How to Stop Spending Money

Posted on August 27, 2011 by Bimal Bhatt

Many people have tried very hard to budget and save money but very few of them have succeeded, this is due to their spending habits. No matter how much you earn if you are a spendthrift then you will not save much money. If you really want to save money and make your financial plans come true then you have to stop spending money. It is not difficult to stop yourself from spending money if you learn to control your expenses and are aware where your money is going. If you are spending more then you earn then you will be in a big financial crisis and your future will not be secured. Lack of money will force you to take debts and once you are in debt it is very difficult to get rid of it.

So you see there are many problems if you do not control your spending. The only way to stop spending is to stop to shop. If you are a shopoholic then you have to learn to stop spending money on unnecessary shopping. Here are some important tips that will help you stop spending money:

1)  Check the stock:
Whenever you decide to go for shopping whether it is for food, clothing, shoes or any other thing, the first thing you must do is to check the stock at home. Open your wardrobe and then decide whether you really need more clothes, check your fridge or kitchen cupboard to see if there is enough food. By doing this you will realize that there is really no need to go for shopping and thus save money.

2)  Stop use of credit cards:
Credit cards will force you to spend more than you can afford. Make payments only by cash or debit cards, in this way you will know how much money you are spending. Avoid using your department and store credit cards, so you will not get coupons on your monthly credit card bills and you will not spend on shopping.

3)  Shop only when you are in a good mood:
Whenever you shop when you are depressed or bored you tend to spend more so avoid shopping when your are not in a good mood. A good state of mind will help you decide whether you really need to buy and also help you take wise shopping decisions.

4)  Make a list:
Whenever you go for shopping make a list of all the things that you need to purchase, this will help you get only the necessary things. Once you are in the shop concentrate only on buying the items on the list, do not get tempted by the things on display. Make sure you go to the right place for purchasing items, like if you want to buy vegetables go to the green grocer only and do not go to a mall or departmental store, here you will tempted to buy things which are not required.

5)  Avoid shopping with shopoholics:
Shopping with a shopoholic will influence your shopping and you will also buy more than required. Always go for shopping with a person who is a wise spender and does not want to spend money. Shop with a frugal friend who will not allow you to spend more.

6)  Pay your bills before you go for shopping:
Whenever you decide to go for shopping first pay your pending credit card bills, this will make you realize how much money you have already spend. This will help you curtail your desire to spend money.

7)  Go shopping with a man:
it is generally found that men are not very good  at shopping and therefore they avoid shopping. So if possible take your spouse with you for shopping, they will not allow you to walk down the aisles in the store and get tempted to buy things. Men usually go to the shop buy the required item, pay the bill and check out, this habit will help you stop spending more money.

8 ) Do not shop for fun:
Do not shop to kill time, there are many things which you can do when you have ample spare time you can read books, watch TV, clean your house, arrange your cupboard etc, so do not go for shopping whenever you have time. Also shopping for fun will result in you spending on unnecessary things and waste money.

Other than the above tips to stop spending you can also visit sites or read books on frugal living that will guide you to spend less and save more.

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Frugal Party Ideas

Posted on August 26, 2011 by Bimal Bhatt

There are many people in this world living a frugal lifestyle and they are really saving a lot of money. Frugal living teaches you to live within your financial limits. It help you differentiate between your needs and wants. It does not prohibit you from enjoying the luxuries of life but teaches you to enjoy it without spending much. When you are living a frugal life you are aware where your money is going and therefore have full control over their expenses. Frugal living is the need of the hour as the economic conditions are uncertain and prices of all the things are rising. If you are not use to living a frugal life then you are bound to face certain financial difficulties in future.

You can learn many ideas on spending less money and still enjoy your life. You can implement simple money saving ideas in all areas of life whether it is your home or office or any place. Even when organizing a party you can use frugal party ideas which will help you save more money. You can save money on food, entertainment, gifts and even the location of the party if you learn these frugal party saving ideas.

1)  Location of the party:
If you own a big house then organizing the party at home will be the cheapest and best option, since all the guest know your place and it will be easy to organize things for the party if the party is at home. You will save money on rent, lighting, music, decorations and even expenses on travel. If your house is not big then hosting the party at a friends place or at a place close to your house or a club will be advisable.

2)  Do not decorate:
If you omit this option then you can save more money for better things for the party. It is not important to decorate the party place unless it is a birthday party for kids as no one will remember the decoration. In a party people are more interested in drinks and food.

3)  Ask friends to contribute:
If it is possible you can ask your friends to co-host the party or contribute. Arranging foods and drinks can be expensive so you can also ask them to bring drinks or food or deserts which ever is convenient. Asking their help for arranging the table or preparing drinks is a good idea, by doing so you will save expenses on helpers or bartenders.

4)  Plan your menu:
Plan your menu according to the vegetables and fruits available according to the season or available on sale in your grocery store, you will get the things cheaper. For example if there is a scheme of buy one get one free on ready to eat packets of food then use them in your menu the same applies to soft drinks.

5)  Skip paper plates and glasses:
If you are hosting the party at your house then do not use paper plates and glasses instead use your own utensils. This will save you the cost of plates and your utensils can be reused after cleaning.

6)  Save on drinks:
Do not use cans of soda or soft drinks instead use bottles, this will save a lot of money, people often leave drinks in their cans and forget about it but if they use glasses they are likely to empty it.

7)  Make a short list of guests:
In many parties there are so many people that you have no time to meet and talk to all of them. It is better to invite only few close people for party in this way you will save money and will attend to all of them.

8)  Save on food and snacks:
Prepare the menu in such a way that the leftover food can be reused. Do not make too much food or waste money on preparing too much food.

9)  Save on drinks:
Buy drinks which are not very expensive and can be given to all the guest from all age groups. Ask your store owner if you can return the unused bottles of drinks to the store this will save money and you will not have to consume the leftover bottles.

10)  Limit the party time:
Let your guests know that the party is not for unlimited hours so they have to come and leave on time.

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Holiday Shopping Tips

Posted on August 25, 2011 by Bimal Bhatt

You have been saving for a long time to buy things during the holiday season but you find that your shopping bills always go over your budget. This is the case with many people around the world, in spite of having a list of things to be purchased you often spend more on holiday shopping. Sometimes the holiday expenses increase so much that you find it difficult to pay them later and may be in debt till the next season. The enjoyment and experience of the holiday fades away when you have to pay the bills.

The following holiday shopping tips will help you save money:

1)    Use Coupons :
Some retailers offer coupons if you purchase more quantity or buy a product which has a coupon offer for another product. The coupon may offer a discount or may give you a certain amount of money off on purchase of another product. Use this facility offered by the retailers during the holiday season and save money.

2)    Bulk Buying:
Things of daily use if bought in bulk will cost you much cheaper than the retail prices. Also if you purchase multiple products from the same retailer then you have an advantage of getting discounts or coupons. There is always a benefit of saving if you buy goods in large quantities.

3)    Get free shipping:
Most of the brands offer free shipping during the holiday season. Check out the sites for free shipping codes for immediate, priority shipping.

4)    Use credit cards:
Whenever you do holiday shopping use credit cards, they are very convenient and most of the companies offer discounts on credit card purchase. Specially for online shopping credit card payment is advisable. There are many advantages of credit card payment like it provides consumer protection, for example if the goods delivered are defective or not in a condition as agreed then you have the right to send it back to the company and stop the payment. It is difficult to get the money back from the company if the payment is made by check. Many credit cards have a tie up with companies where they provide services like exchange , replace or repair and extend warranty of goods purchased. This is really beneficial in case of electronic items and shipping delicate items.

5)    Use gift cards:
If you have unused gift cards , you can now use the same and save money. When ever you buy gift cards for a person make sure that you do not expose the security number on the cards, anybody can write down the number of the card and make purchase on it. Buy gift cards with no issue fees or expiry dates or maintenance fees. If at all you receive a gift card as a gift do not wait, if possible use it immediately to take advantage of holiday discounts.

6)    Shop around:
Whenever you want to buy any product research the product either on the internet or through friends or relatives. This will give you an idea of the correct price of the product. Many retailers give discounts and offer the product as less price during the holiday season this information will be available on their site. They also offer free home delivery of goods so to save money on parking and cost of traveling all the way to the store you can shop online and get free shipping.

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Debit Card Or Credit Card

Posted on August 24, 2011 by Bimal Bhatt

In the olden days people used money for all their purchases but with the invent of plastic money the use of debit and credit card has gained popularity. A debit card and a credit card is very easy and convenient to use. You do not have to pay any cash for your purchases. A debit card is an electronic card issued by a bank which allows its client to pay for their purchases without actually paying cash. The client does not have to remove cash from their accounts , the amount of payment is directly debited from the client’s  account. It removes the need for a check or actual cash. A credit card is also an electronic card issued by a bank or a financial company which gives the card holder the option to borrow funds for making purchases. A credit card charges interest and are use as short term loans. A borrowing limit is pre set for a client according to the credit rating and interest starts one month after the purchase is made. Credit cards are widely accepted and therefore they are the most common form of payment around the world.

An individual may often get confused as to which card is more useful a credit card or a debit card. Though the working of both the cards seems similar they are actually quite different in their working and the services they offer. It is therefore important to understand the working and advantages of both the cards to help you select which one is more useful:

Credit Card:
A credit card allows you to borrow money making purchases. The amount of purchases is given as a loan to the credit card customer. The amount of purchase is not directly debited from your account , instead a bill is sent to you every month for all your purchases during the month. You have a choice to either pay the bill amount in full or part. If you pay part amount of the bill then you will be charged interest on the balance  amount. Credit cards gives you the facility to make payment for big purchases when you do not have enough cash in your account. You need not have an account or money in your account and still make use of a credit card as the amount is actually a loan given by the credit card company which you have to pay later. This is indeed a blessing for people short of money. However this blessing can turn into a curse if you are not disciplined and spend beyond your limits.

Before using a credit card you must understand the terms used and the interest charged by the credit card company. Understand the interest rate for using the banks money and find out if there is any grace period for making full payment. Read the fine print and understand the conditions attached to the card. There are a variety of credit cards available like gold cards and platinum card  which have higher credit limits. So understand the conditions attached to each one and then decide which one is for you.

Debit Card :
A debit card can also be used for making purchases but it does not give you a loan. When you use a debit card for purchases, the bill amount is actually debited from your account. There is no loan given by the bank like a credit card. If there is no balance in your account then you cannot make any purchases using a debit card. A debit card can also be used as a ATM card for withdrawing cash from your account and for carrying out  banking transactions. You do not have to pay any monthly bills or interests for your purchases. Since there is no credit available with a debit card, there is also no interest or penalty for not making timely payment. When you use a debit card you know how much money you are spending, so you can control your spending. The amount of purchase is directly debited from your account therefore a debit card is more convenient then a credit card.

As far as security is concerned a debit card is less secured as it is directly linked to your account. So in case of theft or fraud anybody can use your debit card and use the money available in your account. You have to be very careful while using a debit card. When using a credit card you have to be careful about its interest rates charges and penalties. Overuse of credit cards can lead to debts and if these debts are not handled properly you can be debt ridden within no time. Debit cards are free from debt since there is no credit given on its usage.

Many people do not prefer using credit cards because of fear of taking a loan, so the popularity of debit card is increasing faster. However if you do not have cash in our account then it becomes difficult to make a payment in case of emergency, in this situation a credit card is very useful. Using a credit or a debit car depends upon the individual’s financial requirements. If you think that you have enough money in your savings account then you can use a debit card and when you want a loan for a short period then using a credit card is convenient. So if you take my advice keep both debit and credit card and  use it as the situation demands. Make sure you do not overuse any of these cards as none of these cards encourage saving money.

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Managing Money After College

Posted on August 23, 2011 by Bimal Bhatt

As a child you are very carefree since all your needs are satisfied by your parents but as your grow up you will find that you have to look after yourself and make your own adjustments as far as money is concerned. Your parents provide for all your financial requirements till  the time you are in college but after you complete your education you have to settle down in life. Many of you may have a job in hand , some of you have to search for work, all these are small challenges that you will have to face once you are out of college. The most important challenge after your college life is to manage your money. Most of the students are not use to handling their own finances so they find it very difficult to manage their money after college. Till now their finances were managed by their parents but now they are grown up and want to start their career so it is their responsibility to handle money wisely.

The main expenses during college life were food, books, entertainment etc. but after college you cannot spend the money you use to, you have to spend money only on necessary things. Some student feel free to spend money once they are out of college and thus go on a spending spree. This attitude is very dangerous and you can be trapped in the debt trap even before you start your life out of the college. So consider certain important points to manage money after college:

1)    Do not purchase new cars or any expensive gadgets:
Most students after passing out of the college want to enjoy their life they therefore want to purchase expensive items for their entertainment. They feel it is their right to enjoy life after years of hard work in school. They generally go for new cars and expensive gadgets which are easily available on EMI’s, however it is wise that you buy these things only if you have the full amount to purchase. If you purchase expensive things on credit then you will be in debt for a  number of years. Since you may not have enough money to repay these debts you may further fall into debt which is very dangerous. Save money from your income till you have enough for purchasing a car or any other item.

2)    Minimize the use of credit card:
Credit card overuse is the root cause for most of the debts, so limit the use of credit cards. Use credit cards only in case of emergencies. If you have money in your savings account then use this money for purchasing things. Cash payment is a wise form of payment specially if you are fresh out of college and are not earning enough money. In case if you use a credit card make sure you make the pay the balances in full, the credit card debt may appear small in the beginning but it may increase rapidly if ignored.

3)    Repay your debt as soon as possible:
Being in debt is not a good thing specially if you are out of college and just starting your career. So save some money and repay all your debts immediately. This is the right time to repay your debts as you do not have any responsibilities with you. Create a debt payment plan and repay all your debts.

4)    Start earning:
Enjoying after college is good but do not extend this period for long. You have to start searching for a good job and start earning as soon as possible.  Many graduates think that they deserve a high salary job because they have graduated from a reputed university and will not settle for a less paid job, this is not the right attitude, you must take up a job opportunity as soon as it comes. Do not expect more salary from your first job, try to get experience first instead of thinking about money. Getting a good job is very difficult these days so leaving a job opportunity just for money is not a good idea.

5)    Control your expenses:
This may be a little difficult, but if you practice to control your expenses you will find it easy and will save a lot of money. Reduce unnecessary expenses and only purchase things which are very necessary. Do not adopt a lavish lifestyle instead try to live a frugal life, live below your means. These habits will help you get your finances under control and help you live a more prosperous life in future.

6)    Learn To save money:
This is the most important part after college life, since most of the students are not use to saving money it may be difficult initially but as you experience the benefits of saving money you will agree that this principle of finance is very essential for a peaceful and secure life. Try to save as much as you can , if you have started earning save some percentage of money from your monthly paycheck. Saving money will help you at the time of financial crisis.

Managing money after college is the first thing you must learn. You are starting a new chapter in your life so learn to handle your finances at the earliest. Prepare a budget plan, control your expenses, live a frugal life  and save money, all these factors will help you manage your money.

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Tips on Budgeting Your Money

Posted on August 22, 2011 by Bimal Bhatt

Budgeting money is the most effective ways to save and make more money. People with any amount of income should budget money to ensure a secure future. Even big companies and countries follow budgets to achieve their goals. You must prepare and follow a budget sincerely if you really want to achieve your financial goals and live a secure financial life. Budgeting money does not mean you have to sacrifice good things in life. Budgeting will allow you to spend within your income and ensure that you do not cross your limits. People following a budget plan will never face any financial difficulties in life as they are use to saving money and controlling their expenses. There are many people following a budget and are very happy with their life. This is because they are in full control of their expenses , debts, aware of their limits and are saving money.

The main benefits of a budgeting your money are, you can plan your expenses according to your income this will give you an idea whether you require more income or you need to control your spending. When you are know where your money is going you can take care of it and control spending it. You can prioritize your needs and separate it from your wants. Budgeting promotes saving and savings will ensure financial security. You don’t have to be a financial expert to prepare a budget the following are the simple tips which will help budget your money:

1)    Make a list of all your expenses:
There are many expenses that you have to meet during the month some of these expenses may be fixed and the amount may not change every month like rent, school fees, electricity bills, cable bills etc you have to make provision for such expenses and keep aside a fixed amount every month. There are other expenses which are necessary but the amount may change every month like groceries, utilities, gas expenses etc, for these expenses you have to estimate a amount and keep aside every month. Make sure you make provision for these expenses and do not underestimate their costs. Anticipate how much you will need to pay for each amount every month and make provision accordingly. When making a budget of these expenses ensure that the amount spend on these expenses do not cross the limits set by you. This will prevent you from spending more money and thus help you save more money. When making a list of expenses do not leave out any expense that is vital and may affect your budget plans if missed out, keep provisions for unexpected expenses also.

2)    Make a list of all your incomes:
Include all the income you receive every month in your list like your paycheck, dividends, gifts, interests, bonus etc. By making a list of income from all sources you know exactly how much money you have to spend. You can budget your expenses according to your income. While budgeting money make sure that your expenses are less than you income. If you find that your expenses are more than your income you know where to cut down these expenses and ensure that you do not cross your income limits. Make necessary adjustments on your expenses until your monthly budget equals your monthly income. This will ensure that you do not spend more and save more.

3)    Control spending:
The very important aspect of budgeting is controlled spending. When you control your expenses you will have more money at your disposal which can be used for more important purposes. Once you control your spending  more money can be saved and this money can be deposited in your future financial plans like retirement plans or children’s education or any form of investment. It is not difficult to control spending , you only have to be aware where your money is going and avoid spending on unnecessary things.

4)    Use cash and avoid credit:
Most people use credit cards for all their purchases, they are not aware that credit cards give rise to debts if you miss or delay credit card payments. So if you want to budget your money you must use cash for all your purchases and use credit cards only in case of emergency. When you use cash you know where you are spending and when you carry only limited cash, you will not spend much and thus spend less money. Your budget plans will work if you follow only cash payment method.

Budgeting money may seem a little difficult initially but once you are use to following your budget then managing your money will be very easy. Budgeting your money is important to keep your financial plans in order and it promotes saving and saving money  will make your financial secure.

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Effective Ways of Saving Money

Posted on August 20, 2011 by Bimal Bhatt

With the current uncertain economic scenario and the rising inflation rate saving money is the need of the hour. Saving must be in co operated by every individual no matter how much they earn. Even households have to find ways to save money to full fill their daily requirements. Things that were cheaper ten years back are now not affordable by many people. If you haven’t saved till now it is high time you should start saving money now, because saving money is the only way to help you come out of financial crisis in future. Saved money will also not allow you take unnecessary debts for your needs. If you are not in debts then it is the most wonderful thing because debts are the root cause of any financial problem.

Saving money is not rocket science, it is a simple way to learn how control your spending and frugal living. If you are disciplined enough to know when and where to spend then you will succeed in saving money. Most of the people think that if you are saving money then you are abandoning your luxuries and social life but this is not the truth. Saving money will help you spend in a better way and for more useful causes. You can certainly enjoy luxuries of life if you have a good amount in your savings account rather then take debts and fall into the debt trap which ultimately leads to financial crisis. People complain that there are not enough ways to save money, so here are some very effective and helpful ways of saving money :

  1. Track your spending and check expenses: The first step towards saving money is to control your spending. So keep track of all your expenses and find out if you are spending for purchasing useful things. Sometimes you may buy goods  just for the sake of spending money or to kill time. By tracking your spending you know where your money is going and you can find out ways to stop unnecessary expenses. Only useful things must be purchased and avoid expensive goods. This does not mean that you avoid all the luxuries of life, you can spend for expensive items sometimes but not always. Budget your expenses and make sure you live within your means this will help you save more money.
  2. Avoid plastic: Credit and debit cards are for your convenience but people are so depended on using them that they purchase all most all things by using credit cards. This habit gives rise to debts if the credit card bill is not paid on time. If you have more debts all your money will go in paying these debts so avoid using credit cards and use it only in case of emergency. As far as possible make cash payments, this will make you aware of how much cash you have and will also control spending.
  3. Pay yourself first: This is the most effective way to save money. Generally people save money at the end of the month after they have met all their expenses but the correct method to save money if to save first and then spend. So the first thing you should do is to save some percentage of money from your paycheck at the beginning of the month, pay yourself first and then spend. Even if you get a raise in your salary or receive some bonus you should deposit it in your savings account.
  4. Deposit money in retirement or savings plan: If your company offers any retirement plans then you should deposit money in it by using direct deposit method or open a savings account and request your bank to transfer some amount from your paycheck every month. If the money is deposited then you will not be tempted to spend and your savings will be compulsory.
  5. Learn to shop wisely: Do not shop for your daily groceries from your local vendor instead shop from a mall or supermarket, they offer good discounts and the goods are comparatively cheaper. Shop for clothes or accessories during a sale or discount seasons. Do not go for branded goods they are very expensive and may go out of fashion. Make a list of all the goods you want to buy and do not buy anything extra whenever you go for shopping. Always carry cash and do not use credit cards for small purchases, this will control your spending.
  6. Pay your debts on time: If at all you have taken any loan for house or cars or any other purpose then make sure you repay the loan amount on time and do not miss payments.  If you miss or delay any payments then the interest rate will be increased and you will have to pay more which will hinder your saving plans.
  7. Save at home: There are various ways where you can save money by reducing your electricity bills , cable bills , phone bills or newspaper bills or any other entertainment expenses. You can also save on traveling by using public vehicles for traveling instead of your private car. Buy goods for daily use in bulk to get the benefit of wholesale price. Recycle, reuse and retain things that can be utilized.

If you want to save money for the family then include all the members of the family, discuss ways of saving money with everyone in the family. All  family members should be aware of their expenses and learn to save. Saving is not a job of one day you have to save every day and every month it is an ongoing process which must be continued till you have saved enough for you and your family. So adopt the above ways of saving in your daily life and you will succeed in saving money and securing your future.

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Insuring Personal Property

Posted on August 19, 2011 by Bimal Bhatt

In today’s uncertain environment it is very important to insure property specially personal property. Personal property means things that are owned by an individual and is movable. It includes things like cars, jewelry, clothing, appliances , gadgets and other expensive items which can be moved from one place to another. It can be divided into two categories tangible property and intangible property. Tangible means property which can be seen and touched like cars, jewelry etc and intangible property means property which cannot be seen for example copyright and goodwill. Even real estate is considered to be personal property even though it cannot be moved. Land is considered a property even if it is not build. In several cases even living things is considered as personal property like livestock.

Of the above things we all own some property or the other and want to own it till we live. Personal property has a value beyond its actual price because of the emotions attached to it. Some people are so much attached to their property that they cannot bear the thought of parting with it. Insuring personal property is therefore important. Some personal properties are very expensive and losing this property can cause a lot of financial trouble for the owner so property insurance is essential, insurance will cover the loss of the property. While most of the people insure their life , health and automobiles but when it comes to personal property they are ignorant. Many people have no insurance of their belongings or the insurance is not adequate to cover the loss. Personal property can be destroyed by either natural calamities or accidents or fire or breakage or theft, insurance covers all these factors that causes damage to the property.

Insurance is risk management that which covers the cost of loss so giving importance to insuring personal property is important. If all the personal items are insured then in the invent of loss the loss can be minimized. The first thing to do when insuring personal property is to make a list of all the personal belongings which you wish to insure , this will be helpful at the time of claiming the insurance.  If there are many expensive items in the house then ensure that they are kept in a safe place with proper security systems adopted in the house. Ensure that your expensive painting or artifacts or antiques are kept in place free from moisture or seepage, the moisture or water will spoil the painting and antiques.

Get the right amount of insurance coverage for your property. You can ask an insurance adjuster to come to your house and evaluate every property you want to insure. The insurance adjuster will go through your property and give you an accurate quote of how much coverage you require. This will give you an idea of how much coverage is needed for all your belongings, in case something happens. Before taking any type of insurance for your property consider taking theft under that insurance policy as you do not know what may happen to your property in your absence.

You can combine two types of insurance with your insurance policy for example you can combine your car insurance with other property insurance if the policy is with the same company. This will save up to 30 % of your total premium payment. Most of the homeowners have some insurance of their belongings as they are required to take standard homeowners policy when they mortgage their property. But most of the standard policies for owners insure personal property at actual cash value, that is the cash amount that the object is worth at the time of loss. You must be aware that such coverage will not take into account the loss due to depreciation and inflation. So it is wise to get a property insurance that gives more than the cash value of the property.

Most of the insurance experts agree that the property owners must get the replacement value of the property insured for which they have to pay a higher premium. Adding this replacement value to the property insurance coverage will increase the premium to about 10%.  Most personal property policies limit the amount of reimbursement for certain items. The limits may apply only in case of loss due to theft. Most of the times even if the amount of loss is more the maximum amount the insurance company will pay is much less than the actual loss. An alternative to this is to insure your valuables with a separate policy called personal articles floater where there is a specific amount of insurance for each object which ensures full replacement value.

No matter what type of personal property insurance you select make sure you get the right value of your property. Before taking any property insurance it is advisable to carry out extensive research about the various options available and select a suitable and beneficial personal property insurance.

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How to Manage Your Finances Wisely

Posted on August 18, 2011 by Bimal Bhatt

In the earlier days when money was not invented people use to trade with their goods and services by exchanging them, this system is called barter exchange, there was no system to save or invest for future needs. During those days the needs of people were very little and limited, but now the scenario has changed completely. People have unlimited needs apart from the basic needs of food clothing and shelter. Any amount of money does not satisfy the needs of people. The economic conditions are very uncertain and the rate of inflation is rising drastically. In this situation it is very important to manage money, after all money is the most important requirement to survive. People with limited income have the trouble of saving and meeting day to day requirements and people with more income face the problem of excess and cannot manage their finances.

Managing your finances wisely is the need of the hour, your financial life depends upon how good you manage your finances. Only earning more money is not enough to manage your finances but handling money wisely and putting it to better use is important. Management students are taught how to manage finances but as far as you are concerned you don’t have to be a management graduate to learn to handle your finances. Managing money is simple if you have true dedication to manage it wisely. Every day managing your finances is becoming difficult with limited income and so many expenses to handle. Keeping track of your expenses and budgeting them is the most effective way to handle your expenses. Once your expenses are taken care off and you save a good amount of money you know where you stand financially. When your finances are managed wisely you can plan your future. All your financial plans depend upon how well you manage your finances. It often happens that though people earn good money they fail to plan for their future due to financial mismanagement. Proper money management can secure you from any financial difficulties that may arise in future. Money always causes problems if not handled properly whether it is excess or deficit. It is therefore important for every individual to learn the ways and methods of managing finances wisely.

The following points will help you in managing your finances and ensure a secured future:

  1. Budgeting: The first thing while managing finance is to learn budgeting. Budgeting helps you to estimate your expenses and helps you plan your spending. With a good budget in place you know how much you earn and how much you can afford to spend. You become aware of your financial capacity and therefore learn to spend wisely. It helps you decide between your needs and necessity. Budget helps in controlling spending and helps in saving. A good budget will also help you manage your debts.
  2. Saving: This is the most important requirement while managing your finances. No matter how much you earn some amount of money must always be saved from your monthly income. Saving will help you deal with any form of financial crisis or an emergency situation. Saving money must be your first priority. Saving money is not difficult if you learn to save from your small expenses. When you budget money you know where your money is going and you can stop it by not spending money and saving. If you have enough savings you will not be required to take loans.
  3. Creating an emergency fund: When you save money, you often get tempted to spend this saved money in purchasing your favorite things but remember that this money can be used for more important things in life, like in an emergency situation when you may lose your job or are sick or cannot earn money for quite some time. Money saved every month must be deposited in a separate savings account which must be used only in emergency. This account can be termed as emergency fund account. Usually financial experts recommend you to save the amount equivalent to three or six months of your expenses in your emergency fund account. The money in your emergency fund account will help you get back on track when you are faced with a  financial crisis.
  4. Pay your bills on time: When you are managing your finances you have to be very careful about paying your bills like credit card bills. If you delay or miss these payments then you may have to pay more in form of increased interest rates or penalty charges and these will increase your expenses and reduce your saving. When you are paying your bills on time you are actually saving money, so ensure that you pay all your bills on time.
  5. Control your spending: No matter how much you earn if you are a spendthrift you are bound to face financial crisis in future. When you are spending money you must be aware of its consequences. Even millionaires have become paupers due to their spending habits. So ensure that you always spend less then your earnings and you will save more.
  6. Avoid taking debts: A person with no debt it the happiest person, so avoid taking debts and in case you have already some debts unpaid then arrange to pay it as soon as possible. If you take more debts all your financial plans will fail if you fail to pay it on time. To avoid debts buy things on cash only basis and avoid the use of credit cards.
  7. Plan your taxes: Sometimes if you have not planned your taxes then most of your income will go in paying taxes. So consult a good tax planner and plan your finances in such a way that you pay only the minimum tax required. Invest in products that give you maximum tax benefits.
  8. Invest in good products: Do not invest in risky investment products because there are more chances of you losing your money. Always diversify your portfolio while taking investment decisions. When you invest money you make your money work for you and grow your wealth so invest wisely and earn as much profits as you can.

The best way to manage you finances is to earn a steady income , spend only on necessary things, save as much as you can and invest wisely. If you can manage all these at the same time then you will be successful in managing your finances wisely and create a secure future for you and your family.

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Pros and Cons of Consolidating Debt

Posted on August 17, 2011 by Bimal Bhatt

Many people avail the easy availability of credit and then find themselves in the debt trap. When getting out of debt seems to be impossible people sometimes think of the last option of filing bankruptcy. Filing for bankruptcy will ruin your credit score, you will not be able to get loan and you may lose your car or other valuable assets. There are various ways where you can actually come out of  debt if you follow them sincerely. When you have multiple debts , then debt consolidation is a wise option to choose to get rid of debt soon. Debt consolidation means merging many debts into one single debt. The most common form of debt consolidation is credit card consolidation. In this case all the debts are merged into one unsecured loan. Sometimes a house can be used as a collateral to create one secured loan.

Many people prefer debt consolidation as a solution to come out of debt however before selecting this option it is important to know the facts before deciding whether it is right for you.

In debt consolidation all the debts are merged into one debt and instead of making many payments during the month to many creditors you only have to make a single payment to the debt consolidation company. The debt terms are negotiated with the creditors and the creditors may lower the interest rates. So the very first advantage of debt consolidation is that the interest rate of the consolidation loan is much less then the original debt you are paying. You will have to make only one fixed amount on the same day each month instead of many payments. This will benefits people to budget this payment every month. Since this is only a single payment every month you do not have to take the trouble of remembering different payments dates and amounts to different creditors. You can repay the debt in full by paying less the negotiated amount which is less than the original debt amount. If debts are paid through settlement, then you are no longer subject to any legal action and you will not be troubled by collection calls. If debt consolidation is managed and followed properly then it will not only reduce your debt burden but also restore your credit rating.

Debt consolidation companies charge huge up front fees and may not disbursed the amount deposited by you to the creditors until you pay their fees. Sometimes they even take portion of the forgiven debt as their fees. Debt consolidation is useful to people who have multiple debts on them but for people who do not have a number of debts this may not be a good option to get rid of debt. For people with little debt burden, selling of their assets to pay off their debt is a better option than debt consolidation. If your credit score is not much affected by the debts then you may apply for a zero interest credit card and clear your existing debts within the introductory period.

After taking into consideration all the facts if you decide to opt for  debt consolidation then there are various factors you should consider. Find out the total amount payable every month, this amount may be lower then your existing payments but also find out the repayment terms associated with the consolidation. Also ask the life span of the payments you have to make every month and other clauses attached to the payment terms. Check out the payment protection insurance if any and if there are any early settlement penalties.

No matter what people say it is your debt and you have to decide whether debt consolidation is the right solution. If you have done extensive research, calculation and find that debt consolidation is the only option to get out of debt then the opinions of people doesn’t matter. So go ahead and try debt consolidation, it is of course a better solution then filing bankruptcy.  If you get rid out of debt then ensure that you do not fall into the debt trap again by limiting the use of credit cards, budgeting your expenses and saving more  money. If you can save enough money for settlement and negotiate the debt amount then you can settle your own debt and do not need the help of debt settlement company.

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