Pay yourself first means to set aside money before you do anything else. If you save 1% of your income you might find how easy it is to save and you will start to save bigger amounts like 3% and then 5%http://www.getrichslowly.org/blog/2009/10/19/pay-yourself-first). Setting Money aside should be the first thing you do whether you put in a savings account or for your retirement( http://canadianfinanceblog.com/pay-yourself-first/).
It is recommended that once saving is a habit that you start making savings accounts like "new car" or whatever you what to save for (http://moneycoachescanada.ca/blog/paying-yourself-first/)
You should put the money you are saving in a account that is hard to reach eg Canada's Saving's Bonds(http://canadianfinanceblog.com/pay-yourself-first/)
Monday 20 June 2016
Responses
Pay Yourself First a phrase commonly used in Personal financing and retirement planning, it means to take a percentage of your paycheck and put it into your investments before spending any money. It's an effective way to make sure users continue to save every month.
Using this method teens and young Canadians today can start saving their money towards a financial goals they have in the future such as buying a house, car or vacations. How it would work for example is if I took 20% out of my 100$ pay, for cleaning, and put it into my savings account and investments I would, after 12 months, have 240$ worth of savings and depending on what I get for interest returns depends on how much money I make off of investing. If every Canadian were to apply this concept they would be making money off of their money while saving it and also not have to worry about losing their money by spending it as soon as they earn it. Another example of paying yourself first is a friend of mine he saves 50% of his pay check now which he can use later in the future if he wants to buy something like a car but, on the other hand his brother only saves 5% of his pay which doesn't make a huge difference in his savings account. Also when you compare how each brother saves you can see the first brother will have a mini lottery by the time he is older while his brother will have a smaller amount of cash left in his bank account so the first brother has more options of what he wants to do with his money and what he want to buy while his brother has less options and can fall into debt if he is not careful.
Using this method teens and young Canadians today can start saving their money towards a financial goals they have in the future such as buying a house, car or vacations. How it would work for example is if I took 20% out of my 100$ pay, for cleaning, and put it into my savings account and investments I would, after 12 months, have 240$ worth of savings and depending on what I get for interest returns depends on how much money I make off of investing. If every Canadian were to apply this concept they would be making money off of their money while saving it and also not have to worry about losing their money by spending it as soon as they earn it. Another example of paying yourself first is a friend of mine he saves 50% of his pay check now which he can use later in the future if he wants to buy something like a car but, on the other hand his brother only saves 5% of his pay which doesn't make a huge difference in his savings account. Also when you compare how each brother saves you can see the first brother will have a mini lottery by the time he is older while his brother will have a smaller amount of cash left in his bank account so the first brother has more options of what he wants to do with his money and what he want to buy while his brother has less options and can fall into debt if he is not careful.
Budgeting is an estimate of a person or company's revenue and expenses of a chosen period of time. The use of budgeting is a very small economic concept that has multiple variations for example a surplus budget means profits are predicted, or a balanced budget means that revenues are expected to equal expenses, and a deficit budget means that expenses will exceed revenues. Canadians can budget their money by taking their paycheck and putting certain percentages of it towards different accounts such as 10% goes to savings, 15% towards investments, 20% towards utility expenses, 30% towards rent, and then dividing the rest of their paycheck between other expenses and then putting the rest into a speeding account. the concept is similar to pay yourself first but in this case people or companies are organizing what is happening with their money in the future so they have a set financial plan.
If I was to use this concept with my paycheck of 100$ I would have 25% going into my savings account, 25% towards my investments, 5% towards donations, 5% towards my spending account and 40% towards my phone bill. This can be represented by a pie chart:
If Canadians, like myself were to apply this small concept on top of pay yourself first it would help benefit them financially and in the future.
Budgeting for Beginners
Why is budgeting good?
For a beginner a budget will not be easy as this will require changes, some big and some small, but changes nonetheless. Change is always a little terrifying , we cannot expect anything to get better if we do not make positive changes in our lives.
Steps to success :
1. Assess your income and fixed expenses
Gather up all of your bank statements, checkbook register (or other expense tracking system), bill statements, and any other financial information that you think may be relevant. Sit down and start crunching numbers.
2. Assess your variable expenses
Compare those totals to your Income minus Fixed Expenses. Being in the red means that you run out of money before the end of the month and may have to borrow money from savings, a friend, or pay on credit in order to survive. The key to success is to try, and to try again.
3. Add it all up
Now that you have created your budget, add up the numbers to make sure everything is in balance. If it is not balanced, go back and repeat steps one and two until you get the numbers to balance out.If there is an expense that is eating up so much of your budget that you cannot get the numbers to balance i.e (being spent on food or buying expensive brand name clothes), it may be time to get rid of that expense. If it is an expense that cannot be easily thrown out like car insurance, find other expenses that you can cut until you have your budget in balance.
4. Self Assessment
Put into practice those financial new year’s resolutions today and make a commitment to stick to them throughout the course of the new year.You will be in a better place financially once you do.
Conclusion :
In summary by budgeting, I will follow these steps like a john madden commentary and budget my expenses to make sure that I'm not spending a lot of money on unnecessary things like video games, junk food,etc. In the end all you want your budget to do is balance like a seesaw.
http://www.getsmarteraboutmoney.ca/en/maV2fs1PkrLIVnagingyourmoney/planning/budgeting/Pages/default.aspx#
http://www.investopedia.com/university/budgeting/basics2.asp
http://creativesavingsblog.com/beginners-guide-to-budgeting/
http://www.thefinancegirl.com/how-to-create-a-personal-budget-for-beginners/
Credit. The pros and cons
The definition of credit is, the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. Credit exists in many forms, the, cost common being a credit card. Each time you make a purchase with your credit card, you are using credit to pay for it. Some other forms of credit are loans and mortgages.
Credit, like almost everything, has its advantages and disadvantages. It’s important to understand these if you want to use your credit responsibly. Below is a chart of advantages and disadvantages of credit.
Advantages
|
Disadvantages
|
Credit is a helpful tool, as you could not possibly hope to buy a 320.,000 dollar house in cash straight up unless you have a very good salary, or if you get sick and nothing but your credit card to spend with. As long as it is used wisely credit is a usefull t you. Just make sure to pay it off and chose a card which is right for you
Budgets
Budgets
Budgets are a great tool for a young adult to make use of especially in their young life when they have many things to save for in their future (i.e. mortgage, car, etc.).
Budgets are a powerful tool in that they help you still have everything you need without spending way too much money on things. You can come up with a budget by yourself, with your parents, or with a financial adviser. For instance, a budget could be 40% of your paycheck goes into savings, while 30% goes to bills and whatnot, 10% goes toward food, 10% goes towards personal entertainment, and lastly 10% goes to tithing at church. If this person puts the majority of their money into savings but has enough for the other areas of his life, then he'll have lots saved up in his future, no matter what he makes.
As you can see, a young adult can use budgeting to avoid financial trouble and to maximise their savings in the end and make their bank account happy. Combine the bank cash with some of the other investment tools in my previous post, this young adult could really come ahead in life.
Paying Yourself First
Paying Yourself First
Many Canadian citizens should save up for retirement, but don’t. According to Global News, “there’s a disconnect happening in Canada. A large number of Canadians are looking forward to retirement – a time in their lives to be filled with travel, hobbies and quality time. But nearly half aren’t saving for it”. According to this website, 47 per cent of those polled aren’t contributing to a Retirement Savings Plan (RSP), one of the most popular tools for saving for retirement. RSPs are a powerful tool a Canadian can use to help save for their future retirement. If a young adult gets an RSP when they're young, they'll have lots of money saved up for when the time comes to retire.
One other tool one can use is compound interest. Compound Interest is a powerful tool one can use to their advantage. If you invest the smallest amount of money, compound interest will grow the cash exponentially. For example, if you invest $10,000 and earn 2.5% interest on the investment, you will earn $250 of interest, therefore making your balance $10,250. The next year, you will earn 2.5% on that $10,250. That will earn you $256.25, making your year-end balance $10,506.25. The third year, you will earn 2.5% on that $10,506.25, earning you $262.65 and making your balance $10,768.90. As you can see, you keep earning more and more on your investment. Some investments can command a powerful interest rate, sometimes even up to 25% and over, so investments like this is a good place for your money to go.
These two are just some of the ways a smart, young consumer can save up money for their future.
Avoiding Financial Fraud
Avoiding Financial Fraud
Tushar Khatri
What is a Financial Fraud ?
Financial fraud can be broadly defined as an intentional act of deception involving financial transactions for the purpose of personal gain.
For Example
If the investment broker is fully aware that no such repositories exist and still receives payments for worthless bonds, then victims may sue him for fraud.
Types of Fraud
- IIlegal Deposit Taking. Part of the money deposited by early investors is used to pay the profits due to investors. The operator continues paying these profits for a few months to lull investors into a false sense of security and to persuade investors to invest more.
- Cheque fraud. Dodgy cheques bounce because there are insufficient funds to honour them, or are simply fakes. In either case, the away to avoid this type of fraud is to insist on bank cheques or avoid cheques altogether.
- Banking/Identity fraud. This involves someone acquiring your banking details and then using them to steal from your accounts.
- Direct theft. Employees may ‘lift’ stock or pocket payments by failing to process the sale or deleting invoices.
- Invoices and payments fraud. These types of fraud rely on your business having less-than-perfect accounting practices that see automatic payments made for incoming invoices for something you haven’t ordered or received. Or payments are made to non-existent employees, or excess amounts paid to actual employees
- Embezzlement. Is the illegal use of funds by a person who controls those funds. For example, a bookkeeper may use company money for his own personal needs. Many times, embezzlement stories don’t make it into the paper because businesspeople are so embarrassed that they choose to keep the affair quiet instead.
How to Avoid Financial Fraud :
- Don’t believe your caller ID. Technology makes it easy for scammers to fake caller ID information, so the name and number you see aren’t always real. If someone calls asking for money or personal information, hang up. If you think the caller might be telling the truth, call back to a number you know is genuine.
- Don’t deposit a check and wire money back. By law, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks. If a check you deposit turns out to be a fake, you’re responsible for repaying the bank.
- Do online searches. Type a company or product name into your favorite search engine with words like “review,” “complaint” or “scam.” Or search for a phrase that describes your situation, like “IRS call.” You can even search for phone numbers to see if other people have reported them as scams.
- Watch Your Investments and Verify Them. If you have a stockbroker or an investment advisor, you should verify your investment holdings independently, and do not rely just on the statements you receive from your advisor.
- Protect your PC. Many forms of financial fraud come through stealing of personal information on PCs. Keep that computer protected with the latest anti-virus software.
- Be Careful When Wiring Money. Wiring money is sending people cash, so use caution. Many con artists insist upon bank wires for transactions. It is almost impossible to reverse money wires once they have been completed, and hard to trace. Be sure that you are dealing with a legitimate organization if you are wiring money.
How I can avoid Financial :
When I go into the bank and I get a Credit card, I have to make sure that no one knows my pin or otherwise they can steal my card and abuse it, if it has not been reported stolen. Also, if I do online banking, where I pay phone bill online, I should have a security system on my laptop like Norton or McAFee to help avoid people hacking into the laptop to steal valuable information. Now when you get a new phone it asks you if you want to set up with yellow pages, this is because if you don't have them in you contacts it will put a name on the number and tell you exactly who it is, if not it says "spam or scam" to make sure your safety.
Conclusion :
In Summation financial fraud, is heartbreaking and could eventually wreck you financially, and because of this you need to take precautions that protects your identity and our money you have save up for. And downloading security, and yellow pages to help you know if is a scam or a person.
For more Info:
http://www.cbsnews.com/news/preventing-id-fraud/
Links :
Subscribe to:
Posts (Atom)