Financial Planning


It’s virtually impossible to know what size home you can afford if you aren’t fully aware of how much money you are earning and how much you are spending each month.

Start with your income: How much do you bring home after taxes and retirement plan contributions?

Next, look at your expenses: What are your necessary expenses? How much are you paying each month toward your debt? What additional expenses do you have that wouldn’t be deemed “necessary?” How much money do you have left (if any)?

This will help you see how much breathing room is in your current budget, what expenses might be on the chopping block and the space you have for additional home and mortgage expenses when buying a home.
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emergency-fund

In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

I echo the idea of treating the emergency fund as a bill, put the money away and don’t be tempted by the latest sale. Success at building an emergency fund depends on consistency of saving money on a regular basis and keeping this money separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point.

The size of the special savings account will depend on your personal situation. I always advice my clients to keep between three to six months salary in the reserve. But you will have to decide on an appropriate amount based factors such as your Dependants and fixed monthly expenses.

financial-planning
Most of us are always striving to save money, but it can be very difficult to stick to strict saving efforts. However, in the spirit of New Year’s resolutions, January is a fine time to re-evaluate your financial strategy and design a few ways to generate savings. With that in mind, here are ten miscellaneous tips for increasing your savings this year.

    1. 1. Turn Off The Water – Reducing your water waste can significantly bring down your water bill. Additionally, it’s not difficult to do. You can reduce the amount of water you use at home simply by turning off the tap while you wash dishes or brush your teeth, and taking shorter showers.
    1. 2. Turn Off The Lights – Similar to water waste, electricity is easy to cut back on, and can save you money on your bills. Keep lights and other electronics turned off when not needed, and you may be shocked at the positive financial effect.
    1. 3. Keep Financial Records – This little trick is common among university students, but can serve anyone just as well. By simply writing down all of your expenses, you may find that you are far less likely to over-spend.
    1. 4. Shop Online – Internet shopping has become an extremely broad experience offering a massive variety of products and services. And, you can often find prices online so much better than those in stores that you save significant amounts.
    1. 5. Track Your Subscriptions – These days, it is so easy to sign up for services and subscriptions online that many people lose track of their subscriptions and pay monthly fees for services they don’t use. Avoid this problem by carefully tracking your subscription expenses.
    1. 6. Invest To Save – Most investment opportunities are geared toward generating income. However, you can also look to certain types of investments to preserve and protect your existing finances. For example, try something like BullionVault, where you can purchase gold bullion – often seen as a means of saving your money from potential deflation of currency value.
    1. 7. Get More Rest – This may not seem financially related, but it makes a great deal of sense. When you are better rested, your body will not feel the need for external energy sources, which means you will likely spend less on snacks, sodas, coffee, etc.
    1. 8. Filter Your Water – Purchasing a filter provides you with clean, drinkable water at home, which in turn saves you from having to buy alternative beverages such as bottled water, juices, etc. You don’t need to drink only water, of course, but a filter can save money on a large portion of grocery costs.
    1. 9. Eat At Home – Leading a busy life, it is always tempting to simply grab food outside of the house. In most cases, however, this adds up over time, whereas preparing and eating food from the store can be more financially efficient.
    1. 10. Sell Old Items – Finally, consider selling old items. From used books, to outdated electronics, these extra sales can boost your finances each month, and contribute to savings at no cost.

This guest post was written by freelancer Brad Nelson, on behalf of BullionVault.

Financial advisors are so uncomfortable speaking about life insurance that more than half, 56 percent, simply don’t do it, according to a recent survey by Saybrus Partners Inc.

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Further, almost one-fifth (18%) said they were “uncomfortable” or “very uncomfortable” recommending life insurance policies to their clients. Just a third (34%) of the financial advisors surveyed said they were “very comfortable” recommending life insurance to their clients.

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In the United States an annuity contract is created when an insured party, usually an individual, pays a life insurance company a single premium that will later be distributed back to the insured party over time. Annuity contracts traditionally provide a guaranteed distribution of income over time, until the death of the person or persons named in the contract or until a final date, whichever comes first. However, the majority of modern annuity customers use annuities only to accumulate funds free of income and capital gains taxes and to later take lump-sum withdrawals without using the guaranteed-income-for-life feature.

Annuity contracts in the United States are defined by the Internal Revenue Code and regulated by the individual states. Variable annuities have features of both life insurance and investment products. In the U.S., annuity insurance may be issued only by life insurance companies, although private annuity contracts may be arranged between donors to non-profits to reduce taxes. Insurance companies are regulated by the states, so contracts or options that may be available in some states may not be available in others. Their federal tax treatment, however, is governed by the Internal Revenue Code. Variable annuities are regulated by the Securities and Exchange Commission and the sale of variable annuities is overseen by the Financial Industry Regulatory Authority (FINRA) (the largest non-governmental regulator for all securities firms doing business in the United States).
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Here are a few money management pointers for women. Are there any aha moments for you when you read this list? Post your comment!

Tip 1: Balancing your cheque book is not rocket science
Contrary to what women believe or in many cases are lead to believe by the male influences in their lives, it is not difficult to work out personal finances. The basic principle is not unbelievably complex. What is paid into your account should cover what you pay out.

Spend what you have. In fact preferably not all you have, put some away. But start with balancing the incoming and outgoing as your first baby step towards financial intelligence.

And if that means cutting up the credit cards, then do so right now. If you cannot afford to pay the full amount due on your credit card at the end of the month, then you have a problem. You are trying to eat more than you have.

2) Take care of your own money
In line with balancing your own cheque book, let’s also understand then that you do not need to abdicate the money management function to anybody else. Regardless of what your father, uncle, partner et al says, guess what – you can do it yourself.

Just because you are a woman does not mean you are incapacitated, even handicapped, when it comes to working with your money. This you might have heard your father say often. Mother doesn’t know how to manage money; I can’t leave it to her.

Do not believe this. You can do the money sums. Trust yourself on this score. And in case you might not be able to add up to ten, go and do a course and learn.

3) Treat your money with respect
Where does it say in the handbook on life that you should throw your money at rubbish? You don’t need that expensive hair cut, the designer jeans, the brand spanking new car.
Because guess what. Nobody cares.
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fortunewatch.com

The mantra of the times is cost cutting. The axe of cost cutting invariably falls on the employees. It is either through wage reduction, reduced bonuses, reduction of other benefits, reduced work hours or in a worst case scenario in the form job losses.

In most countries unemployment rates are hitting close to double digits, the worst case scenario might soon become a reality for anybody including you. In such a situation, it is imperative that you should have a plan B ready.

Instead of waiting for a surprise and acting re actively, it is important for you do a realistic assessment of your current situation.

Each and every one of you must have an understanding of your employer’s financial situation and strategy, your own function/department current state and whether there is any danger of retrenchment at your level. Once you access the macro and micro level picture, you need to play your next steps accordingly.

You may not have a choice but to look out for alternate employment if you feel that you may be in the firing line. It may not be easy in the current situation. However the current economic situation gives you an excellent opportunity to do what you always wanted to do.

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Everyone I know is sick of this recession, and sick of hearing about this recession. For one, the media’s attention to the global financial situation is depressing. But as many have pointed out, we are in this situation because of our own devices. On the individual level, poor financial and debt management, have exacerbated outside factors such as the housing market collapse and high rates of unemployment. For others, indiscriminate consumer debt has led to a number of individual crises. But in such a climate, there is a lot that can be learned. While it would have benefited everyone to know this several years ago, here are twelve personal financial lessons that can and should be learned during this recession.

Learn How to Plan Ahead
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It’s no secret that poor planning contributed to why so many people are currently in untenable financial situations. Don’t Panic. Figure out where you are at, where you want to be and put in place a realistic plan for getting there. The majority of businesses without plans in place before they start operations do not succeed. So if you are serious about creating a way to get ahead, or even just caught up, this step could not be more necessary. Unique circumstances will come up and cause you to stray from your plans temporarily, but structure is necessary in order to monitor your progress, and stay focused.

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Our schools teach the fundamentals we all love; reading, writing, math, science and history. What concerns me is our school system lacks some of the ‘street smart’ skills that kids will need to be those successful leaders, healers and entrepreneurs.

As parents, we must take teach our children ‘money smarts’.

Can you imagine how empowered you would be if your parents taught you how to balance a checkbook, invest in the stock market, manage credit card debt, start a business, or the power of compounding interest?

If you were one of the lucky few whose parents did teach you money skills, consider yourself blessed. The present economic situation is a perfect time to teach our kids the importance of money management and the need to respect money for what it is, and isn’t.

So, where do we start? With the basics. Depending upon your child’s age, you can start with talking about money. Most of us don’t discuss the family’s financial situation at the dinner table. I propose you do. I think it’s important that children understand what is happening, good or bad, with the money being earned.

Don’t get me wrong here; I’m not suggesting you tell your kids your annual income or the balance of your investment portfolio. What I am suggesting is to bring the kids into conversations regarding ways to save, creative ways to earn additional money and what to spend that money on. Involve them with decisions on vacations, donating to a charity or cause, or how they plan to buy their first car.
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The Internet is full of wonderful information, and much of this information can be found in ebooks. Whether you’re looking for guidance on feng shui, or just want to know how to save money, there’s an ebook out there for you. Here you’ll find a great collection of ebooks available online for free.

Learn about a wide variety of financial issues and advice in these ebooks.

  1. 66 Ways to Save Money: Learn about practical ways to cut costs in your daily life with this ebook.
  2. Estate Planning: Find out why a will is so important and how you can prepare one, plus plenty of other helpful details for estate planning.
  3. Ten Questions to Ask When Choosing a Financial Planner: Read this ebook to know what you should ask when looking for a professional to help you with your money.
  4. 7 Steps to Eliminate Debt: Take control of and eliminate your debt by following the steps outlined in this ebook.
  5. Living Trust Offers: The FTC commision’s pamphlet explains the details of living trusts and how you can protect yourself from estate planning scams.
  6. Get the Facts on Saving and Investing: This SEC document will help you learn how to save and invest properly.
  7. Simple Strategies for Managing Your Money: This FDIC ebook’s checklists will help you get financially fit and avoid scams.
  8. Building a Better Credit Report: In this ebook, you’ll learn about methods for legally improving your credit score, spotting scams, and dealing with debt.
  9. What You Should Know About Buying Life Insurance: In this pamphlet, you’ll find out about all of the types of life insurance, plus tips for choosing the right policy.
  10. How SIPC Protects You: Read this document to see how the Securities Investor Protection Corproration will help return your assets if your brokerage firm goes under.
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