In order to maintain your home budget, you can get a software package for managing your personal budget. You can read the reviews about these best personal budget software to make your decision. Some of the reviews may be very helpful and others not that great. So you have to make your own decision about choosing the right software package. Once you purchase the software, it will do the job it is required to do.

When you are looking for solutions to your personal financial requirements, you want to create custom lists and reports that won’t require budget items limited to corporations. Hence, unlike many financial software producers who just want one software for all purposes, you will find the home budgeting software very useful as it will plan and track your income, expenses and investments according to your requirements.

What are the benefits of home budget software?

Any competent user who is working on computer based spreadsheets will rather create a complex workbook for tracking the income and expenses will be quite difficult. When you get this software, you are able to create alerts and reminders so that you don’t miss any important date or deadline. You will easily remember the payment dates as well as other events and it will leave a good impact on your personal finance and credit scores.

This personal finance software has the custom reports feature that will allow you to search for any data within a given range. For example, if you want to know how much you spent for the first six months in restaurants, you will be able to pull the report through this software. Or, if you want to keep a track of how much donation you have made to your church or community, this software will be very helpful.

Tips on choosing the best personal budget software

If you are a beginner, you don’t have to use software with all the advanced features. Keep it very simple. Then you will look for the features and functions that you will need to control your budget, like visual reports and flexible reporting with configurable user options. If you want to track investments in your financial plans, then will need software that can retrieve current stock pricing.

Finally, you will choose the right software that will help you in achieving success. You can set all the goals that you want, but if it is not capable of including successful completion of these goals, then it is probably not the right one for you. Make sure that you research the company or the software developer before buying it. You can check out in the forums where all the technical issues are discussed and solved.

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Personal finance

Knowing how to manage your money is absolutely crucial to building wealth, saving for retirement, and simply meeting your day-to-day needs. Keep reading for some simple and effective ways to take charge of your personal finances and make better decisions about your money.

Track Your Spending: The only way to determine whether or not you are sticking to your budget is to keep tabs on how much you spend. You can do this by saving every receipt and adding them up by hand, or you can use software or websites that sync your bank and credit card accounts in real time. This method works best if you use your debit or credit cards for most of your expenses. If you pay primarily with cash, consider using an envelope system to divide your money for different categories of expenses.

Stash something in savings: Whether you can afford to save $10 a week or $1000, anything that you can place in your savings account for emergencies or unforeseen circumstances will no doubt come in handy someday. Ideally, you should try to save six months’ worth of expenses. This could see you through a bout of unemployment, a temporary disability, or another issue that prevents you from earning an income.

Take the time to calculate a budget that will be easy for you to follow: You should add up everything you earn and all the expenses you cannot reduce. Your rent, mortgage payment, car payment and car insurance and your utilities should be added up, and you should put aside enough money to cover all these things as soon as you get your paycheck. Use the rest of your paycheck to pay for groceries, gas and other expenses but try putting as much as possible aside in a savings account for emergencies. Make good use of the tools available to you such as online banking to manage your budget.

You should stay away from certain financial products that are going to cost you a lot on the long term. For instance, using credit cards to pay for your purchases will cost you a lot because of interest rates and late fees if you get behind on your payments. It will also be harder for you to manage your budget if you can spend next month’s paycheck thanks to your credit card. If you are in debt, focus on paying your creditors back as quickly as possible with the help of a quick loan online and stay away from credit cards if possible. Investing your money in the long-term and putting money aside for an emergency fund should help you get by without having to borrow money.

It is easier said than done, but do not spend more than what you make in income. If you do not have enough money to pay for what you had spent on, you will go into debt. Be mindful of what you can afford, and spend within your means.

You can see that there are many ways in which you can improve your personal finances. It is not hard to do, and it just takes a bit of learning and discipline. If you take care of your money, it will take care of you when you need it.

If you can no longer afford your lack of money management skills, now is the time to change your habits. By following the basic steps outlined here, you can learn to make smarter decisions about how you handle money, improving your ability to build wealth and live comfortably!

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Although there are many benefits to acquiring a financial education as early on in our human growth and development as possible, as much as 20% or more of Americans never discuss money management with their children.  Psychologists and financial experts believe that instilling in children ethical work principles, self-reliance, and financial literacy could lead to a happier life. You may find that your recent college graduate has an outstanding debt but very few debt relief options. This is because they haven’t been taught how to become financially independent. If this is the case and your child is looking for debt relief options, read on, finding debt relief may be easier than you think.

Allowances and chores are popular parental strategies, but they are not enough. To help your child deal with debt relief and find the best options for financial success, instead of handing out a spending amount, children can participate in the decision-making process of allowance and become aware of the reasons why it is beneficial for him/her to know how to manage their spending money.  After all, money doesn’t grow on trees. Debt relief options are at your child’s fingertips. It’s how they manage their life that counts.

Budgeting and saving are the most crucial factors to tackle during conversations with your child.  Discussing and setting short and long-term goals lead to achieving the necessary skills to find debt relief options when education and ca loans are weighing  heavily on their finances.  First and foremost, it pays to get into the habit of saving.  Curbing instant gratification purchases such as ice cream, fast food, or the new shoe style, will lead to a debt-free life when you’ve applied the best debt relief option of all: saving for a rainy day.

For many young adults, the cost of living can be extremely difficult to meet.  Student loan debt, for example, is one of the most corrosive elements preventing young adults from obtaining credit and achieving financial independence. Parents are instrumental in helping children reach their financial potential by promoting and showing them the money management skills necessary for success. In fact, debt relief options are simple and straightforward. But they must also be consistently applied to daily living habits.

Many college grads find themselves having to move back home, not because they are looking for a smooth ride, but because the cost of living is higher than their ability to make ends meet. This is true today in most metropolitan areas and beyond.  You may need to step in as a parent and your child’s best friend.  Intervening to help your child find debt relief options and become financially independent is something both of he/she will one day be grateful for.

The following guidelines are proven to develop sound financial judgment in young adults to help them cope and prevent economic hazards.  Don’t wait until you have no debt relief options available.  Prevention is the key to financial wellness.

  1. Define expectations

Whether your child is living back home with you or has moved out on their own, most parents would like to help their children meet the responsibilities of adult life on substantial grounds.  Communication is the key to defining expectations you have of them, especially if they are still living at home, as well as those expectations society places on young adults when they are in the real world surviving on their own.

It’s not that parents don’t want their children to have a nest to return to and be comfortable, but that may hinder their child’s ability to develop the necessary skills to fly way.  When your child is in debt, finding a debt relief option that works for them is where parenting comes in handy at any age.

Be clear and consistent about the boundaries and rules your grown child must abide by at home if he/she is living with you; this will guarantee a safe transition to their own nest. Set realistic goals, decide on a step by step course of action.  Follow through.  Reconvene and discuss what is working and what is not working on a regular basis.  Always keep the communication door open.

  1. Budget, budget, budget

No matter what the circumstances are, even if your child doesn’t have a job yet, a budget can be created so that when he/she does have income, it will be easier to follow through on the plan.  The secret to finding debt relief options is in how well they can stick to a budget.

Becoming aware of the daily cost of living is an eye-opener most young adults don’t develop until later on in life when they have had to figure it out on their own when they have already acquired debt.  Why wait when they can be ready sooner. Frustration is easy to set in when in debt and it may seem like there are no right or quick debt relief options.  But planning for success is the way out of the struggle.

If your child is gainfully employed but the goal is to gain a higher financial position before taking the leap, budgeting and sticking to the budget is the only guarantee to a financially independent existence.  To consistently follow the daily budget limits, checking and reviewing statements and account activities is the best medicine.

  1. Get rid of the unnecessary fluff

There are two little words used frequently that have strong ties to financial success. Discuss  Wants vs. Needs with your child and find pleasure in being able to control frivolous desires that lead you down the wrong fiscal path.  Once the fluff has been eliminated, financial gains will follow, and instant gratification will turn into long-term satisfaction.  Allow and expect your child to cover their phone, gas, and insurance payments. This will make them responsible and reliable. Every debt is manageable, but it takes determination and perseverance: the best debt relief option for everyone.

  1. Motivation is the precursor of change

If everyone saved a percentage of their disposable income instead of spending on things they want versus their future, there would not be any need to find debt relief options. Instead, we would be able to have the big things we desire for our future lives that much faster.  Saving can make a huge difference in being financially independent.  “To motivate your child and create the beneficial habit of saving, you can, for example, offer to match their first $500 saved,” says financial advisor and mom, Stephanie Bussell, of Omaha, NE.  When her daughter came back home after college, she was able to save enough money to move into her own one-bedroom place in less than a year after she got hired by an IT company.  “We used to play games like these when she was in grade school,” recalls Mrs. Bussell.  “She’d get an allowance and was asked to save 20%. If she did, I would match that with another 20% and this made a huge difference in her savings habits.”

“When she found that her graduate student loan was a little overwhelming, she moved back home and was able to make two years worth of payments on the loan with a bit of extra income from a side job. Making this sacrifice really gave her the confidence she needed and was a great debt relief option,” elaborated Mrs. Bussell.

  1. Rent is due

It’s OK to charge your child rent.  Even a small insignificant amount is helpful.  What you want is to build the responsibility and reliability of having to meet a monthly due.  You may want to give it all back to them when they decide it’s time to settle down on their own.  But don’t give it away. Building good financial habits is key to success in life and becoming debt free.

  1. Debt managing

Everyone has to get into debt at one point or another in life.  Whether you are buying a vehicle or acquiring a mortgage on a home, sound debt management is a skill that we all need to learn.  The first debt a child acquires could be a small amount they can pay off quickly, but making payments on time and knowing the terms, benefits, and responsibilities of having a loan are priceless.  Student loans are an excellent example of how not knowing how to manage debt can pull young adults under significant financial stress.  It may be difficult to find the right debt relief option if your child has unpaid education loans and doesn’t make any payments on the interest of the loan.  The unpaid interest will roll over into the principal, and pretty soon the loan principal will double, and there will be no end to it.

Getting the details in print is not enough sometimes.  Making calls and applying even small but consecutive payments to the interest of a loan during hard times is paramount to becoming financially independent.

  1. Vision and career planning

Degrees take effort, time, and resources to achieve. But many young adults lack vision when they graduate from college.  Knowing what their career path is and how to get and stay on can be the most challenging postgraduate activity for young adults.  They focused on getting the degree, but when they finally walk, then what? Many become discouraged when they can’t find the right job.  Planning for and researching career paths is the first step.  In some cases, relocation is necessary since some industries are centralized in certain geographic areas.  The cost of relocation must be computed into the plans.  If one job is only covering the essentials, think about a side or part-time money making venture that will help meet the goals set for a certain number of months.    “Taking the time to visualize and plan a career path while at the same time paying at least the interest on outstanding debts can be the best course of action for a new grad,” says Heather Placencia of Jonesboro, WI, financial planner and educator.

Every child’s circumstance is different and complex.  Smart money management, however, is simple: spend less than you earn and invest in your future by saving between 10 to 20 percent of your income.  No matter how long it takes, the first step to finding debt relief options begins with setting financial goals with your child before incurring in debt.

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By financen | January 9, 2018 - 5:18 pm - Posted in Loan, Personal Loans

Different people need money for different reasons. Some are trying to buy a car or have their current one fixed, others may be starting a small business or sending yet another child of theirs to university, and still some are going travelling with their partner or family – whatever the reason, it is important to know what you are getting into when you take out a personal loan and that you are choosing the best personal loan for you. There are a number of points to keep an eye out for when choosing your loan because everybody’s needs are different. As with any decision, there is no one size fits all, so let’s delve into the tools for finding the best loan for you!

Read the Fine Print

Loans can be sneaky. Taking out a loan is the perfect time to be taken advantage of by the fine print. The way to remedy this? Read the fine print! Learn about any hidden fees that may be attached to your loan. There is no set standard on fees, so every business and company will have their own fees and rules. Read the fine print and are still skeptical? Ask about origination fees, prepayment penalties, whether or not a loan is on fixed term, and interest rates and types.

Compare Companies

Every company is different. Comparing companies is a surefire way to ensure that you are receiving the best deal for your personal loan. Research online a multitude of companies, comparing their interest rates, fees, and the lengths of payback periods. This will help you narrow down your scope and help to solidify whether or not you wish to go with a bank for a personal loan, or a personal loan company.

Ask Questions

Once you have your narrowed scope, set up meetings with advisors of each bank or lending company to ask any further questions that you may have. One of the major perks of personal loans is the speed with which the money reaches your hands. Companies such as LoanCall specialize in personal loans, allowing a quicker receiving time for you, and, generally, less expensive fees and lower interest rates. Asking questions surrounding your personal loan will ensure that you are receiving the loan with the amount of money that you need and with manageable interest rate payments for you.

Personal loans are an excellent way to get the money that you need and quickly! However, it is important to never take on a loan that goes beyond your needs and means. Your personal loan is your ticket to a new business, a family vacation, or covered unexpected costs.

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By financen | December 21, 2017 - 4:30 pm - Posted in Budget, Personal Finance
  1. Make socks your friend: Even with the room heater on, the floor can get really cold during the night, and especially in winter. Having socks on when walking around the house, instead of turning the heat all the way up can save lots of energy in the long run.
  1. Tap on the available heat: Simple household activities such as cooking, taking a shower, or even ironing the clothes generate reasonable amounts of heat. You could tap on these to keep the house warm during winter. One way to do this is leaving the bathroom door open when taking a shower, and not turning the ventilation fan on. This should allow heat from the bathroom disperse to other rooms.
  1. Turn down the heat by 5 or 10 percent: Turning the heat down by a few degrees can save you lots of energy (up to 10% of heating bills) in the long run. Your body won’t notice the difference, but will instead re-adjust to the temperatures. Consider turning down the heater when leaving the house for a few hours.
  1. Lower water heater temperatures too: Turning down the water heater thermostat by 20 degrees say from 140 to 120 degrees can contribute to lower heating bills as well.
  1. Upgrade to a programmable thermostat: A programmable thermostat works a lot better than the old ones. The thermostat makes it possible to adjust heat levels at predetermined times, as well as turn off the heater completely when no one is in the house. Although you may have to part with $80 for one, you’ll most likely save so much more in a year and more to come once it is installed. If you want more tips on cheaper heating, consult this blog at Ethanol Fireplace Pros.
  1. Seal the house to prevent unnecessary heat loss: Doors, windows, and air vents can let warm air escape leaving the heater to work harder to maintain a constant temperature. Ensuring these are correctly shut, and the vents well sealed however creates an envelope of warm air, thus minimizing heat loss. This also means the heater won’t have to work as hard to keep the room/house warm.
  1. Call for regular service and maintenance: Both oil and electric heaters should be serviced by an experienced technician at least once a year. It’s by having the unit serviced that it can run more efficiently with little to no breakdowns. You also ought to ensure the air filters are clean and clear to facilitate proper air movement.
  1. Ensure windows are covered at night: Having curtains over your windows at night not only improves privacy in the house, but also reduces heat loss. This is particularly crucial for older homes with old windows. You however should draw the curtains to let daylight in during the day. Daylight brings warmth – allowing sunrays into the house helps heat the house.
  1. Ensure the outdoor unit is well-taken care of: Most people tend to overlook the outdoor unit forgetting it is equally important as the indoor unit is. Checking the unit for condensate, blocked pan, or overgrowth on the same, and ensuring everything is clear will enable it to continue functioning optimally throughout the cold season. Be sure to get rid of twigs, grass, leaves, and overhanging branches around the same.
  1. Look out for air leaks: Air leaks in the house can be the biggest cause spikes in your home energy bill. Inspect the house for air leaks using a candle. Hold a candle flame next to windows, air vents, the door, and anywhere you suspect there’s a leak. If the candle flame is blown to one direction, then that’s a clear sign of a leak. Inspecting the area farther should help you determine the exact spot, then use weather-stripping or caulk to seal it off. Adding some insulation may help too.
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By financen | August 15, 2017 - 10:42 am - Posted in Finance, Others, Personal Finance

After you have been arrested and detained, you may be given the option to bail or bond out of jail. If your bail or bond amount has been set to high during your arraignment hearing, you may wonder how you can raise the cash without selling any of your assets.

Some of your options include borrowing money from friends or relatives, using any of the Adams County bail bonds services, or simply staying in jail until your trial or next court appearance. When staying in jail is not an option and you lack friends and relatives to borrow money from, you may want to learn more about the bail and bond process.

Bailing or Bonding Out of Jail

The process for securing your release from jail through bail or bonds is relatively simple. When you visit the website, you can find out how much money you or someone in your family or circle of friends would need to put down as a deposit. In most cases, the deposit is about 10 percent of the bail or bond amount.

You can also find out on the website how quickly someone from the bail bonds company can get to the jail house to get you out of jail. Most bail bondsman can be there within the hour and secure your release as long as you have seen a judge if required.

After you are bonded or bailed out of jail, you are then obligated to abide by the terms of your bond or bail contract. The terms include showing up to all of your court appearances as well as staying in contact with the bail bonds service until your case is decided.

If you jump bail, you can expect a warrant to be put out for your arrest. You also may lose any assets or deposit that you used as collateral for the bail or bond amount.

The terms of the contract plus other information you need to get out of jail before your trial or court appearance can be found on the website. You can call the service 24 hours a day and even on holidays and weekends for help.

Posting bail or bond can be expensive. You do not have to have the money in your bank account to secure your release. You can get the cash by using profession bail bonds services.

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By financen | April 24, 2017 - 5:42 pm - Posted in Credit Score, Loan, Personal Loans

Personal loans can be a great arrow in your financial quiver for consolidating higher interest rate debts, like credit cards or short-term loans, or financing a major purchase or unexpected bill. With predictability built in, personal loans make it easy to budget for repayment for the life of the loan, and for the most qualified borrowers, repayment can extend up to several years. However, not everyone is eligible for a personal loan through banks or online lenders. Because personal loans do not require collateral – an asset, like a vehicle, a home, or a bank account the lender can use to recoup losses due to default – the application process can be stringent. Here are the most common factors banks review when evaluating a personal loan application.

Credit Score

credit-score

The first place lenders look when receiving a new personal loan application is the borrower’s credit history and score. Credit information is like a financial fingerprint in that it provides a clear picture of who a borrower is in terms of money management and timely debt payment over an entire lifetime. When credit history is clean, and a credit score is above 700, banks are more apt to offer a personal loan with the lowest possible interest rate and budget-friendly repayment term. If credit score and history are on shaky ground due to past late payment, a recent bankruptcy, or a foreclosure, lenders either decline a loan application or charge far higher interest rates to protect their potential for loss.

Employment History

employment

Some banks ask for employment history on a personal loan application, in an effort to understand a borrower’s track record of earnings. When someone has had significant gaps in jobs over the last few years or has had several different employers in a short period of time, lenders may view the borrower as higher risk. Steady employment and increased income over time is what banks are typically looking for to qualify a borrower for a personal loan.

Current Income

Income

Above and beyond a borrower’s past financial record, banks want to understand current income. Borrowers with steady earnings from a conventional job are perceived as a lower risk to most lenders, while those who are paid by commission or a bonus structure are less reliable in theory. Banks also want to understand the reliability of the income stream a borrower has, and how that stacks up against other outstanding debts that require a monthly payment. Even when income is steady, borrowers who have several other monthly payments due may not be a strong fit for a personal loan through a bank.

Amount and Purpose of the Loan

The last common factor in reviewing a personal loan application is two-fold: the intent of the borrow and the amount funded. First, personal loans may have some restrictions on what items or expenses they can be used to pay, typically excluding paying off another loan or financing education-related costs. The most common uses for personal loans that are deemed suitable by a bank include debt consolidation, a large expense like a family vacation or holiday spending, or business financing. Second, banks always review the amount of the loan requested and compare that to the borrower’s income and other monthly obligations. For most personal loan applications, no more than $35,000 can be borrowed at one time.

Using a personal loan to manage your finances can be a smart way to leverage your borrowing ability, but take note that banks are going to review your loan application carefully. Before applying for a personal loan, make sure to have documentation relating to your income, a list of previous employers, and a clean credit history to improve your chances for approval.

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By financen | March 23, 2017 - 3:44 am - Posted in Credit, Personal Finance

If you are in need of money, you must understand where you can find it and the factors that lenders will look at when they make their decisions about whether to approve an application. You should avoid taking risks that might harm your future so look closely at the advisability of borrowing against real estate or from your 401 (k) which is your retirement fund to provide comfort in your later years.

Your credit score is central to being approved for a loan and you should certainly obtain the copy you are entitled to annually from the three bureaus; if there are any incorrect entries on any, report it and get corrections done as a priority. One of the factors in your credit score is your level of debt against your available credit. If for example you pay off a credit card balance with a personal loan, don’t close the card account because you will be reducing the credit you have access to even though best advice is not to build up a balance once again.

You should only borrow what you can afford to pay back to avoid getting into trouble even if a lender offers you more; that is temptation similar to the irresponsible use of a credit card.

Your Mortgage

Where you are looking for a mortgage, try to make a significant deposit; it will mean immediate equity in the property but often a better interest rate as well. Mortgages are long term, up to 30 years, and though future income is not guaranteed you can only make informed decisions when proceeding with a purchase. Down the line your real estate may well be able to provide security towards further borrowing.

Personal financeHopefully you manage your finances well in the future and if you have been saving in a 401(k) retirement plan for some years, compound interest will be your ally. Regular monthly saving grows far more quickly than you would expect while there are tax advantages in such an investment anyway. It is your money and you have access to it if you wish, though you are obliged to repay from your taxed income. The problem is that if you withdraw any money, you will lose the growth that the borrowings will have earned you until it is repaid. There are better ways to get cash than touching your 401(k) though some will require that you have a good credit score and you make a realistic application. This is where your real estate can come in.

Refinancing

Current mortgage rates are low and refinancing is certainly something to consider. You need to look at all the elements of refinancing, including all fees for settling an existing loan (with nation21cashloans.com) and setting up a new one. If you have significant equity then you can take some cash out when you do the refinancing.

This is something that is certainly worthwhile if the sums add up. If you can get a fixed rate you will know exactly what your future commitments are while there are tax benefits as an additional advantage. As long as you accept the consequences of not making your payments on time and you can accept the term involved, there is little against refinancing if all the detail is included.

Home Equity Loan

You will be borrowing additional money without it affecting your initial mortgage that continues to run. Such a loan is for a fixed term at a fixed interest rate that will certainly be higher than you are paying on your mortgage.

Such a loan is fairly simple and can bring tax advantages yet you will need to have a good credit score and you should understand how much you will be paying back in total.

Home Equity Line of Credit

This is a facility that also offers your real estate as security. It is flexible and you can take money as you need it and again there are tax benefits but the interest rate charged is variable. Be certain that you understand everything because sometimes you will be offered an interest only start with your monthly repayments rising after a certain period. Just as with credit cards, there is temptation to spend when you have a credit facility like this. Think about the number of people who have succumbed to temptation and now have expensive debt on their credit cards.

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By financen | February 3, 2017 - 6:28 pm - Posted in Debt, Personal Finance

Many people in the US, especially freelance workers, struggle to keep their personal finances organized. But with working from home on the rise, freelance workers are set to reach 40 percent of the workforce by 2020. So, whether you work as a developer, designer, translator or manager, if you want to manage your money better, check out these few tips.

Don’t get dragged down by bad credit

Before you worry about your credit rating, make sure that you get an accurate copy. There are several credit rating bureaus you can check, including Experian and TransUnion. Study your report carefully, as it may contain some errors or even include debts that you have already paid. How do you go about setting the record straight? Send a letter to the credit report company that explains the error so that they can remove it and clean your slate.

Learn how to manage your debt

Learning to manage your personal finances is about learning how to set a budget. But, before you can realistically put money aside for certain expenses, you need to pay your debt off first. This can be particularly hard for college students who graduate with thousands of dollars to pay off. But, debt can also be disguised in other forms, such as credit card debt. Start paying off the higher interest debts first and allocate money each month to pay off your debt. Later on, you can simply continue to pay out this money – into your savings account.

Set your budget

Setting a budget is vital if you want to make sure that you live to your means. When you’re a freelance worker, you may not always have the same amount of income every month. So, separating your fixed costs, such as rent and utilities, from your miscellaneous expenses, like clothing and whim purchases is vital. Cut out any spending that isn’t completely necessary, such as your daily coffee or candy bar. You can live without those, right? And every little helps.

Personal financeThink like a saver

You may need to change your habits, if you’re better at spending money than saving it. So, try to put a part of your monthly income aside, for emergency use if needed. Also, consider your mid and long term saving goals, such as taking a vacation or saving up for a deposit on a house. Consulting with a financial advisor, or downloading a savings tracking app, like Mint or Level Money can be a great help.

Get a side-line job

If you’re lucky enough to be in a position where you don’t need to take on a second job, then good for you. But, if you want to boost your income temporarily, think about taking on more clients or extra work. Thanks to technology, there’s a plethora of jobs that you can do online, from writing and design, to customer service, or even selling homemade crafts on sites like Etsy. If you’re skilled in a second language, you could apply to work with an online translation service. You’ll need to have excellent command of at least two languages and, in some cases, an additional specialty.

Look for free activities

They say that the best things in life are free. While you may crave a night in a luxury hotel or a 5-star all-inclusive, your budget may not accompany you right now. So, try to enjoy your life and include activities in it that don’t involve spending money. Take up a sport, like running or cycling – cycling to work can even help you save on bus or gas fare. Check out local events where you live and invite friends to you, rather than going out.

Learning to become finacnailly smart takes some common sense and a lot of dedication. But, if you can instil these disciplines in your spending habits today, you’ll be learning how to manage your personal finances now and for your future.

Author Bio

Christina Comben is Content Manager at translation and localization services provider, Day Translations. Multilingual and qualified to MBA level, Christina is passionate about writing, traveling and continued education.

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In economics, wealth is defined as the net worth of an individual, that is, the value of assets owned by the individual net of all liabilities owed at a given point of time. For a layman, wealth could simply mean being rich. Well, wealth is much beyond these two definitions.

Deloitte, the audit, tax, consulting, enterprise risk and financial advisory services provider defines wealth as follows:

Wealth is the ownership of valuable resources. Wealth creation involves the building of assets by means of careful investment, usually over a long period so as to achieve an income stream that will ensure a continuation of a high-quality lifestyle in the years beyond retirement.

In a nutshell, wealth creation should give you the financial freedom to do what you want to do. For the purpose of long term wealth creation you need to carefully invest your savings over a long period of time so as to ensure that you have a sufficient corpus to meet your financial goals at different milestones of your life child education and marriage, home, and retirement. Hence, a disciplined and systematic investment approach is necessary for wealth creation.

Now, the question is where to invest for wealth creation. The answer to this question really depends on various factors such as your financial goals, age, number of dependents and risk appetite.

There is no one approach for creating wealth but it depends on every individual circumstances and personal choices. Various factors such as financial goals, market risk, return on investments, market volatility should be considered while investing. Your investment is likely to fall in four major asset categories over your lifetime.

debt equity

Equity

Equity includes any money invested in direct equity, mutual funds, exchange traded funds (ETF) and unit linked plans. The value of equity investment fluctuates as per the performance of funds. They can give high returns in the long run, however, they are highly volatile too, especially in the short term. Moreover, you need to be an experienced investor to ensure you are picking up right equity funds.

Debt

Also known as fixed income funds, they mainly comprise of Fixed Deposits (FDs), Public Provident Fund (PPF), National Saving Certificate (NSC) and government bonds to name a few. They give a fixed interest every year, along with the return of the principal amount at the time of maturity. Safety of principal amount and the regular income are the two important features of investment in debt. While the returns are fixed and guaranteed, but they are not high enough to give you edge after discounting for inflation and taxation.

Real Estate

Investment in real estate includes every property that you buy residential, commercial or land as well as the real estate mutual funds. The gradual increase in prices gives more stability to investment. Moreover, regular income can be earned if the property is rented out and the returns on investment can be increased by renovations and repairs. While the real estate market is less volatile compared to the equity market, there might be phases when real estate prices experience volatility. Also, you need to make large capital investments in real estate and it is difficult to sell property quickly. The sale of property is subject to capital gain tax, TDS and some other taxes (depending if the property being sold is constructed or under construction), which eventually lower the net returns from real estate investment. This makes real estate investment rank lower on liquidity and returns on investment parameter.

Commodities

Commodities include precious metals such as silver and gold in the form of coins, bars, ETF and mutual funds. Commodity investment is perhaps the easiest form of investment and can be bought or sold at any point of time as per your financial requirements. Over the long-term, investment in gold and silver can give high dividends and they can be easily mortgaged for availing loans. However, there are no tax advantages and fixed or regular income. Further, people have a tendency to stock up gold and silver rather than selling it. So, that makes commodities a less liquid investment.

Every asset category has its own risk and return profile, so does an investor. There are several investment plans to consider if you plan to invest in equity and debt instruments.

Mutual Funds

A mutual fund is an investment option in which money obtained from various individuals is invested in the securities like stocks, shares, bonds or commodities. Mutual fund schemes charge a small percentage of your investment as fees each year for professional and expert management of your investment. So your risk of losing money through investments is reduced in compared to if you decide to invest directly in the market without having the requisite expertise. There are different kinds of mutual funds such as equity, debt and balanced funds. So, you can accelerate your wealth management goal by investing in different mutual fund schemes depending on the risk you can bear.

However, returns on a mutual fund are by no means guaranteed as they are subject to the performance of funds. If you want to switch from one fund to another, there is no such option available. The only way to protect your investment is to completely exit by paying an exit load and then pay an entry load again if you wish to re-invest. So, if your investment amount in mutual funds is huge, the net returns will get affected.

Public Provident Fund (PPF)

One of the safest debt instruments, PPF investment currently gives an annual interest of 8.75% on deposit amount between Rs500 to Rs1,50,000 every year. The interest and returns on maturity amount is not taxable. However, the downside is that there is a lock in period of 15 years. The only option is partial withdrawal after after completion of 5 years from the date of opening this account.

Fixed Deposits (FDs)

FDs are a safe investment for a conservative investor since it provides a fixed rate of interest and can be easily converted to cash in case of emergency. But, the actual benefits or income from fixed deposit are annulled by the increasing inflation and tax cut. Let’s take an example here. You invested Rs 1,00,000 in tax saving fixed deposits five years back.

Principal Amount Invested (A) 1,00,0000
Interest Rate (B) 10% per annum
Current Inflation Rate (C) 5%
Net Interest Yield (B – C) 4%

Though you will get returns @ 10%, effectively you will get only 4% after factoring in inflation. The final effective return would be even lesser after deducting tax.

Term Insurance Plans

A term Insurance plan is the purest and simplest insurance plan that provides a huge life insurance cover at a very low cost for the specified period of time. If the policyholder dies during the policy term, the death benefit (sum assured or life cover amount) is paid to the nominee. The premium as well as death benefit are tax-free. There is no maturity benefit, though. An investment in a term insurance plan is highly recommended for your peace of mind and to ensure financial security of your dependents after you are not around.

Unit Linked Insurance Plans (ULIPs)

ULIPs are a goal-based investment that provides the benefit of insurance protection with strong wealth creation opportunities. A part of money invested in ULIPs is directed towards your life cover and the residual portion is invested in equity, debt or balanced funds of your choice. Though the returns on your investment is market-linked, you have a control over it since you have the flexibility to switch funds from equity to debt or vice versa at no cost, as per your financial goals and market fluctuations.

ULIPs have given steady returns over the last few years. ULIPs with an aggressive fund allocation (50-75% of the portfolio in stocks) have risen to 28.62% from 9.73% in the last five years.

Ulips

Source

ULIPs have a greater tax advantage too. Under Section 80C of the Income Tax of India a deduction (maximum of Rs 1,50,000) from the taxable income of individual is provided for the premium paid on ULIPs. The capital gains, maturity benefit and death benefits are also exempted from tax under Section 10(10D). ULIPs from reputed private insurers like ICICI Prudential have proven performance and track record, thereby commanding a trust and respect of investors.

Ideally, your wealth portfolio should be a healthy mix of equity, debt, real estate and commodities. But, again how and where you invest depends on your wealth creation goals and risk-return trade-off you are willing to take off. What you must remember is that wealth creation is not an overnight phenomenon. You must be disciplined, systematic and committed in your wealth creation approach.

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The job of managing your personal finances can be time-consuming. You need to have some basic knowledge about finances, and review your situation periodically. If you make poor financial decisions, it can take years to recover from your mistakes. Use these tips from successful corporations to manage your finances.

Creating a cash reserve

Ideally, everyone should create a monthly budget. That budget should include a line item for savings. Everyone needs a cash reserve. The extra cash you accumulate can help you cover an unexpected expense.

Mohawk is an example of a company that maintains a good cash reserve. In business, the cash reserve can cover an expense or be used to take advantage of an opportunity.

When you create a budget, you can use whatever system works for you. It’s critical, however, that you put budget in writing. If you can look at a piece of paper or on a computer screen and see your budget, chances are you’ll make the effort to stick with it.

Create categories for each type of spending. You should label each spending category as either fixed or variable. Say, for example, that your monthly income is $4,000 after tax. You have fixed expenses (home loan, car payments) of $3,000 and variable costs (food, gas, entertainment) of $1,000.

Assume you want to save $150 per month. If you need to cut expenses to generate savings, review your variable expenses first. Maybe you can cut down on dining out and come up with the $150.

Diversify your investments

When your savings balance gets large enough, you may consider investing some of those dollars. When people consider investments, they normally think of stock and bonds.

Hamad Darwish Al Masah Capital explains that investors can now consider alternative investments. Alternative investments include real estate, commodities and other less traditional securities.

The important point is to diversify your holdings. If you diversify, you won’t be hugely affected by any single change in the investment markets.

Maintaining good credit

If you have a good credit rating, manage your borrowing so you keep that high rating. Make sure that you can afford the monthly principal and interest payments on any debt you incur. Ensure that your payments are on time, and that your credit report is accurate.

A high credit rating also provides advantages to a corporation. Standard and Poor’s (S&P) rates the creditworthiness of businesses. The highest S&P rating is AAA.  USA Today reports that only three US companies had a AAA credit rating in 2014.

Both individuals and companies with a high credit rating can borrow at lower interest rates. This reduces the cost of borrowing and makes loan repayment easier.

Borrowing alternatives

Sometimes, a business cannot borrow through a traditional bank. The interest rate on the bank loan may be much higher than the company wants to pay. Hamad Darwish of Al Masah Capital points out that investment firms can help companies raise capital through a loan or buy issuing stock.

Individuals also have choices if they cannot get a loan from a bank or credit union. Borrowers can find a company that specializes in loans to people with poor credit. You can get the financing you need, if you’ll willing to pay a higher interest rate.

Use these tips to monitor your personal finances. If you’re willing to invest some time and effort, you can improve your financial situation.

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