your money
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March 4, 2009TRANSCRIPT
2 YOUR MONEY - An Entrepreneur’s Life
Question: Every month I try to budget so that I can live within my means. However, my budgets never seem to work. What am I doing wrong?
Answer: A budget is simply a written plan which details how your money should be spent every month. It shows the income that is expected to be earned for the month, and the expenses that have to be paid. A budget is extremely important, as it tells you exactly what costs to expect, and helps you to know beforehand if your income will be enough to cover them.
Lots of people find budgeting to be a major challenge, and they eventually give up on the process. The problem is that most people have never learned how to budget properly. Here are ten smart steps to help you to create a workable budget blueprint:
1: Get prepared. Set aside some time to review your monthly spending habits. Look for old receipts over the past year. Download a personal budget form at www.financiallysmartonline.com, under ‘Financial Tools’.
2: Record all the unavoidable expenses that occur every month; e.g. rent or mortgage, utilities, food, transportation, life and/or health insurance, loan payments.
3: Estimate all the expenses that will eventually take place, but do not happen every month; e.g. school fees and supplies, cooking gas, car servicing, property tax.
4: Set reasonable spending limits on non-essentials by deciding how much you can afford to spend on these items; e.g. clothing, personal care, gifts, entertainment.
5: Make allowances for expenses that may occur in an emergency; e.g. medical bills, hurricane repairs. 6: Think about things you would really like to spend money on, but may not necessarily be able to afford now; e.g. retirement savings, children’s college fund, vacation, charitable contributions.
7: Break down all the expenses in steps 3-6 into average monthly amounts; e.g. if your school fee is $36,000 for the year, divide by this figure by 12 to get the average monthly figure.
8: Write down all the monthly expense figures under the relevant categories in the personal budget form.
9: Record all sources of income. If you receive commissions or your salary varies, estimate your lowest take home pay. Include any remittances, interest deductions or child support payments.
10: Subtract total monthly expenses from total monthly income. This indicates if you have a budget shortfall or surplus. If you have a budget surplus, put it aside for emergencies or for future financial goals. If you have a shortfall, go back over the budget to see where you can reduce non-essential spending. If you’ve trimmed and you’re still in negative, you’ll have to increase your earnings to make up for the shortfall.
If you’re disciplined and determined, budgeting can set you firmly on the road to financial success!
Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email [email protected] with comments or questions.
Smart Steps to: Prepare a Budget
MONEY $MARTRaise Your Financial IQ!
10NEW
Personal Care
You realise your gel deodorant is leaving a stain on some of your garments, which powdered stick brand would you switch to?
A) SPEEd STiCk 52%b) Arm and Hammer 14%c) degree 10% d) Gilette 24% Your grandparents are coming over for a visit but they cannot use the same toothpaste as the rest of the household because of dentures and sensitive gums. Which one of the following brands do you buy for them?
a) Sensodyne 36%b) COlGATE 44%c) Aquafresh 10%d) None of the Above 10% After a few minutes of grocery shopping, you head to the cashier. However you have forgotten to pick up mouthwash, which one of these mouthwash do you beg the baggage attendant to get for you?
a) Crest 24%b) liSTERiNE 48%c) Scope 20%d) Cari-Med 8% Your family has expressed that they prefer soaps that have a refreshing memorable scent. Out of these four brands which do you think would fit your their criteria?
by Shari Lyew
a) Protex 22%b) iRiSH SPRiNG 40%c) Palmolive 18%d) lux 20% You decide to prepare for your day of babysitting children, this means more headaches for you than the normal. Which pain killer brand do you stock your medicine cabinet with?
A) Advil 30%b) PANAdOl UlTRA 30%c) Tylenol 14% d) Exedrin 26% Where do you prefer to shop for your personal care items?
a) WHOlESAlE bEAUTY CARE STORES 34%b) Supermarkets 24%c) Pharmacies 8%d) it doesn’t matter, i usually shop around for the cheapest prices 34% ** This survey was conducted with the participation of 30 persons who were consulted on the streets of Jamaica. The other 20 persons participated via the internet. ** The age demographic examined was 18 years old and over.
Survey Says
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4 YOUR MONEY • Business Lounge
Over the past decade and a half, the world’s retailing industry has undergone significant changes, where the role of supermar-kets (small ones in particular) is being questioned in this dynamic business environment. As a result of the growth of new alternative retail formats from the traditional supermarkets to the openings of “Supercentres” there is a steady change in how consumers shop.Wal-Mart, America’s largest supermarket retailer, is said to be a “menace” for small retailers and known to be responsible for the closure/ bankruptcies of 25 out of 29 supermarket chains in the country in 2003 (Wall Street Journal 2003). Is it possible that Jamaica is slowly adopting this trend?
With Pricemart and Mega-marts popping up all over the island, Your Money ponders if it is time for small supermarkets to start packing?
Ms. Victoria Wong – J&R Wholesale and Retail formerly Sunrise Supermarket on Red Hills Road. Her initial view of the current situation of small supermarket versus supercentres was really simple, “if you can’t beat them join them, or if you can’t handle the heat then get out of the kitchen!” The family run Sunrise Supermarket was started by her father and his three brothers and operated for over 30 years; providing all the necessary commodities for families in the surrounding neighbor-hoods. However, competition emerged overtime with Lees Food Fair, Xxtras and most recently “PriceMart” all taking prece-dence in the surrounding community.
“We always had to face competition, its apart of business but the opening of PriceMart surely made things tighter than before, once upon a time there was hardly room for the customers to maneuver through the isles but I guess things change.”, stated Ms. Wong. Subsequently the family made a conscious decision to switch oper-ations from a supermarket into a wholesale, hence the new name J&R which came about in June 2006. Ms. Wong explained, “We saw it best to switch to this type of retail because of the cost struc-ture and of course the importance we still play for persons in the surrounding communities.”
Sandra Wilkins, 36 – Shopper at MegaMart. “I don’t miss the supermarket days one bit, I have everything at my convenience, and even things that I didn’t particularly thought of getting is all under one roof.”
She elaborated on the fact that she wasn’t having a big prob-lem going to the local supermarket but going the supercentre just
seemed more convenient. “My children can get al-most anything they need whether it be for school or for leisure, if we want to have lunch the food court is there, if I need extra cash I can swing by the ATM machine inside, its just pure convenience.”
How can a small supermarket rival such a service?
Danny Simpson & Janet Simpson– Shop-pers of the small Traditional Supermarket.Despite the fear of the forthcoming dominance that supercentres are likely to achieve in the grocery re-tail market, small/traditional supermarkets can and should be able to compete once they continue to maintain “loyal” customers like Mr. and Mrs. Simp-son. For over 10 years the couple has religiously done their grocery shopping at one particular small supermarket, not because it’s any cheaper or even convenient than any other but because it feels like their own business. “ All our children who are basi-cally adults now were pushed in those very trolleys, the staff treats us as family and they try their best to get whatever we may find trouble accessing,” ex-plained Danny. The personalized service seems to be the supermarket’s strongest asset as the Simpsons have trouble experiencing the same type of service when they visit the supercentres. “Yes they may have everything under one roof, but the personalized service is not there, I feel like a lost soul in those places”, said by Mrs. Simp-son.
So, is it safe to assume that a bit of differentiation and personalizing, small supermarkets can gradu-ally rival supercentres?
What we may be aware of is the necessity of strate-gically positioning oneself, regardless of the market. Companies will always have to be aware of poten-tial competitors entering the market and prepare themselves to combat the effects.
BusinessLoungeShould Small Supermarkets start packing?by: Kenarthur Alexander Mitchell Jr.
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