Thursday, January 5, 2012

Business Plans For Your Life

Day 41 of 365 Tiny Changes

It’s the first week of the new year.  I’m not one to start off a new year with any new resolutions, I’ve already committed to making 365 tiny changes, no reason to add on any more.  I think my plate is full enough.

What I do like to do at the first of each year is set up the current year’s business plan for our household.  (Did I really hear you say, “Ugh” ?)

I know, I know, if you aren’t a numbers person, or a planner, this could sound overwhelming, because a good business plan includes both.

You’ve heard of business plans for your company, maybe have even been involved in the creation of them.  The difference in a company business plan and a personal business plan is your commitment to it’s fruition, and the benefits you get when you meet your personal goals.

At work, you are compensated for showing up each day and are probably bonused in some way for meeting certain goals.  You want to see your company succeed so that you can keep showing up each day and possibly get bonused for meeting goals.  After all, it’s your livelihood and your source of the funding you need to live the rest of your life, paying bills, buying things, feeding yourself and your family, but, for the most part you probably aren’t totally responsible for your company’s success or failure.

In your personal life, you are.  Each day you earn a certain amount of income and you spend a certain amount of it.  If there is any left over you either spend it on something else or save it for a rainy day.  This scenario repeats itself every day.  Do you know what the actual numbers are that are related to your daily activities?  Do you know how much you earn, each day, each hour, each minute?  Do you know how much you spend, each day, each hour, each minute?

Do this.  Take your last paycheck of the year, find your total annual gross income number.  Find your total annual hours worked.  Divide the gross income by the gross hours.  That is your hourly rate. 

Then take this number and divide it by 60.  This is the amount you earn each minute you are on the clock.  I always like knowing what I’m  worth minute to minute.  Now you know what a bonus you are giving to your company for every minute you work, off the clock.  Interesting, to say the least, but hang in there with me, because it gets a lot more interesting.

The next step is a little bit more involved, but I promise you will see a benefit in the end.  Add your monthly mortgage payment, including taxes and insurance, your gas, electric, water, and sewage payments together.  This is the total amount it takes to keep a roof over your head.

Now, take this number and divide it by your earnings per minute.  Got it?    This is the number of minutes you have to work to pay for your home. 

Too big of a number to get your head around?   Then divide this number by 60.  This final number is the number of hours it takes you to simply keep a roof over your head.  Surprised?

It actually takes about 30% more hours because the Federal, State, and Local governments all get their piece of your income pie before you do, to the tune of roughly 30-35%, but I wanted to keep the calculation somewhat simple.

In our household, the number equals about 2400 minutes, or about 40 hours.  It takes one full week of income to pay for our home and all of the utilities.  Oh, but we have 2 properties.  It takes another week to pay for the 2nd property that we are in the midst of rehabbing.  (Anybody want to buy a partially gutted house, I know a lot about?)

The other two weeks of income are left to cover everything else.

This past year I tracked every penny we earned and spent.  Doing this allowed me to really see where all of our money was disappearing to.  Based on these numbers, we made adjustments throughout the year. 

We no longer go out to eat nearly as much, and when we do, we’ve make it a game to do it as inexpensively as possible, by uncovering discounts. has some really great deals, and we have discovered good restaurants we never even knew existed.  All this goes into making our meals out much more special.

I also coupon.  To be a good couponer, I can’t be brand loyal.  This has opened my pantry to some products that I have never used in the past and  has allowed some more variety to our home cooked meals.

We’ve made a lot of other changes, based on my close scrutinizing of our spending and bills.  It’s amazing how many bills I was paying while not ever looking at any other information but the amount due.  Now, I review each and every bill, from top to bottom.  If I have a question, I pick the phone up, immediately, and make a call.  I am really surprised at how many errors I have found, especially on cell phone bills and doctor bills.

So, back to our household business plan.  This plan also includes other things we would like to accomplish this year, such as completing the rehab of the 2nd property, taking a dive trip to Guam and the Northern Mariana Islands, building an office in the basement, and starting 2 new businesses.  It's going to be a full year, and one that will not be successful with out a well thought out, well carried out plan.

Tiny Change 41:  Dinner meeting each Tuesday evening, with Guy.

During this dinner meeting we will review the progress we have made during the past week and discuss tasks that need to be completed during the current week to stay on track with our expected time line of completion.

Have you created a business plan for your household?  If not, why not?  Your future is totally in your hands, why not plan for it?

Best Regards,


Tiny Blessing for the Day:  I am extremely grateful to have a computer and the internet available to me.  My life would be completely different without it.

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