Frugal living is not good for your country?

 

One way to increase wealth is by frugal living. We have to cut some "unnecessary" spending and saving it. cutting the spending or a spending is useless when you do not save anything. you have to encouraging by save money. some cafe becomes quit. people prefer eating in home. Eating in home saves money and healthier than eating out. We can control some food that we can cook any food. we also save some dollar from it.

However, a podcast told that Japan small business decline due to frugal living style increases. The cafe become close and it is not good for some people. some people who have a cafe or some people work at there are in bad situation. the worker may get fired. I know that the consumption also increases national income. more consume, more income. in my country, there are so many people and they consume the small business food product. That can increase the other people income.

in individual, more consume, meaning you cannot save money. you decrease your wealth. off course you have to live frugal and spend only you need.

How to overcome the sick financial

Though, you have high salary but you cannot fulfill your spending. Your financial health must be sick, that is why you have to overcome or cure the sick. The sick will harm your finances. You will not save any penny and you have no retirement fund.

Perhaps there action can cure your problem:

1. List of your spending

What is the total of your spending? Perhaps you spend much for leisure only but you ignore the important things, you do not save or invest but you just buy useless things. Track the spending that you spends everyday. Write every spending that you use at the afternoon. Do not write the today spending at the next day. You must be forget to record all the spending.

2. Create a budget

This is a ways to term down your spending. By creating a budget, you know where to spend the money. You must obey the budget that you have made it or you cannot improve you financial health. By creating the budget, you know the balance of your spending and the income. Reduce the speeding when it beyond the income. You can also increase your income if you cannot or do not want to trim down your spending.

3. Crate financial goals

Perhaps you have the financial goals but you do not have the specific one.  You goal just want to be rich. We do not know the reach it .Is rich people who have the car in the house only.  A poor man has car or house but they still poor. You should make specific goals that derive you to work hard.

Perhaps you want to get one million dollars for next ten years. Then, you should save your moneys for it. You can also open a business or invest at some investment.

5 Mistakes in Grocery shopping

We must go to grocery shop periodically to buy food and some needs unless you eating out. There is so many products at grocery that often attract us. The grocery’s owner arranges the product to attract the consumer. The products looks talk to us and said buy me, buy me.
1.    Buying brand names
The brand names must be more expensive than the generic items. People think that brand name’s quality is better than the generic. Actually, some company produces either generic or brand names. The different of the product is the packaging only. I believe you will n buy he packaging if you know it.
2.    Not List
Before go the grocery sore, you have to prepare the list. Write what your want to buy at a piece of paper. You may need to buy bread, meat, vegetables, milk and others. You should also calculate the price and sum the total.
Without list, you can make impulse buying and you may waste the time. We may forget to buy the items that we need. We walk around the grocery When they are coming home, they buy some items that they actually do not need it.
3.    Bring Credit card to grocery
Credit card with no limit must tempt you to buy more and more. You are better to buy cash to brake the spending. Bring enough cash as you have calculated at the list.
4.    Not use coupon
I think coupon can save some dollar. There are some free coupon that offers 100% free product such as new ketchup, a small bottle of soda, a small pouch of detergent, and others.  Some coupon rebates up to 70% for a milk, meat, meat ball, fish and other. Some other coupon adds the quantity of the product. For example, you can get one if you buy one (buy one to get one free (BOGOS))
We can get the coupon from the local newspaper or internet. Clips the coupons and take them to the store that you can use the coupon.
5.    Buying Too Many perishable items
Do no buy too much vegetables and meat due it is perishable. Though, you have good refrigerator, the green vegetables will be dried in a week. You cannot cook dried vegetables and you will not eat it. Your child will not like the fruit that you save in refrigerator more over the meat that you have saved for weeks. The smell and the taste must be bad.
Some people buy to much perishable because the discount or rebates. They buy, for example, five bottles of milk because the price is same to two bottles of milk. You should not use the coupon for perishable income unless you have big family. 


As long you do not make some mistakes, buying grocery can save money.

The role of reduced spending in financial planning

Most article that talks about budget often mention about reducing the spending. We need to reduce the spending to balance our budget. We do not want our income is fewer than our spending. It make us bankrupt. If we have so much spending, we must borrow money from other people or bank. 
Reducing the budget is not easy too. We should be clever to reduce what kind the spending that we can be reduce. It is not wise to reduce the daily necessity such as wheat. For  example, we reduce half of our wheat every month. Your family will hungry when they just eat half of food. Reducing the quality of wheat is also not wise. Your kid may refuse to eat the food.
You can save on food by reducing the food. You can reduce a bit of meat or chicken meat. It is good for your health. Coupon is also a clever ways to reduce the food cost. The coupon can save $20 - $30 per month.
People should reduce the eating out eventhough they like it very much. You can save hundreds dollars in a month.
Before reducing the spending, you need to list all the expenses. We can track the expenses last month. Try to remember the spending that you have been spent last month. We can categorize the needs or the want. We just be able to reduce the unnecessary or unwarranty spending, such as eating out, go to cinema, gadget, and others.
By reducing the spending, we can save more money. By saving our money, we can protect from the uncertainty future. Someday we need the money for our daily necessity. If we got sick, we will need money. The children must also need money for their college.In economic meltdown, we can be fired by the company. We can use our saving to finance our needs. 
We can also earmark our excess money for investment too. The investment is important for our future and It can multiply our money in long term. We can be rich if we invest money at the investment. Unfortunately, the investment return is not good today. The interest rate so low or almost zero. However, some emergency country stock has double digit return such as chinese stock.
Reducing the spending can balance our budget too. If you just low paycheck, you have no choice to reduce the spending. Reducing the debt can make your budget health.

How to avoid bankruptcy

Due to the despair economic, some people are forced to declare bankruptcy. They have no money to fulfill their basic need such food, cloth, and other. Some people are fired by the company. Every company should decrease the productivity and they should also minimize the employee expenses or employee salary.
Of course the employer will be difficult to pay the debt especially the employee who has much debt. They have no money to pay the debt because the company has fired them.
This is not a good news. By filling bankruptcy, the people will be difficult to reach wealth.  Here are some tips to avoid bankruptcy:

1. Debt consolidation
Some careless people borrow money and they think they can pay the debt. Unfortunately, the crisis makes the interest rate high. If you have so much money, you can decide to debt consolidation. You can select the low payment and the low interest. It may enlighten your spending. However, you will need more time to settle your debt.
If you have much cash, you have to pay all debt immediately because he interest rate might increase over many times next
Be careful to find debt consolidation, Sometimes it loads you. The debt consolidation does not work for every people.

2. Talk to the creditor
If you borrow the money from family, you can talk to them. I believe your family will understand with your trouble. Certainly, you should be honest to your family. Do not lie to them because they will not lend some money to you. 
Contact the creditor that you are difficult to pay the debt recently. You can ask them to enlighten the payment. You can pay the interest first and pay the principal when you have much money.
It is not easy to talk the creditor but you should try it. The creditor may be difficult to approve your request because they may have no money. The kind creditor may help you.
If you borrow the money from the bank or financial istitution, you have to write the letter. Tell to the bank that you are in difficult condition but you will pay the loan when you have money.  The bank may ask you to pay the interest first and you should pay the principal later.
It is impossible to cut your debt. Debt is still debt that you should pay. You will not run from your obligation to pay the debt.
3. Sell your asset
When the people have so much asset, they will sell the asset to avoid bankruptcy. They can payoff the debt with the asset. Perhaps you have two car in your garage. Sell one of them to pay off the debt. You can sell both of them if you are able to go o office by bus or train. When you have money, you can buy again. You can also find some antique in your warehouse. Perhaps you can sell it at antique store.
The gold bar is the most liquid asset. While the gold price is so high, you can sell to generate much profit.  Perhaps you still save some gold bar and jewelry, you can sell it. If you do not want to loss them, you can pawn the metal a pawn shop and get cash from it. If you want the gold back, you should redeem the gold a pawn shop. The pawn shop may get benefit from his transaction and you should pay it. However, you get some cash from the pawn.
Surely, you can sell the investment asset such as stock, bond, mutual fund, and ETF. You may not take benefit from selling your investment but you can use the money to settle the debt soon. In my opinion, we should prioritize paying debt than investing. After settling the debt, you can put your money to investment again.
Selling asset is a good way to avoid bankruptcy. You may loss some asset but you can avoid bankruptcy.
4. Create a tight budget
Seek out the ways to trim down the spending side on your budget. Earmark some money to settle your debt. Reduce the spending that you can. See your budget list and find some item that is not too important.
For example: You can reduce the eating out. It can save hundredss dollars a month. You will not die when you stop eating out. You are better to cook the food at your home and eat it. It is more health than eating out.
You can trim down the food spending by:
- Buy in bulk to reduce your food and beverages spending. The supermarket gives rebates for buyer who buy in bulk. You can also save your gasoline cost too.
-Use the coupon to cut the food cost. You can get free product too with the coupon. Some coupon may cut a dollar but it may help you too. There are some coupon in newspaper, magazine, internet and else. You are better to hunt I and buy the item that you need. Do not buy item that you do not need even one penny because you will burn your money for something that you do not need it.
If you buy cloth every month you can reduce the spending. Buy the cloth once in two or three month. It can save hundreds dollars a month. You can also buy cloth when the sore give the discount. Try finding some coupon from internet.
Some people usually go to office by car. This habit is very expensive because you need to buy the gasoline everyday and need money to maintenance it. They can consider go to the office by car or electric train because it is cheaper. You can use the car at the weekend only.
You should obey the tight budget which means you should not spend more than the budget. On the other hand, you are needed to earn more than the budget.  When you can earn more money you can avoid yourself from bankrupt.

Disadvantages of budget

Most financial advisers suggest us to create a budget that help us to control the spending. People can set how much spending for next month. They will spend any product and services that they have write before in the budget. Some people are success to decrease their spending with budget. They can save excess budget to piggy bank and then invest it at capital market.
However, the budget has also some weakness that we should know:
1. Budget is not flexible
Each people has different financial behavior. Some people cannot guess the next month spending. They just write the last month spending but they do not consider other things. Next month, they just buy what they have written on budget while they need to buy something else. It is not good to delay the spending while you need the things immediately.

2. Waste the time
For some people who does not have finance knowledge, they may confuse to build a budget. They may forget to record all of last month spending. As consequently, they always improve the budget every month and it waste time. Next month, the spending may also change so it must be changed again.
You should record what you have spend and what you have got every night. at the end of the month, you should  compute all of it and compare the budget. If your spend more than budget, you have to decrease the spending or increase the income.
If we have missed to record the spending in a day, the record will be fail. We must start to create the budget again and it takes time. 
3. Safe lifestyle decrease your lifestyle
Certainly, your lifestyle will decrease due its budget. We have thrift our spending and delete some "unnecessary" spending such as vacation, clubbing, and others. For some people change the lifestyle is rather difficult. They have to spend "unnecessary" things for their business. They may loss the client or business when they change the lifestyle.
4. Mismanaged life
Some budget creator is not able to allocate the most important things in their life. They spend the money to daily necessity only. They forget that they have to save for future. They may allocate the money to investment or saving.

5. incomplete planning
The budget is not complete and it is short sighted. The budget does not consider the future due it use the previous spending data.

6. Budgeting needs money
Some people ask financial planner to create the budget. As consequently, you have to pay the planner expensively.The financial planner is the expert who can create a good budget for you.

Protect you from high inflation

Some Asian country has high inflation. Inflation is a economic condition when the goods and service price increases. It makes the money weak. We must provide more money to buy the same things. For example, last year, you can buy a cup of coffee for $5. Today, It price is $ 5.5. The coffee price increases up to 10 percent.
Certainly, you have to provide addition cash flow. Most people prefer to cut "unnecessary" spending to keep the live. However we do not have to cut the spending if we can anticipate the inflation. Here are some steps that you can do to protect you from inflation.

1. Buy gold or other precious metal such as, silver, platinum, palladium, and else. Gold are believed as the most stable commodity in the world. No one can manipulate the gold price due it is rare and important. In this year, the gold price is skyrocketing.
We can sell the gold anytime especially gold bar. If you want to buy gold, you can use 5% to 20% of your portfolio.
2. Pay the debt off
As the consequence of inflation, the bank or other financial institution will increase the interest rate. The debtor must be hard to pay the debt off due to its interest rate.
Use cash rather than credit card. The credit card company also charge high interest to the holder. 
3. Cut some spending
This is the most ultimate to face with high inflation. You can use coupon to cut your spending meal or pampers.
Buy your meal, meat, and vegetable in bulky at grocery store. By buying at grocery, you can get discount. You do not have to the market often and it can thrift your money. Place those foods at your refrigerator for weeks. However, some food such as vegetable and fruit will be wilted in few days. Some vegetable also will be dried in a week.
4. Buys some defensive stock
The defensive stock still give you return no matter the economic condition. Shift some risky stock to defensive stock. Certainly, you should not put all money at the defensive stock only.
5. Buy actual product
I have ever bought a scooter for $ 260 in 1997 when the crisis beginning. After graduated from bachelor degree or 2003, I sold it for $360. I realized that I cannot get benefit from the scooter but I have protected my money from high inflation. 

Personal Budgeting Concept

To manage the cash flow, some people create a budget. The budget helps people to track where the money go and where the money come from. Most government, municipal, organization also create budget to manage the organization finance. They afraid they missed some spending or income.
Creating a budget is not difficult. You need to understand the budget concept. Here are some concept about budget:


Purpose
Supposedly the budget has purpose. The creator must know what the budget for. Most budget are made for living frugal. He or she should recognize the income and the spending.
The purpose is a corner stone to create the budgeting.We can allocate the income to some spending post. For example, we want go outside. We should allocate our income for vacation that needs thousand dollars. The creator can set on how long we plan to vacation. Perhaps we want go to vacation next three years.
Simplicity
The budget must be simple and you know what the mean of your budget. You can create the budget that different with other people as long you understand about it.
Use the spreadsheet software such as Microsoft excel or open source spreadsheet. Write your revenue items on the top of the spreadsheet and sum of all revenue. You can write the spending below or the following the revenue. Compute all of spending. Last, Diminish the revenue with the spending.
Flexibility
A budget must not be straight. It must be flexible to pay the unexpected spending. For example, we have set the cereal spending a thousand dollars a month. Unfortunately, the cereal price increases 10 percent. Reduce our cereal spending is not reliable you and your family will starve. That is why you have to pay the cereal and use money from other post such as leisure, and saving. At the end of the month, you can evaluate the cereal spending.
Budgeting for irregular income
Some people has irregular income that they can get anytime. The freelancer work usually generate irregular income. They cannot predict how much money monthly. Sometimes they do not get any money but sometimes they get so much money. The budget also consider irregular income that can balance the spending.
For freelancer, they can compute the average of income in a year. Sum of all revenue in a year and then divided with twelves ( the amount month in a year).