Category Archives: Finance

Personal Finance Tips

It’s unfortunate that personal finance hasn’t yet turned out to be a compulsory subject in schools or colleges. So a lot of people out there are fairly naive about managing their money.

But this doesn’t actually mean that personal finance will always be way above your head! Frankly speaking, it doesn’t take too much to roll back on the right path. Just read this article to know how to craft your own strategy. Fortunately, you don’t have to be good at math to grasp the ideas!

Use self control

May be you were taught by your parents about this when you’ve in your childhood. Just in case you haven’t mastered it, it’s not too late. Almost everybody found success in life through delaying gratification. If you can do it, it’ll be easy for you to have your finances nourishing.

True, you can easily buy something on credit the moment you want, it’s a better idea to wait till you’ve saved up that much. Do you love paying interest on your new pair of shoes or jeans or a bottle of milk? Avoid putting each and every purchase on your credit card.

Take full control of your financial future

Unless you learn to smartly manage your money, others will figure out ways to easily (mis)manage it. Unfortunately, some of them are ill-intentioned (e.g. crooked commission-based, so called financial planners).

At the same time, others might be pretty well-meaning, but might be totally ignorant about what the consequences of their actions are (e.g. Grandma wants that you buy a new house despite the fact that you can at best afford one of those double-crossing adjustable-rate mortgages). So do not rely on other people’s advice. You should rather take charge of your finances and research on some basics on management of personal finance.

Know where all your money goes

When you’ve read a few books on personal finance, you’ll know the importance of keeping your expenses below your income. The finest way of doing this is – budgeting. Once you’ve realized how the seemingly negligible things are adding up at the end of the month, you’ll know how to control that.

Same goes for recurring expenses. If you avoid wasting money on the luxury apartment now, chances are high that you’ll be capable of affording a great condo or a new home even before you know it.

Helpful Personal Finance

In every aspect of life, individuals need some sort of help in organization. We need help in organizing our closets, our work schedules, our play schedules – even our children’s hectic programs. That’s especially true when it comes to personal finances. Personal finances are as important as making sure we keep ourselves healthy and strong. It helps to have a history of keeping things in balance, but if not, then the earlier we find out what we do know about our own finances, the better.

Obviously, there are many ways to manage your finances that will not only get you started on the right path, but help you continue its reality. Once there, you can actually see how well it will work for you. Being on the right path implies so much more than just knowing how to balance your check book once a month. It’s being able to secure a good routine that helps grow your finances and keeps you on the straight and narrow; that ‘s important if you plan on having a future without the added burden of money woes.

The way that this can be done include knowing up front what you have to work with; how much money goes for what. Where the money goes and where it needs to go. Once these facts are established, then putting together a good working plan to track your money for the future, will be easier than you thought. Some tips include budgeting and investing wisely. When you budget using a list method, it’s so much more efficient tracking where your funds will go.

When you think about budgeting your money, you think about how that is done with a minimal amount of stress and strain. First, you need to make a list of bills that need to be paid, and how much they require on a monthly basis. Unfortunately, there are unforeseen circumstances that may arise that just can’t be helped; all the more reason for a good budget to be in place, so that some of the downfall will be offset by how well you’ve made the budget work.

Find out if there is any money that can be invested. If so, then check with an investment broker to see if what you have to invest is worth the trip. If it is substantial and it is placed correctly, then perhaps there will be enough to use toward your retirement plan.

Once you get all your ducks in a row, make sure your tax attorney or accountant is aware of your complete financial progress. They can help you better plan for the future by knowing where you are at the present. They can also give you some great advice as to how to proceed in your investments.

Personal Finance Tips

The financial demands presented by a new addition to the family can overwhelm new parents. Costs for toys, diapers, clothing and medical expenses mount up quickly. Factor in the cost of college 18 years down the line, and it is no wonder new parents panic. Read on for tips to alleviate the worry and costs all new parents face.

1. Consider whether both parents will work outside the house. If one decides to stay home, use pregnancy time to try living on one income, and put the rest in your savings account.

2. Make up a budget if you do not already have one. Keep track of all your expenditures for one month, and decide where to make changes.

3. Lower your debt. Increase the amount you put toward credit card payments by scaling back on eating out and entertainment expenditures.

4. Create an emergency fund. If you cannot sock away three to six months’ worth of living expenses, set aside what you can.

5. Avoid expensive baby boutiques. A small indulgence now and again is fine, but does a 3-month-old really need rhinestone-encrusted shoes for $100? Before you even set up the nursery, devise a spending plan. Shop at consignment stores and yard sales, and accept hand-me-downs.

6. Make sure you have enough life insurance. Parents should seek at least five times their earnings in addition to the total amount of household debt plus college tuition. Most planners recommend term insurance for new parents. The term should last until dependents are finished college and no longer financially dependent on parents.

7. Contribute at least 10 percent to your retirement savings plan before you save for your child’s college tuition. While your child can borrow money for college, there are no loans or scholarships available for retirement. Focusing only on your child’s college tuition will leave you nothing for retirement, and you may have to rely on your child for support in old age.

8. Set up an automatic contribution for a 529 college savings plan. You can put after-tax money aside in an investment account and allow it to grow tax-deferred. The money is tax-free when you withdraw it for college expenses.

9. Buy a home in an area with a great school district. Not only will your child benefit from attending good schools, your house should appreciate over time.

10. Make a will. You should designate a guardian for your child in the event of the premature death of both parents since you do not want the court to make this decision for you. Even if you intend your child to inherit all your assets, you need to designate someone to handle your finances in the event of your death.

Personal Finance Tips

Keeping your personal finance in order is not something that is an easy task. Personal finance disasters can sneak up on you. Sometimes an emergency expense can mess up your budget so badly that you have to take months to get things back in order.

To help prevent emergency expenses or other unexpected situations from blowing your personal finance out of order you need to develop something called an emergency fund. An emergency fund is basically a savings that is used only in case of emergencies.

Importance of an Emergency Fund

The idea of an emergency fund is basically to help prepare you for extreme situations such as the loss of a job. An emergency fund should ideally be something you could live off of for at least three months if you were to suddenly lose your income.

However, an emergency fund can also be something you can dip into should you have an unexpected expense. The whole point is that you have this extra money there if you should need it for something important that does not fit into the budget.

An emergency fund is not a savings account you can use to make special purchases. It is important to understand and maintain that the emergency account is only for emergency situations.

Make a Budget

To start setting up your emergency fund you need to establish a budget. This will help you to learn about your expenses and be able to set up the amount of the emergency fund.

A budget will also help you when it comes to deciding how much money to put in the fund every month. Be honest with your budget.

Find Out How Much You Need

You will want to consult your budget for how much you will need in an emergency fund. You want to make sure that the fund’s total amount would allow you to live for at least three months.

Of course you can feel free to save above that amount, but shooting for a goal of three month’s living expenses is a good place to start. Always remember, too, that when you take any money out of the account that you need to put that amount back.

When deciding you may want to consider extra expenses and if you want to include those in your emergency fund. If you fall on tough times you may end up deciding to forego extra expenses like cable television or weekly night out. Or you may still want to keep those things. Just make sure you come to an honest amount that you could really off of if you needed to.

Build Your Fund

Once you have decided how much you need in an emergency fund and how much you will add to it each month the only thing left to do is start saving. Make sure you choose an account that will pay you a good amount of interest and be a secure place to keep this money.

Personal Finance Tips From the Wealth Masters

If you pay attention to these tips like the wealth masters do, you will learn exactly how the top dogs at WMI make their millions. Believe me, it starts small.

Small tips make it possible. For instance, knowing what you need money for… what are your financial goals? Why bother with all this? Once that is clear, personal finance becomes personal and steers finance the right way.

That, after all, is what personal finance is about. Personal is ‘one’s own’ and finance is ‘a way to pay’. If one doesn’t know why one is paying for anything, obviously one will fumble with ‘one’s own way of paying for it’. So tip 1 is, know why you are learning this and why you’re spending any money.

Some of the money mistakes people make start from the late teenage years. They are probably climbing up debt through school, house, marriage, or material purchases. Wealth Masters advise you keep a tab on how much you’ve borrowed because that will affect everything about how you repay for the next 10-20 years and your income is the least at startup. The best way to handle a credit card is to not carry it with you.

The third tip is to get a free copy of your credit report every quarter to know you are clean. This will help to get an apartment, borrow money, get a cell phone, even get a job. There are many agencies that organize these reports in USA.

If you ‘don’t know where your money is going’, write down every expense every day for a month… or get a receipt for everything you spend money on. One of the wealth masters discovered he was spending $350 on taxicabs before it struck home that he needn’t be broke because of that avoidable expense.

Finally, use the ‘pegging technique’ by which you do business with businesses that are the best bang for your buck. Which is the bargain dry cleaner? Where are the appetizers free? What time is the half-off movie show? Where do you get flowers cheaper on particular days? Know these things and splurge intelligently and economically.

Those with kids are advised to start them early on spending education. Even 3 year olds can understand the concept of money and control personal finance. Get them into bargain hunting, for instance finding the best deal on spaghetti sauce – a bigger bottle or a different brand?

Auto Financing Tips

If you are looking to buy a new automobile no doubt you have already started doing your homework. Comparing vehicles and models, accessories and mileage and checking out an abundance of dealerships to see who has the best price for the exact vehicle you want to drive.

You need to do the same thing when it comes to getting financing for your new vehicle. Financing options abound, and everyone has a slightly different rate with slightly different terms. It is up to you, the consumer, to find the deal that is right for you.

The process of finding a financing option which is best for you can seem daunting but there are at least a few things you can do to make the process a lot less painful and lot more effective in the long run.

Dealer financing

In many cases the dealership will work to help you find an option that you can handle. Remember, they want to sell you a car, so it is in their best interest to help you buy it, but there is only so much they can do. The rest is usually up to you.

Start by comparing financing options available at institutions other than the one your dealer recommends. Don’t be afraid to search online, visit your bank, the neighborhood credit union or anyone who makes new auto loans. Everyone will have different interest rates, terms and options. The more options you have the better the deal you can secure for yourself.

Leasing might be better for you

You might also want to consider a leasing option rather than a straight purchase. With leasing you can often get a much lower monthly payment and also not have to worry about maintaining the car month after month because dealer provided maintenance is part of the agreement. Of course at the end of the least the car belongs to the dealer, not you, so be sure you understand how that will impact you in the long run if you decide to go with that option.

Your credit report

If you do decide to purchase you vehicle there are a few simple steps you can take to make certain you get the financing options that you need.

First, get a copy of your current credit score and credit report and start checking it for errors. It is not uncommon for credit reporting companies to use outdated or completely wrong information. It is up to you as the consumer to make certain the information in your credit report is accurate.

Every lender is going to use your credit report and credit score to determine whether or not to loan you money and what terms to offer you. Making certain this information is correct will go a long was to getting you the deal you need.

Compare lenders

Don’t just settle for the financing option offered by the dealer. Start comparing rates of as many lenders as you can. Visit your bank, local credit unions and even internet lending agencies. Collect a list of the top five deals offered then revisit them and start negotiating. Don’t be afraid to haggle for the best possible deal. Lenders, if they want your business, will be willing to fight for it and will adjust the terms of their loan to better suits your needs in order to get you to deal with them.

Personal Finance Tips

The key to getting the edge on average-Joe finances and struggling with money worries is through gaining first-rate ‘financial literacy’ which reduces any over-dependency on accountants, financial advisors and so on, so that you can get control of and start to manage and direct your own personal finances. A great starting point on this journey is to know about and understand the 5 main financial needs in life as per classic financial planning.

The 5 Main Personal Finance Needs in Life

In classic financial planning there are 5 defined financial needs a typical person will have, oftentimes at pretty predictable time frames.

I find it can be a useful back of a napkin checklist to have the following 5 financial needs listed in front of you and then ask yourself what you could be doing now to ensure you are actively addressing each of these 5 financial needs:

  1. Savings i.e. the financial need to accumulate a lump sum from surplus income (typically saved from earned income) to meet some financial objective and/or build up a rainy day fund. An example of this would be you saving a down-payment for a home purchase at some stage in the near future. Another example of saving is building up an emergency fund (e.g. setting aside 6 months living expenses). You might also start saving with a view to utilizing these funds for a longer term objective such as building up a rainy day or retirement fund.
  2. Investments i.e. the financial need to invest a lump sum not required by you for a period of time, so as to earn a better return than standard saving can generate. A common example of this is investing a capital sum into bonds or stocks so as to generate a medium-to-high return. Another example of this need could be where you’ve recently retired and have received a lump sum retirement benefit and want to invest this appropriately. You’d have a financial need to invest this lump sum in the most suitable fashion possible (in a manner keeping with your age, risk profile and financial goals) so as to maximize your capital return and/or generate a future stream of (passive) income.
  3. Protection i.e. the financial need to provide financially for certain unpredictable events in life, such as ill health or death, causing the total cessation of earned income for you and/or your dependants. An example of this is when you get a mortgage, you will take out a life assurance policy (mortgage protection payment insurance) which would ensure the mortgage is paid off in full were you to die before the end of the mortgage term. In addition to simply buying life policies you can “protect” yourself by building sources of passive and portfolio income.
  4. Retirement Planning i.e. the financial need to accumulate funds to provide a replacement income (passive income and portfolio income) in retirement as you’re no longer working (either by choice or necessity) and not generating earned income.
  5. Mortgages i.e. the financial need to borrow a capital sum to fund the purchase of a property, usually an apartment (condo) or house, which will typically be used as your home.

The Typical Timeline of Your Personal Financial Needs

Your financial needs generally change as you get older. A typical timeline of changing financial needs during the course of someone’s life would be as follows:

  • Age 20- 30: Savings & Mortgages,
  • Age 30-40: Protection & Longer Term Savings
  • Age 40-50: Investment & Retirement Planning
  • Age 60: Investment

It’s important to note that this is a very general timeline. Personally, I think retirement planning should be looked at much earlier in life. With the exception of the current generation of kids (who actually will live shorter lives than those of us in our 20s, 30s and 40s now due to the growing obesity problem), people are living longer than ever before. However, less and less people are planning for and providing for their longer than ever retirement financial needs. (Why not take a look out our website and other articles on retirement planning to understand you retirement planning needs further.) I’ve heard it is said that people spend 5 times more time planning their holidays than they do their retirement! Sad but unfortunately true!

Becoming Your Own Financial Advisor

The process of personal financial planning is a process you can either undertake yourself or most likely with a financial advisor. The objective of financial planning is to achieve your financial plans and goals through the most efficient management of your available financial resources and proper use of financial products. Unfortunately, most people are not equipped to undertake financial planning themselves and they therefore over-rely on financial advisors and institutions.

A word of warning!! There are only a minority of financial advisors that truly have your best interests at heart (sorry…but it’s true). Many are merely flogging you financial products for commissions and fees. The only financial advice worth taking is paid-for financial advice and advice that is in writing. This is as close to independent financial advice that you are going to get I’m afraid. At least by paying for the service, you know the financial advisor is going to provide a service in return for payment rather than have some financial institution line his pockets with initial and trail commissions on financial products sold to you which may or may not be entirely suitable.

After the recent financial crisis and the expos on the entire financial system, there has never been a more important time to get skilled-up and be your own financial advisor. I’m not saying don’t have a team of financial/tax/legal experts you can turn to for advice. Do! However, I am saying, get empowered and become knowledgeable on the financial requirements you have and the strategies, tools and techniques you will need to achieve them. To become rich and create wealth beyond mere averages requires you, to at least some extent, become your own financial advisor.

Personal Finance Tips

If you are looking for a way to add to your financial security for the future, there are a lot of things that you can do. One of those things would be investing in the stock market. If you have never done this before you will need to learn how to start your own investment portfolio. Just remember that whenever you deal with the stock market you are taking a risk with your money, so it’s a good idea for you to learn as much as you can before taking such a big step.

The first and foremost important thing is to educate yourself. You should read about the stocks as well as the market. You should consider taking several seminars or even take a class that teaches investing. You can also go online to a variety of different online financial websites that can provide you with a wealth of information.

You will also need to create for yourself some financial goals and an investment and stock picking strategy. You will need to take time to research different stocks by reading their annual reports, their quarterly reports and any other information there might be on file with the Securities and Exchange Commission. You can also look these up at various websites (Tip: Google freedgar)

Make sure that when you invest that you only invest in the stocks that you have studied and feel that you know. You might want to start by looking into the stocks of companies in your area, companies that you are somewhat familiar with and ones that you might have a little bit of confidence in.

Another thing you need to do is to make sure to check the holdings of some very successful mutual fund companies and if they appear to be doing well with certain stocks then it might be that you could do well with those same stocks.

Make sure that you try to be diversified. You want to try to stay away from investing your money in just a couple of stocks. It’s better if you have a handful that you have investments in. When you do start buying your stocks you need to try and find a discount broker to buy the stocks for you, however, if you feel confident in yourself then you might want to just do the investing yourself and you will save yourself from having to pay out any commissions.

Make sure that the stocks you buy you are going to feel comfortable holding onto for 3 to 5 years, you need to try and resist dumping your stocks the minute you see them dipping in price a few points. You need to give the stocks a chance to do something.

Another way you can invest and it’s a lot easier for you in the long run is if your company offers any 401(k) plans, retirement plans or Keogh plans consider investing in those. Here you don’t have to worry about picking the stocks yourself and there are different tax breaks that come with these types of investments.

Note: Avoid thinking that when you invest your money today that you are going to become an instant millionaire. You need to be thinking of the long term picture not the immediate picture. Besides very few people become millionaires off the stock market, if that were the case everyone would do it. You can however, if you are patient and invest wisely, make a good nest egg for later in life.

Car Finance Tips That You Should Know About

Planning is the best idea to do before buying a new car especially in paying for it. One of the biggest mistakes of most car buyers is when they use the finance deal offered by the car dealer. Compared to the average interest rate on dealer’s car finance, personal loan on the market is much better. It is because the average rate on a dealer’s car finance is 3% higher. In addition, personal loans that can be found in the market are 7.4% available. To know more about car finance, here are some helpful tips that can provide you a better idea before purchasing a new car.

The first hint is to KNOW WHAT TYPE OF CAR OTHERS ARE PAYING FOR. One should search what car models are most people are buying. With this, you can gather ideas about the average price that such individuals are paying for.

Second is to LOOK OUT FOR FINANCE. Search all the companies that are offering loans, remortgaging, and credit cards. You must also know their advantages and disadvantages. After doing this, choose one of them which is the best.

Third is to GET YOUR FINANCE WELL ORGANIZED BEFORE LOOKING FOR A CAR. Prior to checking out cars, it is important to know your highest budget. The buyer is in a good situation to bargain if he already knows his maximum budget.

The fourth hint is to NEGOTIATE. Trying to negotiate the price of a car is not bad. Actually, this is one of the best things to do in purchasing a new car. If the buyer gets the price as low as the dealer goes, he can try to get a little extras like mats and GPS.

Fifth is to BE BRAVE ENOUGH TO WALK AWAY. Do not hesitate to walk away if you feel that you do not get a great deal. There are lots of companies that are offering cars so there is a big chance that you can get a good deal. Make sure that you do a good decision because you are paying a big amount of money for a new car.

The last is to KNOW THE RIGHT TIME. There are times when a car dealer is not concerned about making a huge profit and searching to achieve their bonus targets. This time only happens at the end of the month. This is the right time to look for a new car.

Personal Finance Tips

This article aims to provide a few tips regarding personal finance for working adults. In this time of recession and slow growth we all need to save enormously and curb any unnecessary expenditures. But, most importantly we need to manage our finances wisely.

1. Try to spend according to your budget and save some extra cash. Keep track of your income and expenditures. You should be able to save some cash each month and keep it aside for bad times.

2. Invest wisely and ensure that you get optimal returns for your investments. Avoid investing in one scheme or with single company. Instead spread your investments astutely amongst various schemes and companies.

3. Avoid missing your credit card or loan payments; else you may receive a bad credit rating. Do not miss the payment dates otherwise you may have to pay huge interests and find difficulty in getting further loans.

4. There is much we can do to save on our expenditures. Go green and save on expensive energy bills. Even the government is providing some tax rebates to people trying to make their homes more energy efficient. This way you can save doubly by receiving tax rebates and paying less on your energy bills.

5. Usually in tougher times people tend to invest less, but this should be avoided. Keep your investments regular whether small or big. Remember that even these small investments will pay you good returns in the long run.

6. Avoid exorbitant spending on expensive food and alcohol. These are few things that can be avoided in rough times. The more you save the better it is for you.

7. In case you need financial advice, do not hesitate in consulting. You can also do some research online to make wise investments.

These tips will certainly guide you to control your personal finances and pass through rough times easily.