Only this morning I happened to chance upon a very instructive and informative video on the do's and don't's in relation to financial planning in general and wealth creation in particular. The video is recorded by the world-renowned Robert Kiyosaki and his associate. You can view this video for free by clicking on the link below:
Click here to watch the video...
Do post your comments on my blog if you have any, after viewing the video.
Friday, March 14, 2008
Thursday, March 6, 2008
Financial Planning: Save Money By Preparing and Analyzing A List Of Expenses
With the advent of shopping malls, the accessibility and affordability of technology, the rising costs associated with health care, servicing of loans, and the effect of rising inflation, it has become very difficult for one to spend less and save money for future use.
Current statistics indicate that there is a considerable decline, in percentage terms, on each bank account holder’s savings and also that there has been an increase in the average number of withdrawals per month, leaving people with little money to spend before the next salary credit hits their respective bank accounts.
Coupled with this statistic is the fact that retail outlets marketing a wide range of consumer products have reported a significant increase in the their respective sales revenue, thereby indicating that the age of consumerism is truly alive and kicking!
While these facts and a host of temptations are a commonplace scenario in the real world, there are many ways by which you can keep yourself from being sucked into the hype and in the process assist you in creating and developing your personal and unique habit of saving a few bucks from your monthly salary income. The following are some of the measures that you might find useful to adopt:-
Ø Avoid Compulsive Buying– Given enough money, 7 out of 10 people are easily tempted into buying a personal item they get attracted to in a store at a first glance.
In a simulated sociological study, people who originally planned on merely window-shopping ended up buying personal items in cases where they had their credit cards with them.
If you are doing window-shopping, limit your spending to a few bucks and try making your list the next time you plan on buying such items. Buy only the store items you need and abandon those that do not satisfy an immediate need.
Ø Budgeting – Along with your objective of saving money, it is also important to keep an organized and effective, yet reasonable budgeting technique. Budgeting helps to eliminate impulsive buying that would tend to build up during trips to the shopping mall, thereby enabling you to save money which you would otherwise have spent on items that are not really necessary. Shopping according to a list which is drawn up beforehand will certainly help in this saving process.
Ø Performing Price Comparison– The World Wide Web provides a great avenue for obtaining a checklist of prices on specific items that you plan on buying.
This will work very well for you if you are into bulk buying and plan on conducting your shopping activity in one place. This process will give you a good idea if the usual store from where you usually get all your everyday household needs actually offers you a reasonable price for specific products.
Ø Take All the Convenience At Home – Lunch, snacks, and major meals are something which you can prepare at home. If you are serious on saving money, you can prepare all this from home and get away with some amenities of the gut by replacing soda with water. This is not only beneficial to your pocket but does a great deal for your health as well.
Current statistics indicate that there is a considerable decline, in percentage terms, on each bank account holder’s savings and also that there has been an increase in the average number of withdrawals per month, leaving people with little money to spend before the next salary credit hits their respective bank accounts.
Coupled with this statistic is the fact that retail outlets marketing a wide range of consumer products have reported a significant increase in the their respective sales revenue, thereby indicating that the age of consumerism is truly alive and kicking!
While these facts and a host of temptations are a commonplace scenario in the real world, there are many ways by which you can keep yourself from being sucked into the hype and in the process assist you in creating and developing your personal and unique habit of saving a few bucks from your monthly salary income. The following are some of the measures that you might find useful to adopt:-
Ø Avoid Compulsive Buying– Given enough money, 7 out of 10 people are easily tempted into buying a personal item they get attracted to in a store at a first glance.
In a simulated sociological study, people who originally planned on merely window-shopping ended up buying personal items in cases where they had their credit cards with them.
If you are doing window-shopping, limit your spending to a few bucks and try making your list the next time you plan on buying such items. Buy only the store items you need and abandon those that do not satisfy an immediate need.
Ø Budgeting – Along with your objective of saving money, it is also important to keep an organized and effective, yet reasonable budgeting technique. Budgeting helps to eliminate impulsive buying that would tend to build up during trips to the shopping mall, thereby enabling you to save money which you would otherwise have spent on items that are not really necessary. Shopping according to a list which is drawn up beforehand will certainly help in this saving process.
Ø Performing Price Comparison– The World Wide Web provides a great avenue for obtaining a checklist of prices on specific items that you plan on buying.
This will work very well for you if you are into bulk buying and plan on conducting your shopping activity in one place. This process will give you a good idea if the usual store from where you usually get all your everyday household needs actually offers you a reasonable price for specific products.
Ø Take All the Convenience At Home – Lunch, snacks, and major meals are something which you can prepare at home. If you are serious on saving money, you can prepare all this from home and get away with some amenities of the gut by replacing soda with water. This is not only beneficial to your pocket but does a great deal for your health as well.
Monday, March 3, 2008
Financial Planning: Tips On Credit Card Usage
To some people, credit cards are the best things to happen since sliced bread. Having a credit card is indeed very convenient because it makes carrying a lot of cash unneccesary. Most of us will not leave home without taking our credit cards along with us. But, as with most things in life, the advantages of having a credit card(s) come with a price. Since you can always buy things without carrying cash around, you are always tempted to buy things on impulse which you might not necessarily need. If you have excellent control on your finances, then good for you. If you have a hard time managing your credit card, then the following pointers can help you:-
Get organized
First things first, obtain your credit card records to have a better idea of your spending habits. Be sure to double check the records for errors and ensure its accuracy. A good example would be to find out if you have outstanding debts that should not be there as well as the accuracy of the listing of your former and present address.
Evaluate your credit card
Go over your recent credit card records and look at the interest rates. Some credit card companies have promos wherein they offer lower interest rates for a period of time and this promo may already be over yet you have no idea and are already paying at a higher interest rate. Also take note of the membership fee which they charge annually since some have very high membership fees. Consider cancelling this if you are not using it frequently.
Pay on time
It is important to pay your bills on time since it can have a negative effect on your credit record or rating if you don't. You will also be able to avoid getting charged because of not paying on time. Try asking the credit card company to remove the overdue charge if you have forgotten to pay it on time for the first time.
Manage your debts
If you see that you have more debt than what you can manage comfortably, think ahead and plan out how you will repay it entirely or at least reduce it as far as possible. Devise a way to pay more than what is required of you so that you will have a reduced payment schedule. Prioritize the card that has the highest interest rate. Unless absolutely necessary, do not bring your credit card always when you go around since temptations abound.
Don't bite off more than you can chew
As the saying "don't bite off more than you can chew" goes, do not spend more than you can afford. True, a beautiful gold bracelet or a branded gold watch may give you moments of pleasure when you have the occasion to wear it, but the price tag may mean paying a lot for the next months. If you are bent on saving money when using your credit card, unnecessary items like jewelry and the like should be at the bottom of your considerations.
Get organized
First things first, obtain your credit card records to have a better idea of your spending habits. Be sure to double check the records for errors and ensure its accuracy. A good example would be to find out if you have outstanding debts that should not be there as well as the accuracy of the listing of your former and present address.
Evaluate your credit card
Go over your recent credit card records and look at the interest rates. Some credit card companies have promos wherein they offer lower interest rates for a period of time and this promo may already be over yet you have no idea and are already paying at a higher interest rate. Also take note of the membership fee which they charge annually since some have very high membership fees. Consider cancelling this if you are not using it frequently.
Pay on time
It is important to pay your bills on time since it can have a negative effect on your credit record or rating if you don't. You will also be able to avoid getting charged because of not paying on time. Try asking the credit card company to remove the overdue charge if you have forgotten to pay it on time for the first time.
Manage your debts
If you see that you have more debt than what you can manage comfortably, think ahead and plan out how you will repay it entirely or at least reduce it as far as possible. Devise a way to pay more than what is required of you so that you will have a reduced payment schedule. Prioritize the card that has the highest interest rate. Unless absolutely necessary, do not bring your credit card always when you go around since temptations abound.
Don't bite off more than you can chew
As the saying "don't bite off more than you can chew" goes, do not spend more than you can afford. True, a beautiful gold bracelet or a branded gold watch may give you moments of pleasure when you have the occasion to wear it, but the price tag may mean paying a lot for the next months. If you are bent on saving money when using your credit card, unnecessary items like jewelry and the like should be at the bottom of your considerations.
Thursday, February 28, 2008
Financial Planning: Ten Practical Tips For saving Money
Saving money is not really that difficult. The following are ten practical tips on saving money that you can easily put into practice without changing your lifestyle:-
1. Replace incandescent bulbs with compact fluorescent (CFL) bulbs. CFL bulbs consume 80% less energy than incandescent bulbs, but give the same illumination. Make sure to buy only lamps and bulbs that have the Energy Star rating to ensure quality compliance.
2. Make a list when going to the grocery and stick to it! Anything that is not on the list is not a “need”, but merely a “want”, so avoid busting your pockets for unnecessary items. Buy non-perishable consumables in bulk to benefit from bulk discounts.
3. Use coupons when available. Take the time and have the patience to clip and organize grocery coupons. When added together, savings from using all coupons in one grocery trip can be as much as $20-$30. Purchase dining and shopping coupons online and print them at home. Doing so can save you at least 50% on the face value of the coupons.
4. Buy online, whenever possible. Online stores pass their savings from rental costs and warehousing to the online consumer, thus they can afford as much as 70% off their rack price. When buying items online, Google it first together with the word, “discount code”. This can give you further reductions on the item you want to purchase. Try also online bidding: they offer at least 75% off the original purchase price, for practically new (slightly used!) items.
5. Take lunch to work. Buy potato chips and soda from the grocery and make a homemade sandwich and pack them in a brown bag.
6. Eat homemade dinners as often as possible. Plan menus that are practical and easy-to-cook to encourage eating at home. Save money by dining out only on special occasions.
7. Use everyday pantry items for skin and body care. Cucumbers, honey, milk, lemon, salt and baking soda are some items in your home that can also be used to take care of your skin.
8. Avoid shopping as a means of de-stressing. Try walking around the park or watching a movie instead.
9. Bring your own sodas and snacks when watching a movie. The cost of sodas and snacks are at least 25% higher in movie houses. Plus, homemade popcorn tastes much better: you can put on all the salt and butter you want!
10. Pay off your credit card balances each month and avoid finance charges. Better yet, use cash as much as possible, unless using plastic will give you a better deal (0% interest on appliance purchases, or cash rebates).
1. Replace incandescent bulbs with compact fluorescent (CFL) bulbs. CFL bulbs consume 80% less energy than incandescent bulbs, but give the same illumination. Make sure to buy only lamps and bulbs that have the Energy Star rating to ensure quality compliance.
2. Make a list when going to the grocery and stick to it! Anything that is not on the list is not a “need”, but merely a “want”, so avoid busting your pockets for unnecessary items. Buy non-perishable consumables in bulk to benefit from bulk discounts.
3. Use coupons when available. Take the time and have the patience to clip and organize grocery coupons. When added together, savings from using all coupons in one grocery trip can be as much as $20-$30. Purchase dining and shopping coupons online and print them at home. Doing so can save you at least 50% on the face value of the coupons.
4. Buy online, whenever possible. Online stores pass their savings from rental costs and warehousing to the online consumer, thus they can afford as much as 70% off their rack price. When buying items online, Google it first together with the word, “discount code”. This can give you further reductions on the item you want to purchase. Try also online bidding: they offer at least 75% off the original purchase price, for practically new (slightly used!) items.
5. Take lunch to work. Buy potato chips and soda from the grocery and make a homemade sandwich and pack them in a brown bag.
6. Eat homemade dinners as often as possible. Plan menus that are practical and easy-to-cook to encourage eating at home. Save money by dining out only on special occasions.
7. Use everyday pantry items for skin and body care. Cucumbers, honey, milk, lemon, salt and baking soda are some items in your home that can also be used to take care of your skin.
8. Avoid shopping as a means of de-stressing. Try walking around the park or watching a movie instead.
9. Bring your own sodas and snacks when watching a movie. The cost of sodas and snacks are at least 25% higher in movie houses. Plus, homemade popcorn tastes much better: you can put on all the salt and butter you want!
10. Pay off your credit card balances each month and avoid finance charges. Better yet, use cash as much as possible, unless using plastic will give you a better deal (0% interest on appliance purchases, or cash rebates).
Sunday, February 10, 2008
Financial Planning: Effective Ways of Saving Money
Four Measures That Can Help Make You Rich
Saving has always been a way of life for people who believe in the benefit of doing so. These people know that they have to save more money in order to create a more secure future.
However, as time goes by, more and more people find it hard to save money. They contend that saving is no longer a way of life but a resolution that they have to strictly adhere to just to set aside a sum of money.
Some people even insist that it is no longer possible for a person to save more money because most of them are already living from paycheck to paycheck. With all the high-prices of commodities these days, saving more money is no longer workable. But the truth is that people can indeed save more.
How? Here is a list of some innovative ways that will let you save more money:
1. Save some percentage from your salary
Most money-savers automatically take at least 30% from their salaries and deposit the sum into their respective savings accounts. The basic concept here is that most of us spend whatever amount we have on our paycheck, and maybe even more. If you are able to limit that amount, your expenses will understandably get smaller.
2. Pay for everything in cash
Credit cards have always been a way of life for most consumers. The problem is that they become so comfortable with the 'facility' afforded by credit cards that they tend to spend everything on credit. In fact, statistics show that the average family has an average outstanding balance on their credit cards amounting to $7,000. And they even pay almost $1,000 in each year just on the interest charges alone.
Hence, because of this convenience of credit-driven shopping, they tend to lose track of their expenses and accumulate more payables than they can afford to pay off.
3. Set goals
Create goals that you are serious in achieving and be single-minded about their achievement. If there is a certain amount involved, be specific with the amount, like saying “I will save $5,000 in a year and not around $5,000.” Try to set your goals based on your priorities. Set a target period for every goal.
4. Check your company’s retirement plan
With your employer plan such as the 401(k) or the 403(b), you can definitely save more money for the future. Here, your company will deduct a percentage of your salary from each paycheck and invest the amount in your choice of instruments—predominantly mutual funds.
The bottom line is that saving is not just a way of life or a resolution. In the final analysis, it is the ultimate gratification that you get as the fruit of your labor.
Saving has always been a way of life for people who believe in the benefit of doing so. These people know that they have to save more money in order to create a more secure future.
However, as time goes by, more and more people find it hard to save money. They contend that saving is no longer a way of life but a resolution that they have to strictly adhere to just to set aside a sum of money.
Some people even insist that it is no longer possible for a person to save more money because most of them are already living from paycheck to paycheck. With all the high-prices of commodities these days, saving more money is no longer workable. But the truth is that people can indeed save more.
How? Here is a list of some innovative ways that will let you save more money:
1. Save some percentage from your salary
Most money-savers automatically take at least 30% from their salaries and deposit the sum into their respective savings accounts. The basic concept here is that most of us spend whatever amount we have on our paycheck, and maybe even more. If you are able to limit that amount, your expenses will understandably get smaller.
2. Pay for everything in cash
Credit cards have always been a way of life for most consumers. The problem is that they become so comfortable with the 'facility' afforded by credit cards that they tend to spend everything on credit. In fact, statistics show that the average family has an average outstanding balance on their credit cards amounting to $7,000. And they even pay almost $1,000 in each year just on the interest charges alone.
Hence, because of this convenience of credit-driven shopping, they tend to lose track of their expenses and accumulate more payables than they can afford to pay off.
3. Set goals
Create goals that you are serious in achieving and be single-minded about their achievement. If there is a certain amount involved, be specific with the amount, like saying “I will save $5,000 in a year and not around $5,000.” Try to set your goals based on your priorities. Set a target period for every goal.
4. Check your company’s retirement plan
With your employer plan such as the 401(k) or the 403(b), you can definitely save more money for the future. Here, your company will deduct a percentage of your salary from each paycheck and invest the amount in your choice of instruments—predominantly mutual funds.
The bottom line is that saving is not just a way of life or a resolution. In the final analysis, it is the ultimate gratification that you get as the fruit of your labor.
Saturday, January 26, 2008
Financial Planning: Effective Budgeting Tools And Techniques
Budgeting your monthly expenses in order to get the greatest return on your income (and perhaps, even put aside some for saving!) doesn’t have to be extremely hard.
Various budgeting programs are available for use. Money management programs provide you with a usual package that allows you to enter your cash inflows and outflows, categorizes your expenditures, and at times, presents to you analysis of your spending patterns. Most of these programs also allow you to input the various payments you have to make monthly, and subsequently track if you have paid your dues on time. Furthermore, some programs even offer you a tax form draft that will help you make sure that you are not missing out on any dues or any deductibles, for that matter.
Another budgeting tool that you can utilize are coupons. Certain stores and magazines give away coupons that you can use to get discounts on various products. Should there be a need to purchase a particular product for which you have a coupon, you will save a fraction of the regular purchase price.
Keeping lists on hand —whether on a piece of paper, on your cellular phone, or on your personal digital assistant (PDA) -- will help you maintain focus on what you have to buy, and in effect, keep track of the purchases that you do make. A classic example is your regular grocery trip. Prior to making the trip, plan out the week’s entire menu and identify what food items and materials you need to purchase that are unavailable in your pantry. Then, make a list of other household items that you’ve run out of (or are eventually going to run out of before you can make the next trip to the grocery). Armed with these lists, you can go to the grocery and know exactly where to go and what you’re going to buy. Without these lists, you will walk idly along aisles, and will likely pick up various food items that you won’t likely need in the immediate future, or already have at home.
A filing system is perhaps one of the best budgeting tools you can have in your home. With simple, labeled file folders, you can put together your bills, your receipts, and whatever bank documents are issued to you when you save or pay. By putting together your bills, your credit card receipts, and the like, you are able to keep track of how much you owe and when your payments are due. For those of you who use the computer regularly, it is a good idea to build a spreadsheet to keep track of your weekly or monthly spending.
Effective budgeting tools are those that best address your needs as a consumer. Create your own budgeting tool or find a program to do it for you—just make sure it suits your lifestyle.
Various budgeting programs are available for use. Money management programs provide you with a usual package that allows you to enter your cash inflows and outflows, categorizes your expenditures, and at times, presents to you analysis of your spending patterns. Most of these programs also allow you to input the various payments you have to make monthly, and subsequently track if you have paid your dues on time. Furthermore, some programs even offer you a tax form draft that will help you make sure that you are not missing out on any dues or any deductibles, for that matter.
Another budgeting tool that you can utilize are coupons. Certain stores and magazines give away coupons that you can use to get discounts on various products. Should there be a need to purchase a particular product for which you have a coupon, you will save a fraction of the regular purchase price.
Keeping lists on hand —whether on a piece of paper, on your cellular phone, or on your personal digital assistant (PDA) -- will help you maintain focus on what you have to buy, and in effect, keep track of the purchases that you do make. A classic example is your regular grocery trip. Prior to making the trip, plan out the week’s entire menu and identify what food items and materials you need to purchase that are unavailable in your pantry. Then, make a list of other household items that you’ve run out of (or are eventually going to run out of before you can make the next trip to the grocery). Armed with these lists, you can go to the grocery and know exactly where to go and what you’re going to buy. Without these lists, you will walk idly along aisles, and will likely pick up various food items that you won’t likely need in the immediate future, or already have at home.
A filing system is perhaps one of the best budgeting tools you can have in your home. With simple, labeled file folders, you can put together your bills, your receipts, and whatever bank documents are issued to you when you save or pay. By putting together your bills, your credit card receipts, and the like, you are able to keep track of how much you owe and when your payments are due. For those of you who use the computer regularly, it is a good idea to build a spreadsheet to keep track of your weekly or monthly spending.
Effective budgeting tools are those that best address your needs as a consumer. Create your own budgeting tool or find a program to do it for you—just make sure it suits your lifestyle.
Friday, January 25, 2008
Sensible Spending Habits For Financial Planning
To get on the right path in terms of effectively planning for your financial future, you have to adopt a lifestyle that will enable to save an adequate amount on a consistent basis, at least initially, so that you will have the resources to allocate to an investment plan.
Over the longer term, if you are guided by the right principles and reasons in deciding to adopt what I would call a financially sensible lifestyle, the day will surely come when you will look back with pride and satisfaction on the rich rewards that will accrue to you.
To start off, try out the following tips to see if you can take them on board; if you find them to be practicable, then incorporate them into your lifestyle.
1. Eating Out - Having gimmicks with friends on a Friday night is fine if you do it once in a while. But this can be expensive if you add them up at the end of the month.
2. Clothing - Naturally, if you are the kind of person who adores signature and designer clothes, do not expect that there will be something left of your take home pay. Instead of being trendy, wear clothes that can easily be matched with your other clothes.
3. Own Home - If you are planning to move out and find a place to settle, do not be overwhelmed by the excitement, instead be practical. As a start, buy a smaller house or try other ways like rent-to-own, do-it-yourself arrangements, and owner-financing.
4. Buying Your Own Car - Shy away from sports cars or SUVs. Just stick to your purpose for buying a car, which is to transport you anywhere you need to go. Check out also program cars like a new car warranty. Maybe this is not just the best time to replace your car with a new one.
5. Shopping for Groceries - As much as possible do not go with items that are branded. Choose non-brands or "house brands" and try looking for items on the highest or lowest shelves for best prices. Grab the opportunity and shop during sales or use coupons.
6. Family Out - There are inexpensive ways to bond with your family and be entertained like going to libraries, local parks, malling, picnics, visit friends and local church.
7. Buying School Supplies - Stock school supplies at home and do not buy anything fancy.
8. Be contented with what you have and try to live within what you earn.
9. Plan your Child’s College Education - Teach them the ways to be independent and self-supporting by encouraging them to apply for scholarships and “on campus jobs”.
10. Be Aware of your Financial Limitations
11. Avoid Financial Pitfalls by Planning - Have always a budget plan so you would avoid impulsive buying.
Over the longer term, if you are guided by the right principles and reasons in deciding to adopt what I would call a financially sensible lifestyle, the day will surely come when you will look back with pride and satisfaction on the rich rewards that will accrue to you.
To start off, try out the following tips to see if you can take them on board; if you find them to be practicable, then incorporate them into your lifestyle.
1. Eating Out - Having gimmicks with friends on a Friday night is fine if you do it once in a while. But this can be expensive if you add them up at the end of the month.
2. Clothing - Naturally, if you are the kind of person who adores signature and designer clothes, do not expect that there will be something left of your take home pay. Instead of being trendy, wear clothes that can easily be matched with your other clothes.
3. Own Home - If you are planning to move out and find a place to settle, do not be overwhelmed by the excitement, instead be practical. As a start, buy a smaller house or try other ways like rent-to-own, do-it-yourself arrangements, and owner-financing.
4. Buying Your Own Car - Shy away from sports cars or SUVs. Just stick to your purpose for buying a car, which is to transport you anywhere you need to go. Check out also program cars like a new car warranty. Maybe this is not just the best time to replace your car with a new one.
5. Shopping for Groceries - As much as possible do not go with items that are branded. Choose non-brands or "house brands" and try looking for items on the highest or lowest shelves for best prices. Grab the opportunity and shop during sales or use coupons.
6. Family Out - There are inexpensive ways to bond with your family and be entertained like going to libraries, local parks, malling, picnics, visit friends and local church.
7. Buying School Supplies - Stock school supplies at home and do not buy anything fancy.
8. Be contented with what you have and try to live within what you earn.
9. Plan your Child’s College Education - Teach them the ways to be independent and self-supporting by encouraging them to apply for scholarships and “on campus jobs”.
10. Be Aware of your Financial Limitations
11. Avoid Financial Pitfalls by Planning - Have always a budget plan so you would avoid impulsive buying.
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