1. Create a Personal Expense Account
Open a current account just for household expenses, but avoid accounts with a monthly fee. Next, figure out roughly how much your monthly expenses—everything from electricity to entertainment—are, and put that exact amount into this expense account from your salary. Put the rest of your salary into your savings account and let it accumulate until you need it.
Not only have you just taken the guesswork out of saving, but you've also created a budget without the hassle of doing a monthly line-by-line accounting of what you've spent. If you have £100 left in your current account at the end of the first month, put the extra £100 into your savings account. If you have nothing left, cut back on expenses the following month.
2. Take a Salary Cut
The cash you don't see every month can only help you. You want to put as much of your gross salary into your works pension as is reasonable, especially if your employer matches your contributions. There are numerous tax benefits to this to list in one post. Needless to say, don't put less than 10 percent of your salary into your pension plan each month. Because of the tax benefits, your take-home pay will drop by much less than this. That seems like a lot, but trust me, you'll never miss it. And in 10 years, you'll be giddy every time your pension statement arrives. If you're under 30, put all your money in stocks. At 30 onward, start dripping this into cash, bonds, and other safe investments.
3. Become a Predator in These Unpredictable Times
During downturns or unpredictable times, emotions like guilt or fear can prevent you from making wise purchases. Are you thinking about making an offer on a foreclosure, or buying some cheap furniture or jewelry off Craigslist from a guy who's down on his luck? The herd would call you a vulture, but you're buying from a willing seller—not taking advantage of him. That guy (and even that bank) is just trying to make a clean start. So shrug off the stigma. The economy will thank you.
4. Hold Steady
For people who are a decade or more away from retirement, investing in the stock market has proved to be the best way to grow wealth. But most investors can't match the market's performance. Why? Because sell-offs freak them out. They tend to sell on the dips and then miss out on the climbs.
The market may feel like a yo-yo if you follow it day to day. But imagine that a boy is playing with that yo-yo as he climbs a steep hill. That metaphor best captures how the market has performed over the years, says Ric Edelman, the author of The Truth About Money. The gains have tended to be longer—and larger—than the dips. Edelman's koan: "Focus on the hill, not the string." In other words, stiffen your spine and keep buying through those dips. That's the only way to make the most of the climb.
5. Keep Your Perspective
You can't predict much in these times, but you can bet your last pound on two things: First, the economy soars and plunges, and second, nothing rises in price endlessly. The only people who seem to remember these truths and act on them—that is, those who can overcome the recency effect—have a lot of experience. People who've been in the game long enough, whether it's real estate or anything else, have seen the cycles and had the chance to curb their overconfidence.
So seek financial advice from people who not only are impartial (that is, not trying to sell you anything) but have also been there and done that—two or three times. That means working with financial planners, estate agents, and other professionals who have been in business 15 years or longer. With their help, you'll see the future.
Showing posts with label save money. Show all posts
Showing posts with label save money. Show all posts
Five Tips to Help You Build Your Wealth
1) Own your own home
Home ownership helps you build wealth in at least two ways. First, real estate is an asset with a healthy long term track record. Second, mortgage payments usually help you build equity and are therefore a form of forced savings.
2) Set goals, prioritize and focus
I figured out in the first year of my relationship that if you set goals, prioritize and focus your financial goals are far more likely to be achieved. I’ll repeat this. If you set goals, prioritize and focus, you WILL achieve your financial goals.
3) Invest in stocks
Over the long run, owners come out ahead under our system of democratic capitalism. To get maximum return on your money, you have to have some exposure to common stocks. Why? Making money on the appreciation and on the dividends will help improve your bottom line.
4) Don’t spend more than you earn
This is a no-brainer. If you have £100, but rack up debts of £500 on your credit card, then you’re in the red. Doing this over the long term is a recipe for bankruptcy. But if you got £100 and only spend £80, then your bank account is healthy and you’ll be happier, more in control if your life and better prepared to take whatever financial challenges come at you.
5) Pay off high interest debt
Usury sucks. Many credit card companies are usurious and attempt to engineer you into an agreement whereby your borrowing terms are stacked in favor of credit card companies. Other lenders like payday loan companies do essentially the same thing. In some of the arrangements, the borrower will be forced to pay upwards of 200% or 300% interest on their loans. If you’ve got high interest credit card debt or payday loans, pay them off immediately. Bite the bullet, sell some stuff, beg, do what you have to, but pay these types of obligations off immediately.
Home ownership helps you build wealth in at least two ways. First, real estate is an asset with a healthy long term track record. Second, mortgage payments usually help you build equity and are therefore a form of forced savings.
2) Set goals, prioritize and focus
I figured out in the first year of my relationship that if you set goals, prioritize and focus your financial goals are far more likely to be achieved. I’ll repeat this. If you set goals, prioritize and focus, you WILL achieve your financial goals.
3) Invest in stocks
Over the long run, owners come out ahead under our system of democratic capitalism. To get maximum return on your money, you have to have some exposure to common stocks. Why? Making money on the appreciation and on the dividends will help improve your bottom line.
4) Don’t spend more than you earn
This is a no-brainer. If you have £100, but rack up debts of £500 on your credit card, then you’re in the red. Doing this over the long term is a recipe for bankruptcy. But if you got £100 and only spend £80, then your bank account is healthy and you’ll be happier, more in control if your life and better prepared to take whatever financial challenges come at you.
5) Pay off high interest debt
Usury sucks. Many credit card companies are usurious and attempt to engineer you into an agreement whereby your borrowing terms are stacked in favor of credit card companies. Other lenders like payday loan companies do essentially the same thing. In some of the arrangements, the borrower will be forced to pay upwards of 200% or 300% interest on their loans. If you’ve got high interest credit card debt or payday loans, pay them off immediately. Bite the bullet, sell some stuff, beg, do what you have to, but pay these types of obligations off immediately.
6 Tips for Simple and Successful Marital Finances
I think we can all agree that finances play a key role in our married lives. It’s the need to provide a quality life for our family that drives most of us to work, and we know that the way we spend our resources directly affects our lifestyle now and down the road.
Money stuff is important.
That is not to say that money is the center of life or that managing the family finances must be an oppressive burden. In fact, financial success is really just a matter of making good choices consistently.
The number 1 rule is to keep it simple.
These tips aren't earth-shattering and they're not original. In fact, it is the same advice we have heard from our grandmothers our entire lives. It’s not complicated, but it's effective.
6 Tips for Simple and Successful Marital Finances
1. Build a basic budget…together
The two key components of a meaningful family budget are: (1) to proactively plan ahead for how you will spend your money and (2) to create it with your spouse.
You and your spouse must create your budget together and you must agree to follow the same budget. When you take this approach, a budget can become a surprisingly valuable tool in your marriage. Real communication is needed to formulate a plan, and real trust is developed when you both stick to it out of respect for each other.
2. Work together from a single account
Do you and your spouse operate with separate bank accounts or a “yours, mine and ours” approach to your family finances? I would strongly encourage you to consider simplifying your life by consolidating everything into a single bank account. Not only will it be easier to keep track of, but you will benefit by shifting your mindset to one of unity with your money. As a bonus, you can expect that the openness and communication required to make a single account a success will carry over and enhance other aspects of your married life.
3. Eliminate your debt (very important)
None of us enjoy paying the car finance company or student loan office each month. In fact, I think we can all agree that it sucks to have your hard earned money spoken for before you even receive your salary. So, if we all hate the payments, why do so many families have them?
It’s a matter of mindset. If you are fed up with being normal (i.e., deeply in debt), you can shed the debt and achieve financial freedom. You set the priorities, and you make the decisions that will allow you to ditch the debt. My wife and I only have a mortgage as debt - our credit cards are paid off each month and we don't borrow a single penny for expenditure, and you know what? It's absolute bliss.
4. Stick with simple (and effective) investments
As a rule, if you don’t fully understand something, you should not invest in it. If you chase the latest hot trend and buy what everyone is recommending, you are almost assuring yourself of poor returns.
Instead, take a simple approach and focus your investing in areas with a long track record of success. Personally, I think it is tough to beat a diversified mix of mutual funds for retirement investing. They are not sexy or flashy. But they are very effective, low in cost and easy to understand. That’s a formula for long-term success. There are even no fee mutual funds on the market now that have given consistent and reliable returns - but don't forget to take advantage of your Share ISA to reduce your taxes.
5. Enjoy the simple things in life. Live within your means
At the end of the day, it really does come back to living on less than you make. I hope you make a lot of money and love what you do to earn it. However, the critical point here is that you really don’t need a ton of money to be financially successful.
The key is contentment. Quit placing your value in material things and trying to maintain a high-cost lifestyle. When you learn to appreciate your family and value the simple pleasures in life, your need to impress the neighbors really does start to fade.
6. Remember to pass it on
In my opinion, the best part of simplifying your financial life and finding contentment with your lifestyle is the impact it has on your relationship with your spouse and the example it sets for your kids. When you break the cycle of debt dependence and fights about money, you set the stage for financial success for generations to come. You literally have the ability to change the future shape of your family tree.
Were these suggestions brilliant, original and completely unexpected? Of course not. I’d venture to guess that you knew these things, but you may not be living them. The key is to take action.
Simplify your financial life and invite new success with your money and, most importantly, your marriage.
Money stuff is important.
That is not to say that money is the center of life or that managing the family finances must be an oppressive burden. In fact, financial success is really just a matter of making good choices consistently.
The number 1 rule is to keep it simple.
These tips aren't earth-shattering and they're not original. In fact, it is the same advice we have heard from our grandmothers our entire lives. It’s not complicated, but it's effective.
6 Tips for Simple and Successful Marital Finances
The two key components of a meaningful family budget are: (1) to proactively plan ahead for how you will spend your money and (2) to create it with your spouse.
You and your spouse must create your budget together and you must agree to follow the same budget. When you take this approach, a budget can become a surprisingly valuable tool in your marriage. Real communication is needed to formulate a plan, and real trust is developed when you both stick to it out of respect for each other.
2. Work together from a single account
Do you and your spouse operate with separate bank accounts or a “yours, mine and ours” approach to your family finances? I would strongly encourage you to consider simplifying your life by consolidating everything into a single bank account. Not only will it be easier to keep track of, but you will benefit by shifting your mindset to one of unity with your money. As a bonus, you can expect that the openness and communication required to make a single account a success will carry over and enhance other aspects of your married life.
3. Eliminate your debt (very important)
None of us enjoy paying the car finance company or student loan office each month. In fact, I think we can all agree that it sucks to have your hard earned money spoken for before you even receive your salary. So, if we all hate the payments, why do so many families have them?
It’s a matter of mindset. If you are fed up with being normal (i.e., deeply in debt), you can shed the debt and achieve financial freedom. You set the priorities, and you make the decisions that will allow you to ditch the debt. My wife and I only have a mortgage as debt - our credit cards are paid off each month and we don't borrow a single penny for expenditure, and you know what? It's absolute bliss.
4. Stick with simple (and effective) investments
As a rule, if you don’t fully understand something, you should not invest in it. If you chase the latest hot trend and buy what everyone is recommending, you are almost assuring yourself of poor returns.
Instead, take a simple approach and focus your investing in areas with a long track record of success. Personally, I think it is tough to beat a diversified mix of mutual funds for retirement investing. They are not sexy or flashy. But they are very effective, low in cost and easy to understand. That’s a formula for long-term success. There are even no fee mutual funds on the market now that have given consistent and reliable returns - but don't forget to take advantage of your Share ISA to reduce your taxes.
5. Enjoy the simple things in life. Live within your means
At the end of the day, it really does come back to living on less than you make. I hope you make a lot of money and love what you do to earn it. However, the critical point here is that you really don’t need a ton of money to be financially successful.
The key is contentment. Quit placing your value in material things and trying to maintain a high-cost lifestyle. When you learn to appreciate your family and value the simple pleasures in life, your need to impress the neighbors really does start to fade.
6. Remember to pass it on
In my opinion, the best part of simplifying your financial life and finding contentment with your lifestyle is the impact it has on your relationship with your spouse and the example it sets for your kids. When you break the cycle of debt dependence and fights about money, you set the stage for financial success for generations to come. You literally have the ability to change the future shape of your family tree.
Were these suggestions brilliant, original and completely unexpected? Of course not. I’d venture to guess that you knew these things, but you may not be living them. The key is to take action.
Simplify your financial life and invite new success with your money and, most importantly, your marriage.
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