Live Better, Spend Less, and Save More - Spending and Saving: How to Get Credit and Your Money to Work for You is about what works for real people in the real world. Too much of the financial advice available today is simply not workable for most people in the real world. I have included in this book what I have found works for people, and left out what I have found does not work for people. For example, you will not see a budget in this book. A budget is one of the most common items of financial advice. Use a budget you are told. The problem is most people cannot sustain the use of a budget for any length of time. In public speaking, I ask people how many of them use a budget. The number of people using a budget is small. Why? Because a budget is about limiting spending and most people do not like the limiting concept. Instead I have developed tools that are not based on limitation. My tools are focused on getting you what you want and less of what you do not want.

Live Better, Spend Less, and Save More

Spending and Saving: How to Get Credit and Your Money to Work for You By William C. Haeberle

AuthorHouse

Copyright © 2009 William C. Haeberle
All right reserved.
ISBN: 978-1-4389-8055-3

Contents

Chapter...................................................................................Page1 Introduction to Personal Finance.......................................................12 Managing Cash Flow.....................................................................213 Haeberle's Personal Capitalization Ratio and Other Financial Tools.....................434 Creating Healthy Personal Finances.....................................................495 An Introduction to Credit..............................................................676 How Lenders Make Credit Decisions......................................................857 Vehicles...............................................................................1198 Housing................................................................................1319 How to Experience More Benefits While Spending Less Money..............................15110 Becoming a Skilled and Knowledgeable Consumer..........................................16311 A Summary of Spending and Saving.......................................................177Appendix1 Concepts and Tools.....................................................................1952 Would You Rather Be One Month Ahead, or One Month Behind?..............................2073 Monthly Payment Tables.................................................................2134 Remaining Balance Tables...............................................................221

Chapter One

Introduction to Personal Finance

Let's begin our journey of studying money together. As human beings, we tend to overestimate what we can do financially in a year and underestimate what can be achieved over a few decades. Good financial management should increase personal satisfaction today and improve long-term financial health at the same time. This is the ultimate goal of personal finance.

A Strategy for Financial Success: Develop financial habits and skills that contribute to both short-term satisfaction and long-term financial health.

Many people think there is a tradeoff between short-term satisfaction and long-term financial health. This belief is causing many, many people lots and lots of trouble. This book is about how you can have both short-term satisfaction and long-term financial health. Read on and you will see how you can have both. Read on and see how having both is easier than having just one or the other. Yes, I said having short-term satisfaction and long-term financial health together is easier - much easier - than having just short-term satisfaction or long-term financial health.

What you want is to have healthy personal finances today because healthy personal finances today will give you greater short-term satisfaction. I have heard and read this many times: for the end (destination) to be good, the journey needs to be good. If the journey is really bad, it is unlikely that any "end" will be worth it.

The goal is for healthy personal finances today to produce greater short-term satisfaction than thinking only about short-term satisfaction. Healthy personal finances today and every day will make for a much better journey.

Many people, and you maybe one, will need some convincing. This book is intended to convince you. Others need no convincing, but need to know how they can always have healthy personal finances. This book is intended to show you how.

To begin, it is helpful to start thinking about money not as one large category, but as four smaller categories. It is easier to think about and understand a smaller category. Also, the number of variables that a person must manage is reduced when dealing with a smaller sized category. This results in easier management, better decisions, and healthier personal finances.

The four categories of money are:

* Income: The enjoyable creation of a sufficient income.

* Spending: The purchase of things you enjoy.

* Saving: The reservation of a percentage of your income. * Investing: The spending of your money in your name with the objective of increasing your income.

Money as one subject is too big, so it gets confusing. In this situation, a person could say their goal is to have more money. The problem is, this goal is so general that it is difficult to realize. A person cannot wrap their mind around such a general goal. It is hard to get a clear focus on exactly what to do, in order to accomplish the goal of having more money.

Looking at money from the perspectives of the four categories makes thinking about money much easier. The four categories can be used to create a framework for thinking about and managing money. The framework helps to clarify goals. Clear goals lead to good plans and activities to accomplish the goals. Without clear goals, it is hard to get very far.

* Income: You are looking for a way that you find enjoyable to produce a sufficient income. Enjoying your work is very important, since you will likely spend a large portion of your time and energies on your work.

* Spending: You want to focus your spending on those things that bring you the most satisfaction. You want to reduce spending on things that bring you little or no satisfaction.

* Saving: The general rule of thumb is to save ten percent of your income.

* Investing: You want to spend your savings on assets that will increase your income.

The Focus of This Book

This book is focused on the spending and saving categories. These are the two categories that cause people the most trouble. Plus, you need to have spending and saving working for you before your earned income can do you much good or you can effectively invest to increase your income. I am also writing a book that is focused on earned income and investment income. Originally, I had all four categories in one book. The book was getting very large trying to do all four categories in one book. I decided to split the subjects because, in my experience working with hundreds and hundreds of people on the subject of personal finance, I have learned that spending and saving are the trouble spots for the majority of people. Additional earned income does no good and frequently causes even more trouble when spending and saving are not healthy. When spending and saving are not healthy, effective investing to increase income is not possible.

About Financial Goals and Outcomes

I have been mentioning financial goals. Let's consider some characteristics financial goals should have.

1. Financial goals should be clear. It is difficult to reach a goal unless it is very clear. The greater the clarity, the easier it is to determine the steps and activities needed to accomplish the goal. My experience with people on personal finances has taught me this is the factor that causes people the most trouble.

2. Financial goals should be stated in specific, measurable ways. To be a useful goal, the goal needs to be measurable. This is the second most troublesome factor for most people. They may create goals, but they are not measurable. Therefore, there is no way to assess...