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Monthly Archives: February 2018

Financial Skills – How to Budget & Balance Accounts

I was surprised when I asked parents to tell me the life skills they wish their kids knew, and there was a resounding request for a few topics:

  • How to open a bank account
  • How to budget & balance accounts
  • How to write checks and pay bills
  • And how to start saving for retirement

It seems some of the things we take for granted are, as a result, missing from what we teach kids.

In the last article, we focused on opening a bank account. This article is the second article in the four-part series and will look at how to teach kids to budget and balance their accounts.

Budgeting

It’s not shock that budgeting can be boring and tedious. I’ve personally never been excited to sit down and create my budgets, but it’s something that creates wealth and pays off down the road.

So how do you get kids excited about it? How can you add a little glamour to something so dull and boring? Easy – make it a game with payoffs.

Firstly, it’s important to know how to create a budget, then to adhere to the budget.

Creating a Budget

You may have your own way to create a budget, and that’s fine. In my experience, the easiest way to make a budget is as follows:

On a piece of paper, draw a line down the middle:

  1. Spending BudgetCalculate your average monthly gross income and put that at the top of the page, then multiply it by.80 (for example, if you earned $1,000, you would end up with $800)
  2. Fixed ExpensesWrite down all of your FIXED expense categories (i.e. phone bill, insurance, mortgage etc… ) and put them in one column on the left side of the page
  3. Variable ExpensesNext write in the variable expense categories (i.e. food, gas, leisure, etc… ) and put them in another column on the right side of the page
  4. Fill in all of your expenses
  5. Net Budget after Fixed Expenses – Subtract fixed expenses from your spending budget If it’s a positive number, you don’t need to change anything If it’s zero or a negative number, you should look for expenses that you can cut or lower
  6. Budget variable expenses – Using your Net Budget after fixed expenses, determine what you can spend on variable expenses without overspending each month
  7. Set a budget for each variable expense so you know what you can spend on each category in a given month

Making it Fun

OK, now that you have a budget outline, it’s time to get the kids excited.

I know what you’re thinking: “My kids will never be excited for this.”

They will if you give them some prizes or payoffs. Here’s how:

First, tell them what a budget is and show them the paper. Next, tell them that you’re going to do a contest (if you have more than one kid, this works even better).

Contest 1: Anticipating Spending

The first contest is to see how close they can budget their money to reach a break-even or $0 over the course of a month. In other words, the goal is to predict your spending as close to the penny as possible.

If you have more than one kid person that gets the closest to break-even without going negative wins a prize. With just one kid, tell them that they get $5 or $10 if they reach break-even, and every penny they are off, you deduct 10ȼ

Contest 2 – Saving After Spending

The second contest is to see how well they can budget their money over the next 30 days. If they can save money, tell them you will give them whatever they save. That means if they save $5, you’ll give them another $5 (just like companies matching a person’s 401K contribution).

If you have more than one kid, tell them whoever is able to save the most will win and get a special prize. You will obviously choose the prize since you know your kids best.

Stop Bad Financial Habits And Choose A Fresh Start

People are often influenced to give unsolicited advice to others about the easiest way to manage finances. Even though of the will make sense, the majority of these are very generic in general. You must exercise caution when you assemble a monetary strategy out from this information, though it’s important to create a precise and consistent plan.

Nevertheless, you happen to be still left together with the unanswered question. How would you prevent the decline of funds on stuff that are of no use, and yet approach managing your individual finances?

The Situation: A lot of people, including you, don’t fully understand how important it is to save cash with regard to their future. Figure out how to save first then spend, not the other way around. While this is superior to no savings in any way, it is definitely not the correct way to build an excellent savings plan.

Steps To Managing Your Individual Finances Well.

Listed here are some important tips that you can consider if you wish to reduce costs for the future. These techniques have helped a lot of people be successful at taking better proper care of their finances.

Put 20% Of The Earnings Into Savings

In case you are to be successful in the foreseeable future, carry out the opposite of just what the average person does. As opposed to saving whatever remains, save first and spend afterward. Even if you are expecting a reduced check than normal, be sure to save 20% out from each and every single check that you receive. Make sure to deposit this money once you receive money. You will have learned a vital lesson, and saving the amount of money than enables you to work your way down taking good care of everything, bills first.

Saving money assists you to create a healthy financial habit that will help you to budget your money efficiently for the rest of your way of life. You could possibly feel much less stressed about finances when you know that you have an urgent situation fund available.

Don’t Complicate Matters

It is obvious the iPhone 7 is great. Your buddies and colleagues have purchased it,but the iPhone 6 plus is one that you simply bought a few time ago. While many of these new gadgets are fun and exciting to have, you undoubtedly don’t need a new phone unless your old phone is dying. You must never buy it unless you really want an iPhone 7.

Can that new phone do something that your particular old model can’t do? It is essential to sometimes treat yourself with luxuries, just make sure this really is something great rather than some of those undesirable habits one does repeatedly. Additional money is the best money to pay, not the 20% you will be saving.

Cash Over Credit

Maybe you are from the opinion the charge cards in your wallet should be used, not hidden away. Often we start off with good intentions buying only small things likely to pay them off at the conclusion of every month. $50 here or $25 there can’t hurt, and you can always pay it off following the month. That brand of thinking gets people in trouble quickly, plus they rack up a pile of debt.

Using cash whenever you can will help you to curb this tendency. Don’t make use of credit card unless it’s a crisis situation. Alternatively, it is possible to change it out having a debit card, and that is a significantly better option!

Keep in mind that becoming a rock star at personal finance doesn’t have to be hard. It requires breaking undesirable habits and creating new, healthier ones.

Some Reasons Everyone Need Financial Planning

Do you some of the time ponder whether you could assume responsibility of your own financial planning? financial planning australia is never as hard as it looks; all you truly need to comprehend is the reason it is required and how it functions. This will give you a clearer picture of what is required of you on the off chance that you ever choose to take the procedure into your own particular hands. To be sure, we guarantee you that it is conceivable! Truth be told, most people, or laymen, on the off chance that they call themselves, are effortlessly frightened away by the mountain that money related arranging sydney appears to them. For reasons unknown, individuals are persuaded that the procedure is excessively troublesome for them.

This is not generally genuine; it is not, in the event that you simply put your brain to it. Truth be told, the supposed ‘everyday citizens’ are frequently persuaded that they can’t accomplish a proficient arrangement of funds without an expert. The expert organizations’ thought processes behind this are self-evident, and along these lines, you ought to look unequivocally to see whether you might be equipped for making your budgetary arrangement without anyone else’s input.

On the off chance that you have never at any point considered making a money related arrangement for yourself, it is vital that you do. Beneath, we explain to you exactly how and why making an arrangement of accounts for yourself is so imperative. Firstly, there is dependably the dread that your days are numbered, and that demise will come very soon. This ought to be to a great degree stressing for you, particularly on the off chance that you have a domain or dependants. You would prefer not to abandon them with obligation! For sure, what does happen when you kick the bucket? On the off chance that you dependants, a spouse, a wife, organic or received kids then you should realize that the obligation will pass on to them. You may have believed that your obligation will kick the bucket when you pass on, yet this is a totally wrong thought! In the event that you don’t have wards, however rather claim a great deal of property or domain and have left obligation on a bond identified with that, the liquidity of your property might be done in the event that it has been accommodated. Accordingly, you should plan to pay off all your obligation before you kick the bucket so as not to weight others with your unpaid cash after you are no more.

Another motivation to begin money related arranging is on the inverse end of the range of reasons. This reason is that you may pass on later than you anticipated that would or later than a great many people in your family bite the dust. What’s more, surprisingly, you have not spared enough cash to see you through your retirement! Everybody needs to resign well, thus they begin arranging early. They would prefer not to be messed with monetary matters, and in fact, neither destroy you, your seniority. So why squander your valuable time in your childhood? Make a monetary arrangement that guarantees that your obligation will be paid off before you resign. Moreover, you more likely than not set aside enough cash to live serenely on when you are does not work anymore.

What Are Merchant Banks?

Merchant banks are the financial institutions that offer financial services, solutions, & consultation to organisations. According to a notification of the Ministry of Finance in India, a Merchant Banker in India is defined as ‘any person engaged in the business of issue management either by making arrangements regarding selling, buying, or subscribing to the securities as manager, consultant, an adviser in relation to such an issue management’. Thus, a merchant banker provides its client’s consultancy for financial, marketing, managerial and legal matters.

What is Merchant Banking?

Unlike commercial banks who caters to the needs of the common man whereas merchant banks cater to the needs of corporate firms.

Merchant Banking is typically the provision of guidance and service to corporate for a fee, which can help an entrepreneur start a new venture, raise capital, expand and modernize the existing business, restructuring a business or help companies register, buy and sell assets (shares) at a stock exchange.

What are Merchant Banking Services?

Project Management: Merchant bankers prepare project reports to analyse the financing patterns to evaluate the cost of a project and appraising the same with financial institutions.

Management of Debt and Equity offers: One of the major functions of a merchant banker in India is assisting companies in raising funds from the investors. The main services offered are,

• Product designing
• Pricing
• Registration of documents
• Guaranteeing support
• Allocation and refund
• Manage Stock exchange listing

Management of Issues: These bankers play an important role in the management of issue that involves the marketing of corporate securities like equity shares, preference shares and bonds offerings to the public.

Merchant banks act as a middle man in aiding transfer of capital from investors to their client. Per the SEBI guidelines in India, a merchant banker in India, organizes meetings between the company representatives and agents to settle arrangements related registration of prospectus, launching advertising campaign and fix board meetings to pass necessary resolutions. These bankers also consult companies in the Pricing of issues. The merchant bankers also provide Underwriting of Public Issue (not exceeding 15%).

Client Portfolio Management: Managing a diverse array of securities such as shares, bonds issued by different companies to ensure maximum return with minimum risk.

Placement and distribution: These bankers assist in the allocation and distribution of securities through the merchant banks institutional and retail network.

Corporate Restructuring: These bankers act as the middle agents in negotiations between the two companies and assisting the management of its client for various to restructure activities such as mergers and acquisitions, divestitures, management buyouts, joint venture and more.

Off Shore Funding: The merchant bankers help their clients manage joint ventures, foreign currency investment and foreign collaboration arrangements.

Loan Syndication: Merchant bankers assist clients in getting term loans for projects, obtainable from a single development finance institution, a syndicate or a consortium.

Corporate Counselling and Advisory Services: Corporate counselling is a comprehensive package of all merchant banking services, such as project counselling, restructuring, issue management, loan syndication, etc. Merchant bankers also offer their corporate customer’s customized solutions to financial difficulties along with attempts to refinancing alternatives, evaluating cheaper sources of funds.