9 Benefit of Budgeting of your money

To manage your money well, you should have a budget. However, some people are not interested with it. They are lazy to create a budget though there are so much benefit in budgeting the money. Here are the benefit of budgeting money.
1. Organize your money well
Though an employee get $120,000 per year, he cannot saves any peny. He used to spend entire money. Sometimes, he borrow the money from the parent. The employee cannot manage the money well.
2. Help us to save
The budget encourage us to save. No matter how much money that you can make, you should still save your money. Earmark 10% of the salary for your saving. You are better to save your money in front which means you save the money once you receive the money.
3. Focus on the goal
The aimf of create goal is to reach the goal. For example, you wan to buy Nintendo in one year. In the budget, there is a post that dedicated for Nintendo.
4. Aware your money
A man who does not create jobs may be confused when the money almost spending out. He do not know where he has spent the money. He become curios that someone near him has stolen the money. He ask the wife, or child about the money.
5. Free from debt
The Budget help you to settle the debt. The budget may not increase your income to pay the debt but it can help you to manage your money so you can pay off the debt immediately. Most budget that people create is to prioritize to settle the debt than spending money.
6. Protect you from stress
By budgeting your money, you know where your money spend. Therefore, you should not stress with the loss of money. You must spend it at some spending items.
7. Early warning
The budget is an alarm that remind your finance is running out.
8. Determine take the debt
Should we take the debt? You can take the debt if you feel you can pay it. Check the budget. Is there excess cash that you can use to pay the installment?
To me, I prefer not to borrow from other people. I just want to save for buying something or starting a business.
9. Communication with people near you
You can tell to children who ask something big that you have limited cash. Your kid may be understand your situation.
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How to Set Goal to make money

As the crisis lurk, people try to make more money. They want to reach wealth. The afraid that the crisis can fail their goal. To setting the goal, you can make these things:

1. Think of yourself
How much money that you have today. You can also write down the asset that you have today. The asset is a fuel to make your money. For example: We can hire out the house to the tenant and receive the rent fee every month or evey year.
2. Think of the goal
What is your goal? Do you want to have a house? Compute how much money that you need for the house. Let say the house price is $250,000. You should consider the interest rates too.
Do you think you can reach the goal? Or, Is the goal attainable? It means you can reach the goal.
3. Plan the action to make money.
where you will get the money? Do you find side jobs? Working to other place after work hours. It can generates hundred dollars. Teach the tutorial to make $70 to $ 100 per hours. If you have some experience in jobs, you will be not difficult to do that.
Seek ot the ways to make money. You can start opening business. Write the business plan before starting the business.
4. Saving and investing
To reach the long term goal, you may not able to reach in one or three year. You should save first the money so your money can be gathered so much. Save a hundred dollars a month. You will get more than thousands dollars in dozen years.
Then, invest the money to profitable investment. The investment can grow up your money in long term. Your money might be doubled or tripled. Invest your money at Dividend Reinvestment Plan or DRIP and do not withdrawn until the time that you have set. Example, you hope the DRIP return can finance your kid education for next 17 years.
5. Life expectancy
In developed country such as United States, Europe, and Japan, the life expectancy is higher than underdeveloped country. This should be consider for setting your goal. The higher life expectancy means the more money you should make. When you become older, you should have money because you do not work anymore. You might depend on your saving or your investment. It will be better when you own the business that can finance you when you become old.

How to protect your family by protecting your income

 to protect your family by protecting your income
All family should have income to fund the daily necessity. The child may need college fee that is very expensive moreover the the child want to enter the medical school. A medical school course fee is higher than other major study such as technician, economic, culture, and others.
Unfortunately, we also face with uncertainty future.
Our saving could running out at the time we should use it for the kid college. We have to plan the course for kid; however, the economic crisis occurs. Our investment may decline due the market index fall to the valley.
Therefore, we have to protect our income to protect our family. We can also do like this:
1. Stream your income from various income
Most people feel safe with one income source only. They think $ 300,000 per year is enough for their life and retirement. You can start the business before late. Do not wait until you retire. Sacrifice your time and money to build it. After years, you might get benefit from the business. You just receive the money while you still work for the company.
Side jobs may be a good idea to increase your income. When you got fired, you can do more side jobs. Be a trader. You can sell the cloth, bag, shoes, or anything else. A man with selling skill will never starve unless he lives at far place.
2. For the future, you will need not only retirement fund but also investment. The retire man may help you to life simple; however, you may need so much money.
Invest your money at the stock company. Research any prospective stock that can generate high return. It is not difficult to find it. Most brokers know the better stock. You should also invest your money at various stock and do not invest at one stock only. Create a protfolio that contain different stocks. When a stock down, the other may increase. The portfolio can reduce the market risk.
Do not put your money at stock only because there are some others investment such as bond, ETF, and mutual fund. Those investment has different characteristics.
3. Life insurance will not protect your life. The life is God business we cannot change the God will. The insurance helps the people that has been leave by someone. They can get some money from the insurance company. The child can continue the education. They still have house and they do not need to sell if for their live.
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Understanding debt ratio : Knowing the debt that can harm you

To apply a new credit, you need to tell the debt to income ratio to the creditor. They will check on how much your debt now. They want to make sure that you will pay off the debt on right time. They want to donate their money to the debtor who are not able to pay the debt.
Some people people whose has so much debt often propose the credit to the bank or mortgage loan. They want to pay the spending for daily necessity. They have no money anymore to buy the bread, oat, meat, milk, egg or fish. For this kind people, the bank will not lend the money.
The debt to income ratio is also an indicator of the financial health. When you have so much debt, you must be not health. You should cure it by paying off the debt soon. Surely, you are forbid to use debt for paying other debt. You should find money to pay your debt.
To calculate the debt to income ratio, you need to list the debt first. Most people have mortgage loan that they should pay it every month. Let say your mortgage loan is $800 per month. Perhaps, your car in garage is a lease car from car lease company. You have to pay $ 600 per month. You also have debt to pay the motorcycle $50 per month. Compute of the debt that sums $1450.
You can check the income that you stream. Most people receive routinely paycheck from the boss. Let say, you got $ 1500 per month from your boss. Beside paycheck, your boss often give bonus to you $ 300 in average. You also have some business. Let say you got $1000 per month. Compute all of your income $1500 paycheck, $300; bonus, and $1000, business; results $2800.
To get the debt ratio to income, you should divide the debt to income. The result is $1450 / $2800 or almost 50%. This ratio is very high. I am pretty sure the people cannot pay off the debt so the financial institution will not give the debt again to him.
The maximum debt to income ratio is 35% which mean over 35% is very bad. To fix the debt to income ratio, you should increase the income. Find sides jobs to add your income. You can also develop your business to stream more income. You can also decrease your debt too.

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.
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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.
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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.

Disadvantages of hourly wages

A good lawyer often asks hundred dollars for their service. An experienced doctor ask hundred dollars for just few minutes consultation. The professional get highly payment. On the other hand some worker also get hourly wages. They get $7 a day to do something. They will receive the payment at the end of the month.
For the professional, the hourly wage is better than annually wages but the common worker hourly wages is not good. There are some disadvantages when you receive hourly wages:

1. The payment is so low
The payment is so low especially for the common worker. They just get $7 per hours. Some employee just get $5 per hours. It is difficult to negotiate to the employer to rise the hourly wages. The employer know that the economic is so tight and the employee will receive the low wages.

2. The boss often push you
Some employer push the worker to work hard. They want the jobs has done in specific times because they do not want the employee spend much time. The employee know that they should pay more when the job has not done yet in certain time.

3. The worker should arrive on time
Some employer fine the employee who came late. They do not care the reason why they late. The employee should punch the card to absent machine. If he or she forget punching the machine, he or she will not be paid. An employee should arrive on 9 am and go home on 5 pm.

4. The hourly wages does not challenge us
The hour wages does not challenge us to work more efficient and effective. Working fast or late, you just get similar wages. You do not think to find a ways to work fast.

5. We cannot work for other project or jobs
My friend was a public service. He has not much jobs and he often go home early. His boss angered to him because he used to go home early. He explained that he has finished the jobs. The boss did not accept his reason. My friend should be at office even though there was no jobs. The boss said that he could do anything like reading newspaper.
My friend does not want to stay long at the office, he should do some business. Finally, he decided to stop working from public service. Now, he has been leading a print company.

How to reduce financial stress

Most people face financial stress. They may have lack of money because the low income and the high spending. It forced them to find the excess money to cover the lack of money. They can overcome the problem by doing this:

1. List all expenses
Some people are lazy to list or track the spending. They may spend money many times so they may miss to record an expense. Listing the expense is not an easy jobs. You should list the expenses everyday. However, you should do this to reduce the financial stress.
Record the expenses at a piece paper. You can put it at the kitchen or you can stick it at refrigerator.

2. Budget
After creating list, you can create the budget. Write all the income that you generate. Compare the income with your spending. Is the income enough to cover the spending? If your income is lower than spending, you have to reduce the spending. Be creative to reduce the spending. Do not make it suffer you.

3. Find other income
If you have low salary, you have to find other income. Seek out the creative ways to generate money. There are some freelance jobs in internet. Perhaps, you can do data entry, making presentation, writing script, writing article, shooting photograph, and so many.
If you have jobs, you should be able to manage the time. The other project should not disturb your main jobs.
Some employee can make income from home. They write hundreds article or content for the website. Dozen or hundreds dollar from the article is not bad. You can use it to buy your kid cloth.

4. Creative to reduce the expenses
Use the coupon to reduce the food and beverages expense. It is not reduce the expenses much. You can save $20 to $40 a month or $240 to $480 per year.
You can cut the cable TV expenses too. Shift to the cheaper packet to reduce it. If you want to stop subscribing it, it will be better. Not watching cable TV will not kill you.
Consider to reduce the debt especially the consumer debt. You can back the items to the creditor. Alternatively, you can rent it to other people. For example, you can rent your lease car to other people.

How to make debt reduction plan

The debt can make people bankrupt. The amount of the debt increasing when we do not pay the debt on time. The debt also can load our finances. We have to make the debt reduction plan to settle our debt fast.

Here are ways to make debt reduction plan:

Tracking everything
In the middle of month, some employee confuse because the money almost loss. They do not know where the money gone up. They do not track it.
Supposedly, you should track all of your money. It help you to allocate the money to the debt payment. It is not difficult to do that. You just need to record the spending in a piece of paper or you can record it at spreadsheet. 
Base on tracking, you can make a budget. Set aside the money for the debt. To settle the debt fast you must prioritize the debt.

Balance the budget
The generic ways to balance the budget is to reduce the spending. This is not an effective ways to settle your debt. You need to pay attention to your income side. Try to boost the income to pay the debt immediately. There are so much ways to increase the income. If you cannot do it, you can reduce the spending. Use the generic product to save some dollar.

Renegotiate debt
You can ask the creditor to enlighten your debt. You can buy the interest only for temporary when you have so much money, you can pay the debt immediately. It will good when the creditor forgive your debt.

Generate income from the debt
Some people put the loan to deposit. It must be wrong steps. The loan interest is higher than the deposit interest so they must pay the interest. If you have house or car, you can generate income from them. The house or the car that you have not pay off can be hired to anyone. You can use money to pay your debt.
In my country, some public transportation use this way to get the transportation. You do not have to sell the asset but you still be able to pay the debt.

Generate income from investment
This time, you need to generate income from investment. Despite the economic downturn, you should find the investment that can makes money. There are some stock from Brazil, India, Russia, and China that can makes money. The money that you can get from investment will help you to settle the debt.