Financial advice for teen

The rich people son's often get financial knowledge from the parents. They can manage the money better since they are teenager. As a teenager, you can follow the advice to make your life better.

1. Learn about budgeting
Your mom or father give allowance for monthly or for daily. It is no problem whether your parents give the allowance, you have to save the part of allowance.
Calculate what your needs such as lunch, bus fare, book, notes book, handphone voucher, cloth, and others. List the spending on your notes and the type all the entries on spreadsheet. 
The amount of spending should be balance with the allowance. As a teenager, you can seek out the new income. Sell the used bottle or can to the recycle shop.
Today the teenager can make money easily with internet. They can blog and make dozen or hundreds dollar.  It will not takes the times to blog. You need only one to two hours a day.

Photo by : Onemoneydesign
2. Saving the excess allowance
Do not return back the allowance to your parents. You are better to save the excess money for other things. Perhaps, you want to buy iPad or new notebook. There are some book or dvd that you like but you have no money. You can save some money and buy it. 
Save the money in the cash box or piggy bank. The piggy bank will be full if you save constantly. Remove the money from the cash box to the saving or investment. Ask your parent to invest your money at equity, mutual fund, ETF, and others. You can buy precious metal too and save it to your parents.
3. Financials goals
The teen should have a goal? The short term goal is the goals that you can reach in one year. Example: You want a new skateboard, or chicken coop at the backyard. Write the goals in your diary or blog.
As a teenager, you must have a ideal. Some teenager are confused to choose the ideal that is fits with them.Consult the ideal with your parents, teacher, or friend. They may direct you to right ideal.  Some kids ideal is to become a doctor. The teenager can help the father to enlighten the medical school fee that is very expensive. Find the scholarship to support the medical education fund. Borrowing from student loan may be not a good idea. You will difficult to pay off the debt.

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Financial Planning for freelance worker

A Freelancer is not same to employee. The Freelancer does not receive month paycheck like the employee does. Sometimes they get money twice in a month but sometimes they get nothing in a month. The freelancer often get more money than the employee receive. It is because the company does not need to pay the insurance, the health benefit, retirement fund to the freelancer. The freelancer must pay those benefit with their own money.
The freelancer face with uncertainty income, uncertainty benefit, and uncertain future. They have to make well preparation to face with the future. Here are financial planning for the freelancers.

1. Set most of your income to your future. The freelancer has no retirement fund and they must realize it. Collect as many as you can for your future. The money can be used for the big expenses such as medical bill, kid college, house and others.
Some freelancers trust to retirement fund. They can take the benefit when they need the money.
2. Saving and invest the money
Save the mot of your income. You will need the money someday. Invest the money on stock that can give high profit. If the freelancers still young, they can take the risk. Some stock is also good for long term too.
3. Find other income sources
Most freelancers open a business that has relate with his experts. For example: The website designer often found IT company who provide the IT service. They can ask other designer to join the company. The business might be other income source for you if your business success.
The freelancer may work for other people. You can teach at the university or school. It will not disturb your schedule because you just need two or three hours for teaching.
4. Set the tight budget
The freelancer must be a simple man. They do nor want to extravagant the money or overindulgence. They must realize that they are far from financial freedom.
Surely, you do not need to be misery. You can still donate some money or help the close people near you.
5. The freelancer should have a shelter
Like other people, the freelancer should have the house. The freelancers may be difficult to get the mortgages due they do not have salary. The bank might not approve the mortgage propose. If you can get the mortgage, you can save the money and pay the house cash.

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How to use salary to reach financial freedom

Only few employee can reach financial freedom due they just have little salary. Sometimes the salary is not enough for them because the cost of living is higher than the salary. No matter how much your salary, you can use it to reach financial freedom.
Do not trust to people who say the employee cannot reach financial freedom. Create some action to use your salary.

1. Saving the part of salary
Even you just get hundreds dollar from your boss, you should save little money. Saving is important for emergency fund that you can use whenever you need.
Saving keeping the value of your money and keep pace with price of goods. Due the downturn economic, the goods price are increasing.
Some employee saves money for the business capital. Founding a business needs money to buy the material, to hire the employee, to market the business. 
2. Invest wisely
little money that you invest can grow to abundant money. The investment is very important for your future too. When you retire, you wan withdraw the money.
While you still receive the money from boss, you can invest it to risky investment. Despite the bad economic, little stock can generate more money. In China, the stock return has hit double digit return. You will never find the stock at other place. Seek out the investment at the new emerging country such as Brazil, Russia, and India.
3. Education
There are so many employee who enter the college or university or college. You should choose the marketable subject such as accounting, management, IT, nursery, and others. Those major can make more money than others subject.
After graduated from the college, you can ask the boss to increase your salary. The boss may consider your education to raise your salary. If your boss do not care to what your requirement, you may find other boss.
4. Setting the goal for future
What is goal for the short term, middle term and long term. The goal can encourage you to work more hard. The goal should be match with your salary.

5 Ways to save money on Food

The food is the component of the cost of living. We cannot live without food and we should buy food. However, we can save on food. The method can slash our budget for hundreds. You may save the money for pay off the debt or invest to the profitable investment.

1. Do not Eating out often
Some family often go to restaurant or cafe. At least they need $ 300 a month for it. They are difficult to reduce to eating out. Perhaps the mom or father are not clever to cook the food. They can reduce eating out from six times a week to three times a week. It may slash $150 per month.
2. Bring Lunch pack to your office
My father did not like the restaurant food. He brought the lunch pack that contain my mother cuisine. He like my mother food very much. The home food is more health than fast food. My mother not used to use MSG, dye, and preservation. With the lunch pack, we can slash $10 a day, meaning you can slash $250 per month.
3. Coupon
Despite the coupon does not give food much, It can slash little dollar  a month. The coupon are printed from the company that want to promote the product. The company give a sample product when you buy their product.
The company also give rebates or discount to the buyer. Sometimes the coupon give discount 20%, 30%, or 40%. Not every time, the producer give discount.
You can find the coupon on Facebook. Sometimes we can get the coupon on twitter too. Seek out the coupon from any media. A bottle of ketchup or a slice of pizza may be meaningful for you. 
4. Buying in bulk
The supermarket or grocery usually offers the cheaper product for buyer who want buy in bulk. However, we cannot save money for specific items. Example: Buying a bread in bulk may be not profitable for you. The bread is expired and few days, and you could not eat it.
The meat or chicken boneless could be saved for weak. Consider the amount of meat that you need with the refrigerator's space.
5. Produce food on your backyard
Plant fruit tree on your backyard. In four or five years, the apple will have fruit. You can slash little dollar from it. In great depression, the people raise the chicken at backyard. We can also raise chicken to get fresh meat and fresh egg.
Photo by : GoldenEel

The Envelope Budgeting: Help You to Make a Strict Budgeting

By using envelope budget, you may decrease some unnecessary spending.

When we receive paycheck or honor from our boss directly, we receive the money inside the envelope. Some people who give money in envelope. People often save the money inside the envelope to protect the air that could damage the money. The envelope also keep the money from bad people. When you let the money up the table, the other person may grab it.

The envelope budgeting is a simple budgeting and cheap. We do not have to buy a software to make the budget. Perhaps this budgeting has been found hundred years ago.

The envelope can be used for budgeting. It helps us to strictly in money spending. We allocate the money into various kind of spending. We have to determine what kind or the category of spending in a month. We are hoped not to spending more money than the money on the envelope.

The strength of the envelope is that it can reduce your spending. Perhaps, you will use cash rather than credit card. You do not need to pay the credit car interest or credit card fee.

The envelope can remind us to strict the money that we spend. When we see the empty envelope, we should not use other envelope to replace the empty envelope moreover our salary.
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Use your previous record to list your spending. Name each envelope with spending item. Then, put the money as you have allocate before. The amount of money base on your previous month and your estimation. Example: your budget for cinema is $ 50 per month. Inser the $50 into the envelope. You can make other envelope to keep some money.

Here are the example of the spending:

Mortgages $800

Electric bill $100

Water bill $50

Telephone bill $75

Food $375

Gasoline $200

The weakness of the envelope system is that you need to provide some envelope. The envelope is also easy to damage. You should need envelope that is not expensive. A piece of envelope just 10 penny.

You should saves the envelope to the wardrobe or to the safe place. Keep the envelope far from our kids or other people.

Due to advance technology when people often do not use cash, This budgeting is an old fashion budgeting. However, some software company developed enveloped budgeting software. This software may help you to build an envelope budget but it is reduce the essential of envelope budget. The software do not use cash but credit card or others.

Fundamental Investment for Financial Planning

When we read any article about financial planning, we often meet investment. Investment is an important element of financial planning because it can help us to materialize our planning. Some money that we have invested at the investment will grow. Here are the fundamental investment in financial planning.

1. Match to goal
The investment should match with goal. We can invest fro short, middle, and long term. If you want invest for 20 years next or for your kid education, you may invest your money at blue chip stock or Dvividend Reinvestment Plan. Your money will multiply over many times.

2. High risk, High return
Most investment is risky. You dare to take the risk for the higher return investment. On the other hand, the risk adverser will not get higher return. For example, we will not receive much money by investing our money on certified deposit or saving account. The interest rate is less than a percent while the inflation is high. On the other hand, the stock investor who dare invest at China can get double digit return. Some Chinese stock has hit double digit return. 

3. Portfolio
Share or diversify your asset to various investment. Do not invest at low risk investment or high risk investment only. Put the money in one basket is too risky and it will not make so much money. Example: Your money in saving account or certified deposit will not give you much return whereas your money decrease. The rate may be lower than inflation rate and you still pay the administrasion fee, atm fee, and other fee.
When one of investment decrease, others investment may increase. You will still get benefit even the market is worst.

4. Low cost and Low tax
Find the cheap investment. Notice the transaction fee and other cost when you invest your money. Try to minimize the cost so you will get so much return. For example: the no load mutual fund is free charge.
Consider the tax when you invest too. The investor should minimize the investment tax. You can consult to your financial adviser for it.

5. Pay yourself first
Having received money from boss, you invest the money directly. Then, you pay the debt. The investment will pay you at the future or when you need much money.

How to manage money better

To become a rich man or welath man, you have to able to manage your money better. Some people who has high salary cannot manage the money well. They buy anything and they do not think about their future. In the mid of month, the salary has gone. They are forced owe money to other people to fulfill the daily necessity. Day by day, the debt increases and they bankrupt. Here are the some stesp to manage your money better:

1. Create a cash flow budget
The budget depict what cash flow come from and what cash flow goes for. This budget help you to fulfill what you need. The budget keeps your cash inflow equals with cash outflow. The cash inflow should be enough for paying what we needs. If the cash inclow is not enough, we can decrease the cash outflow or increase the cash inflow. 
What you plan to buy next month? You can write in spending post. Dou you have money enough to buy the stuff? If your income is high, you can buy it. If, on the other hand, your income is small, you can cicil for couple month. For example, you want buy a $ 500 bicyle for kids but you just have $ 100 a month for toy kids. Set a side $100 for five month. You can buy your bicycle to your kids after five month.

2. Save the money before spending
Some people cannot save their money whether they have high salary. They have wrong method for saving, for example: They save money at the end of the month or they save after spending. They never allocate to save their money. 
You should allocate at least 10% for saving. If you have more money, you can save higher than 10%.

3. Buy what you need not you want
Some people always materialize their want without considering the money. They want buy X Box, Plasma TV, Games, and other whereas they have not enough money. Off course, human need entertanint but they have to consider their finance.

4. Settle the debt soon
After get paycheck, you have to pay the debt soon. If you late to pay it, the creditor may charge you fine. Your debt will increase and you will be difficult to settle it.
Before borrow the debt, you need to consider the pros and cons. For what you borrow the money?

5. Emergency Fund
Emergency fund is very important when you need money immediately. With emergency fund, you do not have to borrow money from brother, sister, parent, and neighbor. Allocate six or more times your daily necessity for emergency fund.

What is net worth

Henry whose has jaguar cannot claim that he is richer than Smith whose has no Jaguar. We should calculate the net worth of the jaguar owner and the people whose has no jaguar. Henry lease the Jaguar to a car company for five years. Henry has no right to sell the jaguar unless he settle the lease.
Henry is a manager in a good company that produce microchip. He has one house in the urban area that price is $ 50,000. Henry got much paycchek from the company. He get at least $ 10,000 each month. Henry also save money for his emergency fund. He realizes that he will need when he got sick. He has cash $ 60,000 in various assets such as mutual fund, cash, and other. Henry invest the money to stock market that the value reach a million dollar. He diversifies the investment into various investment such as stock, bond, mutual fund and others.
On the other hand, Smith is a freelancers. He just work when someone need his service. Smith is a financial consulting and blogger. The clients just pay him $ 2,000 a month. Smith receive money lesser than Henry. He just has Honda car that price is only $5,000. Smith is a low profile man. He has no credit card and he has no debt to other people. He buy the small house cash.
Smith also has business. He found a printing company. They serve some company and print some book. He also saves the money to the stock market and he has $ 50,000 gold.
To compute the net worth, you have to sum of all the asset. Then sub it with the liabilities. Sum the Henry's asset house $ 50,000, emergency fund $ 60,000, and $ 10,000 investment equals $120,000 assets. Sum the Smith's assets Honda car, $5000; gold $, 50,000; $ house, $ 25,000, investment; 30,000,  in the printing company equals $ 85,000 equals $195,000. Smith has no debt so the net worth is equals $195,000. Meanwhile henry has debt that he should pay $20,000. The net worth is total asset $120,000 minus total liability $20,000 equals $ 100,000.
The Smith net worth is higher than the Henry. Smith is richer than Henry. Smith prefer to live blow the mean. He are not tempted to buy jaguar though he can buy it. People may respect Henry than smith due its car but smith is still the richer.

How to finance kid college

A kid needs to go to university so they will have a better life. They have opportune to get a good jobs If they pass the college. They might get manager position and get wealth.  Unfortunately, Sending the kid to a college is not easy because its fee is expensive especially in private college or the best college.

You can start allocate money when your child is born. Calculate the approximately cost of college. Find information about cost of college and forecast the cost with present value. 

Do not use the money for anything moreover useless things. You should be disciplined with kid college money.

Here is how

1. Saving part of your salary to the account that dedicate for your child college. Consider the amount of children. More children,more money.

2. Invest early for long term investment like value investing. Buy some blue chips stock and get dividend for it. Create a portfolio of stock for your college kid. Reinvest the dividend to the stock or other investor. You can redempt when your child enter the college.

3. Buy asset that dedicated to your children college. For example: buy a house and hire it. You can collect the rent fee for your child college. Someday, you can sell the house if you have no money to finance your kid college. In my country, the parent buy some farm crop to support their child college. They use or hire the land to other people. The parent will sell the land if only the child need college fee. 

4. Buy precious metal like gold, silver, platinum and others. Precious metal value is stable and it may good for your child investment. It can help us to protect us from recession. In bad recession the gold value could increase many times. I suggest to buy certified gold bar. Buy it and safe it at deposit box.

5.Encourage your child study hard so they can get scholarship. Scholarship can help to light the kid  college. Some university, foundation, and company offers full scholarship that pay the college fee, book, apartment, and others.

By studying hard, they have a good future and they can work at any company.

6. Order your kid to get freelance jobs if your money is less. Someday, they will be able to fund his or her college. The cons of jobs is that jobs can disturb the kid college.

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How to Set Financial Goal : It determine your future

The financial goals is a part of the financial planning. We should make to create a good financial goals to reach our the wealth. Without a financial goals, you will loss in a trying to reach the wealth. Here are the steps to create a financial goals:
1. Create a specific goals
Most people want to reach wealth. It is now wrong but the financial goal is not specific. We do not know the wealth definition. Every people has different view about wealth. Some people define wealth with house, car, gadget and other.
Example: A teenage want a car
We do not know what the car because the goals is very vague. Is the boy want a Jaguar? Mercedez? Honda?
There are some question about the goals, such as:
When does he buy the car?
Is it a new car?
Will he buy cash or lease?
The teenage can write the goals is to save $ 5,000 for  buying old Honda car next three years. He does not want a new car that is very expensive.
The teenage know that he must be realistics to create a financial goals. He feels he can save $ 5,000 for three years.
2. Set the short, middle, and long term financial goals
Create the goal for short term or next 1-5 years. The short term may be not bigger as the long term cause the short time.
Example: the short term is to save $ 2,000 to own a good motorcycle.
The middle term financial goal is the anything that you could reach by 5-10 years.
Example: The middle term is to save $ 50,000 for master degree fee.
The long term financial goal is anything that can you reach in ten years more.
Example : The long term is to save $ 100,000 for hose.

3. Review the goal
After a year, you must review the goals? Can you materialize the one year financial goals? If you cannot materialize it, you have to work hard.

4. Determine the plane toward financial goals
Some people do nothing after create a goal. They must be wrong. They have to struggle to materialize their financial planning.

5.Review and modify the goal
What is the progress after one years you have made the financial planning?
Some economic situation may break our financial goals? Do not blame the economic situation because you cannot change it. The step that you can do is to modify the financials goals. Find the ways to reach the goal but do not decrease the financial goals.

How to organizes Finances

Like ride at the deadliest road, organizing the finances is difficult. Some people is not able to manage their money whereas they have so muc money. Here are some steps to organize the finances:
1. Set the finances goal
Write your goals at the book or your dairy.The finances goal is very simple. Every people want to be health, meaning has house, vehicles, saving and investment. Create a specific goal so you know the goal exactly. Example, you want a million dollar when you retire or you want to have a big house. 
The finances goal encourage people to work hard. People often stop to work before they reach the goal. They feel so tired to reach the goal whereas they have not yet hit the goal. Without a goal, they do not what they work for. They have no direct to work. 
2. Track your spending
How much you spend for a month. Compute what you have spend in food, cloth, transportation. You need gasoline to go to office so you must to include the gasoline to your spending list.
The kid spending is also your spending. Compute the food, cloth, and everything of their spending.
3. Create a budget
Having known the financial goals, you can allocate some money for goal. Provide the post at your budget to buy the house as you have write at the financial goals. Set aside paycheck for the house.
The budget can help you to manage your finances. It helps you to compute all income and spending.
4. Compute your net worth
The networth is depict the wealth of someone. The basic formula of net worth is asset minus the liability. The more net worth, the more wealth.
To compute the net worth is not difficult. First, List all asset that you have such as cash, saving, investment, and others. Your house that you buy or car that you have are your assets. Calculate the investment you too. The investment value is the market value now.
Second, list of your liability. Compute the debt you have to some creditor. The car at your garage have been not yet settled from the credit company. You still have the liability to the company. Record the remain of money that you should have as your liability.
Third, Deduct the asset with the liability. If the result is minus, you are in dangerous. You need to reduce the liability and increase the asset.

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How financial goals impact your financial planning

Before creating a financial planning, a financial adviser must ask exactly what is financial goals. With your financial goals the adviser will create your financial planning. Surely the financial goals will affect the financial plannings. Without the goals, you cannot construct the financial planning. Like driving a car, you should know where you are gonna go. A driver must be confused if they should drive without any destination. Having been told the destination, the driver may need the map or a plan to arrive at the destination.

How the goals affect the financial planning:

1. The financial goals will affect the budget that will create. If we want the expensive house but we have little money, we have to make a tight budget. Our priority is to save much money for the expensive house. We may slash some spending for the house or we may find other money for the house. The adviser will suggest us to find more money from other sources.

2. The goals also encorage you to save more money bit by bit. We realize that the our goals is so difficult to reach. The rule of thumb of saving is ten percent of the income. The financial planning may order you to increase the percentage of saving if you have so many financial goals.
The percentage of saving to the income will influence your lifestyle because you should set aside more money to the saving.  The financial adviser may suggest you to tight your spending. Perhaps, you may change your car or resize your house that saves thousand dollars.

3. One element of financial planning is investment. The goals will influence the number of money that you should invest. If the goal is high, they should dare to invest at high risk investment because it could make more money. As consequently, you are dare to take the risk. The possibility of loss is high too.
The portfolio of your investment may contain stock and junk bond. The portion stock could be 90% of the portfolio. Due the economic tight, this portfolio is not profitable too.
4.Retirement fund
The worker whose has financial goal to retire early must save more money. As the life expectacy is greater, they need more money. They will not recieve the paycheck from the boss again.  They can start the business early. The easier business opportunity is the selling. Selling anything that you like and you know.

The effect of the goals is very real. You should be careful to create the financials goals.

How debt influence net worth?

Some people think owe money can increase the net worth. Let Says, Mr Broderick has $ 10,000 in the certified deposit. He wants to increase the asset by owe $ 10,000 from the bank. Mr. Broderick asset look increase. He has $ 10,000 in deposit and he has $ 10,000 in suitcase. Mr. Broderick want to buy the store at the certain city to wide the market.

Mr. Broderick net worth is not increase per se. After get loan from Bank the netw worth is become zero. He has deposit $ 10,000 asset, but he has bank loan $10,000 liability.

The Bank also charge interest rate 5% years so Mr. B will pay $ 10,050 next year. Next ten years Mr. B net worth will be below zero. The liability $10,050 minus $ 10,000 equals $ 50. If Mr. B cannot get the cash from his new store, he must be bankrupt. If, on the other hand, the new store sales so many product, the asset may increase. Let say, Mr. B can make money $ 11,000 from the new stores. His networth wil increase to $ 11,000 assets minus $10,050 loan equals to $ 950.

Not all debt decreases the net worth. For a moment, debt must decrease the net worth. If we can use the debt, the net worth could increase. Before propose the loan, a businessman should make sure that the debt can be useful for business.

Borrowing money for buy a luxorious car must decrease your net worth. You cannot generate financial benefit from luxorious car. The interest rate of lease car is high and the value decreases every year.

In my opinion, the debt is difficult to lift our net worth. The interest of the debt is high so you will difficult to pay it.

Borrowing to userer or mafia is a fast ways to bankrupt. They can provide the cash quickly without guarantee but they will find you wherever you go. They are not shame to charge the high interest to the borrower.
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Five Things About Loan

You should know that loan is dangerous

A loan sometimes helps some people that need something like things, car, computer, book, etc. Some people could not pay cash for expensive things because their salary is low.

I think we should not think about loan today because we are hard to return the loan. The employee cuts so many jobs. Perhaps we suffer firing too. Of course, the unemployment needs to open a business for their live. Unfortunately, some unemployment use loan because they have no fund.

You should know some information before ask a loan to others. The information is useful to avoid you from bankrupt. The information is:

    You should know what is the purpose of loan

You should know why you loan to others. Some people use loan for needs like education, house, car, furniture, etc. People must need house for staying, car for transport, college for future. Unfortunately, most people has limited money.
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Do not use loan for unnecessary thing like buying a Jaguar, buying a bungalow, etc. You should use a loan for productive things like open a business. Make sure the business could give you return so you can pay the loan.

The global crisis make your salary is decreasing. Our ability to buy anything is also decreasing.

    You should know that you can pay the loan

You could measure your ability of paying the loan. If you feel hard to pay the loan, you should not ask the loan.  A bank will help you to determine the ability paying the loan. They will survey your financial health with notifying your salary, assets, family, child, etc.  For example, your asset is only $10,000. The bank will not lend you for $ 20,000.

If you have no ability to pay the loan, the bank will not give you any loan and reversely. A bank is a profitable oriented company so they will not give you charity.

    You should know what (who) is the creditor

Some creditor asks your guarantee like house, car, land, and other fixed assets. They will seize your asset, if you cannot pay the loan. Bank and other financial institution are selective to give the loan.

Besides bank and financial institution, you can ask loan to people. You can ask people around you like parent, family, friend, etc. They may be kind creditors. Most of people will not charge you with interest and other cost.  Some people offer you with soft loan that does not ask you with interest and cost. My Grandpa said that some people give you soft loan without returning obligation. You can return, if you could get the profit.

Borrowing with people is sometimes easy. If you could not pay the loan, you will break the friendship and fellowship.

    What is the loan

Financial institution offers various loans like personal loan, secured loan, unsecured loans, mortgages, auto loan, equity loan, etc. the loans has different characteristics each other. Mortgages is for the borrower who need house, auto loan is for the borrower who need auto, etc. we cannot use auto loan for house financing and reversely.  The types of loan i.e:

Mortgage loans: a loan for buying house or building

Personal loan: a loan for buying something

Auto loan: a loan for buying car

You should check what loan that fits on your needs. You had better ask soft loan to the financial institution. It will light your loan payment.

    The cost of loan

You should consider the cost of loan. Some financial institution set high interest for your loan. The higher loan will make you difficult to pay it. If you postpone the payment, the interest will grow over many times.

Financial institution also provides fixed rates and floating rates. A Fixed rate is the rates that set stable for example 4 % a year. The financial institution usually set higher interest to fixed rate than the floating rates. A common people think that fixed rate is cheap than the floating rate. In reality, fixed rate could be a cheap cost, if the Fed rate is down.

Besides interest, you must pay some fees like origination fee, administration fee, underwriting fee, appraisal fee, credit report fees, and processing fees.

How someone whose has variable income creating budget

Thanks for internet that helps us to work online and make money online. We can make money by making business presentation for other people. If they like, they may pay you dozen or thousand dollar. The company can pay less than hire some employer. For the self employed people, they may receive more or less revenue, depending on their project. When they got abundant project, they may receive more money.
Someday, Company will employ freelancer than employer to cut the company expenses.  In future, the company just pays the salary without pension fund, health insurance, and others.
As a freelancer or self employed, they may receive uncertainty revenue or variable income. Sometimes they receive dozen dollar or sometimes they receive nothing. To create budget for freelancer or self employed, they may calculate yearly income. Find the average of your income by dividing income by twelve.
Though you have no fixed income, you should allocate your some expenses. List also that you expenses monthly that you have expenses. Compute grocery food, water bill, electric bill, and cable bill, and others.  The spending side is relative fixed than the income. You must adjust the average of your income to the spending. Do not spend more than you can earn or you will borrow money to cover your high spending.
As a freelancer, we can estimate when we receive the income base on last year experience. For example, the auditor will receive abundant money in March because the jobs or project is abundant in March. There are so many companies that find audit service. Do not use the money for spending only. Some people may spend the money for useless gadget whereas use it wisely and you can put it at emergency fund that you can withdraw it whenever you need money.
In my opinion, emergency fund is very important for the people who have no fixed income. They can use it whenever they have no jobs or project. I think they are better to provide at least six month of your monthly spending. Increasing it double is also wise decision.

Why you need to increase money when retire

When you retire, it does not mean you can feel free. Perhaps there are some money that may harm you. Here are the cost that may harm you:

1. Maintenance the house
After you stay for twenty or thirty years, your house may damage. Perhaps the rain has damage the roof. Surely, you have to improve it or your house will break. The maintenance is not cheap, you have to pay the roof and the repairman service.
Some house needs improvement in the wall, the window, or others. If the retire want the best material, they should dare to pay more.

2. Kid Education
If you have still young child, you should fund the kid. Your kid college fee may need your money. Surely, you cannot ignore your kid college or you will need money to care them. For example: If they do not pay the college, they will stop to study. If they stop study, they cannot graduate the college. If they cannot graduate the college, they will be difficult to find jobs. If they have no jobs, you must help your kids to fulfill the daily necessity. Surely, you have other option to expel your kid from your house. It is your choice .

3. Health
Some sick retire may spend so much money for medical expenses. The young who do not keep the health will get so many diseases in the old time.

Photo by : Philip Taylor PT


4. Hobby
After retirement, some worker focus on the hobby. They use the severance to buy collectibles such as coin, stamps, painting and statue. A piece collectible is hundred thousand dollars. The crazy collector may spend the money for it whereas the real value of the coin is just dozen thousands dollars. The are tempted to collect the coin that is not important. Perhaps they think that the collectibles will generate money from them.
The maintenance of hobby is usually expensive too. A collectible do not need expensive maintenance but caring pet needs high cost. Example: Cats need the expensive food. My brother has six cats (one mom and five kitten). He needs $200 a month for cat feed, not included cat sand and vitamin. My brother also do not bath the cat to pet salon. He can bath the cats alone. Fortunately, the cat is health. We do not have to ask veterinary to cure the cats. In my country, the veterinary cost is not expensive just $ 10-$20. I believe the cost of veterinary is more than $ 100 in United States.

5. Child trouble
Perhaps your child owe some money to mafia. Surely, you should pay the debt or Mafia will kill your child. As a parent, you will not let any people hurt your child.

Four Financial goal mistakes

Some people cannot reach the financial goal whereas they have written it in the book or computer. The unreachable financial goal could happen because some mistakes in writing the financial goals.

1.The financial goal is vague
The people often write that the financial goals is wealth but the wealth definition is so wide. Each people has different opinion about the wealth. The homeless think that the wealth people is someonew whose has a comfort house. The small house owner think that the wealth people is someone whose has house and condo.


2. The goal is unrealistic
The ordinary clerck set the financial goals is to have an airbus aircraft. This is unrealistic goals, the man must be a dreamer.
The ordinary should think as the common people. Their salary is enough for house, kid education, ordinary car, and others. They also need to consider the medical and the retirement.
They can fits the financial goals with the money they have own or salary they have. How much the amount money that can they save in a month?

3. unmeasurable
The goals is to own the house but the goal does not describe the house. The goal should describe the house well. Example, the house price is in the urban city near the centre of city. The house in city center is more expensive than the suburban house because the land price is very expensive. The unmeasureable goal make you difficult to allocate the money.

4. Decrease the goal
Evaluate the goal is a must but decrease the goal is a mistake. When you have a realistic and reachable goal, you do not have to change the goal.
Example: Last year, you have write the financial goal about saving $ 100,000 for house. Due the downturn economic, you change the goals. you decrease the saving to $ 75,000. The decreased goal make you lazy. You do not find the alternative way to reach the goal.
Be creative to reach the goal. Find other income source to reach the goal and do not depend on paycheck every month. You can buy some asset such as land, property, vehicles, and rent the assets. Alternatively, you can invest to the profitable investment. 
The financial goals is an element of financial planning. Making a msitakes in financial goals will influence the financial planning. Carefully to make the financial goals for your life. You can consultate to the financial expert about your financial goals.

Top Financial Planning tips
Personal budgeting Concept

What is Liquid Net Worth mean?

Liquid net worth is the diferrence of liquid asset to the debt or liabilities. The liquid net worth compute how much cash that we can spend. The liquid asset is very important for our life. We need cash to buy food or beverages. If you go vacation to underdeveloped country, some cafe may not receive your credit card. They just need cash. Therefore, you should change your money to the destination local currency.
Beside paper money and cash, there are some liquid asset that you may have. In your country, the suppermarket still receive your debit card. You can use it to buy meat, vegetable, cereal, milk, for your daily necessity.
When you go to cafe, you can also pay the food and beverages with the debit card. Surely, your asset will decreases if you often eating out.
Even a company need liquid asset for buying inventory, buying raw material, paying the salary, paying tax, and others. The company is impossible to pay the employee with table or car. The employee will not receive the office inventory but they just want cash.
The lack of liquid asset can disturb the company operational so the man does. A health company must have a good liquid net worth. 
The money that you put in investment is also liquid asset too because you can cash the money easily. It needs few hours or second to cash the asset. When you need money, you can ask your broker to sell the stock. Surely, the stock price is same with the market value that day. You can either win or loss in selling stock that day.
Though the investment is a liquid asset but we cannot predict the value of asset like a cash. Today, our stock price is $ 1,000. The next days, the price might increase or decreases. Beside stock or equity, the liquid asset from investment are non-IRA mutual Fund, ETF, and others.
The other liquid assets is precious metal such as, gold, silver, platinum, and paladium. We can sell the metal at jewelry store or online store such as Amazon and eBay. The precious metal price is stable unlike stock or other capital market investment. The best investment metal is precious metal bar.
To calculate the liquid net worth, you add all the liquid asset. Then sub it with your debt. It is good when you have a positive liquid net worth. If, on the other hand, you have negative liquid net worth, you need to add the liquid assets.

Five advices to help you become a millonaire

Every people want to have million dollars but it is not a rocket science and easy. To become a millionaire, you can do these advices below.

1.Stream so much income

Try to find so much money as you can. An employee can get $ 35,000 or $ 65,000 per year, depending on the skill. If your salary is low, you can find side jobs. You can still work while you do some side jobs.

Create the book, software, technology to get royalty. Some famous book author can be a millionaire from the book.

Do not depend to your boss only. Someday the boss will not pay you. You have to create so much income source.

2. Save your money

Saving the money is not just in bank. There are some things you can do to save your money. Buying in a bulk is a way to save your money. Use the coupon in the web or magazine to trim down your spending.

We can save the money by thrift the fuel. Buy the regular gasoline rather than the premium. You can save little dollar from it.

3. Invest wisely

Invest for your future. When you stop working, you will get some money to fulfill your daily needs. Investment can multiply our money in short term or long term.

The capital market is the most famous investment today. Unfortunately, the return of stock is not good recently due the economic tight. The bond market is also not good because some Europe country such as Greek offers high interest bond. we can get high interest from the Greek Bond but we are doubt that Greek will pay back our money at the time.

Alternatively, you can invest at real asset such as land, property, crop land, farm, plantation and other.

4. Live below your mean

For what a luxorious car if the cheap car can pick up you to office? For what a big house if the small house is enough for you? For what a gold watch if the steel watch can show the right time?

A millionaire should live below the mean. They can use the money for investment. Warren Buffet, a millionaire investor, prefers to drive cheap car than luxorius car. 

5. Be consistent

A millionaire should be consistent. They should do what they have planned. When they cannot get jobs, they can open a business. Some lucky business man make money more than the employee can do.
read also 
How to increase net worth 
Why Financial Planning is necessary 
How to avoid personal financial crisis