Monthly Archives: December 2015

Tips on How to Save Or Spend That Hard Earned Cash Wisely

Planning your expenses is an important thing which you will need to do if you would like to have a certain level of savings or even want to invest minimally in order to get a decent income flowing when you wish to retire. What this article aims to do is provide some easy tips which you can immediately carry out in order to control and at least help you curb your expenditure and spend wisely. I will describe this in two phases. The first is what I would call structural methods. In this section, I will describe to you some methods you can use to at least implement a system into your personal finances so that you will have some form of financial plan for any period of time in place. The second is what I shall call personal methods. These are methods and habits which you can carry out for your everyday life. Believe me, these will at least improve how you plan your finances.

1) STRUCTURAL

a) Budget your finances, Monthly, Weekly and Daily.

Yes, the first thing that will come out of the lips of everyone when they talk about personal financial planning is always creating a budget. And for good reason too. Creating a budget for your finances would at least provide a system for you to actually set aside some money for whatever purposes or things you wish to get, or even cover you in emergencies. While most people would recommend that you plan your budget monthly, I would suggest that a monthly AND weekly plan would actually be beneficial. Why? Because anything can happen within a week that may result in us tweaking or compromising our monthly budget plan. I will cover daily budgeting in the personal section later.

An example of how to do monthly budgeting is to firstly, list down all your necessary expenses. This can range from monthly household items like bills for the home to even the amount of allowance you give your kids. Minus off that from your income (usually your monthly salary only) and you should have a balance. Now plan the amount of savings you believe you can draw out of that monthly balance after you have already taken away necessary. I strongly recommend you set aside at least 10% of your income before expenses as savings to ensure that at least you have some cash for a rainy day.

The same can be said for your weekly planning. Plan for weekly expenses or events which you know you need to plan for in the particular week. It can range from things like grocery shopping expenses, or even the pizza you feel you want on that week because of a night of Football or Soccer on tv. This will allow you the flexibility of changing the monthly plan, without being so drastic about it.

b) Sign up for a monthly savings account from a bank.

Well, if you do not want the hassle of planning to save (though I feel it is VERY IMPORTANT that you do), you can try signing up for a monthly savings plan with your bank. What happens here is that when you sign up, every month, the bank will withdraw from your main bank account a certain set amount into another savings fixed account. This way, every month, you will have peace of mind that at the very least, you have set aside a certain amount of money for savings. If your local bank does not have such a service, then you could open a fixed account, which will not allow you to withdraw the cash, but will ensure you will save every month.

2) PERSONAL

a) Plan your daily budget.

Alright lets get personal. When I am talking about personal daily budgeting, I mean that limit your amount you wish to spend daily. Also, watch what you are spending on and really ask yourself “Do I Really Need That Thing?”

This is due to the fact that we buy a lot of things on impulse. Hence this is why we need to be conscious about what we are spending on and limit the amount which we are willing to take out for expenses on that particular day. Remember, BUY ONLY WHATS NECESSARY. Try not to spend beyond how much you have set aside for that day.

b) ALWAYS ask for a receipt and other small tips that you can use.

There are small everyday habits which you can use that can make a whole lot of difference in your lives in terms of personal finance. For one, I personally find keeping my receipts of my purchases useful. This would allow me to keep track of my expenditure for the day or week, and will also tell me what I spent on and what I can reduce. Another tip I can offer is to really practice delayed gratification. What I mean by this is, do not immediately jump in whenever you see the latest tech gizmo on sale, or that scarf on discount. Hold yourself back and question yourself whether is it really worth it? For example, once I saw this iPod Nano selling for $130 and it was ON SALE. I felt myself wanting to jump in, but I held myself back, thinking do I really need this? That held me back and stopped me from making that wild eyed decision. True enough, there was another shop selling it for even cheaper. At $100, and it’s a 4th Generation model.

So that’s it. I hope that these few tips will be of help to you. They certainly helped me, and young as I am, I am confident that I am heading to a financially secure future. I know you can too.

Two Tips To Start Taking Control Of Your Personal Finances

Don’t think you are the one to blame if you have a limited knowledge about your finances. The majority of Americans are not too savvy on finances. The reason is because basic personal finances classes are not offered on any level of education. Nor in schools, high schools, nor even in the top colleges and graduate schools.

There are common mistakes people keep making one time after another such as not planning their spending, not doing a proper due diligence and investigation before making any important financial decision, falling for any hyped financial product an smart salesperson is offering, etc.

We all have heard or read about the consequences of bad given financial advice, and believe it or not, a lot of the errors people make are committed when they seek for financial advice in the first place. This is because a good number of financial counselors are filled with biased information for their own benefit.

I’ve seen too many times the only financial advice given is to invest. But the correct approach must help you define your goals and discover your problems so you can link them to the rest of your life. All aspects of your financial life such as taxes, investing, saving, spending, buying a house, retirement, education, must be understood.

I understand you may be full of your occupations and don’t have enough time to take care of your finances and that’s why you need a quick and easy way to analyze your finances and determine your action plan. The problem is that there is too much information and thousands options to pick from.

And even worse, your main source of information for financial products is undoubtedly the advertising you read on papers, watch on TV, or hear on the radio. Although there are ethical and helpful financial companies on the media, there are also a lot of trash companies that only want to take your hard earned money and run with their profits.

You should seek for financial advice that gives you comprehensive recommendations for products that have been tested and proven. That advice can be in the form of a financial counselor or on the web. And if you want to start right now to educate on your finances here are a couple of general tips you should start with:

  • First you have to analyze and discover how your actual financial condition is and what parts of your financial knowledge you have to reinforce. And the most important thing after you know where you are failing is to set your goals and have them in writing. Those must be specific measures of your aspirations, how much you need to save for your retirement or the education of your kids, etc.
  • Now that you have your goals, you need to realize where and when you are spending your money and how to reduce it. Are you aware of the high interest rates of cred cards? Are you paying too much in taxes? Do you know how to reduce it?

How a Personal Finance Budget Will Save Your Financial Life

A personal finance budget is extremely important when it comes to your finances. Having a budget will allow you to manage your investments, your savings, and handle all of your bills in an effective manner.

Start the process by writing out all of your expenses. Then track your spending for at least a month, this includes not just your bills but your savings as well.

At the end of the month use the list of your expenses to categorize them either as needs or as wants. Please understand the basic difference here. A need is essential to your survival like food, shelter, clothes, heat. (it’s unlikely that you would survive for long without food, heat or shelter so money allocated to rent, work clothes, heating oil, are needs-you can extend this to things like transportation as you would not be able to get to work to earn income otherwise (unless you telecommute of course).

A want consists of something not absolutely necessary, but that you desire. Examples would be an iPhone, a gym membership or a pedicure, which you do not need to survive.

Then take a look at your wants list and eliminate the most superfluous. Of what’s left, if there is anything that you can save money on, think of alternatives..For instance, instead of getting your car professionally detailed, save money by getting it washed for 5 dollars by a kid on the block.

Examine your needs as well to see where there may be some saving opportunities. Then proceed to categorize them between fixed and flexible expenses. Your fixed expenses are the same every month, things like health insurance would be classified that way. Flexible ones like your groceries can vary every month.

Take your personal finance budget to the next level. Classify your expenses by due date, for instance, the rent bill should be reflected on the first of the month and if for instance a credit card payment is due on the 5th, it might be next on your chronological budget.

Continue classifying them by weeks, some will be constant (will appear every week- like groceries and gas for the car) and some will be periodic (once in a while- like scheduled car maintenance, heating oil charges or water and sewer charges.) Add up all your weekly expenses to see what cash outlay to anticipate. Total all four weeks and compare to your actual take home salary. Based on that, make sure you put enough in weekly savings to meet those bills when they come due.

If your expenses are greater than your income, take another look at your list and eliminate any “wants” items and re-examine your “needs” to see how you can save money. Call your credit card company to see if you can renegotiate a lower rate or switch to a cheaper prepaid cell phone plan.

Reprogram your house thermostat for lower settings- wear a sweater during the week-end and in the evening if need be. If you are still short, then it’s time to consider getting a second or part time job to supplement your income and meet your obligations.

From now on your personal finance budget will revolve around your needs rather than your wants. You only spend money on wants if you have extra at the end of the month and even then you should try to apply it to any form of debt you may have or to shore up your savings and investments.

Four Tips to Effectively Manage Your Personal Finances

If you are looking for information that can help you manage your personal finances responsibly, then you have found the right article. In the remainder of this piece, we have enumerated and discussed five tips guaranteed to help consumers like you to succeed in their quest to handle their respective financial resources in the best way they can.

Helpful Tips for Consumers

• Come up and stick to a personal budget. We encourage all our readers to come up with a personal budget. This tool will not only help you manage your personal finances in the most responsible way you can. It can also help curb overspending, which is the main reason why a lot of consumers today have huge financial obligations and severely damaged credit profiles.

To do this tip, you need to take your time examining your income as well as your monthly expenses. Consider what percentage of your income goes to your expenses and how much money goes to your savings account. If you think that you need to reduce your expenses for the month so that you can save more, then list down all the items that you have spent cash on for the past months. Then, think about which goods and expenditures are necessary and which are not. By doing this, you can eventually come up with a final budget that you can use not only for managing your day-to-day finances but also for reaching the financial goals that you have set for yourself.

• Sign up for automatic savings. If you find it hard to set aside cash that will go directly to your savings fund, then we suggest that you sign up for an automatic savings arrangement with your bank. In this arrangement, your bank will automatically deduct an agreed-upon amount of money from your salary, and transfer it to a savings account, which imposes a significantly higher rate of interest.

By employing this tip, for sure you will find it easier to save up for your future. And, at the same time, you can have a sure source of funds that you can use to finance emergencies and other urgent needs.

• Take out lines of credit only when necessary. Before you apply for and take out a credit account, like a personal loan or a credit card, you need to consider not only if you really need it, but more importantly if you can afford it. Always remember that most credit programs offered to a majority of consumers these days impose steep rates of interest and fees and very stringent payment terms. And if you won’t be careful in choosing a line of credit, you might end up with one that will not suit your needs, preferences and your financial capability. This is why we encourage you to take out credit programs only when it is absolutely necessary.

• Look for additional sources of income. If you think that you need more funds to sustain your lifestyle, then you might as well consider applying for a good-paying home-based job that will fit your schedule. For example, you can serve as a part-time virtual assistant to an offshore executive. You can also start your very own online business so that you can supplement the income you earn from your full-time job.