personal finance

The Indian Budget 2018 – Personal finance highlights you shouldn’t miss

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If you are pretty aware of the Indian Budget 2018, you will know that it was one of give and take. However, keeping the taxpayer in the forefront, it was more of ‘take’ than ‘give’. On one side, Arun Jaitley brought into effect the standard deduction once again and offered few new reasons to cheer to the seniors and also increased the total take-home pay of women who are employed in the workforce.

At the same time, he took away all the travel and medical allowances for the entire salaried employees and instead introduced capital gains tax on equity for the long term and even increased the cess which people had to pay on income tax. Here are few personal finance takeaways that you should learn from Modi government’s latest budget and implement them before the upcoming year.

#1: There’s no change in the slab of income tax for the individuals

Due to the fact that the Indian government had made different sorts of positive changes to the rate of personal income tax which are applicable to the people since the last 3 years, Arun Jaitley left the entire income tax slab unchanged this year. Hence the impact on people is NIL.

#2: Income tax cess increased to 4%

Budget 2018 was said to increase the cess on the income tax, straight from 3-4% and this in turn increased the tax that is payable by all categories of tax payers. This hike will have an impact on all different sections of the taxpayers. Due to this hike, the tax liability of the income bracket with highest tax will increase to Rs. 2625. For the middle income tax payers, their liability will soar up by Rs. 1125 and the marginal increase for the lowest bracket will be Rs. 125.

#3: Reintroduction of standard deduction

Budget 2018 has provided a new standard deduction of Rs. 40,000 from salary income to the employees. If you don’t know what standard deductions mean, it is a flat amount which is deducted from the income before tax calculations on the income. This was a part of the Income Tax Act till the finance minister, P. Chidambaram. This standard deduction will just benefit the non-salaried people and the pensioners.

#4: Transport and medical allowance knocked off from salary

As the Budget 2018 offers yet again the standard deduction of Rs. 40,000 from salary income to the employees, it even takes away annual transport allowance of around 19,200 Rs and medical reimbursement of 15,000 Rs. Once again, the salaried employees will certainly be at a disadvantage. Individuals with income of more than 5 lakh would shell off more tax after the standard deduction. This will have a neutral impact on the pensioners.

Therefore, when you’re a resident of India and you don’t know how to adjust your personal finances in accordance with the Budget 2018, you should definitely take into account the above mentioned factors. Stay on top of your finances and make sure you don’t take any wrong steps which boomerang your decisions in the long run.


Unbalanced Books: Introducing Order and Control to Your Personal Finances

When was the last time you made a concerted effort to get your personal finances in order? It’s something that shouldn’t be too hard to do, but many people struggle with it because they bury their heads in the sand. Don’t fall into that trip. Now is the perfect time to introduce some order and control to your personal finances. Make 2017 the year you manage your finances better once and for all.

Trim the Fat

First of all, you need to start trimming the fat. This can be a painful and difficult process for some people. It’s all about getting rid of any unnecessary spending and making sure that you’re not wasting any more. For example, you might need to examine your utility arrangements or see if you can get a cheaper internet provider deal. Those savings will give you the best platform from which to organise your finances properly. You won’t have to worry about spending more than you’re earning because all that fat will already be trimmed. This is something you can start immediately.

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Commit to Learning About Financial Management

Learning is an essential part of financial management. Unless you have a professional background in finance, the chances are you’re not a money expert. And that means you can always learn something new and do something differently to how you’ve previously been doing it. So, commit to learning a bit more about financial management each and every week. You can do this by listening to one of the many great personal finance podcasts out there. Or you can read some books on the subject. What you learn can then be put into practice when you’re managing your own money.

Assess or Change Your Living Arrangements to Suit Your Income

Your living arrangements matter a lot when it comes to balancing the books and controlling your personal finances. If you are living in a way that is not suited to your income or financial situation, you could make things steadily worse for yourself. So, now is a good time to assess your living arrangements and make any changes if necessary. If you need money fast and you’re wondering ‘how can I sell my house quickly’, consider a home buying service. This will help you free up some money and find a living arrangement that’s more suitable.

If Things Don’t Turn Around, Meet with a Professional Financial Planner

If things still don’t turn around for you, it might be time to hire a professional financial planner. These are people who have expertise in dealing with other people’s personal finances. They will bring that order and control that you’ve failed to put in place yourself. Of course, you will need to pay them, but that could be the best expenditure you ever make if they help you regain control of your personal finances. Meet with a few different financial planners before you actually decide which one of them is the right one for you. There are so many options out there, and you don’t want to press ahead without making sure you’ve found the best.


Keeping Your Budget is Easy, if You Change Your Life Instead

If you have a budget that just won’t work, something’s got to give. Many people change the budget in this situation. But I’m going to suggest the novel idea that instead of reworking the budget, you rework your life instead. This will be harder for some readers than others, as professional and family connections make big changes difficult. But for a certain kind of reader, this won’t be hard at all, and others will find that personal finance is important enough to warrant some drastic action. Here’s what I’m talking about.

Budget gurus tend to make budgeting all about lifestyle. They tell you to eat out less. They tell you to save more. They tell you to live on rice and beans for the next 10 years, thriving on the knowledge that you have so much self-control. This writer has never been able to live that way. Instead, it can work a lot better for many people to simply change the game. For some people, this starts with moving.Budget

You can save thousands of dollars every years simply by moving to another city or region. Different areas have wildly different cost of living standards. If you live in an expensive area, it’s like a tax that you pay on everything you do. This “tax” is often many times higher than any money demanded by your state and federal governments, and people pay it simply because they’ve never thought about doing otherwise. But what if you just moved? There are cheap American cities which have a lot of room for new residents. Get in on the ground floor, and you could save tens of thousands on food, housing, and lifestyle expenses, just within a couple of years.

Most consumers are also paying for things they no longer use or remember. I’m talking here about things like online entertainment subscriptions, or those mail-order razorblades you forgot to cancel. These subscriptions are all the rage, and more and more online retailers are offering this as an option. It’s best to take a careful look at your online spending statements to figure out if you are making payments that you are not aware of. An hour’s work can save you hundreds of dollars in the next year.

Similar auto-drafted payments for unwanted services is a big news story in England. PPI is a kind of insurance that got sneaked into a bunch of standard financial contracts. So thousands of people signed up for it (and paid for it every month) without even knowing about it or wanting it. This has given rise to a lot of lawsuits, and several class actions options are available to people who have PPI and don’t want it.

As you can see, there are a variety of big (and detail-oriented) changes which and free up your budget in a way that simple self-control and fun-denial can’t. If you’re able to identify and commit to these changes, you’ll be on your way to a much better personal finance lifestyle, without having to change your behavior much at all.


Understanding Loans: Working Out How Much to Borrow

There are many types of loans available to those in need, and they’re available from many different types of lenders, such as banks, building societies, and even private companies like Nemo Personal Finance, remember that a Nemo Loan is secured on your home so always make sure you can afford the repayments. People tend to spend a lot of time looking at, and evaluating these options, and yet they often overlook one of the most basic considerations associated with taking out a loan: how much money they’re going to borrow.

If you find yourself in this position, here are a few things to consider:

Do You Actually Need a Loan?

The first thing to do when considering a loan is to sit down and work out how much cash you actually need at your disposal. Let’s say, as an example, that you need £5,000 to put towards home improvements. Before you look at lenders, is it possible that you could find some, or all, of this sum without borrowing?

Many people are loathe to dip into their savings, but these can provide a source of income, and taking funds out of them can save you money in the long run if the interest you earn on them is less than the amount you would pay on a loan.

You may also find that family and friends are willing to lend you money inteloansrest-free, although many might prefer not to ask.

It is also possible that, if the venture you’re saving towards can wait, you can simply save money over the period of a few months or years, and eventually pay outright without borrowing a penny.

Remember, any money you borrow will have interest attached, so it is always worthwhile to consider other ventures before taking the plunge.

How Much Do You Need to Borrow?

As mentioned above, you should think about how much you need before ever actually considering taking out a loan. This amount will be dependent on what you want to use it for, so make sure that you have a good idea before looking at your options. If you need £10,000 to buy a car immediately, for example, and have no other source of raising capital, then borrowing £5,000 will do little to help you. Make sure that your estimates are accurate before looking at different avenues for securing capital.

Consider, also, how much you have the capacity to repay, and factor in interest when you’re doing so. Failure to meet repayments can have very negative consequences, so if you know that you’ll never be able to pay back the amount you need to borrow, a loan isn’t for you, and you may have to put aside dreams of the object or venture that you were going to use the money for.

Assess the Total Cost of the Loan

Once you know how much you need to borrow, plus how much you can afford to repay, it’s time to look at your options, considering the real cost of the different loans available to you. To do so, you’ll need to factor in the following:

APR

APR is the annual rate of interest that you’ll pay on the money you borrow, and can significantly increase the sum you need to repay.

Fees

Many loan companies will charge you a number of different fees for using their service, from setup to admin costs. Don’t forget to add them to the overall equation.

The Term of the Loan

The length of the loan you take out will largely determine the amount you pay in interest. If, for example, you borrow £10,000 over a term of two years, your interest payments are likely to be significantly lower overall than if you borrow the same amount, but make repayments over the course of three years.

These must all be added to the amount you borrow to estimate the total amount you will repay.

Loans can be a useful tool for helping people to secure capital that is not immediately available to them; however, as with most things in life, they do have their downsides. It’s very important to be aware of these, and to fully understand what you’re agreeing to, before borrowing money. If you still feel that loaning is for you, do your research to make sure that you choose the best possible option and don’t leave yourself out of pocket in the long run.

 


Present and Future of Personal Finance for Mint

Today, my Interview has been published at Mint.com, after a long waiting.. I am very happy to see it online..

 

 

Financial Future

Interview on personal Finance


How to start saving for your child’s college education

Saving money for one’s financial future is not always an easy task. When it comes to putting away funds for children to go to college, it is important to know that options are available to ensure that they have the best chances to succeed.

Knowing the right tools can be vital, as making mistakes can end up costing families dearly. According to Bankrate.com, not keeping in mind that some savings accounts have taxes attached when reaching a certain point can really hurt more than help.

“In the federal formula that determines how much financial aid a student receives, there are asset protections for money in a parent’s name that are not there for money in a student’s name,” said Robert Helgeson, director of financial aid for Valparaiso University in Indiana, according to the news source. “If a parent has $100,000 in assets, the government is going to expect them to contribute $6,000 of it to education. If a student has $100,000 in assets, the government will expect $20,000.”

Financial_plannerMultiple options available

Instead of using a plain savings account, it may be a good idea to check out the 529 college plan. The news source explained that these accounts work similarly to retirement plans, and they accrue funds without being taxed. Depending on the type, the plan may invest aggressively at an early age before leveling out as the child ages.

Though 529 accounts are set up to pay for college, parents may not want to cease contributions at the point of acceptance into school, U.S. News and World Report showed. This is due to these tools being useful for those who want to continue to put money toward their child’s education and not be hit with tax penalties while they are in school.

Using an IRA also is a possibility. According to BabyCenter, these options are not just for retirement, and they will help lower taxes, with some contributions being tax deductible. It is important to keep in mind that using this as a part of a personal finance plan will have taxes deducted once money is withdrawn.

Looking toward a number of options may be the best way to tailor a financial strategy that gets a child through college as painlessly as possible.

 

 

 


Four Naughty Credit Cards Spending Habits You Need To Fix

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It is common knowledge that Santa Claus is making a list and checking it twice,  that he’s gonna find out who’s naughty and nice.

But that’s just for kids.  Adults get into all sorts of mischief without the benefit of a jolly old elf to check in on them.

Perhaps the biggest mischief adults get into is credit card debt.  While this might not seem as exciting as putting a frog in a classmate’s desk, the repercussions are much more profound. “Many of our customers come to us because they are at their wit’s end with credit card debt, and they need to find a better card with lower interest or better cash-back rewards to bring their spending back into balance,” says Chris Mettler of the popular credit card comparison website CompareCards.com.

Naughty spending habits come in various forms.  Sometimes it is simply spending too much, other times it is spending on the wrong things

Here are some of the top naughty spending habits that you might want to break now.

Shopping to lift your mood.

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This is a bad one.  In fact, it’s not just pulling out their credit cards (or “retail therapy”, as it is sometimes called) that people do to lift their moods.  Some people smoke whenever they get stressed or feel low.  Others drink, which can lead to even bigger problems.  Other eat (and overeat), and we all know where that leads.

While overeating, alcohol and smoking are all bad for your health, they are also horrible for your pocketbook.  Whether you try to lift your mood by shopping for shoes or dresses or power drills, or you seek comfort in pastries or drinks, the financial result is the same : more debt to bring down your mood.

Much better to lift your mood through music or exercise.  Yes, just go for a walk or a run to boost your mood.  Play some uplifting or energetic music.  Get pumped up rather than spiralling down in debt.

Spending more than you make.

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This is the mathematician’s truism.  If you spend more than you make, you will be in debt.  Each time you spend more than you make, you get further in debt.  The only solution to this is to spend less on things you don’t need or make more money (which could be the subject for dozens more articles).  The easier option is to simply spend less. 

Draw up a budget.  Start with how much you make, and remove from that all the automated payments and expenses you don’t have a choice about.  What you are left with is discretionary spending, including emergency expenses, like when your car breaks down or you need to call a plumber.

Carrying a credit card balance.

Credit cards cost money…but only when you carry a balance.  When you don’t carry a balance, any credit card with a reward actually makes you money.  So what to do about the balance?  Pay it off in full every month.  Before deciding to take that weekend trip to Paris, first pay off the balance.  If you don’t, you’ll be skipping more than one weekend getaway in the years ahead.

Impulse buying.

How many times have you come home from the store with twice as many items as you had on your list?  That means your credit card is bearing twice as much weight as planned, and it is probably not necessities that you purchased.  Impulse spending adds up to huge amounts of debt that ultimately can drain your finances in a big way.

Furthermore, if that impulse spending was at a food store, chances are it was on high-sugar, high-fat, low-nutrition and high-calorie “foods”  that you really would rather have left behind once you feel their effects.

Always shop with a list and be determined to stick to it.  Break this rule under only one circumstance: when a consumable (such as food or cleaning products) is on a very good sale.  In such cases, if you absolutely know you regularly use the product, buy several of them while on special.  If you use the product regularly, it will save you money.  If you don’t, chances are it will simply cost you money.

The Bottom Line

People spend too much for many reasons, and for the most part the same spending habits repeat themselves.  If you can identify those habits, you can fix the problem.

Santa isn’t making a list for you, so hopefully this list will help.  If you can avoid these naughty credit card spending habits, your bank account will be better for it.  And in some cases, so will your health.

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Justin Black is a freelance writer who covers personal finance, health and life planning issues.  He grew up on the Atlantic Seaboard, an average child in an average home and got an average education.  He has a wife and two children, who he hopes will make smart choices about their futures.


A Simple Guide To Wealth Management

Managing your wealth can in fact be pretty difficult. So many people view the rich people of the world with distain but maintain wealth is something that is a skill in itself. There are so many ways you can go about it if you have the initial capital but very few people actually know what the most effective methods are.wealth management

In this article I will try to highlight three of the simplest methods and traits of a successful investor and wealth manager. There are also many companies out there that can provide this service for you and that again will be explained within this article.

The economy we are part of is changing consistently and at the moment is extremely fragile and I believe large scale investment is too risky but small scale investments and a solid plan can really stand you in great stead for the future and when the economy settles down some more then investment can increase further.

A Plan

It is essential that you have a plan with your money. There are too many people out there who invest without thought or care. In a world that is dominated by money you will find that people become more and more ruthless to get it and those investors who have the disposable income are at a higher risk of losing a lot of it through poor investment and taking poor advice.

There are many companies out there that have a strong track record in wealth management, Brett Lankaster is a boss of one of the city’s leading companies and he values planning for the future extremely highly.

The plan doesn’t have to be too detailed, at the end of the day, investment is something that is down to you as a person, it is your money and you can essentially do as you like with it but I firmly believe forward thinking and planning is essential.

Re-Investment

When you have money you can re-invest to get more, that’s the way the business world works nowadays. If you have that capital, the potential to make more is vast and there are numerous ways to go about it and each of them differ in importance and value. If you have a particular interest in one area it can be a great way to engage with your investments.

There are thousands of investors out there and it is down to you as an investor to work out what direction you want to take with your assets.

Some go for short term profit investing heavily in stocks and shares and there are some people out there who go for more long term and steadily maturing things like government bonds.

Risk Taker

If you want to increase your wealth you have got to be a risk taker, you get nowhere in the investment world if you aren’t willing to go out and explore the investment world.

There are just so many options and providing you have the right attitude and knowhow a lot of enjoyment and profit can be had.

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Tom Sasse has experience in the writing industry and has completed work for some very high profile clients. He has a very particular style of writing that is quite chatty and engaging.


Popular Financial Myths Debunked

The Financial Educators Council reports that the majority of educators in the United States have no formal financial training or financial education and would not be comfortable teaching a financial literacy course to students.  Most people don’t learn a lot of facts about money or their finances, which can make it really difficult to make smart financial choices that help you to be prepared for your future.

Unfortunately, a lack of formal financial education also makes many people vulnerable to believing myths about their money.  It is important to learn the truth about the type financial myths so you don’t end up falling into financial traps.

Popular Financial Myths Debunked 

Here are a few key financial myths that many people mistakenly believe:

  • It is impossible to get a loan without having good credit 

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The reality is that it is very possible for almost anyone to get a loan, even if they do not have a positive credit history.  In fact, if you have no credit score or history, or if you have a bad history, there are still loan alternatives out there that you can explore.

By visiting LoanMaxTitleLoans.net, you can find out information about a car title loan, which may be a viable solution if you need to borrow money and have bad credit.  A car title loan lets you tap into the equity in your vehicle in order to borrow money.  You can still keep driving the car and don’t lose your vehicle when you take a title loan. The loan is available to help you with a pressing financial need and you get the car title back when you have repaid the debt.

  • You must have a credit card balance in order to develop a positive credit history

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A lot of people mistakenly believe that you have to carry a balance on your credit cards so you can establish a good credit history and get a good credit score.  This is actually not true at all. As long as you have credit accounts and you pay them on time each month, you can develop a positive credit history regardless of whether you ever carry a balance or not.

Carrying a balance ends up costing you a lot of money in interest for virtually no reason. This makes all of your purchases more expensive and it makes it harder for you to get ahead.   By paying off your credit card bills in full every month, you can still build a good credit score and you won’t waste money.

  • Real estate behaves differently than other kinds of investments

This is one of the top 10 financial myths highlighted by Kiplinger.   Many people believe that real estate will always go up over time and that they cannot lose money on real estate. Others believe that real estate investments do not correlate directly with the return on stocks or other financial instruments.

The reality is that real estate as an investment just like any other, and it has risks like any other. Prices can rise and fall based on supply, demand, external market factors and a whole host of other things.  You can make money on real estate if you hold your real estate long enough and sell at the right time, but this is true of pretty much any investment that doesn’t go bankrupt. Since you never know when you’ll need to sell or how long it will take for real estate to go up, you cannot count on it being a sure money maker for you.

An expectation that real estate would always rise in value was one of the major driving factors that led to the financial crisis and foreclosure disasters that began in 2008 and that are still having ripple effects throughout the economy.   People took mortgage loans they couldn’t really afford because they assumed their house would increase in value and they could refinance or sell. The events of 2008 should be enough to show everyone that this is not necessarily going to be true.

Do Your Research When Making Financial Choices 

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These are just some of the many myths that people have about their finances and their money.  It is important to do your research and learn as much as you can before making any financial decisions so you can ensure you are making the right choices for you and your family.

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Jessica Pratt loves getting to the bottom of an issue. She has the sniffing out skills of a reporter, and the financial acumen of an accountant. Follow her for no BS financial advice.


The Single Parent Financial Safety Net

At the risk of recounting anxieties here that are no doubt familiar to pretty much anyone reading this: times are tough at the moment. Being a single parent isn’t exactly a walk in the park at the best of time, but the state of the economy has further complicated the prospect of parenting without a partner. While the challenges of single parenting are probably too numerous to list here, a good argument could be made that virtually all of them are in some way, monetary. At the very least, if money doesn’t inevitably make someone’s life easier, having less of it makes life harder.

So, with the importance of money established, here are ways in which a single parent can manage it wisely.

Track Income and Carefully Maintain a Budget

This may seem like an obvious one, but establishing and sticking to a budget is extremely important. Do so by taking an inventory of monthly spending and plot out spending patterns based on fixed and average expenditures: how much always goes to rent or mortgage and bills, and how much on average goes to food, gas, clothing, entertainment, etc. Once a budget’s been set up, it’s easier to plan spending and it’s easier to save.

Almost inevitably, budgets reveal surprises: more money is consistently spent in one area than you’d have guessed, while you end up spending less in another, etc. Understanding those trends also contributes to effective saving.

Build up Savings and an Emergency Fund

Everyone’s saving decisions and priorities, of course, unique and based on their specific budget and spending habits. However, there are some more universal hints that can contribute to good saving habits. One good strategy is thinking of savings as money that isn’t yours (for spending at least), or like another bill. Getting in the habit of putting away as little as twenty dollars a month in a savings account can yield huge benefits later. Most banks will automatically transfer a portion of a paycheck into a savings account.

Make Sure Your Insurance is Up To Date

While no one is particularly fond of making insurance payments, doing so is far better than the alternative. Most important are health and life insurance. More than 60% of bankruptcies in the United States are related to medical expenses and when one parent is watching over their own health and that of their children, the threat of those expenditures is that much more pronounced. Life insurance is just as important. Morbid as it is- buying life insurance is comparably important. Should anything happen to a single parent, life insurance can provide for their children.

Plan Ahead, Stay Employable and Plan for Hardship

Keeping money flowing into the family coffers is obviously extremely important, and having a job is necessary for that flow of funds. If additional job training and/or education is available, it’s virtually always a good idea to take advantage of the opportunity. If a job is temporary, shaky or layoffs seem likely, get started on looking for more work. While it’s a cliché to assert that the best time to look for a job is while you have one, it’s also true. Start a job search before it becomes absolutely necessary to do so and consider padding your income with part time or freelance work if that’s available and doable.

Furthermore, if a gap in employment does loom, look into what steps are necessary for setting up unemployment benefits. Less well known is supplemental unemployment insurance, which can be invaluable for those concerned that an unemployment is looming. Generally, supplemental unemployment programs will pay at least 50% of someone’s former paycheck, making up the difference between state benefits and that 50% or more.

Basically, it comes down to planning and organization. Plan a budget, plan for the future, plan for potential financial hurdles and organize accordingly. Do that and there’s very little that can’t be accomplished.

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Frank McCourt is an investment, frugal living, and just-about-anything-else finance related. When pried away from his laptop, he enjoys fishing and hiking with his wife across the northwest.


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