Money

The Great Balancing Act: Self Knowledge and Self Budgeting

What is the key to a healthy bank balance? The answer is contained within the question itself, balance. Balance is needed to enjoy a healthy relationship with money (and when I say a ‘healthy’ that’s exactly what I mean, as it is now well documented that financial concerns have a huge effect on our physical well being.)

Achieving this balance doesn’t necessarily involve filling up your savings account, tightening your belt and waiting for a rainy day, just as it doesn’t involve gratuitous indulgence. What’s sought is an ability to enjoy putting money to a responsible use.

Reaching this goal may mean altering your financial behaviours. However, in order to do this you will first require a level of self knowledge. Knowing your own tendencies will allow you to emphasis your positive traits and then level out you natural flaws.

For example, you may recognise yourself as a shopaholic, someone for whom consumption is a form of recreation, a hobby and often a comfort. If so, spending money for you is a thrill and, like any other activity supposed to provide a thrill, it will offer diminishing returns. You will spend more, enjoy it less and less each time and a vicious cycle will develop.

How do you find balance again? On a practical level you need to restrict the opportunities for impulsive shopping. One very easy way of doing this is simply to avoid the shops. However, you will need to face them at some stage. Using a list will help you focus your attention on only getting things you need, rather than browsing everything you could potentially want.

Take other practical steps. Carry cash instead of cards. When your money is there in your hands, in a tangible pile it is harder to hand it over, to feel to bulk of your wallet diminishing as you walk from one store to the next.

Similarly, as a psychological exercise, go out shopping with no money. Browse as your normally would, get worked up about how much you want to buy this or that and observe how by the time you’ve got home again (to where your cards and cash are safely stowed) you’re desire to spend is already dulled.

On a deeper level you need to confront the fact that you are using spending to fill a void in your life. Try and spend your time in other ways, develop new hobbies and if on some level you suspect the spending is a response to some from of inner turmoil, you need to confront it head on.

By the same token some people have an unhealthy obsession with not spending money. Not wanting to waste money is fine, but some are adverse to spending money at all and want to avoid doing so at every opportunity. This is, in some ways, must as mad as showing no fiscal restraint. After all, money has no value in of itself. Not spending it is, in a perverse way, a kind of waste.

If you think this applies to you or someone you know you may have noticed the person in question will sit in the cold, unwilling to turn the heating up, in ragged clothes, unwilling to get a new set, despite being well in the black.

If this is the case your relationship with money is also unhealthy. You need to learn to enjoy wise spending, look at your disposable income and force yourself to spend a sensible amount of it each month. You’ll notice that there are probably areas of your life you’ve needed to invest in for sometime but have put off with no real reason, much to your own detriment.

Paul Greening is a retired financial adviser who enjoys writing on money related subjects that effect ordinary people, from debt management to life insurance cover.


Money Management Tips

Money Management Tips

Saving money now days seems almost impossible. Not only have gas prices and home expenses risen over the past 6 months but jobs have become harder and harder to find. In order to save money in this type of economy parents need to start teaching their children money management tips from a small age. Below are a few helpful tips.

  • Track your money. You should know exactly what is coming in and going out.
  • Limit your credit cards. Credit cards should not be for everyday use but for emergency situations.
  • Keep a budget. Limit the amount of money you spend on entertainment and eating out. Give yourself a weekly allowance.
  • Always have an emergency fund. The average person should have at least 3 months salary in an emergency savings account in case of job loss, family illness, etc.
  • Don’t get behind on bills- Ask for help when you need it. There are a few financial services that offer short-term payday loans for minimal finance fees.

These tips seem very simple yet 61% of Americans say they live paycheck to paycheck an increase from 49% in 2008. Of the 61%, 21% of these Americans are in the high-income levels. Another alarming statistic states that 36% of individuals put no money towards retirement like a 401k or IRA. Social security is predicted to run out in 2037 so it is very important to start saving for retirement now. These tips are a starting point and will hopefully help with your money management.


How Networking Marketing Can Be Used to Fast Track Your Way to Wealth

If you follow the careers of most people about 80 % are either dead broke, depend on the state, or their parents, 19 % are financially independent and can stand on their own, while only 1% are rich enough to live life according to their own terms. In the state of today’s economy where nothing is certain one thing is for sure, there is no such thing as “job security”. Ever since we were young our parents would tell us to study hard, graduate with honors and get a good job in a huge company. But you know what no matter how big a company is when recession strikes, your job could be the one at risk. So why work for other people and make them rich when you can work for yourself and make you rich?

The reality now is that employees work their heads off six days a week for some large corporation, retire at 60 and realize that their pension is not enough. So what can you do to avoid this? Two words. Network marketing. Yes. This is an industry that has been creating millionaire after millionaire.

Here are 3 ways on how you can use networking marketing to fast-track your way to wealth.

  • Leverage. No matter how good you are or how fast you work there will always be limits. You are just one person with 24 hours a day. You might be able to do the work of 2, even 3 people but not for long. You’ll just get tired and stressed out. Why push yourself so hard when you don’t need to? The beauty of network marketing is that it give you leverage. Its system is structured in such a way so that you will be able to multiply your productivity through other people.
  • Team work. Network marketing is all about team work. This is one environment where you won’t have to step on anyone to go up. In fact if you want to succeed to have to help other people (your down lines) succeed. The system trains you to work to well with others. Here, you have to be a team player or you won’t get anywhere.
  • Passive income. In network marketing, your recruits or down lines are like seeds. Some may die but some will thrive. The more seeds you plant the greater the chance of having more thriving plants you will have. You have to take care of them and water them daily until they become strong enough to stand on their own. Once they can do this you will be able to enjoy passive income for life.

Amy C. is an interior decoration aficionado and online marketer.  She also likes testing and trying new home and office decorating themes.  In addition to being an interior decoration hobbyist, she enjoys designing calming indoor fountains and glass art.  Amy invites you to browse her delightful collection of  glass vases”.


5 personal finance tips for the self employed

In the past job security was taken for granted, but as many businesses, large and small, feel the pinch on their finances, working for some-one else is no longer the safe haven that it used to be.

Looking for a new job is also a very disheartening task, with few new positions being created and the employment sector stagnating.

However, with the number of businesses going under, there are gaps in the market and despite the tough economy, now could be a prime time to consider working for yourself.

Being self-employed may sound very liberating, but it is not a decision that should be taken lightly as it will make some fundamental differences to the way in which you run your finances.

If you are sure that becoming self-employed is right for you, don’t just jump into it. The key to success is planning, planning, planning and whilst this may sound boring, many people fail simply because of a lack of organization.

It is important to put your finances into the best order possible before becoming self employed, as personal finance will be hard to access for a while once you make the switch.

Simple steps such as checking you do not qualify for a better deal by using an online mortgage calculator can help you to maximize any spare money. A mortgage calculator from a comparison site can also help to highlight whether your current lender is competitive in the market.

When setting up the business it is very easy to simply plump for a business loan, if you can persuade a bank that your business plan is viable.

However, if an injection of capital is required at the outset, it is better to source from alternative means if possible, otherwise the business is already under financial pressure before you start trading.

For some people, remortgaging to a different deal helps to free up some cash; a mortgage calculator would give an idea if this is an option. However, this is not an appropriate route for everyone and should be given careful consideration.

Once the business is up and running, it is essential to constantly budget, as you never know when there is going to be a cessation of money coming in.

When you are employed you know you can rely on receiving your paycheck on time and with regular frequency, whether that be weekly, fortnightly or monthly.

When you are self employed, you are reliant on customers paying their bills on time and economic difficulties in other areas can have a knock-on effect to bill payments.

It is not unusual to have to go an extra few weeks with little income at times when you are self employed and having to keep dipping into savings or use credit is not an ideal way to survive financially in the long term.

It is also very easy to forget that not all the money sitting in the business account belongs to you. Unlike the employed, self employed workers pay the IRS separately, meaning that some of those dollars belong to the taxman.

Self employment is a good option for some people and with commitment, a lot of hard work and sometime a dose of good luck, it can work very well.


10 Easy Money Saving Tips on Groceries!

10 Easy Money Saving Tips on Groceries!

Times are tough and many of us are doing all we can to tighten our belts and keep a close eye on our budgets; everything from spending less on entertainment to not traveling very far due to fuel prices Another major expense is the cost of food You’ve probably heard all over the news that the cost of food has been consistently rising for months straight; and besides hearing it, you’ve probably felt it in the bank account as well.

Although times are tough for many there are some important things you should know about shopping at the grocery store In this article I will share with you some things that I’ve learned since tightening our belts at our home.

1. Shop at the cheap stores.
The best prices overall are usually found at the discount stores Often times they are “Big Box” stores, however places like that can purchase their items at a lower cost, therefore pushing those savings on to you

2 Be Smart about Circulars/Advertisements and remember the coupons out there!
Not all items that are in circulars are necessarily on sale A good thing to know is that manufacturers pay to have their products in a circular because it boosts their sales up to 500% even if there is no price cut Keep your eyes open for that Sunday paper they are usually packed full of coupons to use for 30-90 days on average Even though saving 35 cent on one item may not seem like a lot, it adds up quickly if used on multiple items.

3 Avoid store take-outs
Watch out for the end of the isle bins, displays or recipe-related items and their placement…especially the middle shelf items Much of the time bargains are often on lower shelves!

4 Be color-blind
Stores and manufacturers often use colors to persuade the shopper to choose one brand over another Attempt to ignore colors and check out the individual unit prices so you can truly compare the items intelligently.

5 Slice, dice and chill it yourself!
Prepackaged items that are packaged in convenient independent ways are usually always overpriced!  I suggest purchasing the item in a bigger package or even in bulk and packaging it up yourself Sandwich bags are great for this or even the kitchen appliances you can purchase to remove the air from the plastic bags are great for freezing or simply vacuum packing things up to keep fresh! Chilled drinks are also priced higher.

6 Try store brands.
Much of the time store brands are exactly the same as the big brands, just hidden in other packaging Try the store brands, if you and your family enjoy them then you can save up to 50% on many items! How great is that?!

7 Limit your impulse buys.
Do you write out a shopping list? If not, start to do so and stick to the list If you’ve forgotten something on the list, allow yourself a certain dollar amount, say $10 so you can still get what you want/need, but won’t over extend yourself.

8 Ask for a deal!
Have you been practicing your negotiation skills?  A great, easy way to do that is asking a store to match the price or coupon of a competitor Let’s face it, there are stores that have everything from automotive parts to sewing supplies, if we don’t have to drive from store to store to get all the good deals, why do it? Advertising in the recent weeks have shown a major “big box” store stating that they will match other store’s prices Pick your favorite store and see if they too will match prices! It can’t hurt…only help, so try it.

9 Don’t leave your store membership card at home.
These little cards can save you big bucks at the checkout They are easy to store and more convenient than clipping coupons.

10 Watch the scanners.
Make sure you are watching the items that are being scanned Mistakes can be made by the person doing the scanning, or even the machine itself so keep an eye on both By doing so you can prevent any over charging that may accidentally occur.

By utilizing these great 10 tips you will be sure to have more money Enjoy your summer and if you really want to save money on fresh produce, my favorite recommendation is plant a garden! If it’s too late to do it this year, I would recommend doing so next year Not only is the food free, it’s more delicious than store bought produce Here’s to saving at the grocery store!

Lisa Harris Gore is an Award Winning Educator, Wellness Consultant and is a regular contributor for the health and nutrition website PSCLife.com – one of the web’s top retailers of Cosamin ASU – a hip, joint, and sore muscle supplement for those ailing from joint and muscle pain.


Teaching Your Kids Financial Literacy

Teaching Your Kids Financial Literacy

Even though money is such a huge part of the adult world, it’s often up to parents to teach kids what (little) they know about money, how it works and how to make it. But don’t panic! Giving your kid a solid grounding of financial knowledge and igniting that entrepreneurial spark isn’t actually that difficult; just good habits repeated over a lifetime, taught when they are young enough to not answer back:)

Who knows, you might just have a budding Steve Jobs or Warren Buffet on your hands, if you take note of the following:

Give Them an Allowance

Allowances are a contentious issue with many parents and money experts – some argue that allowances should be linked to chores the child does, others say that children should do chores regardless of payment as a part of the family. Whatever you decide to base an allowance on (good grades at school perhaps?) is very much your decision, but be sure that they get one – this introduces the concept of working for money early on in your child’s life, and helps them realise that grown-ups aren’t magical money vending machines.

Teach Them to Budget

Teaching your child to separate their money for different purposes is an important lesson; a lesson that many adults still haven’t learned. Kids don’t have regular expenses at a young age, so there’s only really 2 things they can do with their money – spend it or spend it. Teach them regularly put a percentage aside for a rainy day. The percentage that they decide to save isn’t hugely important at this point, what is important is that they stick to what they have decided to save.

Give Them Financial Goals

Setting a goal for your child could just be saving enough for a more expensive toy, or it could be reaching a certain dollar milestone, like $100 in the savings piggy bank. What it is isn’t really important; what’s important is teaching the concept of financial goals to your child. If your child doesn’t have any reason for saving, they likely won’t stick to the regime.

Cover the Basics of Investing

When your kids are a little older (say 12 and above) you should start to introduce the world of investing and entrepreneurism to them. Start with the absolute basics of why owning your own business or parts of other peoples businesses (shares) is an important part of getting ahead in life.

At this point you could give your child some financial “practice” with investing games like Cashflow For Kids and similar products that make the (somewhat dry) world of business/investing more interesting.

Conclusion

Teaching your child about money is more than the lessons you teach them – it’s also about the examples you set at home. With a solid grounding in the above and the right example set by their parents, your child should be in good stead for the future.


Four Scenarios for Pension Buyouts

Four Scenarios for Pension Buyouts

When companies are looking to downsize but would rather not lay off workers, they often offer a corporate pension buy out (for companies in the private sector) or civil pension buyouts (for those in the governmental sector). Buyouts typically do not offer as much money as early retirement options, but they can still be invaluable to those who aren’t close to retirement. You can often receive annual pension payment buy outs or a lump sum. While lump sums can be rolled over into an IRA (and thus, are not usually taxed), regular payments are typically subject to fees. No matter which option you choose, there are benefits to accepting a buyout, rather than waiting around if your company’s future is uncertain.

1) Eliminate debt.

Although it may not seem fun to use your pension buyout to get rid of back bills, it can be one of the best decisions you have ever made. Debt is like a vicious chronic disease; as long as it is not paid off, it only grows larger and creates more havoc in your financial life. Even if you are paying the minimum or more on your credit cards or loans, interest is accruing each month. This means that the debt is growing all the time, even when you are throwing money at it. By paying off as much debt as you can in one shot, you can ultimately save yourself hundreds or thousands of dollars in the long run. This is especially true of big purchases (like real estate) or items with a high interest rate (like some credit cards).

2) Finance a college education.

College educations aren’t cheap, and guess what? Financial aid loans also carry interest rates, albeit typically low ones. If you can pay cash for your child’s (or your own) college degree, you can eliminate further debt and start off with a clean slate, in terms of credit. Although your child may not realize it now, this is one of the best gifts you can ever give him/her.

3) Make that dream purchase/investment.

Have you ever thought of starting a new chapter in life after retiring? A buyout can help you achieve your dreams earlier than expected. Whether you want to downsize your home and move to a warmer climate, buy an RV and travel the country or start up that bakery you’ve always wanted, a pension buyout can help you finance those wishes.

4) Pay for an emergency.

As unglamorous as spending your pension sum on an emergency is, it can be a lifesaver. If you or a loved one ends up in the hospital or is dealing with property damage, your pension can allow you to pay off those bills without losing sleep/accruing additional debt.

Jessica writes about a wide variety of topics. She especially enjoys writing about finances. You can learn more about Annual Pension Payment Buy Outs at http://www.uspensionfunding.com/


The Economy and Personal Debt

The UK economy appears to have finally escaped the spectra of recession, but growth remains low.  The latest snapshot from the National Institute for GDP indicate a slowdown in month on month growth, which it said showed a “picture of continued weakness in the UK economy”.  Austerity cuts, increasing energy bills and higher fuel costs are all hitting the average UK homeowner hard.

According to Credit Action, a national financial education charity, average household debt in the UK is £8,144 (excluding mortgages).  Taking into account households with some form of unsecured loan, this figure increases to £15,661.

Credit Action figures also show that every day in the UK 1,392 people will be made redundant and 337 will be declared insolvent or bankrupt.

The Citizens Advice Bureau deals with, on average, 8,004 new debt problems every working day in England and Wales.  The organisation also states that average consumer borrowing, in various forms, has significantly increased, the average being £4,350 per UK adult, as at the end of March 2011.

Much of this unsecured debt is made up of credit cards or unsecured loans, which may be at extremely high interest rate levels.  For homeowners who find themselves in this position, it may be that much more favourable remortgage rates could be available; allowing them to raise finance to repay existing unsecured debts.

This option has the added advantage of enabling all debts to be consolidated into one monthly payment, makes for much clearer budgeting, will cut down on the clutter of credit card bills, unsecured loan repayment letters and the like and could also lower the amount of your monthly debt payment.  Perhaps you have taken a pay cut at work or are struggling to cope with the widely publicised rising cost of living in the UK.

You could therefore be looking to lower your debt outgoings for the time being and increase payments once your circumstances improve.  Remortgaging, in order to consolidate your debts will lock a variety of repayment rates into one fixed rate, which again gives much more clarity to you as a borrower.

It is important to speak to a remortgage professional before acting, because detailed calculations would have to be made.  It may be preferable to pay off the consolidated aspect of the loan sooner rather than over the entire mortgage term, something that can be achieved via a mortgage that allows overpayments.

If your personal finances are particularly poor, there may only be a limited number of remortgage rates available to choose from, however, there is no reason to despair, as there are some lenders who specialise in these types of mortgage.

Raising finance through remortgaging, for the purpose of consolidating existing unsecured loans, in the current difficult economic climate may therefore be a great option for the many homeowners who find themselves in the difficult position we have been discussing here.


How to pay for DIY

Some people will have been saving hard to finance a DIY project with the intention of paying it all up front. Depending on the amount available to invest and how accessible funds need to be on a short term basis will depend on the options chosen for saving. Bank and building society savings accounts, an international bank account, or ISAs can all be used to generate interest to help towards the costs. An International Bank Accounts can offer savings advantages and allow the saver to take advantage of beneficial exchange rates to maximise their returns.

Almost everyone will have small, routine DIY jobs to do around the house at some point and there are as many ways to finance DIY as there are shades of paint. These are often paid for in full at the time of purchasing the necessary goods and equipment, but there are alternatives that can reap some benefits for the purchaser.

Some DIY stores now operate their own store cards, offering customers credit against purchases. These can have advantages, as a customer using their card may attract a discount from the store, or the card may offer a period of interest free credit for new customers. These cards are notorious, however, for having extremely high interest rates, so it is vital that a user makes sure that they will be able to pay up before the interest free period comes to an end.

Credit cards can also offer new users generous interest free periods on purchases, which would again allow a customer to spread the cost of their purchase add no additional cost. It is also worth looking into credit card providers’ loyalty schemes, which can give customers points per pound spent to be exchanged for a host of extras. Again, this is only really a cost effective solution if payment is made in full by the due date, or before an interest free period expires.

Bank or building society loans are one of the most popular means of financing a loan. While these may not offer an interest free period, they do give the borrower a sense of security in knowing that the length of the loan is finite providing all repayments are made. There are many loan deals in the marketplace and it is often worth checking with the bank or building society that provides the applicant’s current account, as some banks offer preferential rates to their own customers.

For the larger projects around the home, such as a new kitchen or bathroom, many home owners will look to a home owner loan to provide the capital expenditure required. The rates on a home owner loan are often lower than a conventional loan and certainly far lower than a credit or store card. A home owner loan is, however, dependant on the equity available in a property and is secured on that property. Consequently, there can be far reaching consequences if a borrower cannot keep up with repayments.

With so many options available, there is no real need to put off creating the home of your dreams.


Teaching your Children the Importance of Money and Budgeting

Did you know that the ability to have financial independence lies in your budgeting skills? One of the wisest investments that you will ever make is to not just practicing having a budget but also teaching your children the importance of money and sharing your knowledge with them. Children are easy to teach. They learn what their parents teach them when they are young and have fresh minds. If you want to secure the future of your children, this is a very valuable lesson that you will teach them in their life. Budgeting is as important to you as it will be to them at any point in their life. So, it is crucial that you give your children the right knowledge and teach them the right skills when it comes to making financial choices.

  • Work culture: As a parent, you have the most influence over your children and they will learn from you. They see you and they learn your ways. Maintaining a good work ethic is very important in leading a stress-free life. Teach your children that hard work always pays. Give them smalls chores to do so that they develop a sense of responsibility from a tender age. They will also learn how to get a job done in time. This will help them be a better master of budgeting their finances or for that matter any aspect of their life.
  • Social skills: Teach your children some social skills. Teach them how to get along with others and live in harmony with their friends. This way you will develop their skills to manage in a competitive world and yet be at peace. This will be rather advantageous when they come in contact with other people in business as they grow up. If you notice a certain situation that may be going out of their hands, teach them how best to handle it so that they remember the lesson and learn from it.
  • Law and Rules: Talk to your children about rules and the law. Tell them how important it is to follow the law. This will teach them to be legal in whatever they do. When you abide by the law, you are within certain limits and when you have limits you also need a budget to help you stay within the limit. Let them know about taxes and how it is very important to pay them. Also tell them that sometimes you may not agree with the law but since they are laws you have to abide by them.

Finances: When you talk to your children about budgeting and money and finances, tell them the importance of all of these. Tell them where the money from the tax is being used and how that will be beneficial for them.


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