Monthly Archives: August 2008

10 Finance Tips for Working Families

We tend to assume these days that it is necessary for both parents to work in order to keep the family going. You may find that this is not necessarily so if you take a hard look at the facts. Here are some tips to help you.

  1. Consider the cost of working: You may not be making as much money from a job as you might imagine, because you might be incurring a lot of expenses such as day care for children and paid help, just for keeping your job.
  2. Make a budget: Planning is the key to success in anything that you do, and this is particularly true in finance. So know in advance how much money you are likely to need.
  3. Control your purchases: Once you have made the budget, control your purchases and expenses carefully to fit into the budget
  4. Know where the money will come from: This is really a part of the budgeting process. You should know in advance how much money would be available to you.
  5. Avoid debt traps: Taking large amounts of loans to satisfy your immediate wants, including use of your credit cards, may seem very attractive till the first statement reaches you.
  6. Live within your means: This is an extension of the previous point. If after careful examination you find that an expenditure that you’re planning to incur is not fitting into your immediate budget, wait till your financial condition improves (It always does).
  7. Set priorities: If you are to successfully implement the above suggestions, you’ll need to set priorities, so that it becomes easy for you to knock off less important items from the family expenditure list.
  8. Build a network: You’re not alone in this world. There are lots of others who also have temporary financial difficulties. If you support each other, you can avoid taking recourse to outside debts and high interest rates.
  9. Look for cheaper alternatives: If you look around, you’ll find plenty of tips that would help you to cut your expenses without sacrificing your lifestyle. For example, move your credit card to a more suitable card. If you signed up for a frequent flyer credit card but find you don’t have the opportunity to travel on it then scrap it! Shop around for a simple, low interest credit card which doesn’t have high monthly interest repayments or annual fee’s.
  10. Look for bargains: It just takes keeping an open eye or looking around to take advantage of bargains.

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5 Secrets To Saving Money

With the news constantly reminding us about the financial downturn that is happening, its probably time to start making some savings for the future. It’s easy to spend but harder to save, but there are 5 secrets to saving money that will make saving simpler for everyone.

1) In life, it is always easier to head towards a goal – and this is true in saving. Setting goals is the first step, and be it an amount you want to earn, a date you want to save until or a goal you want to spend the money on, having a focus will help considerably.

2) It can also help to have a separate savings and checking account. This is because you have to switch the money to the savings account and you will be less inclined to withdraw from there. A separate savings account acts as an additional barrier to wasting your money. If you can manage your cash flow, getting access to your own money using a debit card instead of a credit card is beneficial. Have a look around and compare credit cards if you need to switch cards.

3) There is also great benefit in drawing a budget and sticking to it. If you have on paper how much money you are going to spend and carry that amount of money with you, it’ll be easy to stay on budget. It’s very easy to spend dollars on luxury items, so organise a budget and stick to it!

4) When saving money, you don’t need to go it alone. You may not want to ask your boss for a raise but there may be overtime available, or perhaps there are additional tasks you can do. Any extra money can be put directly into savings, helping you to save more quickly. It will also help to save money by getting the support from your spouse or partner. If you are both working towards the same goal, it’ll be easier to make the savings and you can share plans about the best ways to do it.

5) Lastly, if there are places where you know you spend money you don’t need to, stop going there! If you don’t need to visit the mall, avoid it as you might waste money on products you don’t need. If you follow these 5 simple rules, saving money will be so much easier than you have ever previously realised.

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Emergency Fund: Should I Have One?

There was a point in my life where I thought that having an emergency fund was like taking away my money, but soon I realised it is the other way round. Having an emergency fund is more beneficial than you can imagine.

For example, if an emergency happened that cost you around $1000 – what would you do? No big problem. What if you’re like thousands of other Aussies without car insurance when your car breaks down badly (ie. your timing belt goes!) — what is your financial response? Do you have enough in your everyday money to absorb the cost? Consider, what happened if you needed to suddenly travel interstate or overseas? What if you loose your job unexpectedly? There are plenty of unique scenarios which happen at the drop of a hat.

Be wise with your money and don’t assume that you will cruise through difficulties. For some who are clever enough to have an emergency fund, they can easily pay off the emergency and perhaps still have some left over. But what about those who don’t have an emergency fund? Therefore, we can divide it into two categories, one is those who pay interest and another is those who earn interest.

Paying Interest

This category applies to those who depend heavily on credit cards. In this case, you use the credit card to pay for the $100 emergency. Your credit card is the fastest way to solve any emergency situation that involves money. However, credit cards can have negative effects on your long-term financial plan especially if you don’t have the best credit card suited to your financial abilities. Lets say you manage to pay the $1000 emergency on your card, but you will have to bear the burden of paying back to the bank not only of the $1000, but also the interest. The percentage rate ranges between 10 – 20% per year, so can you imagine how much the interest adds up if you don’t pay it back within a few months. Look for a balance transfer credit card with a low ongoing interest rate if you’re needing to get a better deal than what you’re currently getting.

Therefore, while you are still paying for the first emergency, you don’t manage to save for the second emergency. Then when the second emergency happens, you will have to borrow again, and that adds up to your burden. Then the cycle is repeated when you are still trying to pay for first and second emergency; you don’t have any credit to absorb the third emergency and your debt is going up to a point that I am sure you don’t want to think about! Okay – so three bad things happening in quick succession…unlikely I know, but be prepared.

Earning Interest

This category applies to those who are clever enough to understand the importance of having an emergency fund. They put aside a small amount of money every month, lets say $100. Then as the time goes by and first emergency happens, you don’t worry much because it can easily pay the $1000 emergency, and perhaps some of them might have that balance in their fund, so they can continue to save for the second emergency while at the same time, earning the interest from the bank. This is a prudent move that everyone should make. Now, when the second emergency happens, again they don’t have to fret. They easily settled the second emergency and this time, as usual, they might have even more money remaining in the fund – and they keep on saving and earning interest. Look for savings accounts with as high interest as possible which can accessed at any time.

So, in conclusion, I shall add that for just a small amount of around $100 every month, you are on your way out of any financial burden and heading towards a peaceful and more organised life.

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Top 5 Saving Tips For A Longer Holiday

You work hard all year to get your big holiday vacation and then it feels like it’s over before its even started. Holidays move so quickly that it is easy to wish for a longer break. You may feel that long vacations are for the mega rich and gap year students but with careful planning, longer holidays can be acheived. There are 5 key tips for learning how to save for a longer holiday.

  1. Set Goals – Firstly and most importantly, set your goal of wanting a long terms holiday and make a deadline for when you need to pay for the holiday. Having specific figures and dates to aim for will help you reach that target. The longer the run up you give yourself to save, the better and less stressed you’ll be when you book the holiday because you’ll have all the money (or most of it available right there and then).
  2. Separate Savings Account – Having a high interest savings account will keep your saving cash separate and earn whilst it is just sitting there. Having it apart from your normal account will reduce the temptation to spend it. Many people like to pay directly into their savings account from their pay check or they set up a direct debit to transfer from their account as soon as they are paid. This helps because you don’t get to see the money and it is in your savings account before you even have it.
  3. Rewards Credit Cards – Consider one of the rewards credit cards or frequent flyer credit cards on the market which reward your spending with travel perks such as Qantas points, free travel insurance or even a free flight. Its worth checking out the options. Don’t be put off – you don’t need to apply for a gold or platinum card to get great travel perks.
  4. Make Small Daily Savings – There are also many daily savings you can make to your expenditure. If you regularly get a coffee on the way to work why not keep a jar of coffee at work and have one there. This would offer great savings per day. Similarly, if you take bus rides for short journeys perhaps you could walk and save the case, as well as getting great exercise.
  5. Shop Around – Lastly, it is always important to book early and research all the prices. With internet price comparison sites such WebJet, it is easier to find the best price available and these sites should always be checked before buying.

With a bit of forward planning and following these 5 simple tips, it is possible to make saving to earn a longer holiday.

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