Saving or investment; Which you prefer?

At the end of the month, you still have cash. The boss give you the bonus after you finish some project or your business get order from the customer. They celebrate it at the cafe and restaurant but they still have money. They do not know spend the money. If we find this case, we can save or invest the money. We may be confused to put money whether in saving or investment.

Saving your money does not increase the number of money if you save in cash box or piggy bank, however, you can withdrawn the money anytime. You do not hate to go to the bank office or ATM. The cash box also does not charge you administration fee.

If you put money in investing, you can make more money. Some stock has return around 17% in good economic. However, most stock has decline. We do not know when the stock rise again. The investment is also high risk. We can loss all money in the investment.

Either you invest your money or save your money is your decision but you should consider some aspects:

1. The financial goal

Do you have financial goal for short term? If you have plan to buy a notebook, you are better to save your money at cash box. You can withdraw the money anytime. If you have still other money, you can invest it for long term goal. For example: you want to buy a house. You are better to invest your money. Buying a house is long term goal for most people due its price is so high. Rarely, we find people pay the house cash.

2. Budget

It is not difficult when we have budget our money. Rarely we find the excess cash at the end of the month. See the proportion of the investment that you should spend. Share the excess money to either saving or investment. 

3. Emergency fund

Only one third US people has emergency fund. If you have no emergency fund, you can save your money as emergency fund. It helps you when you need money immediately. You have better to have emergency fund that six times your monthly expenses. If you have provide emergency fund, you can invest your money.

Both saving and investment is a good habit and can raise your wealth. You are better spend your money at saving or investing rather than unnecessary things.

Smart Financial Moves For Teen

A teenager should know about the finance because it will be useful when they are growing up. They can manage the money well and collect the abundant wealth. The teens are expected can help themselves and other people.
This is the important financial moves for teenager:

1. Learn about the money
Money is not everything but it sometimes can buy so much things. We realize that money is very important for us. It is not easy to make money. The teenager should learn to generate money. Do not depend on parents. Someday, you should finance yourself.
For teenager, they can make money by helping the neighbor. Make dozen dollars for them. You can assist them to clean the house, sit the baby, cut the grass, and so much.

2. Saving the money
You can save cent by cent in cash box or piggy bank. Do not ask your parent to buy the PSP, NDS or some kind of that. You are better to save money for couple month to get it. You can earmark money pocket from your parent.
When the cash box is full, you can save the money to your parent. You can ask them to invest your money at stock. The stock is not a good investment today because the price is declining. However, some finance expert says that the stock price will increase multiply times.
3. Budget
Create the budget for you. It is not difficult to do that. You can list all last month expenses. Do not miss to write any expenses include the small expenses. For example, you buy the rubber eraser or a cup of ice cream. Though those items is not more than a dollar, you are better to write down it.
Prioritize your school needs such as book, ballpoint, and others. You are better to use generic product rather than brand product. It can save more than 50%.
4. Retirement fund
You can think about the retirement though you are still young. The retirement is not mature men problem only. When you contribute at retirement early, you can make more money than other people.
5. Be a frugal teenager
Most teenager want to buy expensive gadget. It is not problem when your father have so much money. If your father just ordinary clerk, you should be apprehensive. Do not forced your father to materialize what you want. You are better to save and save your money to reach your goal.
Read Also:
smart financial decision making
Financial Advice For Teen

Smart financial decision making

Decision making is a branch of management science that learn how the manager can reach the right decision that result the most efficient and effective results. The financial planning also needs the decision making like management science.
An individual should decide where the financial planning is going out. If you have so much money, you are free to use the money. You can buy any luxurious car to increase your pride; however, you should also think the uncertain future. You may need more money at the future.
Here are some tips for decision making:
1. Know how rich are you?
Are you rich? Check the money that you have now. You can start with the cash that you have now such as wallet, cash box, and others. Check also the money at bank account, certified deposit, and others.
2. Spend less
The rule of thumb is spending should be lower than the income. You need to increase the income if you have low income. You can find sides jobs to make hundreds dollars a month.You can also start business that you like. Sell anything to make money. If you cannot make money, you have no choice to reduce the spending.
We can reduce our frequency eating out to save hundreds dollar a month. Use some coupon to get rebates.
3. Budgeting
Budgeting can help you to decide on where you use the money. Some people do not know to use the money. They use the money for unnecessarily things. The woman often buy too much cloth that they may not use it.
The budget is a guidance how much money that you should spend. We should earmark our money to pay the debt off soon. The debt may make you poor.
4. Avoid credit card
With credit card, you can buy items without cash. You will pay the items at the end of the month. The credit card company will charge what you have used plus interest and administration fee. You should pay more than you have spend.
5. Saving
No matter how much your income, you should try saving money. The rule of thumb of saving is ten percent. We do not know what will happen next. We can use the money someday. For example, Your kids got sick and must get opname at the hospital. The cost of it must be expensive. If you have so much saving, you can use it.
read also:
How to identify bad financial advice
How someone whose has unfixed income creating budget

How to identify bad financial advice

Some people loss some money after follow the financial advice from other people. They must got the bad advice from them. They cannot distingusih whether the advice is good or bad. The client who has lost money cannot claim the bad advice to the financial planner. We know that they just give us advice but the financial decision is still in our hand. We are free to put our money to any investment.
Therefore, we have to know whether the financial advice is good or bad. We can identify by doing these:
1. Is the personal qualified?
Some financial planner has doctor degree but they may not have experienced in finance or investing. They have no expereience in personal finance advice.  You should know whether they have experience. The financial planner should have certified financial planner or CFP or they have pass the CFP exam.
2. Is the person has interest with some company?
Some bad people suggest you to buy specific stock. They persuade that the stock will double or triple next month. Surely, you are tempted with the word.
Some people will get money or marketing fee when they can ask people to buy specific stock. They can get the percentage of the stock. If they can attract more people to buy the stock, they can get more money.
3. The opinion from other people
Ask the people who is also the client of the planner. Is the planner bad? Are the client not satisfied with them? You can also ask the friend or people near you.  How much people say satisfied and how much people say unsatisfied? Make sure the advice has a good track record.
4. Do you understand the advice
The ambiguity advice must be a bad advice. The man who advice should give the clear explanation about the advice. They can answer any question that you ask. If they can answer your question well, you should be careful with the advice. They may not know about the advice. They may have bad motives.
5. Feel Good
Are you feel good with the advice? Some people have high institution. They can feel bad when they get the advice. If you are doubt, you may leave the advice. Do not follow the advice when you are in a doubt.
6. The advice come from questionable source
The people who give the advice does not know where he get the advice. Sometimes they quote unknown or questionable source.

How to Plan Financial Future

People are worried about the lack of money in future. They may have so much money today but they are still worried to the future. A human should make financial planning for the future. Here are some steps for it?

1. Write what your plan in future
what do you want in future? Write the specific, measurable, and attainable goal. For example, you want money a million dollar is future. Write the steps to reach the goal.This is a direction for the future.

2. Invest in your career
In my country, 95% people get money from working. I believe Most US people get money from working . You can work for the company or work for yourself. Both jobs can make money. Offers your knowledge or skill to other people to make money. You need to study at the university to get the knowledge.
Find the right jobs for you which means it will give you appropriate wages and career. Try to get promotion from the company by work hard. You can move to other office if you feel you cannot grow at the current company. If you are an expert, you will not be difficult to find job.
3. Saving
Save 10% of your paycheck every month. You will need the money someday. If you want to make a big plan, you should save more. Reduce the unnecessary or unwarranted expense and save for other purpose.
Save money from your lifestyle. You can save money on gasoline. Buy the cheaper gasoline to save dozen dollars a month. You can also use mass transportation rather than your own car.
4. Earmark your money to investment
Most people put some money to the investment. When the economic grow, they can generate much money from company stock. The company stock tend to increase when the economic grows. Unfortunately, the crisis affect the stock trading now. Most people sell the stock so its price is down.
The decreasing stock is temporary only. When the economic recover, the stockholder can get the return again.
5. Retirement fund
Perhaps you will decide to stop working at 60 or 70. You could not receive the money from the boss anymore. That is why you need to prepare retirement fund. It can fulfill your living cost in future.

Money management tips for teenager

A teenager should be able to manage the money. This is useful for them. Someday, they must manage the money when they grow up. They should know to earmark money for the specific spending. They are still young and they need the guidance from the parrent. Here are the money management tips for teenagers:

1. Find the jobs
I saw so many teenager works at restaurant. In my country, some tenagers make wood box for fruit. They can get half dollar from there, which is precious in my country. If you have so much opportune to make money, you can try it. Warren Buffet also made money by collecting bottle cap when he was young.

2. Being Frugal
You are not the son of rich dad so you should not live extravagant. Do not spend your money to unwarranted or unnecessary things. They do not buy the story book that does not necessary for them. They can hire the book from friend or library to save some dollar.

3. Avoid the credit card
Some credit card company hunt the extravagant teenager. They want to increase the profit from the credit card holder. The credit card holder should pay the interest and the administration fee at the end of month. More you spend your money, more interest that you should pay.
If you cannot pay the credit card, the collector may terror you. They know that the teenager does not understand anything. They can be intimidate easily. Finally, the parent will pay the credit card.

4. Construct the financial plan
What is your ideal? Some kids has ideal so must the teenagers. They can start saving to buy a big purchase. Perhaps, they want a new nintendo nds or video games. They can collect penny by penny to buy it. They can save the penny at the cash box or piggy bank first.

5. Budgeting
It is not difficult to budget your money. List what you buy last month. It will not be large different for the next month spending.
Why we should avoid

Why we should avoid credit card

I hate the bank officer who call my house because the officer ask whether my brother had his paid credit card bill. The officer told me to send his message to my brother.

Next day, I told what officer said to my brother. He was angry because he had paid the bill before the end of the month. He called the officer to confirm the bill but the officer said that my brother's payment was late because my brother paid through a bank which has no online payment with the credit card. Next month, he paid through the bank as the officer has suggested but he was charge some fee too.

He called the credit card manager to ask about the payment, but the manager said that those were the term of credit card. I think a credit card company want the credit card holder are fined so they will get some profit. That is why credit card is expensive than cash, You should be careful with credit card.

I do not like credit card because it wastes money. My finance lecture said that owning a credit card will load you because they will charge you with high interest at the end of month. Do not trust what the credit card sales or credit card brochure.

There are some reason why credit card is so expensive, you can see the reason below:

1. Credit card's interest is so high and it will load you. Of course the credit card company want profit for the company operation so do not believe that credit card is cheap.

2.Boost us to spending more money. With credit card, you will be easy to buy at market, shop, restaurant, etc and you will forget to count your expenses.

3. You will get some fine if you late to pay the bill. As I mentioned above, the credit company try to make you late to pay the bill.

Further

In my country the credit card trouble is increasing so high. The Bank or credit company does not want to be bothered by credit card remainder. They bid to the debt collector company for cover their loss. The debt collector company pay a half of amount of unpaid credit card bill. For example, a credit card company has 1 million dollar unpaid credit card bill, so the debt collector will bid $ 500,000 to the credit card company. Some debt collector company are dare to bid for $ 750,000.

If the company get it, they will chase the credit card remainder. Sometimes they use harassment to get money. I think this harassment does not occur in develop countries.