Monday, November 10, 2008

Prepare your personal budget..

Everyone have their own budget whether they realize it or not. It can happen without us knowing it. Have you ever think about buying something and start to think about how much money to spend on other things in order to have enough money to buy that "something"? That is what we call as budget. It means that you
plan the flow rate and direction of your money.
This way of budgeting is only suitable for short term and only about few simple spending activities.

However, when it comes to many and complicated spending activities, it is better for you to have proper budget under your concious mind. This will be obviously important for some BIG SPENDING that you will need in the future for example to buy your dream car, house and even to get marry! :)
You can continue to a longer term of budgeting which is for you children's education and support their financial needs in the future.

Some guidelines to be considered for planing your budget:

  • Your budget should match your goals. For example if you prefer to spend more on your car because you love it, then you should plan your budget more on your car.

  • It is wise to calculate how much money you can generate along the budget period so that you know how much is your saving and spending power. This is important so that you will not over budget.

  • It is advisable for you to save at least 10% of your income for you to reap decent rewards of your saving later in the future.

  • Save some money for emergency situation that is not in your plan.

  • Make sure that you list down all the fixed monthly payment that you need to pay for example your car payment and house payment..

  • Same goes to your variable monthly spending such as electric,water, telephone bills, petrols, kitchen things etc.. It's been called as variable because it does not have fix amount of value that you need to pay. You can only set the average value for it and set aside your money according to it.

  • Don't ever forget about your entertainment fund as it is important to help you stay motivated and releasing your work stress. It can be your hobby or something that you do to hang out with your love one or your friends.


Wednesday, November 5, 2008

More about financial planning

Talking about financial planning, it is better to see how you want youself to be during your retirement later. During that time you should not worry about your financial state. You should enjoy more of your life rather than continue striving to earn your income.

Start making the right decision for every things that have the options of which is the best in saving your money while producing the best results. To make it simple we can say that we need to optimize every even little things that happening in our life. The small things will accumulate and able cause big differences in your latter life.

There are few stages in life that we can generally be categorized. It started from childhood life then goes to teen, single adult, married adult and retire/old adult. Each of these stages should have proper planning on how we conduct our decision making process especially about minimizing your spending to get the best result.

There are 5 steps for you to conduct your financial planning:

1. Really know your financial condition
2. Create your goal(s)
3. Produce your financial plan
4. Act according to the plan
5. Do continuous improvement on it

We will discuss more on this later.
All the best..

Thursday, October 30, 2008

Plan Your Financial

Do you know what are your financial condition right now?
or Do you ever care about it?
Well, you should.

For the youngsters, they will still not feeling any problem without having financial planning because their parents will support them. As time pass by, they will gradually feel the negative outcome of not having financial planning. They will start to regret for not plan their financial earlier. So for youngsters that reading this post right now. Please start your financial planning from this moment if you still haven't done so.

You do not have to go to University to learn about how to plan your financial because this knowledge can be obtain by guidance from othes, reading books or doing trial and error method. This blog is one example place to get some financial planning information.

When you think about how to do certain things, you actually already in the process of doing financial planning but through indirect methods where it happen without your knowing it. For example if you are thinking how to go to certain places, either by bus or driving your car. You are thinking about reaching to your destination faster while saving your money. That's mean you want to optimize your decision to be the best in all aspects of consideration.

First of all, you will want to search for the best way to do something in order to optimize your money usage which we will go through one by one in the later post. Then you will also find the ways how to generate income for you. There will be tons of methods to do so. It's up to invidual person to find what's best for him/her. After getting some money in saving, it's time to think what is the best way to grow them. All of these have many methods available to be apply.

Thursday, October 23, 2008

Shopping wiser

   One of the ways to optimize your spending is by planning your shopping schedule. We need to set when the best time to shops is. Without schedule, we will tend to shopping randomly and usually there will be something that we forget and need to go back to buy that “things” again. This is known as wasting and “wasting” will never be friends with “saving”.

   Firstly, you waste your time by going to buy the “Forgot to buy” things. Secondly, you will waste your money for the fuel (if you have you own transportation), transportation fee (if you are using public transport) or energy if you walk to the shop.

   Isn’t better if we just add a little modification to the ways we manage our shopping styles. Firstly, shops only when you needed it. Make a list to write everything that you need to buy. Just put the list where you can come and add new “items to buy” every time you remembered one. Gradually, the list will become bigger. When it reaches the shopping time, bring the list and make it as your checklist.

   Before going out, categories the items by “shops to go”. This is because there may be different shops to go in order to buy all the items. So, when you already categorized it, you will know which items to buy at which shop.

This is only one way that I do to save money usage. Meet you later for more sharing. =)



Friday, October 17, 2008

Let's get started!

Hi there,

In this blog, I will focus more on how to save and invest our money that we have.  About how to make money, I will explain in my other blog.

Before we discuss about how we can save money, I think it is better if we know the reason why we do that.  The question here is, "How the rich people have so much money?".  We often ask the question to ourselves and friends.  We only talk about how they make the money but seldomly discuss about the methods that they use to save money.  Actually it is crucial to plan about how we can save our money because no matter how much money we can generate, if we do not control the spending, we still cannot have the money stay and grow.  

I did always talk this scenario with my friends:

There are 2 persons, X and Y.  X has income of 2500$ and Y only have 1500$.  X like to spend money and spends about 1900$ per month to support his luxurious life styles while Y hate to waste money and only spends about 700$.  If we look at the saving that they made, X saves 600$ per month while Y saves 800$.  From this situation, we can see that even though Y have less income, he can SAVE more because of his ATTITUDE and also he plan his money well.  

The formula is very simple:

Income - Spending = Save

There are two aprroaches to save more money and which are to increase income and the decrease spending.  The easiest approach should be about "DECREASE SPENDING" and that is what we are gonna discuss here.

See you in the next post..