Budget Today for Taxes Tomorrow

Did you promise yourself last year that you wouldn't wait again until April 15th to pay your self-employment taxes? Do you wait and use next year’s income to pay the prior year’s taxes? If you haven’t already started to set money aside for your year-end and quarterly tax payments, then today is the day!!!

Here are a few tips that could help get your thinking straight on this: 

1) Set a Budget: Keeping a monthly budget can make a huge difference in whether or not you follow through on these promises to yourself.  It's important to get all your numbers laid out so you can see exactly what you are doing and can make clear-headed decisions that won't make you an accomplice in your own pain and stress. Cash Liquidity is essential in a credit-poor economy, but you must plan ahead and budget to build up ample cash reserves. Writing on Home & Business Budgeting for the New Economy is a primary emphasis of Numbers Speak Louder Than Words. 

2) Keep Your Numbers: Keeping your numbers on a monthly or weekly basis will free you up to not only save for your tax liability, but even more you will develop a keen awareness of the key indicators that could make or break your business. I can't stress it enough the importance of working towards having in-depth accounting. If you look only at the bottom line you will be missing out on the details that are specific to your business and industry. 

3) Move Your Money: Transfer the apportioned amounts out of your operations/spending account RIGHT AWAY. Put it in an account that you won't touch until it's time to pay your taxes. 

4) Get Help: Don’t do this alone. If this seems like a daunting situation, don’t do it alone. Get support-- voicing your goals and intentions to another human being increases the likelihood of success. “Book Ending” is a simple technique where you tell someone your goal or task before you start and then check back in after you have completed it.

Like it or not make payments or set aside this money as you go, so you won't get in a jam come April 15th. Drama and crisis is avoidable in this case (as it is in most cases)… not to mention the late fees and penalties. 

I know it’s easy to say, but harder to do. Let this year be different.

Now You See It, Now You Don't

Here is a technique that I use to help myself stay conscious of what I am doing. I have direct deposit for one of my clients so on payday I go online and make sure my paycheck was deposited. As soon as I see the amount is there, I transfer what I don’t need into savings. Now you see it, now you don’t.

This helps me to stick to my budget. And helps me to be conscious every time I spend money. I have noticed with some of my clients that out of necessity we pay more attention when money is tighter. So why not use this technique even on weeks when we may not have to. 

This is a chance for me to mention a paradoxical concept I came across that continues to inspire and fascinate me… Employing constraints in your life, can engender freedom.

Learning Happens

I first got this concept from Edward Yu. A good friend and my personal trainer. He kicked my butt on a daily basis. And our early trainings ended up becoming the grist for his book: The Art of Slowing Down. What he would use to trick me out of my less-than conscious habits. Is what he called "constraints". 

“Walk on the 2^nd metatarsal,” “Walk on the heal,” "Walk on the toes," "Now walk normally." These guidelines helped me feel how my body was moving. I was learning proper alignment and what it felt like from the inside-out. We would incorporate Tai Chi slowing down to improve our speed by creating more efficient, effective running. 

Edward would suggest various constraints while we warmed up and did our running workouts to focus us, his students, in class and break us of our bad habits. By maintaining the constraints you move out of the habitual movement and awaken new neural pathways in the brain. 

The problem is we can fall easily into our habit posture and running form. The body (and mind) go automatically to the path of least resistance and we need mental and physical reminders to prop us out of this less than conscious state.

Rules to Find Freedom

With home and business budgets constraints achieve the same powerful affect. They wake us up out of our habits and keep us in alignment with our goals. 

With home budgets we slow down what is happening so we can gather the info we need to make better decisions and have the alignment to be more efficient and effective. We invite constraints into our daily life on what we are spending so we can save more and achieve our dreams. Though they seem like pain at first these constraints allow greater freedom and range of motion in our life.

When we overspend and have nothing in savings for emergency, when crisis hits we are much more stressed and vulnerable in the situation. Which would you rather have the constraints of a budget that enables you to save or the constraints of 29.99% APR breathing down your neck because you burned thru your cash and had to use credit?

Whether you use keep the balance in your spending account intentionally low or checking your budget before you leave the house can be helpful constraints to release the weight of worry about money. We can find freedom in surrendering to the budget that we have developed and trust that with this greater awareness and courage to follow our action plan we will arrive to a sound place with our money.

Home Budgeting: Its the Economy Stupid

First thing: if you don’t have a home budget, start one.  If you’ve let it slip lately, get it going again. As the saying goes, "It’s the Economy Stupid" and you probably have a sneaking suspicion that you are falling further behind and in the new economy, you can't afford to hide in the darkness, you need facts and the inspiration to get into right-action. The times of the lone wolf method of struggling on your own and playing the strong silent type are over. It's just not the economy for that-- not individually and not collectively.

The good news is the economy won't be getting any better (as in back to normal), not for a long time. The bad news is that we can start today on keeping a Home Budget.

I say "bad news" because facing facts is often the last thing we want to do. Something in our human nature that makes the hardest things the last things we want to do, if we ever get to them. It may be comforting to realize that home budgets are not technically hard to do, only elementary-level arithmetic is required and you can even cheat and use a calculator. Though most of the time the technical skill is not what holds people back, its the emotions and feelings that get unearthed in the process. Again, it's important to realize that what keeps people from keeping a home budget is not the elementary-level arithmetic, but the emotions and feelings that get unearthed.

I say "good news" because the economy won't let us keep putting this off. We have to sober up. It's time to learn from our mistakes and make better choices. For most of us there just isn't the credit cushion of which we had grown accustomed to and that enabled our worst spending habits and semi-conscious patterns.

This is good news because many of us have been in denial for a long time. 360 degree denial. Everywhere we look, everything we see is chock full of denial. We are told the economy is improving and we believe it. We are told the stock market is a safe gamble, but we aren't given the massive users manual that should come with our 401k. We are told spend like there is no tomorrow and you don't have to tell us twice. 

Good news because we can start today-- as soon as we wipe the sleep from our eyes and smell the coffee brewing in the kitchen.

Good news because we can get on with living. Living not the big house, extravagant lifestyle we see reflected back in our TV, but the living within our means. Balancing our checkbook. Back to basics- whatever that may mean to us. Be it back to nature, back to knowing our neighbors, back to cleaning our house ourselves or just back to reality. With a home budget we can see how far off our spending is in order to make our savings goals and plans. Quick money and quick debt has a long lasting hangover with no easy cure. 

There may be nothing glamorous about putting yourself on a home budget. Though it is basic common sense, it can feel awkward and bewildering at first. But the thing I want to focus in on here the most is developing a shame-free approach to money. A lot of us have picked up feelings of shame around money, not earning enough, spending too much, etc. In our society debt and bankruptcy is comparable to the 7 Deadly Sins and we try to hide this reality at all costs. This secret life that we think we have to live slowly sucks us dry. The secrecy and shame is not only harmful to our health and relationships, but even more it hamstrings our ability to make much needed, positive changes. And in effect deadlocks our own personal recovery. The secret problems often seem too overwhelming to deal with outright. So my primary goal is to maintain this blog a shame-free zone: a home for mutual aid and support. 

It is the self-isolating behaviors that come hand-in-hand with shame, that also needs our care and attention. Creating a home budget is one major tool that can help lead us out of the grip of despair. What can lead us out of the darkness of suffering alone is the other tool of sharing what we are doing with someone we know and trust- someone we can confide in. It is important not to do this work alone because letting down the veil of absolute privacy can be good for your health.

I am going to probably end up repeating it many times on this blog, which is necessary to do because it is so vitally important and so often overlooked--- we are social animals-- we need each other more than we think. To function optimally, we need a healthy robust support network. We do not function well as isolated individuals maximizing our own self-interest. This is the myth of the 1%, if you will, and enough of us have bought into it that it almost seems real, but the shame we feel when we don't cut it is killing us. We need a supportive public life. We need a social support network, that is both deep and wide, to support us when things get strained at home, at work or in our neighborhood. This social safety net, what has been called Social Capital, may be the most important aspect in our health care. And it deeply depends on trust. Trust that we build together one step at a time. Likewise none of it happens if we remain in isolation and secrecy.  This is a larger question to explore, but just for today we can feel moved and inspired to take our first step: start a home budget and tell a friend what we are doing.