Category Archives: Money and investments

How to Save Money when You Have a Spending Habit

How to Save Money when You Have a Spending Habit


Everybody loves money especially spending money. A lot of the things people buy are not needed: new clothes, gadgets and night life are not always necessary. The economy is rough, getting jobs is tough, so you need to value your money. Sadly, many people don’t have a high a financial IQ. They know how to make money, but not sure how to save and spend it. If your able to manage your money right–you will be able to treat yourself more comfortable and more often in the long run.

Here are some of the steps with which you can save money even while spending enough:

1.Realize that you have a problem. The first step to solve any issue is to be self aware. It’s easy to be in denial, so if you’re conscious of your habits then you already won half of the battle. When you’re aware of the negative spending habits, you start second guessing every cash exchange, swipe and proceed to checkout click. Even if you continue to spend carelessly, the “should I do this” thought will linger in the back of your mind.
2.Open up a savings account. When preserving money, you need a savings account. It’s safer than holding cash in your house and it’s easier to manage. Pick a bank of your choice and physically go to that bank and sit down with a bank representative. They will thoroughly discuss everything you need to know about your new account; it’s easier to understand when speaking face to face. Have them walk through with you and set up an online banking account to help manage your money with that bank.
3.Separate your wants from your needs. It’s obvious that you can’t avoid spending money on certain things: bills, children and food is a must. Other things you can live without. You don’t need to upgrade your phone when it is due—you want to upgrade it. You don’t need to buy that extra Big Mac—you want the extra food. You don’t need the premium cable package when you’re barely home to watch TV in the first place—you want the premium cable package.
4.Create a new zero. After you budget your monthly expenses and cut back from all the things you don’t need, set a new benchmark in your savings that you cannot go below. For example: if after all your expenses each month you usually end up with $500 in your account—act like that’s zero. Do everything in your power not to have your account fall below $500. Now lets say time passes and you save a little more money, make $550 your new zero and keep doing this system forever.
5.Pay yourself before you pay Uncle Sam. When people first get their paychecks or if it’s the time of the month that their bills are do, they are quick to throw all their money at those companies they owe. Hold on for a second—take a step back and relax, ease off the pressure. The first thing you do when you get your money is put a certain amount that you’re comfortable with into your savings. Before any bills are paid, before any money is spent, give yourself the money you worked hard for before giving it to the government. Realistically, what’s the worst that happen if you’re a few days late when your bills are due? Credit yourself first.
6.Develop Will-power. You will see commercials, you will see other people with nice things, and friends will tempt you to take a night out of town. There is much power in saying the word no. Stay strong and keep reminding yourself that you’re trying to value your money and not let it go to waste.
7.Set goals. Much like step five, have a benchmark. This is important: it gives you a standard. Take out a pen and paper and write them down. You will only go out to eat once a month—goal. You will make sure to cut off the lights every night to save electricity–goal. You will walk to certain places to instead of driving to save gas—goal.
8.Don’t be afraid of coupons. When shopping, plan before you buy. Grocery shopping, book shopping etc. When you’re in need of an item, take your time before purchasing. Go to the best place so you can get the best deal. Don’t be afraid to be called cheap, your saving money. Groupon is an excellent place to look for coupons and if you are online shopping, go on Saving a couple bucks with each coupon will add up more than you think in the long run.
10.Treat yourself. After you trained yourself in this new found saving habit, there is nothing wrong with spending a little bit of money on yourself. You worked hard for this paycheck; you deserve it. Remember, be responsible and don’t forget your priorities. Do not spend more than you make—this is an ultimate no. Stay within your budget, stay within your living means, and enjoy the things that you buy yourself.

How to Develop and Improve Your Money Saving Habits

How to Develop and Improve Your Money Saving Habits

Saving money is one of those habits that we know is good for us, but might not have developed particularly well. For an individual who doesn’t currently save, perhaps it’s because they’ve faced some financial hardships in the past, that they’re too busy “enjoying life” or that they simply never saw the value of devoting any of their energy to saving.

But at the end of the day, none of those reasons is particularly important. Rather than spend time figuring out why we don’t yet have that good habit in place, it’s better to simply start building one.

Here is some banking advice and pointers for developing and improving your own money-saving habits:

  • Take a Financial Inventory. Sometimes the biggest incentive to getting into a money-saving habit is merely understanding that your current financial situation might not be as strong as you thought. By taking a financial inventory you’ll be able to quantify exactly how much you currently have saved, as well as your current assets and liabilities. This is usually known as calculating your Net Worth. Understanding clearly that you might not have as much saved as you thought can give you a strong push to start doing so.
  • Make a Budget. Even though you know you should be saving, you might not have a good idea of what is a reasonable savings amount to target each month. Having a personal budget that clearly identifies your income and all of your expenses can help make this happen. There are manybudgeting tools that you can use. When you have a detailed budget you can identify potential areas to cut back on in order to boost your savings rate.
  • Be Creative. In order to maximize your potential savings, don’t assume that any category of your expenses is fixed. Nearly all things can be changed and scaled back on, provided that you have enough will to do so.
  • Involve Your Family and Friends. Even though we’re talking about your personal finances, your daily life probably involves many other people. It can be difficult to save as much as you’d like if you have friends and family members who may be competing for your financial resources. For example, your budget may demonstrate that you spend a bit too much going out for with your friends, so consider proposing less costly alternatives sometimes. Similarly, if your family spends too much money going out to eat, come up with a less costly way to still get the quality time together. By involving those in your life who are closest to you the savings process becomes easier.
  • Prepare Yourself for a Change. Even once you’ve identified the areas that you want to cut back on in order to boost your savings rate, it’s quite another thing to actually go ahead and change your behaviors. If you assume that changing your other habits will be easy, you may be frustrated to find that it requires a little more work, and frustration can lead to failure. If you are targeting multiple areas, change one at a time and to give each change some time to become a new habit before trying to change the next one.

The best way to improve your savings rate over time is to do so in a deliberate and sustainable manner.

How to grow your investments?

How to grow your investments?


Investing in the stock market or saving to fund retirement is like growing asparagus – you should always have started five years ago.

Recent economic shocks have caused many to question the wisdom of the City saying, not least because the FTSE 100 has gone nowhere over the last five years. But the facts that dividend income during that period added 20pc to total returns, many shares and sectors have done better than the blue chip index and the power of compound interest over time continue to argue against delay or remaining in deposits.

Major financial institutions including M&G, Barclays Bank, Foreign & Colonial and Witan Investment Trust have supported the Royal Horticultural Society Chelsea Flower Show in the belief that gardeners and investors are often the same people – and similar principles can apply to both activities.

If that sounds a tad simple-minded to some self-supposed sophisticates of the blogosphere (“buy silver!”), then do try to remember that bumpkinWarren Buffet’s observation that investment is “simple but not easy”. So here are 10 tips to make your money grow using common or garden strategies:

1: Be patient. Don’t expect instant results from plants or your portfolio. But shares and stock market-based funds are likely to produce higher returns than bank deposits over the medium to long term. They did so in three quarters of the periods of five consecutive years during the last century, according to research by Barclays Capital.

2: Be vigilant. Little and often is the best way to water your garden and to regularly monitor the progress of your investments. Do not file and forget assets any more than you would fail to keep an eye on your herbaceous border.

3: Mix and match. No garden should be filled with only one type of flower – because that would make it dull for 50 weeks a year, when that plant is not in bloom, and prone to disease. Similarly, diversification is the surest way to diminish the risk in stock markets and maximise returns.

4: Don’t be afraid to prune. Just as deadwood should be removed to stimulate new growth in plants, your portfolio will benefit from dumping dud investments.

5: Don’t be disheartened. Bad weather and economic shocks are ever-present risks for gardeners and investors but the good ones learn to live with them and thrive despite occasional setbacks.

6: Enjoy compound returns. Progress with substantial plants such as shrubs and trees may seem slow at first but, after a few years, each summer’s harvest is noticeably bigger than the last. The explanation is that 3.2pc – the current yield net of basic rate tax on the FTSE 100 – is worth a lot more on a portfolio of £100,000 than the same return on £1,000.

7: Avoid delay. The sooner you start gardening and investing, the sooner you will get through the dull or difficult early stages and begin to see why both are well worth the bother. That’s why investing – as mentioned at the outset – is sometimes compared to growing asparagus; you should always have started five years ago.

8: Make hay while the sun shines. ‘Buy low’ is the first step to making a profit and ‘sell high’ is the second. Use your annual Capital Gains Tax (CGT) allowance to take up to £10,600 of profits this year tax-free.

9: Don’t be a fashion victim. Garden gnomes are no longer widely regarded as a good idea – but followers of financial fashion suffered more than embarassment when the technology, media and telecommunications (TMT) bubble burst.

10: Enjoy your garden and investments. Both can be rewarding hobbies – especially now that fewer people are retiring with final salary pensions and more of us manage our own retirement funds via Self Invested Personal Pensions (SIPPs). Both activities should also prove more intellectually stimulating and profitable than vegging out in front of the TV.



8 Habits That Keep You Poor Even With A Reasonable Income

8 Habits That Keep You Poor Even With A Reasonable Income

businessmen grasp money , pocket empty

Have you ever wondered where all your money went to? Do you often ponder why there is no money in your bank account at the end of each month? Have you found yourself frequently thinking about the invisible holes through which your funds vanish? If yes, then you have landed at the right place. We can tell you exactly the reasons why you are unable to amass money despite earning a decent income.

Here are the top 8 habits that can sneak into your hard-earned income and eat up your funds.

1. Spending more as your income increases

There’s no harm in raising your standard of life when you can. However, if you are a person who is constantly looking for ways to spend your money, you will probably find yourself in a difficult situation soon enough. If you continuously raise your expenditure along with any increase in your income (or even without it), it would be hard to have any real savings.

Try to keep your expenditures at a constant level along with exploring ways to increase your income. That’s the route to success!

2.Focusing on the present without caring about the future

Usually, when people find it hard to tackle a problem, they choose to ignore it. That’s a sure recipe for disaster. The same is the case with your finances. Generally, people focus on their present needs, wishfully thinking that future needs will somehow be met in some way.

You need to take the future into perspective whenever you are making any financial decision. Although it is good to take care of everything in the present, do your best to save for your future.

3.You think it is too early to start saving

When you are young, it is easy to get carried away by the various pleasures money can buy. People often think that right now is too early to start saving or investing. Wrong! It is never too early to save a portion of your income, no matter how low or high your income is!

Start saving today! In fact, experts say that you should save before you spend. Keep aside a portion of whatever money or income you get, and then spend the rest!

4.Not keeping a record of your money

We all think that we know where our money comes from and where it ends up. Sadly, that’s not true for most of us. We might be aware of our major expenditures, but the small things usually eat up our finances more than the big ones.

It is an excellent idea to start keeping a journal for all your income and expenses, whether they are huge or small. This way you will have a much better idea for controlling your finances.

5.Lack of budgeting and/or poor budgeting

You might be documenting everything. Then again, you might be missing the starting point — a budget! Having a realistic and well-documented budget is the foundation of all your financial planning and success.

Make a budget and stick to it! I can say this from my own experience: it makes a huge difference in how you look at your money. In the absence of a budget, it is very easy to get carried away and commit unnecessary expenditures.

6.Being unclear of your needs, wants, and finances!

In order to save money and build wealth, it is of the utmost important that you absolutely care about the must-haves, good-to-haves, and not-to-haves! You need to prioritize your financial targets. If getting rich is a top priority for you, then you need to sacrifice some of your present pleasures, whether you like it or not.

Be clear about your goals and write them down. Review them at regular intervals to keep yourself on track.

7.Ignoring your debt

For a lot of people in today’s world, interest eats up a huge portion of their finances. It’s a painful fact. Still, they don’t know how to get out of this vicious cycle, leaving them with little to no savings.

First of all, make paying your debt a top-of-the-list item on your agenda. Work out a plan for this and stick to it, no matter what. You don’t want to believe that you’re poor, do you?

8.Constantly upgrading your electronic gadgets

There is no limit to it. While there is no harm in buying gadgets that you actually need, buying only because there is this next version of mobile available in the market will definitely cause you more harm than good.

Take charge of your life today. Do what needs to be done right now. Youcan do it. Do yourself a favour and start your journey of becoming wealthy today. As William Shatner said, “If saving money is wrong, I don’t want to be right.”



Things you need to know about tax-free bonds

Things you need to know about tax-free bonds


National Highways Authority of India (NHAI) is set to raise Rs10,000 crore through the sale of tax-free bonds . The issue opens for subscription from 17th December to 31st December. The paper offers 7.39 to 7.6 per cent interest with 10-15 years maturities.

Tax free bonds are emerging as a popular choice for investors. Last week only IRFC got bids worth Rs 10,000 crore, which was double the application size it applied for.  Many more tax-free bonds are expected to hit the market as the financial year draws to a close.

Here is a low down to help you understand what all is offered by tax free bonds.

1) Compared with FDs, tax-free bonds comes with longer maturities of 10, 15 and 20 years.

2) Most importantly, unlike FDs the interest income is tax-free in such bonds. Therefore, the effective yield in tax free bonds is higher than FDs. Consider this  : the effective yield on 7.6% 15-year NHAI bonds for an individual in the 30.9% tax bracket is 11%. Similarly, for 10 years the effective yield on 7.39 per cent comes out to 10.69 per cent in the 30.9% tax bracket.

3) Tax-free bonds works best for people in higher tax brackets.  You can expect stable return from such bonds in the long run as they lock in return for 10, 15 and 20 years irrespective of the interest rate moving down.

4) These bonds are not eligible for deduction under section 80C of the Income Tax Act. Moreover, short-term capital gains are taxed at normal income tax rates while long-term capital gains (from sale of bonds after more than one year) are taxed at 10% based on indexation

5) You are paid interest annually and on maturity the principal amount is paid back. But selling bonds before maturity may not offer you required amount as it depends on market conditions.

7) As the government is moving towards paperless transactions you can apply in physical as well as demat form for these bonds.

8) Tax-free bonds are tradable on BSE and NSE. Once it gets listed on the exchange you can sell them off if there is need for money.

9) Tax-free bonds are rated by credit rating agencies such as  ICRA, CRISIL, and CARE. These bonds generally assigned AAA ratings.

10) The price of  bonds vary  inversely  with  changes  in  prevailing  interest  rates. This means when  interest  rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase.