Greg Speicher

Budgeting is the foundation of financial well-being. Whether you’re just starting your financial journey or looking to refine your money management, a solid budget helps you take control, reduce stress, and achieve your financial goals. In this guide, we’ll cover simple steps to create and maintain a budget that works for you, offering tips on tracking expenses, setting financial goals, and avoiding common pitfalls. With these strategies, you’ll be able to make informed financial decisions and build a path to financial stability.

1. Why Budgeting Matters for Financial Health

Budgeting isn’t just about tracking your spending; it’s a powerful tool to help you meet both short-term and long-term financial goals. Here’s how budgeting benefits you:

• Gain Control Over Your Finances: A budget shows you where your money is going and helps you make adjustments as needed.
• Reduce Financial Stress: Knowing you have a plan reduces worry, especially during unexpected expenses.
• Achieve Financial Goals: With a clear budget, you can allocate funds toward goals like saving for a home, paying off debt, or building an emergency fund.

2. Start with Your Income: Calculate What’s Coming In

The first step in budgeting is knowing how much money you have. For most people, this is their monthly income from jobs, side gigs, or investments. When calculating your income:

• Include All Sources: Be sure to account for any additional sources of income, such as freelance work, rental income, or bonuses.
• Use After-Tax Income: If you’re an employee, look at your take-home pay, which is your income after taxes and deductions. If you’re self-employed, estimate your monthly income and set aside an amount for taxes.

3. Track Your Spending: Know Where Your Money Goes

Understanding your spending habits is key to creating an effective budget. Spend at least one month tracking every expense. Use a spreadsheet, an app, or simply write it down. Categorize your spending to see where you might be overspending. Common categories include:

• Fixed Expenses: These are consistent every month, such as rent or mortgage payments, utilities, and insurance.
• Variable Expenses: Costs that fluctuate, like groceries, gas, and entertainment.
• Discretionary Spending: Non-essential expenses, such as dining out, streaming services, and hobbies.

Once you know your spending habits, you’ll have a clearer picture of where to make adjustments to save more.

4. Set Financial Goals: Define What You’re Working Toward

A budget without goals is just a list of numbers. Setting specific financial goals gives your budget purpose. Consider both short-term and long-term goals:

• Short-Term Goals: These could include paying off credit card debt, saving for a vacation, or building a small emergency fund.
• Long-Term Goals: Think about retirement savings, buying a home, or building a college fund for children.

Having clear goals helps you stay motivated and disciplined in sticking to your budget.

5. Choose a Budgeting Method That Works for You

There’s no one-size-fits-all approach to budgeting, and finding the right method is crucial for long-term success. Here are some popular budgeting methods:

• 50/30/20 Budget: Allocate 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.
• Zero-Based Budget: Every dollar is assigned a purpose until your income minus expenses equals zero.
• Envelope System: Allocate cash into envelopes for each category, which is particularly effective for those who tend to overspend.

Experiment with different methods to see what fits best with your lifestyle and financial goals.

6. Build an Emergency Fund: Prepare for the Unexpected

An emergency fund is your financial safety net. Experts recommend saving three to six months’ worth of living expenses, but you can start with a smaller goal if needed. Keep this money in a separate, easily accessible savings account, and only use it for true emergencies like medical expenses or car repairs.

• Start Small: Begin by setting aside a little each month.
• Automate Savings: Set up automatic transfers to your emergency fund so you’re consistently saving.

An emergency fund not only protects you financially but also provides peace of mind.

7. Cut Unnecessary Expenses: Find Places to Save

Take a look at your tracked spending and identify any non-essential expenses you can reduce or eliminate. This could include canceling unused subscriptions, dining out less frequently, or shopping more mindfully. Here are some quick tips:

• Review Subscriptions: Cancel those you rarely use.
• Cook at Home: Save money by reducing takeout and restaurant expenses.
• Consider Alternatives: Look for cheaper alternatives for everyday purchases.

Even small adjustments can make a big difference over time.

8. Review and Adjust Your Budget Regularly

A budget isn’t static—it should evolve with your financial situation. Set a schedule to review your budget monthly, assess your progress toward goals, and make adjustments as necessary. Factors like a raise, job change, or new financial goal may require you to adjust your spending or savings.

• Monthly Check-In: Review your spending and compare it to your budget.
• Adjust Categories: As life changes, you may need to allocate more to certain areas and less to others.

Regular reviews keep you on track and help you adapt to changes without derailing your financial plan.

9. Use Budgeting Tools and Apps to Stay on Track

Budgeting apps can simplify the process, offering easy ways to track spending, set goals, and monitor progress. Popular budgeting tools include:

• Mint: A free app that tracks spending, bills, and goals.
• YNAB (You Need a Budget): Based on zero-based budgeting, it encourages proactive planning.
• EveryDollar: A simplified budgeting app focused on the zero-based method.

Using a tool that fits your preferences can help make budgeting a regular part of your financial routine.

10. Avoid Common Budgeting Pitfalls

Sticking to a budget can be challenging, especially for beginners. Be mindful of common pitfalls like unrealistic goals, neglecting to track small expenses, or giving up after a single slip-up. To stay on track:

• Be Realistic: Don’t set overly restrictive budgets.
• Forgive Slip-Ups: Everyone makes mistakes; adjust and keep moving forward.
• Celebrate Wins: Acknowledge milestones, like reaching a savings goal.

Understanding potential pitfalls can help you stick with your budget over the long term.

Creating a budget doesn’t have to be overwhelming. By following these simple steps, you’ll have a budget that puts you in control of your finances, helps you achieve your goals, and reduces financial stress. Remember, budgeting is a journey, and small steps can make a big difference over time. Whether you’re saving for an emergency fund, planning a vacation, or building wealth, a well-crafted budget is your path to financial freedom.

Ready to take control of your finances? Start your budgeting journey today! Use these steps as a guide and try out a budgeting method that suits your lifestyle. You’ll be surprised at the progress you can make when you have a clear plan in place.

I’ve made a ton of great investments: QVC in the late 80s, AOL the late 90s, Amazon in the 2000s and Taiwan Semi in the 2020s.  What have been my worst investments?  Here are a few of them: 

1. Dream Marketing DMMK.  I cant even remember what these guys did.  100% loss, they went defunct in 2013. 

2. General Motors 2008.  100% loss.  I hate the automobile manufacturing industry, I know there are times when you can make money, I’ve never been involved in those times. 

3. Pets.com  Launched in 1998, closed their doors in 2000.  Total loss.  Ahead of their time, they were what the website Chewy.com is today. 

4. Bear Stearns.  I owned Bear Stearns in the 90s but sold long before they closed their doors in 2008.  BST, I can even remember the symbol years later. 

5. Enron.  I owned less than 50 shares of Enron.  As this stock plummeted, I basically rode it all the way to zero. 

Why do investors avoid selling, even though the stock is crashing? 

I have a few theories on this.  Some investors simply don’t know what they own.  Maybe the holding is small relative to the size of the portfolio.  Other investors might know the stock will never recover and they figure since they have a loss anyway, they might as well have the largest loss possible for tax purposes. 

How to avoid stocks going to zero?  There’s no real guarantee like everything with investing, I’d say the best idea is to watch your investments quite carefully.  Even if you can’t subscribe to expensive research tools, consider free tools like Google news alerts.  You can set up Google news alerts for anything really; by tracking the headlines closely you’ll keep an eye on your investment and you may be prompted to sell before it’s too late. 

In case you’re curious, here are the top stock failures of the 1929 crash: 

Caldwell and Company   A financial holding company in the South that collapsed due to its leaders investing too much in securities markets.  

Do you ever shop or do business at a company that has a unique way of doing business and wonder why others in the same industry don’t copy that idea? 

Here are my random observations on great business ideas that never seem to be copied by others in the same industry. 

1. Aldi’s cart retrieval system.  If you’ve ever shopped at Aldi you’ll know that in order to use a shopping cart, you need to insert a coin like a quarter.  Aldi does this everywhere in the world.  The result:  customers return their carts to the store instead of leaving them abandoned in the parking lot.  Great idea…why don’t other merchants do the same thing? 

2. Speaking of Aldi.  Aldi prints UPC barcodes on every side of each product that they sell.  Result:  cashiers don’t constantly turn products over looking for the barcode during the check out process.  Checkouts are fast at Aldi. 

3. Chick-fil-a drive through process.  Chick-fil-a drive throughs are different.  Instead of driving up to a window or speaker box and speaking your order, Chick-fil-a employees instead walk up to your vehicle with a tablet and take your order.  The result, the line is always moving.  I’ve seen similar ideas in other industries but I dont know why McDonald’s doesnt do this at all of their drive throughs. 

4. Apple’s app marketplace.  Sure Google has their own app store but why haven’t other cell phone manufacturers (looking at you Samsung) created their own app store.  The advantage with Apple’s app store is that Apple ensures security, they keep out random apps, and, if the app collects money, Apple gets a cut from each transaction.  As an Apple user, I know the apps are always secure, there are no such thing as IOs viruses, and it’s somewhat idiot proof for non tech people.  Why wouldn’t Samsung copy that? 

5. Why didn’t Sears keep their catalog business?  Sears Roebuck and company once was the largest catalog merchant in the United States.  They discontinued their catalog in 1993. Amazon started selling books in 1994 and launched into items other than books in 1997, arguably only  4 years after Sears discontinud their catalog. 

There are plenty more examples…can you think of any?  Comment below 

W.W. Grainger, Inc. is a leading industrial supply company, known for providing a vast array of products such as maintenance, repair, and operating (MRO) supplies to businesses across various industries. While Grainger is a dominant player in the market, several other companies are also significant competitors, offering similar products and services. Here’s a look at the top five competitors to Grainger. 

1. Fastenal Company 

Fastenal is one of the most formidable competitors to Grainger in the MRO market. Founded in 1967, Fastenal has grown from a small fastener shop to a global distributor of industrial and construction supplies. The company offers a wide range of products, including fasteners, safety supplies, tools, and industrial vending solutions. 

Key Strengths: 

• Vending Solutions: Fastenal is known for its innovative industrial vending machines that provide customers with easy access to MRO supplies directly at their job sites. 

• Extensive Branch Network: Fastenal operates thousands of branches worldwide, providing localized service and quick access to products. 

• Customized Solutions: Fastenal offers tailored solutions to meet the specific needs of their clients, particularly in inventory management and supply chain efficiency. 

2. MSC Industrial Direct Co., Inc. 

MSC Industrial Direct is another major competitor in the MRO supply space. Established in 1941, MSC has built a strong reputation for its comprehensive catalog of industrial supplies, which includes metalworking tools, safety equipment, and facility maintenance products. 

Key Strengths: 

• Metalworking Expertise: MSC has a strong focus on metalworking, offering a wide selection of tools and services specific to this sector, including custom tool reconditioning. 

• E-commerce Platform: MSC’s online platform is user-friendly and offers a broad selection of over 1.5 million products, making it easy for customers to find and order supplies. 

• Customer Support: MSC provides excellent customer support, including technical assistance, helping businesses choose the right products for their needs. 

3. Motion Industries 

Motion Industries is a division of the Genuine Parts Company, also the owner of NAPA auto parts.  Motion grew over the years and also acquired other parts companies like Berry Bearing, and others. 

4.  Applied Industrial Technology (publicly traded as AIT) 

Applied Industrial Technologies (AIT) is a leading industrial distributor and solutions provider focused on supplying a broad range of products and services to various industries. Established in 1923 and headquartered in Cleveland, Ohio, AIT primarily serves industries like manufacturing, energy, healthcare, food and beverage, and government. The company is well-known for its expertise in bearings, power transmission components, fluid power products, and other industrial solutions. 

5. HD Supply (Part of The Home Depot Pro) 

HD Supply, now part of The Home Depot Pro, is a significant player in the distribution of MRO products, particularly in the facilities maintenance, infrastructure, and residential construction sectors. It caters to professional customers, including contractors, maintenance professionals, and government agencies. 

Key Strengths: 

• Focus on Facilities Maintenance: HD Supply offers a deep selection of products for facilities maintenance, including plumbing, HVAC, and electrical supplies. 

• Integration with The Home Depot: The backing of The Home Depot provides HD Supply with extensive resources, including access to The Home Depot’s retail network and logistical capabilities. 

• Pro Services: HD Supply offers value-added services such as inventory management, delivery options, and product training to enhance customer experience. 

5. Amazon  

Amazon has rapidly emerged as a strong competitor in the industrial supply market. While not a traditional industrial distributor, Amazon leverages its vast logistics network, customer-centric platform, and competitive pricing to attract MRO customers. 

Top Publicly Traded Ball Bearing Manufacturers in the World 

Ball bearings, essential components in countless mechanical systems, play a crucial role in reducing friction and improving efficiency. The global ball bearing market is vast and competitive, with several major players dominating the industry. Here are some of the largest publicly traded ball bearing manufacturers worldwide: 

1. SKF AB 

• Country: Sweden 

• Overview: SKF is one of the world’s leading providers of bearings and seals. It offers a wide range of products for various industries, including automotive, aerospace, and industrial machinery. SKF’s commitment to innovation and sustainability has solidified its position as a global market leader. 

2. NTN Corporation 

• Country: Japan 

• Overview: NTN is a Japanese conglomerate involved in the manufacturing of bearings, automotive parts, and other precision components. The company has a strong global presence and is known for its high-quality products and technological advancements. 

3. Timken Company 

• Country: United States 

• Overview: Timken is an American industrial company specializing in bearings, seals, power transmission products, and steel services. The company has a long history and is renowned for its innovative solutions and commitment to quality. 

4. Schaeffler AG 

• Country: Germany 

• Overview: Schaeffler is a German industrial group that offers a diverse range of products, including bearings, clutches, and automotive components. The company is known for its strong research and development capabilities and its focus on sustainable solutions. 

5. NSK Ltd. 

• Country: Japan 

• Overview: NSK is a Japanese precision machinery manufacturer that offers a wide range of products, including bearings, steering systems, and automotive components. The company has a global footprint and is known for its technological expertise and commitment to quality. 

6. INA Holding 

• Country: Germany 

• Overview: INA Holding is a German industrial group that specializes in bearings, linear technology, and mechatronics. The company is known for its innovative products and its focus on precision and quality. 

7. Rexnord Corporation 

• Country: United States 

• Overview: Rexnord is an American industrial company that offers a wide range of products, including bearings, power transmission components, and process systems. The company is known for its strong focus on innovation and customer satisfaction. 

There are very few United States manufacturers of bearings.  The generic/commodity portion of the bearing industry has been taken over by Chinese manufacturers.  The specialized bearing industry has been taken over by German companies and the broad product line bearing companies are mostly based in Japan. 

The materials handling industry, driven by the demand for efficient logistics and warehousing solutions, has seen significant growth and consolidation. Many forklift manufacturers have expanded their operations and become publicly traded companies, offering investors opportunities to participate in this dynamic sector. Here’s a look at some of the prominent publicly traded forklift manufacturers: 

North America 

• Caterpillar Inc. (CAT): Caterpillar is a global construction equipment manufacturer.  CAT forklifts are technically made under license by a Mitsubishi affiliate.  Its stock is traded on the New York Stock Exchange (NYSE). 

• Toyota Industries Corporation (TOYOTA): While primarily known for its automotive business, Toyota also manufactures forklifts. Its stock is traded on the Tokyo Stock Exchange. 

• HYG Hyster Yale Group.  Hyster/Yale formerly was a division of North American Coal.  It started trading on its own back in 2007.   

Europe 

• KION Group AG (KION): KION is a leading provider of industrial trucks and warehouse automation solutions. Its stock is traded on the Frankfurt Stock Exchange (FWB).  Brands include Linde and Still and Rapistan. 

• Jungheinrich Aktiengesellschaft (JUN3.DE) Jungheinrich is another major European forklift manufacturer with a strong presence in the global market. Its stock is traded on the Frankfurt Stock Exchange (FWB). 

• Kalmar is publicly traded on the Helsinki stock exchange. 

Asia 

• Hyundai Heavy Industries Co., Ltd. (HHI): HHI is a South Korean conglomerate involved in shipbuilding, offshore engineering, and industrial machinery, including forklifts. Its stock is traded on the Korea Exchange (KRX). 

• Komatsu Ltd. (KOM): Komatsu is a Japanese multinational manufacturer of construction and mining equipment, as well as forklifts. Its stock is traded on the Tokyo Stock Exchange. 

For small businesses, having extra cash on hand can be a blessing. It provides a financial cushion to weather unexpected challenges and seize growth opportunities. However, simply hoarding cash isn’t the most strategic approach. Investing this extra money wisely can yield significant returns and help your business thrive. Here are some effective options for small businesses to consider: 

1. Business Expansion 

• New Locations: If your business model is scalable, consider expanding into new markets or opening additional locations. 

• Product or Service Expansion: Introduce new products or services to cater to a wider customer base or tap into emerging trends. 

• Technology Upgrades: Invest in new technology or software to improve efficiency, productivity, or customer experience. 

2. Vendors and inventory  

• Lower prices for faster payment.  If your company paid vendors slowly in the past, it’s possible those vendors raised their prices to accomodate  your slow payment patterns.  Ask your vendors if you can get lower prices if you paid in 30 days or less.  

• Inventory:   Since you have excess cash, does it make sense to order more inventory?  Do vendors offer quantity based discounts if you place larger orders?  

3. Marketing and Branding 

• Digital Marketing: Invest in digital marketing campaigns to increase online visibility and reach a wider audience. This could include search engine optimization (SEO), social media advertising, or content marketing. 

• Branding and Rebranding: If your brand is outdated or needs a refresh, invest in a rebranding effort to improve your company’s image and appeal to customers. 

4. Financial Investments 

• Savings Accounts: While not as exciting as other investment options, high-yield savings accounts can provide a safe and accessible place to store extra cash. 

• Certificates of Deposit (CDs): CDs offer higher interest rates than savings accounts but come with a fixed term, so you’ll need to consider your liquidity needs. 

5. Debt Reduction 

• Pay Down Debt: If your business has high-interest debt, consider using extra cash to pay it down. This can reduce your monthly expenses and improve your financial health. 

6. Acquisitions 

Instead of competing against your competitor, consider buying their operation!  You better control margins, you build your customer base, and potentially acquire new talent. 

While investment advisers are often seen as financial experts who provide personalized advice, the reality is that many of them primarily focus on selling standard mutual funds. This practice, often referred to as “selling the product, not the advice,” has raised concerns among investors and regulators alike. 

Why Do Investment Advisers Focus on Standard Mutual Funds? 

There are several reasons why investment advisers may prioritize selling standard mutual funds: 

1. Commission Structure: Many investment advisers earn commissions on the mutual funds they sell. This commission-based compensation model can incentivize advisers to prioritize products that generate higher commissions, even if they may not be the best fit for the investor’s needs. 

2. Familiarity: Investment advisers may be more familiar with standard mutual funds due to their widespread availability and marketing efforts. This familiarity can make them easier to sell and promote. 

3. Simplicity: Standard mutual funds are often seen as a relatively simple and straightforward investment option. This simplicity can make them appealing to both advisers and investors. 

The Limitations of Standard Mutual Funds 

While standard mutual funds can be a suitable investment for some investors, they also have limitations: 

1. High Costs: Many standard mutual funds come with high expense ratios, which can erode investment returns over time. 

2. Lack of Customization: Standard mutual funds offer limited customization options, making it difficult to tailor investments to specific investor goals and risk tolerances. 

3. Market Tracking: Many standard mutual funds are designed to track a specific market index, such as the S&P 500. This can limit their potential for outperformance. 

The Importance of Personalized Advice 

Investors seeking personalized financial advice should be aware of the limitations of standard mutual funds and demand a more comprehensive approach from their investment advisers. This may involve considering alternative investment options, such as exchange-traded funds (ETFs), individual securities, or custom-built portfolios. 

How Investors Can Protect Themselves 

Investors can protect themselves by: 

• Asking Questions: Inquire about the investment adviser’s compensation structure and any conflicts of interest. 

• Understanding Fees: Carefully review the expense ratios and other costs associated with any recommended investments. 

• Seeking Alternative Options: Explore other investment options that may be more suitable for your individual needs and goals. 

• Working with a Fiduciary: Consider working with a fiduciary adviser who is legally obligated to act in your best interests. 

Want to do it yourself?  You could manage your investments on your own.  Investing platforms like Schwab or Fidelity have a large variety of free tools.  Many have tools that will analyze your investments and help you re-shape your portfolio.