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SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

 

The United States Securities and Exchange Commission announced fraud charges against a Washington State-based company and its owner for defrauding investors with claims to raise billions of investment capital under the JOBS Act and invest it exclusively with domestic companies.

The SEC alleged that Daniel Peterson and his business USA Real Estate Fund 1 guaranteed investors that they could procure considerable returns from an upcoming offering in a product backed by prominent financial companies. Peterson told investors that the 2012 JOBS Act would allow him to raise billions by advertising the offering to the American public, and produce significant profits for early investors. Mr. Peterson took advantage of his investors’ sense of patriotism by promising to invest the funds of the offering in exclusively American companies, and help assist the state of Washington in their economic recovery.

The SEC alleges that Peterson utilized investor money for personal expenses, and is continuing to solicit investors in his scheme.

“We have brought these charges to stop Peterson’s illegal activity before his fraudulent plan picks up more momentum,” said Michael Dicke, the Associate Director in the SEC’s San Francisco Office. “The American JOBS Act is intended to aid small businesses with their capital raising efforts, not to legalize fraud or provide unscrupulous entrepreneurs with the right to make fraudulent claims to dupe investors.”

According to the complaint filed in a Washington federal court, Peterson sold common stock in his fund from November 2010 to June of 2012 to more than 20 investors in Washington and five other states. Through e-newsletters and e-mails, Peterson claimed that he was preparing to raise billions in a subsequent offering of “preferred” securities, which he claimed would yield 10-year returns of up to 1,300 percent. Peterson then claimed that two prominent financial firms had partnered with him to bring this offering to the marketplace and that the firms had conducted proper due diligence on his fund and were in the process of structuring pricing models and sales agreements.

All of Peterson’s claims were false; he never created an investment product, the stated returns were made up, and he has never had any affiliation with any Wall Street firm to underwrite his purported offering.

The SEC claims that Peterson used investor funds to pay his rent, entertainment, food, vacations and luxury vehicles. Peterson also is alleged of using investor funds on clothing, luggage, and expenses at a Las Vegas casino. 

Broke Doctors: Wait, What?

Broke Doctors: Wait, What?

 

 
As a considerable number of doctors struggle to keep their practices afloat, some are buckling under finance woes and pushed into bankruptcy. 
 
A bankruptcy filing among those in the medical field is a trend that has accelerated in recent years industry experts say, with potentially crippling consequences for patients and doctors. Some doctors are still able to keep their practices open post bankruptcy, but for others, the filing represents a career-ending event. 
 
Chapter 11 bankruptcy filings by medical professionals have spiked recently as noted by Bobby Guy, the co-chair of the American Bankruptcy Institute’s health care committee, who is responsible for tacking bankruptcy trends tied to distressed companies. Guy claims there were at least eight filings in the past couple of weeks, which he remarked as “highly unusual.”
 
Just five years ago, Florida-based bankruptcy attorney David Langley did not have a single medical professional as a client; however, since then he has handled at least six bankruptcy filings involving doctors. Two current clients—an OB/GYN and an orthopedic surgeon—also are in the midst of filing for bankruptcy. 
 
None of Mr. Langley’s clients were facing malpractice suits that forced them into dire financial situations; in fact, all regarded as top-notch doctors.
 
The struggling economy has taken a toll on doctors’ revenue as consumers cut back on elective procedures and office visits. Doctors also point to the shrinking insurance reimbursements, the rising costs of malpractice insurance and fluctuating regulations as impediments to maintain a steady practice. 
 
Primary care professionals are also facing similar challenges. Langley remembers one client, a solo doctor whose patients lacked insurance and were mostly on Medicare. As the economy weakened in the wake of the recession, fewer of this doctor’s patients could afford to make visits. As a result, cash payments and reimbursements plummeted. To come up with cash to keep the practice afloat, the doctor was forced to take a second job at a local hospital. The extra income; however did little as the doctor’s debt ballooned. 
 
Two years ago, state tax officials showed up at the doctor’s office to shut the clinic down. The doctor called Langley and was able to file an emergency bankruptcy suit online while the officials were pacing in the waiting room. The doctor gave the officials the bankruptcy case number, and they exited without closing the clinic. 
 
A similar medical professional was on the brink of bankruptcy in 2011; by 2010, she lost almost half of her patients causing her annual revenue to drop nearly 30 percent. This doctor hired Guy and was fortunate enough to restructure her debt and keep her business going. 
 
Every day since the filing has been a struggle, however. “Every time payroll comes around, I wonder if we will be able to keep this up,” she said. “I try not to think too much about it because it paralyzes me with fear.”
 
Source: CNN
 

Crash and Burn: Microsoft Fined $730 million by European Union

Crash and Burn: Microsoft Fined $730 million by European Union

 

European regulators have fined computer giant Microsoft roughly $730 million for failing to uphold an agreement to offer users with a choice of Internet browsers. 
 
The European Union warned the software empire last October that it faced a steep fine following the results of an antitrust investigation launched in July. The investigation revealed that Microsoft had breached a five-year agreement to provide European customers with a choice regarding which browser they could use. 
 
“Legally binding contracts reached in antitrust decisions play a prominent role in enforcement policies because they allow for rapid solutions to competition matters,” said an antitrust official with the European Union. “A failure to comply is a serious infringement that must be sanctioned properly.”
 
This is the first fine imposed by the Commission for a breach of a contract or commitment made in the context of an investigation. 
 
Microsoft shares dropped 1% in pre-market trading as NASDAQ futures rose slightly. The steep fine could have been significantly larger as the European Union has the authority to impose fines of up to 10% of a company’s annual revenue, or approximately $7 billion in Microsoft’s case. 
 
According to the commitment, which dates back to 2009, PC users setting up Microsoft’s Windows operating system were supposed to see a “choice screen” offering 11 different browsers, including Microsoft’s Internet Explorer. The prompt; however, was removed following an upgrade to the Windows 7 operating system in February of 2011, depriving 15 million European Internet users a choice of browser. 
Following the announcement of a sanction, Microsoft apologized for what it labeled as a “technical error,” which lasted over a year. Microsoft announced that it had fixed the problem as soon it was made aware of the mistake. 
 
“We provided the commission with a candid and comprehensive assessment of the situation, and we have taken steps to improve our software development to avoid this mistake in the future,” Microsoft said in a statement issued Wednesday. 
 
Microsoft is no stranger to these sanctions; the software giant faced similar suits in the United States in the 90’s and 2000’s over its tactic of using its prominent position with Windows to promote its browser over competitors. 
 
Microsoft’s share of the browser market has plummeted as alternatives such as Mozilla’s Firefox and Google’s Chrome have grown in popularity.  
 
 
Source: CNN
 

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

 

 
College graduates under the age of 25 faces an 8.8 percent unemployment rate and of those lucky enough to secure employment, more than 50 percent work in positions that do not require a bachelor’s degree.
 
The upcoming class of 2013 will face an extremely grim job market, according to a new research report. 
 
Unemployment remains severe for young college graduates, and for those who will find employment, many will be forced to settle for low-level opportunities, the Economic Policy Institute reported today. 
 
The unemployment rate for recent college graduates between the ages of 21 to 24 has averaged roughly 9 percent over the last year, according to statistics from the United States Department of Labor, and when you include young college graduates who work part-time for economic means and those young individuals who have stopped looking for work in the past year, the unemployment rate sky rockets to nearly 18.5 percent. 
Although the job market has seen improvements over the past few years, the rates remain higher than pre-recession levels. Meanwhile, graduating at the wrong time and in the wrong market is likely to influence the earnings potential of these students throughout their entire career. 
 
“In general, they are not going to do well,” said Heidi Shierholz, an EPI economist. “These young people can expect lower earnings for the next couple of decades.”
Young college graduates who are working full-time are making roughly $3,200 less each year, than they were in 2000. The average hourly wage for these individuals was $16.60 last year, compared to $18.15 in 2000. 
 
As of last year, roughly 52 percent of employed college graduates under the age of 25 were not working in jobs that require a college degree, which is up from 47 percent in 2007 and 40 percent in 2000. However, EPI claimed the job problem for recent college graduates stems from weak demand for goods and services, rather than a lack of the appropriate skills or education. 
 
Source: AP

Guarantee

Guarantee

Obtaining a Guarantee (or Surety)
A guarantee, or surety, is a promise made by a third party who agrees to assume responsibility on a liability, such as a bond, loan, or payment, of a borrower in the event of default. The individual or company who agrees to the responsibility, or the guarantor, can often be a private individual or a bank. Often the use of a bank reduces the risk to various liabilities and often improves bond credit agency ratings.
In the United States and other common law jurisdictions, a guarantee is only value when written and signed by both the borrower and guarantor. Also, a creditor cannot pursue a guarantor unless the creditor has exhausted all possible forms of pursuing the debtor.
As mentioned, individuals can obtain guarantees through banks. The advising bank acts as a party of the guarantee and can provide various different guarantees, such as a performance bond, warranty bond, advance payment guarantee, or credit/loan repayment guarantee.
The government can also enter into the commitment of guaranteeing a surety. Under Title 15 of the U.S. Code, § 694b, Surety bond guarantees, the Administration may guarantee a surety against loss from the principle’s breach of bond as long as the principle does not exceed $5,000,000. The Administration can evaluate the commitments based on previous experience with the surety and authorize any surety without further administration approval.
All guarantees that are issued must involve a small business concern, require a person to bid on the contract, expect that the principle will perform the conditions reasonable to the bond, and that the borrower agrees to these conditions as well.
Small businesses can receive warranties from the federal government. The U.S. Small Business organization, an independent agency of the federal government who works to help and protect small business interests, has two surety bond guarantee programs. The Office of Surety Guarantees, a division of the Small Business Administration works to provide and manage these guarantees for qualified small. One is the prior approval, or the SBG Program and the other is the Preferred, or PSB program. 
In either program, the United States Small Business Administration does not directly issue the bond to the borrower. For the Prior Approval program, the borrower must be able to find a bonding agent representing a participating surety company or just a surety company who is willing to provide the bond. 
A borrower must submit the correct forms and provide the proper information to the agency who will then choose to execute the bother, either with or wither the Small Business Administration guarantee. All forms for obtaining the surety bond guarantee can be found on the Small Business Administration’s website. This application can be submitted 24 hours a day, seven days a week electronically through the E-application system. The information is sent directly to the surety company agent. 

Bill of Sale

Bill of Sale

 
A bill of sale is a document that a purchaser receives from a seller signifying an item being sold, its value and the transfer of title from one owner to another.  A bill of sale can be absolute or conditional, depending on the prior agreement of the grantor and grantee.  The bill of sale is generally a legal document that transfers the rights of ownership or use and both parties are expected to abide by the conditions of the agreement.  Bill of sales is typically used in the car purchases.
 
 
What is an absolute bill of sale?
 
 
An absolute bill of sale transfers rights of use and ownership to another party.  The grantor party does not retain a security interest in the transfer of the item.
 
 
What is a conditional bill of sale?
 
 
Under a conditional bill of sale, the grantor party maintains the right of seizure against the grantee if certain conditions stipulated in the bill of sale are not met.  A conditional bill of sale can be used in “title loans” that put a creditor’s item, such as the title to a car, up as collateral for a loan.  These loans are generally high interest and the debtor risks losing possession of the car if payments on the loan cannot be made.  Until the debtor fails to repay the loan, the conditional bill of sale remains in effect, with the debtor enjoying the use of the property (the car) but handing the potential for the car to be repossessed to the creditor.
 
 
What items are bills of sale used for?
 
 
Bills of sale can be used for significant, moveable pieces of property such as cars, furniture and jewelry.  A bill of sale form can be customized based on the nature of the sale and a lawyer can help generate a legally binding bill of sale.
 
 
What is featured on a typical bill of sale form?
 
 
A proper bill of sale form will start with the names and addresses of the two parties involved and signify which among is the seller and purchaser.  The bill of sale form will then state the location of the sale and location of the property and confirm that the item is being sold.
The next part of the bill of sale form is the most important part and signifies the amount that is being paid for the properly and when the item will be delivered.  There will also be a provision for the transfer of funds to cover the transfer of property.  Especially in bills of sale involving motor vehicles, there will be detailed information about the make, model, color and style of the property as well as identification numbers, if applicable.
 
 
The bill of sale will end with guarantees from the seller that the vehicle or other property is free from other claims from creditors and that the seller has the legal right to sell the property.  The seller disavows claims any further damages of losses associated with the property.
 

Teapot Dome Scandal

Teapot Dome Scandal

A Look at the Teapot Dome Scandal


The Teapot Dome Scandal of the 1920’s was a bribery incident due to the influence of oil money during the Warren G. Harding Administration. During this time, Harding proved himself to be a poor president. He was unable to properly manage the Federal government and often delegated work and authority to his cabinet officials. Many of these officials were dishonest, creating many problems.
In the beginning of the 1900’s the United States Navy switched from coal to oil as their primary source of fuel. In order to ensure that they would have enough, President Taft designated many oil producing areas as Naval Oil Reserves.
The Teapot Dome Scandal began with the Warren Administration. Warren G. Harding was a U.S. Senator from Ohio who was elected into the Presidential office in 1920. Early in his administration, before the Teapot Dome Scandal, the Secretary of the Navy requested that some of the responsibility for the Navy’s reserve oil be transferred to the Department of the Interior. This included the Teapot Dome field in Wyoming, which the Teapot Dome Scandal was named after, and other land in California.
At the time of the early events of the Teapot Dome Scandal, Albert B. Fall was the Secretary of the Interior. In 1921, he rented these naval oil reserves to two private oil companies, the Pan American Petroleum Company and the Mammoth Oil Company in exchange for gifts and loans, the sum of which added up to approximately $404,000.
The events of the Teapot Dome Scandal were not discovered and publicly announced till On April 14, 1922, the Wall Street Journal released a report stating that there had been an arrangement between Secretary Fall and a private oil company. The report claimed that the land had been leased out without any competitive bidding. 
The next date, the Senate opened up an investigation of the Teapot Dome Scandal. The Senate expected the investigation to be most likely futile, so the committee’s Republican Leadership allowed Democrat Thomas Walsh, the Montana Democratic Senator, chair the panel. The panel eventually discovered the Secretary’s shady agreement   because of one piece of evidence that Secretary Fall had not covered up.
In 1927, the Supreme Court invalidated the oil leases that have been illegally obtained through Secretary Fall the reserves were returned to the U.S. Navy. In 1929, Albert Fall was found guilty of bribery and fined $100,000. He also became the first Presidential cabinet member to be given a prison sentence for his actions while in office. He received a sentence of one year in prison.
The Teapot Dome Scandal as well as other cases quickly tested the reach of the Senate’s investigative powers. In 1927, the Supreme Court ruled on the landmark case, McGrain v. Daugherty, and found that Congress had the right to compel a witness to testify before the committees of Congress.

Figure Out How to Save Money

Figure Out How to Save Money

Figuring out How to Save Money


No matter what financial situation a person is in, it is always a good idea to try to save money. However, it is often difficult to figure out how to save money. Whether it is saving money for a retirement fund, or just trying to keep a few extra dollars, having extra money and being a careful spender is important in order to obtain financial success. 
Here are some helpful tips to help you figure out how to save money.

How to Save Money on Transportation
• New cars
o Choose a model that has a low purchase price and a low depreciation, insurance, gas, maintenance, and financing cost. New car guides can often provide this information.
o After choosing a model, go comparison shopping with several dealers both over the phone and online.
• Used cars
o Use a car guide, such as a “bluebook” to help compare the average retail price of the car with what the seller is asking.
o Have a mechanic check the car to find any potentially expensive problems.
• Car leases
o When leasing a car, consider the price, trade-in allowance, monthly payments, down payments, and any other fees that will be involved.
• Airline fares
o Look at internet travel sites and airline sites online to find special deals.
o Compare major carriers and low-cost carriers.

How to Save Money on Insurance
• Car Insurance
o Make sure a new policy is already in effect before cancelling an old one.
o Purchase insurance from a licensed, low price insurance. Call at least four of these agencies to find the best deal.
• Life Insurance
o Buy a term life insurance policy for just the protection without investments and savings services.
o When buying a universal life, whole life, or other case value policy, anticipate holding the plan for at least 15 years. Cancelling these plans early on can double the life insurance cost
• Homeowner/Renter Insurance
How to Save Money on Banking/Credit


• Debit Cards and Checking Accounts
o Use a free checking account that does not have a minimum balance requirement.
o Some banks provide lower checking costs through either direct depot or ATM use only.
• Credit Cards
o Send payments 7-10 days in advance to avoid late fees and increases in interest rates.
o If the entire bill cannot be paid off, switch the balance to a credit card with a lower APR.
• Savings Product
o Use a bank that is insured by the Federal government.
o Compare fees and rates of different banks and financial institutions.
o Consider U.S. Savings Bonds or Certificates of Deposit to earn the highest return.
How to Save Money on Housing Needs


• Buying a Home
o Try negotiating a lower sale price through a buyer broker working for you and not the seller.
o Have a home inspected before purchasing it.
• Renting a Home
o Find buildings and inquire about the availability.
o Do not sign a lease until you are sure you can be responsible for the monthly payments as agreed upon.
• Home Improvement
o Look at established licensed contracted who give fixed-price bids for jobs.
o Do not sign contracts that require a full payment before finishing the work.
How to Save Money at the Store


• Food
o Shop at lower-priced food stores. Smaller convenience store are more likely to have higher prices.
o Compare the unit price of similar products and choose those with the lower one.
o Take advantages of sale items.
o Buy basic ingredients instead of pre-packaged or ready-made food items.
• Prescriptions
o Use generic equivalents of drugs when possible.
o Call a pharmacy in advance to ask for a price of a medicine.
• Clothing stores
o Check online for any coupons or promotions the store may have.
How to Save Money for Retirement
• Keep putting away money regularly and stick to a plan.
• Understand your retirement needs.
• Put money towards an employer’s retirement savings plan
• Do not touch retirement savings.
• Learn about an employer’s pension plan.

A Full Explanation on Pell Grants

A Full Explanation on Pell Grants

What is a Pell Grant?
A Pell Grant is a government grant furnished by the United States Department of Education that helps students who could not normally afford the luxury of a secondary education, the opportunity to attend college or, in some cases, post-bachelors degree education.  
The federal Pell Grant helps 5.4 million individuals pay for college every year through the United States Department of education, which allots $17 billion a year towards  the funding of Pell Grants.  
The yearly allowance for funding for Pell Grants is a maximum of $5,550 dollars per student.  Prior to the 2011 amendments to Pell Grants a student who meets the hardship requirements under Pell Grant eligibility was permitted to receive two allocations of money per year for the funding of post-secondary education.  Under the new amendments that has decreased to one dispersement a year equal to $5,550.
Pell Grants were established by the United States Department of Education in 1965 as an aspect of the Higher Education Act of 1965.  The goal of the act was to supply those  individuals who would not normally be able to afford post-secondary education the opportunity to do so.  Pell Grants are unlike loans in that they do not need to be repaid.  They are considered to be the first step in post-secondary  education funding.  
In addition to Pell Grants a student attending post-secondary education will want to supplement the rest of their post-secondary education with student loans through the government and private institutions.  Lending through the federal government, through Sallie Mae will result in low interest rates whereas going through a private institution will result in higher interest rates and more difficult repayment plans.
When looking to fund post-secondary education you will want to first get your Pell Grant.  If you still need money to fund your annual post-secondary education tuition then you will want to analyze how much money you will need.  If the amount you will need to cover the rest of your annual education is low then the best option is to look for part time work.  You may also consider part time education and work a full time job.  The benefit of this is that you will not incur student loan debt.  Student loan debt can be overwhelming, especially for someone recently out of college who is having trouble finding acceptably paying employment in todays harsh employment environment.
If the money you need for post-secondary education is much more than is covered by the Pell Grant and any part time work you may want to consider a government loan.  You can apply for government loans, including your Pell Grant, through filling out a FAFSA application.  This will allow you to get the funding you need for your post-secondary education while paying a low interest rate upon graduation.  
There are two main types of government loans.  The first are subsidized and the second are not.  The subsidized loans are the first type you will want to get from the federal government’s department of education, through Sallie Mae.  The amount that will be allotted per student through subsidized loans is low, but usually allows around $12,000 per year.  The benefit of these loans is that they do not garner interest until the completion of your education.  For example, if you borrow $36,000 over 3 years for your college education starting in 2011 you will not be charged interest for the school years ending in 2012, 2013, and 2014., but upon your graduation in 2014, or if you leave your educational institution before graduation, then your interest will start accumulating.
In contrast, unsubsidized loans through the federal governments department of education will begin accumulating interest upon the time that  your loans are dispersed to you.  Because of this reason it is always beneficial for students to avoid unsubsidized loans through either the federal government department of education or through a private lending institution.  
Because of these reasons, when you are beginning your grant and loan process you should look to take advantage of the Pell Grant, and any other grants that you may be applicable for either through the state or federal government and private entities.  If you are ineligible for the Pell Grant or any other grant or scholarship, or that amount is deficient for your complete educational year, then you should apply for subsidized federal loans through the department of education.  Only if you need more funding should you even think about unsubsidized loans and those should be gotten through the department of education if at all possible.  Private unsubsidized loans should be your last resort.  

How to Qualify for a Pell Grant
The process for qualifying for a Pell Grant requires some paperwork and the tracking down documentation and information pertaining to both you and your families income.  Individuals who are eligible to receive government funding for post-secondary education through a Pell Grant must meet certain requirements.  An applicant must be a  United States citizen, must not be in default on any other student loans through previous education, must not have been found guilty of any drug related offenses including possession, distribution or selling of a controlled substance and must be a high school graduate.  
If an individual meets these requirements then he, or she, will be eligible for a to apply for a Pell Grant through the United States Department of Education.  This is done by completing and filing, in a timely manner, a FAFSA application.  The FAFSA  form, or Free Application for Federal Student Aide may be downloaded  and printed from the  United States Department of Education website by going to www.fafsa.ed.gov.  
The FAFSA form will require you to input information including your income,and if you are a dependent, your families income; the cost of attendance of the educational institution; your status as a full time or part time student; and whether you will be attending post-secondary education for the whole year or on a semester basis.  You may only receive one Pell Grant for your  post-secondary education per year, no matter how many post-secondary institutions you may attend in that given year. You may only use a Pell Grant for your first bachelors degree or some post-bachelors degree education and license, such as teaching.  
By filling out the FAFSA form the department of education will properly be able to assess your need based on your, and your families, income.  The eligibility under FAFSA will also analyze your expected family contribution which is calculated based on your household income, number of students from the household in college, and your families net assets (not including 401ks).  
One exception to requiring a certain need to qualify for funding under the Pell Grant is if you are a child of a member of the armed forces who has fought, and died, in either the war in Iraq or Afghanistan.  This is limited to individuals who were 24 or younger at the time of their parents death and that death occured during those conflicts at or after September 11, 2001.  
In its current form, a FAFSA form will consist of 130 questions based on the student and families income and dependency.  None of the questions address the issue of race, religion, or any other aspect that may be considered to insinuate any other motive other than need based.

Current FAFSA amendments
Under the 2011 amendments to FAFSA and Pell Grants there are a number of changes.  Under the current regulations, and as a result of the budget cuts of 2011, the amount of federal funds that the United States Department of Education is allotted to spend on Pell Grants has been cut by $5.7 billion.  This means that the average allotment per student will drop by $845 per student per year.  In addition, over 1.7 million students who are not eligible for the full amount under the previous legislation are cut out entirely from eligibility for Pell Grants.  

Personal Budget

Personal Budget

The purpose of a personal budget is to allocate income towards expenses, debts, and savings.  A personal budget will help you keep track of your financial status and using a number of resources to ensure that you are making sound financial decisions that will keep you from losing money, falling into bankruptcy and improving your net worth.
Making and maintaining a personal budget can be difficult and in many regards require a great amount of discipline. All individuals who you would consider “rich” did so; not because they have high paying jobs, although that helps, but because they managed their personal budget and income. Instead of spending their paychecks on short term, and material, benefits these individuals budgeted their income and invested their funds in assets that, over time, increased their wealth.
There are numerous tools that can be used for making a personal budget. There is the traditional paper and pen method but in today’s day and age it is almost essential that any tool used for making a personal budget be in the form of computer software.  There are a number of different options in this regard.  You can use spreadsheet software such as Microsoft Excel which will require you to manually input all data and is more of a “do-it-yourself” method.  You may also take advantage of management software for creating a personal budget.  This includes programs such as Quicken and Microsoft Money.  These programs will help you manage your personal budget and even automatically update your personal budget based on data from your bank accounts, credit cards, investments, and retirement accounts.  
A personal budget should have a goal that is achievable within a certain period of time.  When creating a personal budget it is always helpful to have a “light at the end of the tunnel.” If you set your goals too far away or you make them too unreachable the chances of you meeting your personal budget goals may be slim.
Your personal budget should also be simple and flexible.  You should have the ability to adjust your budget depending on certain circumstances.  If you find that you are spending an extra $100 a month on entertainment, over your budget, you should be able to simply remove that expense and without incurring any hardship.
There are a number of different philosophies on personal budgets.  MSN Money editor and chief Richard Jenkins created the “60% solution.”  What the “60% solution” does is allocate 60% of your gross income to fixed expenses such as mortgages, taxes, social security expenses, car payments, groceries, etc.  The other 40% is allocated, 10% a piece, to retirement, long-term savings, irregular savings, and “fun money.”
Another philosophy is to have a personal budget that includes spending only 25% of your budget on housing. 
One popular form of personal budgeting is a resource called envelope budgeting.  Envelope budgeting consists of placing the budgeted amount for each expense in an envelope.  Over the course of the month, as you deplete the resources in that envelope you will eventually come to one of two circumstances.  The first is that you have money left over, that should go into a savings account, or other long term savings plan.  The second is that you run out of money before the end of the month.  When this happens you will have the option of taking money from a different envelope reserved for a different expense or doing without the expense.
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