wallet, whether you’re spending cash or using plastic. At the end of your observation period, you’ll have a list of transactions that will give you a much clearer view of your expenses than a bank statement can. At a bare minimum, you’ll have an idea of where the cash you pull out of the ATM goes.

    Keep It Simple

    For most people, tracking spending for a full month will give you the best picture of finances: how you spend right after your paycheck comes in can be quite different from how you spend during other parts of the month, for instance. However, it is difficult to keep up with tracking your spending for that long. There are a few ways to make the process easier:

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    • Keep a notebook with your wallet, so that you have to pull it out whenever you’re making a purchase.
    • Write down every transaction, even if you get a receipt. It helps turn the process into a habit — and you’ll have one document with all your information.
    • Go with the paper route. Messing with texting your expense to yourself or shooting off an email just adds more hassle than a simple note.

    The important part of keeping this sort of ‘every cent counts’ record is to get the best data possible to work with. While some people can build a budget that they can stick to without such specific records, the fact of the matter is that most of us struggle to stick to a budget if we have spend without accountability. For those of us who fall into that category, budgeting becomes much easier when we already know how much we spend in a given category over the month. We know where we should cut back — and where we can cut back.

    Processing Data

    At the end of the observational period, you’re likely to have at least a few pages worth of records that you’ll need to interpret into a usable format. You may be able to spot patterns without doing anything in the way of processing, but it’s probably worth investing some time in the project and creating a spreadsheet with each of your expenses. Categorizing your expenses can make spotting patterns much easier — like picking up a candy bar every afternoon for a snack. These sorts of patterns are the starting point for changing your finances for the better. There are both good and bad spending patterns, and being able to see them can make a major difference in your ability to budget.

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    Once you’ve gone through all the data you’ve collected, it’s time to compare it to what you’d like your budget to actually be. There may be a large discrepancy between your plan and reality — the typical reason that so many budgets fail — so make note of where those big differences are. Breaking just one or two patterns may make all the difference in bringing your actual spending in to line with a budget: if something like a daily candy bar is driving up your budget, taking a step to eliminate the need for that candy bar (like bringing a snack to work along with your lunch) can make a dramatic difference. It’s worth noting that breaking a habit is often difficult — replacing it is usually easier. That fact applies to spending as much as any other habit.

    After an observational period, it almost always makes sense to end your financial tracking. It’s useful to get the sort of data you need to form a lasting budget, but it can be a fairly time-consuming process. Furthermore, you probably don’t need a cent-by-cent accounting of your finances beyond the planning stage. You may need to occasionally revisit your daily spending habits to make sure you’re still on track, but otherwise, reviewing your bank statements and receipts will more than suffice. It’s also worth looking into some sort of financial tracking application: while they may not be so useful in understanding the details of your spending, they can provide you with a broad overview that can be enough to guide you if you’re already on track.

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    Published on November 8, 2018

    How to Answer the Tough Question: What are Your Salary Requirements?

    How to Answer the Tough Question: What are Your Salary Requirements?

    After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

    But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

    Unfortunately, this is the wrong approach.

    Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

    Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

    Of course, you can’t command a high price without bringing value.

    The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

    1. Hack time to accomplish more than most

    Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

    With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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    Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

    Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

    For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

    Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

    It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

    2. Set your own boundaries

    Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

    Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

    Here are some important traits to consider:

    • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
    • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
    • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

    These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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    3. Continuously invest in yourself

    Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

    You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

    Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

    Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

    Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

    It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

    4. Document the value you bring

    Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

    To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

    A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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    Here are some ideas:

    • joesmith.com
    • joeasmith.com
    • joesmithprojects.com

    Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

    During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

    5. Hide your salary requirements

    Avoid giving you salary requirements early in the interview process.

    But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

    The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

    Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

    6. Do just enough research

    Research average salary compensation in your industry, then wing it.

    Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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    Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

    Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

    7. Get compensated by your value

    Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

    Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

    Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

    You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

    The bottom line

    You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

    You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

    Featured photo credit: LinkedIn Sales Navigator via unsplash.com

    Reference

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