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.
Read Also:
Four Financial goal mistakes
What should be included in Financial planning

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.
Read Also :
How to cope family member
How to budget to saving

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.
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