YOU'VE STOPPED SMOKING -- WHERE"S THE MONEY?

by John English

You bought my book, KILL THE ADDICTION. You read it twice, and came to the conclusion that I made it all up, or that I was really a lifelong non-smoker, because my method seemed too simplistic. This couldn't possibly work! Yet you thought a lot about it and even had a close friend read it to confirm your conclusions. Surprise...your friend said “Well, it is all totally logical. What do you have to lose? If I were still smoking, I would certainly give it a shot”. So you sat down and went through it one more time, doing everything by the method . . .

AMAZING! It worked. Within just a few days you had the cravings down to an occasional twinge. Within a week you had what the author called “the moment you knew with absolute certainty that you would NEVER smoke again”. You also knew that you would never miss it. (It was easy). Elation! You started telling anyone who would listen. Congratulations.

Then with a blinding flash of intuition, you knew with absolute certainty that the large amount of money you should be saving would not be there. Instead, the money you should be saving would get itself reabsorbed into other things, without you even being able to pinpoint what. At only $5.00 per day, you should have a cool $18,250, completely tax-free plus interest, in only ten years.

Better do something to make sure that happens. But what?

Most people live right up to their means, meaning their expenses equal their net income, so that at the end of each year they have saved nothing. Many people go one worse, living beyond their means and racking up credit card and/or mortgage debt in horrifying amounts. Why? Because they do not have a system in place to help them ‘save money for a rainy day’, as the saying goes. Putting money aside not only to cover the unexpected setback, but also for ones old age has never been as important as now. This is because our life expectancy in the fortunate developed countries is steadily increasing. What is more, with the explosive development in genetic research, postponing death has changed from being an unlikely dream to a realistic probability in the not so distant future.

The most obvious saving system guaranteed to be successful is the one I call the BaSIC method, standing for Budget and Save, Invest, Consult. “That's obvious,” you say, but as with almost anything in life, it all depends upon your interpretation of the four key words.

A final word of caution: the BaSIC method calls for a heavy dose of self-discipline which so many people interpret as a threat to their personal freedom. But it doesn’t have to be, so let's begin!

BUDGET

For this first part of the process, we are talking about a personal budget for a single person devoid of any family responsibilities, or a family unit. Either way, we'll call it a personal budget as opposed to a business budget, and it comprises four steps.

Step 1: Gather Expense Information. Putting it another way, find out exactly what you are spending, meaning how much and what for. Do not at this stage, in any way, change your usual spending patterns, even if some expenditures seem wasteful to you, now that you are working on the new method. Carry around a small notebook and write down every single expense, however necessary or however small. For example, grocery shopping need only be one entry such as Groceries $64.39, or Candy $0.67, or Clothing $125.50 and so forth. Do not try to analyze, criticize, or justify any expense whatsoever. Just go about your life as you usually do, and only take note of expenses.

It’s best to jot down the expense right away, not waiting until the evening to write them down. Don’t look back and analyze any of your notes - just file them away.


Step 2: Group/Total Your Expenses. Reading through your expense record, start trying to mentally group your expenses. For example, you might come up with main groups like Food (groceries, light snacks -- as distinct from a full restaurant meal, liquor, candy); Entertainment (dinner out, movies, DVD's rented, theater, amusement parks); Household (furniture/furnishings, home insurance, alarm system, repairs/maintenance, heating, lighting, pool).

Now get a spreadsheet showing columns for each group and (sub-group) and post all your expenses to the correct categories, total up each column then divide each total by the number of months involved noting your expenses. You now have an average expense per month.

Step 3: Adjust for seasonal/other distortions. You might have done the gathering of information during the six month period of November through April, failing to reflect new beach towels and chlorine for the pool. Also in colder months your home heating will be higher than in summer. Vacations may usually be in summer, so they would not even have appeared. There are so many variables that you will have to go over each category and add or deduct from the total, the distortions, based upon the best estimates you can make. Now you have new totals.

Step 4: Analyze your expenses. When you first examine where you are spending your money and how much, you may be really surprised. In any event, the first thing you now do is total up all your adjusted average monthly expenses and compare that figure to your total monthly NET income. If the expenses exceed the income, you are in serious trouble because you are getting steadily further into debt. If they are roughly equal, you are saving nothing. If your expenses are below your income, where is the money you have saved? (If nowhere, something went wrong with your calculations).

In any event, you want to save more, especially the $1,850 per year you were wasting on cigarettes. Analyze each expense group and sub-group to make cuts, and the new numbers become your budget for the next one year. It is also imperative that you budget for the unexpected so you should allow funds for such things as illness and car maintenance.

SAVE

This second part of the process is simply the result of your budgeting, including the all-important cuts you decide upon, resulting in an acceptable difference between your income and what you spend. That is your savings goal.

Finally, you have to really work hard at staying within your budget. Also, feel free to periodically review your budget for two reasons. You need to remind yourself where you have made cuts so that they really happen, and also because a budget must be open to revision as the reality of your life is modified by your lifestyle, as well as by circumstances beyond your control.

It is not easy, but it is doable and very much worthwhile. The reward is the sense of increased security you will enjoy as you see your savings grow.

INVEST

Do not leave your savings in your bank account, for two good reasons. First, banks pay very little interest on money left in a personal savings or checking account. Secondly, if your savings are as readily available to you as writing a check, you are bound to be tempted sooner or later to withdraw part or all of your savings to indulge some great temptation, and you may not be able to resist it, or you may tell yourself that you will pay it back next month, and next month never comes.

Sound investment is based upon an analysis of the risks you are prepared to take, or rather, the risks that seem wise for you to take given your age, employment, state of health, lifestyle and dependants, to name only some of the factors involved in this type of risk assessment. Generally speaking, you should also diversify your investments, as all the victims of Ponzi schemes will (too late) attest.

When you start your saving scheme, part of your investment can be “locked-in” for a period of a year or more but be sure not to devote all you have saved to this type of investment. Remember that one of the objectives of building your savings is to be in a position to meet unexpected but necessary expenses. The most important aspect to investing is the one that follows.

CONSULT

It is said that the person who renounces legal advice and represents himself in court has a fool for a lawyer! It should also be said that the person who handles his own investments has a fool for a consultant. And I will go much further than that....the person who takes investment advice from family, friends, neighbors across the fence, or business associates may as well set fire to his money! None of the above has the knowledge or the training or the information resources of the only person who should be giving you advice, a professional financial consultant. Another word of advice here, too. The professional financial consultant you choose should preferably not be associated with or employed by a bank, as they have a conflict of interest to deal with.

Now that you have a full understanding of the BaSIC method and know where your money is, take joy in remembering that it all began when you stopped smoking for life!

John English is author of KILL THE ADDICTION, Stop Smoking Without Quitting. He reports that his financial situation has greatly improved since he came clean. If you have any questions or comments you would like to make, please contact the author at his blog http://killtheaddiction.blogspot.com and visit him at his website http://www.budurl.com/ryma

MOST OF WORLD EXPOSED TO DEADLY TOBACCO SMOKE: WHO

Source: Reuters
Date: 2009-12-09
Author: Kate Kelland
URL: http://www.reuters.com/article/idUSTRE5B83X620091209
ID: 293888

More than 94 percent of the world's people are not protected by laws against smoking, leaving them exposed to the biggest cause of preventable death, the World Health Organization said on Wednesday.

Health

In a Global Tobacco Epidemic report the WHO said smoke-free policies were crucial to reducing the harm caused by second-hand smoke, which it said kills around 600,000 people prematurely each year and causes crippling, disfiguring illness and economic losses reaching tens of billions of dollars.

The report found some progress had been made, with 2.3 percent of the world's population, or around 154 million people, newly covered by smoke-free laws in 2008. But it warned of many more early deaths if governments did not act quickly.

"The fact that more than 94 percent of people remain unprotected by comprehensive smoke-free laws shows that much more work needs to be done," said the WHO's expert on non-communicable diseases, Ala Alwan. . .

The WHO said seven countries - Colombia, Djibouti, Guatemala, Mauritius, Panama, Turkey and Zambia - brought in comprehensive smoke-free laws in 2008, bringing the total to 17.

Category -International -Secondhand Smoke -Smokefree Policies Org -WHO