Budgeting For Your Personal Finance

Wednesday, November 19, 2008

Most of us find ourselves having to part with our hard-earned cash almost on a daily basis to just keep ourselves going. Have you ever thought about exactly what you’re spending though? A great deal of people never bother to budget – yet they could find themselves a lot better off by keeping an eye on their income and outgoings. If your finances are starting to get the better of you and you want to know how to manage your money more effectively, read on.

Work out your income and outgoings

First, decide whether you’ll do a monthly or weekly budget, whichever suits you best. Then write down all your income. (e.g. salary, benefits, pension). Now list your outgoings. Don’t forget those that you only pay on an annual or quarterly basis – which you’ll need to break down to a weekly or monthly amount. Here are some common household expenditures:

mortgage or rent
home insurance
council tax
utilities (gas, electricity, water, phone)
TV licence
car tax
car insurance
car parking charges
travel to work (public transport)
credit cards
loan repayments
pocket money for kids
vet bills
luxuries (going out, clothes, presents)
Tally up your total outgoings and subtract them from your income, and what’s left over is yours to spend – or save if you’re wise. If your outgoings are more than your income, alarm bells should be ringing. You won’t be able to sustain this on a long-term basis and you’ll quickly find yourself in more and more debt. Now’s the time to sort it out. You know where you stand with your income and outgoings, so you can now make changes and improvements to the way you manage your money. Below are some tips to help you cut down your spending and increase your savings.

Save, not spend

There are lots of ways in which you can live more efficiently, and a little goes a long way – if you save just £1 a day, you’ll have £365 in a year! So everything counts:

Cook at home rather than buying ready meals and takeaways or eating out.

Cut down on your treats – CDs, clothing, make-up etc. The best way in which to do this is to give yourself a budget and stick to it.

Don’t buy designer labels or expensive brands – cut down by purchasing high street clothes or the supermarket’s own brand of groceries.

Just make your own lunch, or don’t buy coffee at work, and you’ll easily save it.

Give up smoking – it’s an expensive habit.

Switch off unneeded lights in your house.

Find out whether you’re entitled to any benefits. The government has various tax credits and allowances for individuals and families on low incomes.

Open a savings account if you don’t have one and set up a standing order to ensure that some of your income goes there every week or month.

Tax-free savings accounts such as ISAs (Individual Savings Accounts) allow you to save a certain amount each year without paying tax.

Leave your savings alone – once they’re in your savings account, they’re untouchable. The more you have, the more you’ll make in interest.

Check regularly how your savings are performing and move to a bank account with a better interest rate if necessary.

If you get a bonus or extra cash, put it in your savings before you’re tempted to spend it.

Don’t buy anything on credit unless you really have to – and only then if you know you will have the means to pay it back. It’s a much more expensive way to shop, as you’ll pay back more in interest.

Most people start to have problems with debt when there’s a major change in their life circumstances, such as getting married, changing job, moving house or starting a family. If any of your circumstances change, revise your budget and make any necessary adjustments.

If you’re still struggling …

… don’t sweep the issue under the carpet. The longer you ignore your money problems, the bigger your debts will get. We live in an expensive world nowadays and many people struggle to get by – so there’s nothing to be ashamed of. There are lots of organisations who can provide specialist help on debt management – for example the government Insolvency Service, Consumer Credit Counselling Service and the Citizen’s Advice Bureau. They’ll give you free practical advice to help you get your finances back on track.

The first thing to do is to make a list of everyone to whom you own money, and sort the list into priority and non-priority debts. Priority debts are those that are secured against your home or could have serious consequences such as you being evicted or taken to court, and these must be tackled first.

Then speak to your creditors, for your priority debts first. They’ll be a lot more understanding if you explain your situation to them than they would if you tried to ignore their payment demands. Run through your budget and try to negotiate a repayment plan that’s manageable for you.

Once you’ve managed to repay all your debts, don’t let yourself get caught in the same vicious circle again. Live within your means, don’t be tempted by credit or ‘buy now, pay later’, and keep a close eye on your budget and expenditure.

Credit Limits For Personal Financing

Sunday, November 16, 2008

The credit limits for personal financing opportunities might limit the number of offers that some people get for applying for major credit cards. Some consumers refuse to get another credit card if the credit limit is not high enough to cover debts paid with the card each month, and many lenders are lowering credit limits to reduce the overhead of operating a business based on credit. Credit risks are rising every day because people are accruing more debt each day and are not paying for the privilege of carrying a major credit card.

Most consumers earn higher credit limits for personal financing needs by paying bills before they are due. Good credit ratings are awarded by merchants to prompt payers and some high limits might be more than a consumer asks for and will often be returned to the company with a note attached that asks the company to cancel the card at the earliest opportunity. Seasoned buyers know how difficult it is to pay off credit card balances. Many consumers that have made it a point to use credit wisely in later years still remember how easy it was to be tempted to run up a lot of debt during their younger years.

The memories of being in debt never seem to go away either and many credit card owners would rather return a new credit card than be tempted to use it one day and accrue more debt. People will consider obtaining a new credit card if the credit limits for personal financing will allow them to transfer balances from other credit cards. The enticement of having no interest on debts for over six months is enough to beguile some people to use credit limits for personal financing that will ultimately reduce balances faster than the consumer could using the monthly payment plans.

If used responsibly, the credit limits for personal financing needs can serve as a barometer for consumers who are intent on monitoring the creditworthiness of the family. The high limits will signify the amount of trust in judgment that a credit card company has in a customer. By assigning a high credit limit, the customer will know right away that all of the hard work put forth to pay debts when due have paid off. People who receive credit card offers with lower credit limits will know that further work will be needed to gain the trust and confidence of credit lenders.

Some people buy consumer electronics and other high-end items and use the credit limits for personal financing plans in place of in-store financing options. The interest rates for financing these luxury items will be considerably lower and consumers feel that the credit card buyer protection plans will offer more protection when buying products right off the shelf. Most credit card companies will allow credit customers to recoup monies spent on items that are defective or purchased in error. Using credit limits for personal financing needs resembles a shield against fraud and unauthorized purchases as well.

Consumer buying incentives have increased tremendously based on the credit limits set for personal financing that provide consumers with cash back rebates and discounts on purchases made with certain credit cards. People can use the low interest rates on cash transfer to wire monies to friends and family that live throughout the world. When the credit limits for personal financing allow consumers to save money throughout the year, in all likelihood, the consumer is more open minded about asking credit card companies for an increase on special occasions when money transfer amounts extend the credit limit currently in place.

Asset Finance

Friday, November 14, 2008

In the context of finance, an asset is any material owned by an individual or a company, which has a cash value. An asset can be real estate, plant & machinery, inventory, savings, accounts receivable, patents, trademarks, jewelry, or financial instruments like bonds and equity, etc. Some Banks and finance companies offer finance against such assets, which is known as asset-based financing, and the finance thus received, is known as asset finance or asset-based finance.

Why Choose Asset Finance?
To buy capital equipment, a budget may be difficult to mobilize for growing companies. With the help of asset finance, immediate purchase and use of the equipment is possible, leaving the other lines of credit undisturbed. Maximum finance is availed as the entire cost of the equipment is met by the asset finance. The repayment is made from the income that the usage of the equipment generates over a period of time, thereby increasing your working capital. The repayments are fixed; thereby the financial structure of your business remains unchanged during fluctuation in interest rates. With fixed repayments, budget planning and cash flow forecasting is made simpler. In an economic crisis, the repayments are made flexible and adjusted accordingly.

Availing finance on your existing equipment is known as refinancing, which can be effectively used for the company's growth. Normally three types of agreement, namely, hire purchase, finance lease, or minimum term agreement are made for extending asset finance for new and existing equipment, preferably with identifiable serial numbers. These agreements once executed cannot be withdrawn; hence, a certainty of credit is assured.

Hire Purchase Agreement
In this type of agreement, you choose the equipment you require and also the vendor. The asset financing company pays the vendor. According to the repayment plan as mutually agreed upon, you repay the cost of the equipment over a period of time, typically ranging from 2 to 5 years or 7 years for assets which have a longer life. At the end of the repayment plan, you own the equipment.

Finance Lease Agreement
This type of agreement is similar to the Hire Purchase Agreement. The difference is that the equipment belongs to the finance company. You have three options, namely, to return the equipment to the finance company, to continue using it against secondary rental, or to sell the equipment at market value. Some finance companies will repay you the major part of the sale proceeds.

Minimum Term Rental Agreement
Similar to finance lease agreements, here the equipment is rented for a minimum term, and once the minimum term is over, the equipment is returned to the finance company without any extra cost.

If your company qualifies for an asset-based finance agreement, some finance companies can even extend factoring facilities to further increase your cash flow; thereby, empowering you to manage the initial difficult months with confidence.

Cheap Finance At Your Terms

Tuesday, November 11, 2008

Your property can serve you well in gaining access to a low cost loan for personal purposes. Secured personal loan finance is what you are looking around. The loan finance is available at lower interest rate and loan availing cost is kept to minimum. The loan can be utilize for variety of personal purposes like making home improvements, meeting medical or educational expenses, financing a vehicle or enjoying a holiday tour.

Secured personal loan finance requires loan seekers to place collateral with the lender. Collateral may consist of any of borrower’s property like home, jewelry or vehicle etc. purpose of collateral is to secure the loaned amount. In case there is a payment default, lender is free to sell the property to recover the amount.

Under secured personal loan finance, one can borrow £5000 to £75000 and for a greater loan lender would like to evaluate equity in collateral. So, higher equity collateral like home enables in taking greater loan. Secured personal loan finance is given to the loan seekers at lower interest rate which is main attraction. In fact the interest rate can be brought down once borrower makes comparison of different loan packages on offer.

Another big advantage attached with secured personal loan finance is that one can repay the loan in larger period ranging from 5 to 30 years. This gives ample time to the borrower for recovering financial health if he is going through a lean patch.

Those people who are labeled as bad credit in the loan market also take secured personal loan finance and with ease. This is because the bad credit person has given his property for the security of the loan. If there is payment default on his part, lender sells the property and recovers his amount. So no risk is there for the lender. Take a copy of your credit report and check it for errors before approaching the lender.

For a low cost loan and fast approval, prefer applying online. You fill some basic information in online application like loan amount, repayment period, purpose of the loan and personal details. The approval is conveyed to you soon.

Secured personal loans finance gives you access to lower interest rate finance at your terms. Make the best use of the loan. When monthly installments are paid in time, the loan enables in enhancing your credit score. Go through each aspect of the loan before making a deal.

Find A Good Financial Planner

Monday, November 10, 2008

There are many ways in which you can plan for your financial retirement. The first step in making the right moves is always the step that involves actually creating a plan of action that you can follow as a family. Many people focus too much on the now or too much on the later and have a great deal of difficulty when it comes to creating a happy medium for savings and investing.

Throughout our lives we will have both long and short-term goals that need to be assessed, addressed, and often revisited. Whether you need to find a way to pay for your children to attend college, home improvement projects, or a method for saving for your retirement you can find information and assistance for all these things and so much more if you seek the services of a qualified financial advisor.

A good financial advisor will help you find that balance that so many people and families lack. He or she will also help you assess your means in comparison with your long and short-term needs in order to see where your funds would experience the greatest return in order to suit your specific needs with minimal risk.

It is important to remember that going with a financial planner or advisor does not eliminate the risks that are an integral part of investing but it does help you learn to better calculate those risks.

Investing is a risky business. Learning how to weigh the odds and go for the prize is the best way to earn the biggest possible return on your investment no matter how modest your investment may be.

We are all starting from different means, isn't it amazing to know that we could all end up with very similar abilities when all is said and done and we are living out our 'golden years'?

Good financial planning is the key to success when it concerns your financial retirement. With so few people around the world adequately prepared to retire it is great to know that there are options and assistance that is available to help you get started on your retirement no matter how late in the game it is.

Even better is the knowledge that limits are lifted a little once you reach the age of 50 and retirement is much more eminent. This allows those who got a late start on their retirement planning or who have hit a speed bump or two along the way the opportunity to 'catch up' on their investing and work up to the place they need to be in order to establish a more comfortable retirement for themselves and those they love.

401 (k) plans offer some of the best retirement benefits your money can buy at the moment. They certainly allow you to make the maximum possible investment for your money. If you aren't taking your company up on their offer to match your investment in a 401(k) then you should seriously rethink that thought. Seriously, you're throwing away free money.

When it comes to the murky water of retirement investing it helps to have a guide to get you through. Utilizing the services of a financial planner may be the best move you've ever made in your life when it comes to the financial health of your family and your retirement.

Steps To Financial Freedom

Finally the truth is that you're better off spending 15 minutes going over your taxes to make sure they're done right, and that you've taken every tax break you're entitled to, than you are spending 50 minutes researching a stock. A tax break is not subject to the emotional whims of a market, as stocks are. Most retail tax firms will look over your tax return for free.

The reality is that the way you arrange your finances affects your parent's financial life and vice versa while taking the steps to financial freedom. Perhaps your parents are helping you pay for college. Great idea, but if they're saving money in your name, it will greatly hinder your chances of getting financial aid. What your parents and grandparents do with their money can affect your financial life. It may seem like there's no reason for you to meet with a tax advisor but if you didn't get all the financial aid you were expecting, it may be because your parents, not you, have made a financial mistake. Perhaps your folks need to meet with a tax advisor and since their money affects yours and vice versa, you need to go along with the steps to financial freedom. Throughout this article there are many times of the importance of talking with your parents about money.

If you decide to use a general financial planner, they'll charge about $100 an hour. Your first meeting will be about three hours, probably less if you're well prepared. So you have three hours. What should you do? Well this person is a financial planner, as opposed to a financial bowler or a financial belly dancer, so you should spend those hours planning.

It's important to save but it is inevitable to spend. We've all had weak moments in the video store during our steps to financial freedom. A lazy Sunday afternoon or perhaps a lonely Friday drives us to rent something we know we'll regret. While you can't salvage your pride from such a purchase, the movie does carry a financial lesson, especially because it fits in well with this whole getting loaded versus getting loaded theme.

People think that tracking expenses restricts freedom. Being broke, however, all the time restricts freedom. Pricing your habits gives you more freedom because you'll know where you're spending money. When you know that, then you have the option of arranging your life. You may want to spend more here and less there. You can save up for what you want and not waste money on stuff you don't want.

You want to keep track of all your expenses for one week. Write down every expense. Every time you swipe that credit card, write a check or pay cash. By the way, this week must be an average week in your life. Don't conduct this exercise during spring break or right before a big holiday when your shopping muscles get a workout. Pick an average week in the life of you.

Great Tips on Money Saving

Wednesday, November 5, 2008

If you hear someone offering you tips on money saving in today's hard pressed economy you should at least perk up and listen. What you decide to do with the advice at the end of the day is entirely up to you. We all know times are extremely difficult. Price of gas is absurd, interest rates are being stupid and people all over the place are losing money. You don't want this to be you so stand up and take action now.

I surf the internet quite often looking for tips on money saving and its incredible that with a little effort there are quite a few places to be found. I enjoy sharing these places with others who have decided to live the same frugal lifestyle as myself. Single handed it can be very difficult to survive emotionally in times like we are living through right now. However as a group of people sharing great ideas life is a whole lot easier.

We all know the story right now. Plain and simple times are extremely tough. Is that a reason however to give up. Well myself and many others have decided that it's definitely not a reason or even a thought that needs to be considered. In my experience I have found that saving money isn't that difficult or even painful. Especially when there are others who love to share tips on money saving.

I still live a very enjoyable life. Maybe instead of my family and me going out to a movie we may go out for a nice long walk through the park and enjoy an ice cream. Tips on money saving can be a lot of fun. It totally depends on how you face the situation. If you go in on the defensive right off the bat you will find great difficulty in making the small changes in your life. However if you enter frugal living with an open mind I am absolutely sure you will be very pleased with the results.

Tips on money saving is something you can choose to listen to and practice or something you choose to ignore. At the end of the day how your financial position turns out is all in your hands and the outcome is completely determined by yourself.

Money Market Funds

Over the long haul, the stock market has historically provided roughly an 8 % return per year. This is a statistic that has been tracked since the Great Depression of 1929. However, during this period of time, we have seen some major bear markets with spikes downward. One of these downward spikes which has been extremely evident, occurred recently during the turbulent financial credit crisis of 2008. It certainly is not mandatory for investors to remain in stocks during these horrific financial times, as there are other safer instruments that are available and should be utilized during these periods of uncertainty.

Money market instruments are an excellent and viable choice during these volatile times, to help preserve capital, and to provide almost instantaneous access to these funds (usually you can gain access within 2-3 business days), should the need arise. By definition, money market instruments are short-term debt securities (which typically mature in under one year), and are typically considered to be almost equivalent to cash, since you can liquidate them quickly to "cash out". Money market instruments are usually considered to be very safe instruments, and are usually issued by financial institutions, mega-corporations, or by the U.S. government itself. For the consumer, the quickest way to gain access to these investment vehicles, are through money market mutual funds through your brokerage account, or via money market bank accounts.

Historically, money market rates have increased and decreased in unison with shifts of government fiscal policy and resultant interest rates. In the last 20 years, we have seen money market rates in excess of 6 %, and as low as close to 0 %. With interest rates at the low end of the historical curve these days, money market instruments are at their historical lower end. It should be noted that money markets always maintain a $ 1 per share cost, and issue interest on this per share basis.

Although most money market funds issues by government or big corporations are typically not guaranteed, most issued by banks are typically FDIC-insured, which makes them backed by the Federal government. Specifically, these are the ideal money markets to invest in. Although non-bank issued funds have been historically uninsured, since the mammoth financial credit crisis of 2008, the government is now guaranteeing them for the next year (at least), with a dedicated $ 50 billion dollar emergency pool. This guarantee was devised since a well-known money market mutual fund (the Reserve Primary Fund), broke the sacred $ 1 per share paid by investors of this fund. Since the fund was unable to cash out investors who requested liquidations, due to the fund's exposure to failing Lehman Brothers' Holdings debt, the government stepped in to calm the anxiety of money market investors (currently, over $ 3.3 trillion is invested in these funds in the U.S.). This was only the second time in U.S. history that the "breaking of the buck" had ever occurred.

Given the government's assurance that all money market funds will be guaranteed by the government for the forseeable future, and that most bank-issued funds are insured by the FDIC to the new limits of $ 250,000 ($ 500,000 for joint account holders), these instruments offer an excellent, liquid place to park one's money, during trying, turbulent financial market times. Although you will not see gains in money markets like you will see gains in stock market index funds (over the long haul), the use of these instruments provide an excellent vehicle for cash preservation for those who need cash in the short-term, and/or for those looking to preserve their capital in a downward-spiking financial market.

Business Finance

Monday, November 3, 2008

The term equity finance refers to share capital that is invested into a business for the medium to long term in return for a share of the ownership and in many cases an element of control over the running of the business. There are two main forms of equity finance available to businesses. These are business angels and venture capitalists. Equity finance is fast becoming one of the most popular ways of gaining start up finance for businesses.

Equity finance is the perfect example of true risk capital. This is because there is no guarantee that your investor will ever get there money back. Unlike lenders equity finance investors don't normally have the rights to interest or to be repaid at a particular date. The way in which equity investors regain the money that they have invested into a company is through taking a share of the business and a percentage of the profit. It is because of this high risk involved in equity finance that if your business can not support growth rates of at least 20% you may not be able to attract equity funding. Equity investors are more likely to invest in someone they feel they can trust with a clear business plan and strategy.

As a business you need a clear business plan and strategy regardless of what type of business start up finance you are hoping to attract. You need a comprehensive business plan with a detailed marketing plan and your financial forecast. Your business plan needs to address issues such as how much funding you are going to need and how much control you are hoping to retain over your business. You also need to clearly state what you are using your business start up finance for as well as if your plans are realistic and if your venture is appropriate for outside funding. Whilst you are completing your business plan you also need to consider what potential investors may be concerned about. Without all of this; plus much more no potential investor will go near your business, planning is key if you are hoping to secure external funding.

If you are hoping to gain the financial help of an equity investor there are several questions that you need to keep in mind such as are you prepared to give up some of the shares within your business as well as part of the control over your business? Investors will expect to have some say in the way in which your business is run so you should be prepared for this. You also need to be confident in your business and the products and services that your business has to offer, one way in which you can do this is by identifying what your businesses unique selling point is. As well as this you also need to have the necessary industry skills and experience to drive your business.

Money Management Plan

One of the most important books that I've read during the past year is T. Harv Eker's Secrets of the Millionaire Mind. I want to review and share a savings plan that Eker shares in Chapter 14 called the Millionaire Mind Money Management Plan. Eker begins his chapter with these words:

Rich people manage their money well, Poor people mismanage their money well.

It's an excellent chapter, and I'm going to share with you a summary of the financial management plan that will set you on the right path to building wealth. It's important in all things resulting in success that you take action. So, no matter what you can start with, even if it's a dollar a month, you must take action and begin to manage your money.

Some people say, "Well, when I get ahead financially, I'll manage my money." That's a poor person mindset! The millionaire mind begins to manage now, because if you can manage a little, then you'll begin to manage a lot. I was SO into this way of thinking in the past. When I turned it around and began to manage money, I started to get wealthy!

Before I share the money management plan, here are some wealth principles from the chapter and that Eker teaches at his Millionaire Mind Intensives.

  • Until you can handle what you've got, you won't get any more!
  • The habit of managing your money is more important than the amount.
  • Either you control money, or it will control you.

So, how exactly do you manage your money? Here's a great plan from the book. Remember, it's important to start, not the amount. Start with $1 if you must; just start! Get the habit going!

Prepare 6 jars ("Jars" can be literal, or bank accounts, or categories on a spreadsheet).

Place the following amounts in each of the jars every month after taxes.

  1. Financial Freedom Account (10%)- used only for investments and buying or creating passive income streams. Money is never spent, only invested. Also, have a Financial Freedom Jar where you deposit money each day ($1, $10, loose change). Do something daily.
  2. Play Account (10%)- Use this money to nurture yourself. Use it for extra-special things in your life. The only guideline is that you must spend the money every month. Use it each month in a way that makes you feel rich!
  3. Education Account (10%) - Set aside money for your education (school, seminars,etc.) or your child's education.
  4. Long-term Savings for Spending Account (10%)
  5. Giving (10%)
  6. Necessities Account (50%)

Start the plan and let the universe know that you are ready for more money.

Financial Success System

More often than not, people associate success with money and wealth. While that is a lopsided view of success, it is true that success often brings with it financial rewards; it is also true that many people who aspire to success are thinking of the financial rewards that will follow when they succeed. But what if your idea of success is purely financial? In that case, it could be that you are looking for a financial success system that will help you achieve your financial objective.

In two other articles I discussed the use of project management techniques in achieving personal success. In that case, we looked at "Project Success" and how we could plan for it. Why not apply more business techniques, this time to money, and develop a financial success system or plan?

In most respects, your personal finances are no different to a business's finances. The underlying principles are the same. As a former professional management accountant, I can assure you that the way a company's or organisation's finances are, or should be, run is fundamentally similar to the way your own finances should be run.

Every company will have systems in place that are designed to further the success of the company, as well as protect its assets from misappropriation. In effect, they put in a financial success system that should enable them to run the business profitably and by so doing build assets.

The main elements of a company's financial system can quite easily be recognised as good practice in your own personal financial system. The statutory requirements are quite different, but from a financial management point of view there are some helpful similarities an individual can learn from.

If you apply some of the following business finance fundamentals to your own approach to personal finance, then over time you will develop a finance success system that will grow your wealth for the rest of your life.

1. Budgeting

Setting and managing budgets is a routine part of any business; they are a key tool in financial control. A home budget is vitally important too. Get into the habit of setting and monitoring your personal budget of income and expenditure, and you will have the foundation of a financial success plan.

2. Investment Appraisal

Whenever a company decides to spend money on a large capital item or new product, for example, it may carry out an investment appraisal. You will not have such large spending decisions to make, but the important thing is to consciously assess the expenditure. Will it build your financial success or hinder it? For example, if you are buying a car, which will depreciate, there is a high risk it will diminish your personal assets significantly and set back your finance success plan. When it is time to indulge, be sure it is the right time.

3. Building Assets

A company builds assets by consistently being profitable, investing wisely, and developing the business at a sensible and sustainable pace. Being profitable is earning more revenue than you spend in expenditure. The same is true of you as an individual; always ensure you earn more each month than you spend. The balance (savings) goes into your spare assets, which can build over time, especially with sound investment.

4. Balance Sheet

Creating a balance sheet in a large business can be quite complex. A simplified version may help you keep an eye on your own asset status. Preparing a rough balance sheet once a year, showing your assets on one side and liabilities on the other, will give you an idea of your personal worth, in financial terms. By comparing year on year, you can ensure you are making progress.

If you use a home budget software program, it may have a balance sheet facility to help you.

5. Regular Financial Reporting

Companies have a legal obligation to produce accounts each financial year. Your legal requirements are for your personal tax purposes only.

However, a business does not rely just on annual accounts, and nor should you. It is likely they will have management accounts on at least a monthly basis, to allow management to keep track of the way business is progressing. You should also follow that example, and keep a close watch on your budget each month, and react accordingly.

6. Cash Flow Forecasting

Even a profitable company can have problems keeping going if it does not manage its cash flow properly. In fact, it is a common reason for companies to cease trading. As part of your budgeting, ensure you incorporate cash flow forecasting, that way you can allow for peaks and troughs in income and expenditure without hitting problems with paying bills on time.

Missing payments can prove expensive to your overall wealth, so is best avoided at all times.

7. Investment and Treasury

If all goes according to plan, you will have surplus cash. A company will have a treasurer for that, but in your case that treasurer is you. Take that role seriously, and over time you will be a financial success. If you have a partner, it makes sense to involve them in this, and other parts of your plan for financial security.

Investment is a fascinating subject, so if you can learn about it, you will be well placed to do better than an average investor. Investment is about balancing risk and return, and if you can master that without taking silly risks, you should do well financially.

On top of those purely financial aspects, there are other key areas to a business that will affect finances that you could learn from:

1. Marketing.

Keep an eye on the market place for the type of success you are seeking and your areas of expertise. Try to anticipate how that market may develop and prepare yourself ahead of everyone else. You are worth more if you are ahead of the game, whatever field you may be. For example, when I was 20 I decided it was a good idea, long term, to learn as much about computing and finance as possible, as eventually they would be key in every organisation. That was before pc's existed, and it proved a sensible decision, even though my main aim was to be a writer.

2. Education and Training of Key Personnel

As an individual, the more you educate yourself about many aspects of life, both personal and commercial, the better placed you are to become wealthy. Never become complacent about your own knowledge; over time it will decline in importance, so you need to refresh it constantly. Train yourself, educate yourself, continuous.

Those are just a few ideas of how you may use business finance practices to build your own financial success over the long term. Follow those, and you should not go far wrong, and prepare yourself for a rebound should anything ever go wrong, such as redundancy or divorce, which can scupper even the best of financial plans.

Real Finance And Mortgage Interest Rates

For many of us living in the UK today, our mortgage interest rates are far too important to us, it is the largest financial deal we'll ever make. This is why it can be well worth taking the time to figure out exactly what we want.

People do not have to understand everything about mortgages. As a homebuyer, what you really need to do is understand interest rates, the different types of mortgages and think about which direction the property market is heading. For more information it would be highly advised to speak to a financial advisor.
Interest Rates

The interest rate that comes with a loan indicates how much extra one will have to repay, as well as repaying the actual money borrowed. It can be very important to gather how much of a difference even 0.5% can create. The greater the loan, the longer the repayment term, and the more important that difference. Since most mortgages are of a large scale and repaid very slowly, interest rates can be a very important factor to consider.

Below are a few examples of what you could be looking at;

With a 5,000 pounds loan, repaid over 5 years:
- a 5% interest rate could cost you 5,661
- a 5.5% interest rate could cost you 5,730

Looking at a 250,000 mortgage, repaid over 20 years:
- a 5% interest rate could cost up to 395,973
- a 5.5% interest rate could total at 412,732

Mortgages are not generally 20 years long; a vast majority of people prefer to take a series of shorter mortgages, so they can take advantage of changing conditions. There are all kinds of mortgages, but the most important question would be to ask you, is the mortgage deal fixed or adjustable?

An adjustable-rate mortgages change over a time period. So if you feel that the cost of a mortgage deal is going to come down, an adjustable mortgage could be a good idea.

If you are tied to a fixed-rate mortgage, you'll know exactly how much interest you'll pay, this leaving a time to create a budget knowing how much each monthly payment will be needed.

Finance Charges On Credit Cards

The actual charge from each purchase is not the only fee associated with the use of a credit card, there are some other fees.The amount you will have to pay on your credit card account each month will be increased by these other costs.From time to time, the common credit card fees of the APR, the annual fee, the late payment fee and the finance fee are found on credit card statements. The finance fee is added to it every month while the other fees will be added less frequently.

The credit card providers charge for the use of their lines of credit to make purchases and this is the dollar amount of the credit card finance charge.The finance charge amount will depend on the APR or the annual percentage rate and the outstanding balance on your card will determine how much you will pay in credit card finance charges.In the determination of your credit card finance charges your individual credit card company will implement their own policies and approach.

You need to understand how your outstanding balance is calculated; it may be calculated during one billing cycle or within two billing cycles.

There are three types of balances which are used to figure the amount of your annual finance charges and these three balances are the adjusted balance, the average daily balance, and the previous balance.The decision on whether the new or recent purchases you have made will be counted on the relative balance may be the common thing about these balances.The credit card finance charges can be figured when this decision has been made. Finance charges will vary depending on the billing cycle and based on the carry-over balance and the timing of different purchases and payments.

Many of the credit card companies are providing cards that operate under the minimum finance charge policy.Differences in the card’s balance each billing cycle will not cause changes or variations in the finance charges if this type of finance charge gives the cardholder a flat rate.The credit card’s minimum finance charge will go into effect when the card has a carry-over balance that goes into the next billing cycle.

The credit card finance charge is an unavoidable cost that has to be paid in order to be able to keep using the lines of credit on your credit card to make purchases.It is a very wise idea to keep a working knowledge of what will affect the finance charges which are added to the balance you pay on your credit card.Being charged an unreasonable fee for something you don’t want is unacceptable and you need to know what to do in such a circumstance.Time must be spent in studying your credit card terms and uses in order to know what to watch for on your monthly statement.Finance charges which cause an increase in the balance you will have to pay should be something you are aware of on the credit card you originally chose because of it’s reasonable rates and terms.

Financial Freedom

In this world of the Instant Meal, where water and heat seem to be the only ingredient added to a premix of compounded elements, a look at the world of personal finance certainly needs to be examined along those same lines. But what goes into the perfect "after dinner" portfolio that will be easy, fast, and memorable? Taking each element of the equation, this article lists and combines the carefully measured proportions of services and tools needed to create the perfect financially tasty entrée.

Since the beginning of the Industrial Age, advertisers, business people, snake-oil salesmen, marketing moguls and the like have sold the idea that faster, easier, and "more nutrition" through chemicals is better. We've been convinced that instant gratification is not only something to seek, but even demand in modern society. One only has to look at recent cookbooks to see we have become a society of "mixers" not cooks. Our hunger for the quick and easy has taken the place of real substance, not only in our kitchens, but in our finances as well.

As one who certainly knows his way around an oven, I wouldn't promote this type of culinary blasphemy. Nor would I endorse the type of piecemeal financial planning that I see emerging and evolving today. As with food that has been semi-produced before it even sees a mixing bowl; pre-mixed, poly-financial solutions requiring no critical thought should be discouraged as well.

So, if you could locate everything you needed to prepare, serve, and enjoy a financially tasty future, what would it look like?

The first ingredient is money. Like it or not, if you're going to manage finances you have to have finances to manage. Get out the big measuring cup for this ingredient. If you don't have this, the best case scenario is to put yourself in a position to obtain it. If your financial plan doesn't include a way to obtain and renew this resource, you won't even have the opportunity to preheat your oven…or bank account.

If you are among those "cash gifted" to have this already, the next step is a set of goals and a plan that will be refined and tweaked throughout the process. If your recipe doesn't allow for creativity, you're just another one of the masses that will be stuck in a continually rotating cycle of mediocrity. You will eventually fall short of the imagined final result. The financial horizon is always changing…you should too.

You should have a cupboard full of ingredients. As any good chef knows, just because it's there doesn't mean you have to use it. With the exception of some in the southern United States, cayenne usually doesn't compliment pecan pie. That's not to say you couldn't use it. Just as unfamiliar ingredients shouldn't be tested on guests, so too is your approach to finance. If you aren't completely comfortable with the "ingredient" don't use it. After a little study and, yes, critical thought, if you have a complete understanding of the risks and benefits choose your next step.

Your ingredients should include:

1. Solid Corporate Structures- this should be both legal and effective in furthering your goals. Sometimes, depending on where you reside, this means looking beyond your comfort zone. If you only used saffron or whole vanilla beans that are produced within your own borders, would this not seriously limit your table fare? The same is true in the financial world. Chefs and financiers alike know the value of using unusual ingredients to their advantage. That's what makes them number successful and sought after!

2. Legal and Financial Professionals - a solid team of international folks in the know. As governments, laws, and attitudes change and evolve, you need timely information to make informed decisions

3. A Basket of Diversified Financial Products - FOREX (Foreign Currency Exchange), a private, secure, members only credit union with internationally competitive certificates of deposit, proven hedge fund, tested managed accounts, precious metal depository for the physical product, several choices of currencies to hold, an international credit card (not a debit card) for use with corporate expenses and international business or travel, and a corral of folks to advise and educate you on new and tasty financial opportunities. Here again, you don't have to use everything in your cupboard, only those ingredients you feel comfortable using.

4. Continuing Education and Program Expansion - Let's face it, a menu can get boring and stale after awhile. Just as chefs change and tweak their courses, so too will the savvy financier. You could not possibly research and attempt everything that comes through the door onto the financial scene. That's why you need to employ the assistance of legal and financial experts to keep you abreast of what's changing, what's working, and what's not. For every new program that comes along, it's a good bet that 90% of them are "duds" or simply not something you're going to try. A good team working on your behalf is essential for safe, steady growth.

I attempted to find just such a group for many years. I was always disappointed with the results. Sure, I could find these services and opportunities, but never in one place! For FOREX, I had ABC Investments, for stocks, there was Chuckles, Inc., for international business structures there was a train load of companies who, after closer scrutiny, were communicating to members who were either on the run or in "the big house." Bad advice, outdated theories on ever-changing international tax laws and inter-nation co operations seemed to be the norm. After much searching I was able to discover and confirm the Venture Resource Group (personal link hyperlinked here); a group of like-minded individuals who are constantly on the lookout for opportunities, shifts in the international legal and financial arena, and a business building structure that enables even those with very little starting capital to begin to grow and thrive in, not just survive in the hottest room in the international house! This is certainly worth a look and deserves serious consideration for those that don't want to have to join several different companies to begin their journey towards financial and personal freedom. The Venture Resource Group (hyperlink here), I discovered, has everything I have listed above. If you're not a great "cash cook", or don't have a lot of time, if you're just looking for something in "a box" this may be your "instant meal." This international group brings forward practical ideas and legal alternatives that are available to most everyone worldwide. Individual control of one's path and destiny is not only required, but encouraged.

Avoiding Financial Failure

I am certain you and I can agree that if anyone is to achieve financial independence it is common sense that you must spend less than you make. No matter if you consider yourself rich or in the poor house or somewhere in between, if you continually spend more than you make you are destined for financial failure. Wouldn’t you agree?
Although spending less than you make may be as equally important to any one of the listed reasons below, it is not the number one reason people fail financially. Have you ever heard the old saying “what you don’t know won’t hurt you”? Well, that couldn’t be furthest from the truth. What you don’t know CAN hurt you. It WILL hurt you if you continually do the same things but expect different results. Albert Einstein labeled that insanity.
Below are top 10 causes most people fail in their finances and building wealth. Hopefully it will give you insight to not conform to status-quo and bring forth desire to do things differently to change failing results or even increase good results you may be having.

Cause # 10: Procrastination
A lot of people postpone an investing and savings plan until it is too late. Young people have a fantastic opportunity and advantage because they have time on their side. The reasons people give for not starting an investment and savings plan are wide-ranging and many are genuine. They also vary according to age. In their twenties they are just getting rolling in life with a first job and would like to enjoy themselves by spending on cars, electronic gadgets, social life, etc. In their thirties they have a young family and a mortgage to hold up and no money. At this point most are living paycheck to paycheck. Many have credit issues from misuse of credit and lack of knowledge of the correct way to use credit. In their forties they say things are rough with kids to put through university and unforeseen medical expenses, and in their late fifties it is already too late without any time left to accumulate capital through the magic of compound interest on investments. The truth of the matter is, a convenient time never comes and it’s already later than you imagine. Be it in your twenties or sixties, the time is now.

Cause # 9: Lack of Discipline
Most people find it hard to save because they save - buy - save - buy, while yet others simply buy - buy - buy. It is easier to say "yes" than "no." Those who lack discipline to say "no" will discover financial success an inconceivable achievement. The "must have it now" mindset being perpetuated by media compels one to buy now what he can't afford by charging it in the hope that he can pay for it later on. Most people are easily led by advertising and the ease of swiping a credit card. That conditioned mindset will damage you until you learn and understand the power of leverage and how to use credit as a leveraging tool to cancel interest costs instead of increasing interest costs. Lack of Discipline also arises from trying to keep up with “The Jones” syndrome. When in actuality, the Jones are broke too trying to keep one leg over you.

Cause # 8: Inadequate Protection Against Unexpected Events
It may be the loss of a house due to natural catastrophe or the death or disability of the bread winner. Adequate protection (insurance) against these events is critical to financial success. Not being properly covered has financially swept away many potentially successful people.

Cause # 7: Lack of Desire as a consequence of a Poor Attitude to developing Wealth
Bad mental attitude has caused more personal troubles than anything else. What we think and expect to come about usually does. Successful people are optimists while unsuccessful people have a pessimistic mental attitude. If you continually think about getting out of debt you may probably stay there. Focus on building wealth. The vibration of the word wealth is greater than the word debt. Block out negative thinking and conditioned thoughts and mingle with other successful, positive people.

Cause # 6: Poor Debt Management Through Excessive Borrowing
Lack of patience can result in borrowing for things that lose value, so that with interest payments you pay back, you pay a great deal more for the item than it cost at first. (Especially houses, new automobiles, furniture etc.)

Cause # 5: The Need to Adjust But Fail to Act
Daring to do things different or switch up the routine is why a lot of people fail to achieve the success they seek. Don't be afraid to engage measured risks. Think about it, the multitude who make megabucks are the ones who do the opposite of what everybody else does. Sell when everyone else buys and vice versa.

Cause # 4: Lack of Foresight
Winners have an ability to look beyond the immediate and into the future. Although some may see your visions as dreams do not forget that you have to have a vision to make a dream come true. Unless you are fortunate enough to be willed a legacy, the only income you will ever make work for you is that what you lay aside from current income and investments. People with foresight can multiply their money by investing, saving and leveraging their income by canceling interest cost on debt. Work for your money then have your money work for you.

Cause # 3: Inefficient usage of Time and inadequate Work Habits
Time truly is like money. You have a choice to either spend it or invest it in manufacturing a more proficient YOU by self-development. Once you waste time or money, it’s gone. Consider not to waste yourself. Yesterday is gone, tomorrow is not here or certain. What matters is now. Plan your day; what do you genuinely desire to achieve today? Do that and it will pave the way for tomorrow.

Cause # 2: Failure to construct Plans
Did you know that just 5% of the population sets goals and only 2% have any form of goals that are written down? Their activities have a purposefulness; they are results oriented; they are motivated; they are positive; they are confident…they are life's achievers. Where would you like to be in five years? Without a plan it is easy to float without aim, and bounce around from day to day. If you have set goals you will acknowledge what you want to attain. People fail to attain because they never plan to succeed. It is not that they plan to fail, they fail to plan. So set your financial goals, objectives and targets.

Cause # 1: Lack of Knowledge
May I say more specifically, a lack of a desire to gain knowledge. Make the attempt to read about financial affairs and wealth building strategies and you will learn. Many financial perspectives will help you decide the best course of action for your financial matters. When you get to the point of where you think you know it all or you are not open minded to expand your financial horizons to increase your current condition, you are destined for failure and financial stagnation. Many people don't know where to go for unbiased life and financial advice so they do nothing. To do nothing is the worst move to make. You should always seek advancement through knowledge.

The effect of these causes is financial failure. You could never grow by doing the same things or worst, do nothing. So I submit to you, to yield great rewards, never be afraid to step outside your conditioned way of doing things – your comfort zone. With an open mind, always seek knowledge of a better way.

Tips On Personal Finance

Do you ever wonder where your money goes every month? Does it sometimes seem as though you cannot afford to do things because your financial obligations are holding you back? If you find that you are asking yourself these sorts of questions, perhaps you should take a look at your financial situation and assess whether you are practicing good personal finance management or not. Good personal finance management spends within their income, plan for the future and solve financial problems as they arise. Poor personal finance management pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.

Planning your personal finances doesn’t always come naturally, and even if you’re just beginning to take your financial matters seriously, then you likely need a few personal finance tips.

Evaluate your current financial situation. One of the most important goals for most people is financial independence. Collect accurate information about your personal financial situation. Calculate your net worth which includes the real estate, saving and retirement accounts, and all other assets. This will help you decide how much money you can set aside for meeting future needs and goals.

A basic personal finance tip is to make a budget. A personal finance budget is information made up of your income and expenses and the more accurate this information is, the more likely you are be able to meet your goals and realize your dreams. A personal finance budget should be made for at most one year at a time and include a list of your monthly expenses.

All expenses must be included. To be sure of that go through all your paid bills, check register and credit card receipts to find expenditures that recure every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.

Get an electronic bill pay. This is a very convenient way to pay your bills. You pay them electronically, by direct withdrawal from your bank account. The transaction is processed immediately. You can even link your bill pay service to your personal finance budget, so that your expenditures are automatically entered in the appropriate category. Personal financial management can be really easy.

Make an investment and finance plan. Now that the fundamental state of your personal financial security has been established, the time has come for the more prosperous part of your personal financial life. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.

You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you don’t have to worry about debt taking control of you.

Way To Manage Your Debts Is Debt Consolidation Finance

In modern times, most of us are suppressed under piles of debts. It is becoming more and more difficult to manage debts. Ignoring financial matters for a long time may create trouble for you in the near future. To avoid any such fuss, usually people opt for debt consolidation for matters pertaining to finance. Debt consolidation finance is an integral part of debt management program, which aims at elimination of debts, with debt consolidation plan. Debt consolidation finance can prove to be miraculous, if chosen properly. Now, we will discuss in detail, what debt consolidation finance is and how you should plan it to finance your debts in an uncomplicated manner.

Under a debt consolidation finance plan, the borrower is not supposed to make repayments to different lenders. All of the borrower’s debts are merged in to a single debt, and the interest is charged upon that particular amount. This automatically results in trimming down of the entire debt. It makes the debt less complicated and all the more manageable.

Before choosing any debt consolidation finance plan, a borrower can either ask for counsel from some credit advisor or evaluate his financial status on his own. This should take place even prior to your search for debt consolidation finance plan. You should have a clear idea of your own financial situation. First of all, jot down your financial requirements. Here, financial requirements do not mean the things that you would like to buy. It refers to debts that you are planning to repay. You should have a clear cut idea of your long term and short term financial aims. With the help of some arithmetic find out, whether will there be need of an additional source of income or you can manage by cutting some of your expenses.

After ascertaining your own financial position, you can finance your debt consolidation from any of the two available options, which are secured and unsecured. A secured loan mandates any of your property as collateral. It reduces the risk factor, in turn of which, your lender facilitates you with various benefits like lower rate of interest, larger loan amount, longer repayment tenure etc. On the contrary, an unsecured loan does not necessitate any collateral and thus, the rate of interest is higher. The loan amount will be smaller as compared to secured loans. Whatsoever loan you may choose to finance your debt consolidation, make sure you repay it on time. It should also be in conformity with your financial situation.