Essential steps to maintaining your money

Protect Your Money From Risks

Risk is the uncertainty of an event occurring that could have a negative impact on the achievement of your financial objectives. In order to preserve the money you have made, you need to plan strategies to counteract these harmful occurrences.

Investing risk is the possibility that the returns on your investment may be less than expected. The reality is that a great investing opportunity is like a double-edged sword - it can bring massive gain or cause you to lose big. To protect yourself against investing risks, consider:

- the consequences: what would happen to you if the negative event occurred?
- the probability: how likely is it that the negative event will occur?
- your objectives: how will the investing risks affect your goals?

It’s best to seek professional advice to help you decide if the returns are worth the risks.

Personal risk is the possibility that you won’t be able to carry on with your investment plans. These risks include the loss of your ability to earn and early death. Building up an emergency fund with three to six months’ living expenses is your first defence against personal risk. It is also crucial to get life and health insurance to protect you and your family.

Plan For Retirement

When you are young, strong and seemingly invincible, it’s very hard for you to think about the time when you don’t want to, or can’t work for money any more. Sadly, I have seen that a major reason for loss of wealth is that people retire and outlive the money that they have acquired.

It is vital to start planning early for your retirement. Get help from an advisor to calculate how much money you will need to last throughout retirement. Then make a plan to save consistently by using salary deductions, and try to contribute the maximum to your pension plan. With time on your side, you can create a comfortable nest egg.

However, even if you have delayed planning for this life change, don’t give up hope. Doing a retirement spending projection will let you know the extent of your shortfall. This will allow you to make appropriate plans to continue earning in your golden years to make ends meet.

Plan For Your Passing

It is financially smart to make plans while you are alive, to transfer your money and assets when you die. Estate planning is not only for the wealthy, but for everyone with dependents or any type of property.

If you don’t plan for your passing, your survivors may find it hard to get money to pay funeral expenses, your outstanding bills, and estate taxes and fees on your property. Smart preparation for your inevitable demise can also help to preserve your wealth from excessive charges.

You can reduce the hassle and time it can take to pass on your property by writing a will, using joint accounts at the bank, buying property as joint tenants, and taking out life insurance with a named beneficiary. Make sure that you think carefully about who you want to carry out your wishes, and get proper advice from insurance, legal and financial experts.

Achieve True Freedom

There is more to financial success than just the accumulation of wealth; your mentality about money is also important. Isn’t it sad to see people who may have significant monetary assets but who are fearful, stingy, and generally not enjoying their good fortune? What’s the point of having money if it doesn’t enrich your life and that of others?

To truly achieve financial freedom you must be aware that money is abundant; there is no shortage of wealth. However, if you hold on tightly to your money, you actually believe that money is scarce. Scarcity thinking will only keep you poor in mind and spirit, so try to increase abundance in your life by giving time and money to worthy causes.

January 2010 Entrecard Dropper

THANK YOU VERY MUCH!!!

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Tips for a Wonderful Financial Life

When exchanging i' do's be ready to share your balance sheet too! Discuss what money means to you one of these day when the hubby isn't that busy or harassed, find time to sit down with him over coffee and talk about money. Each of you should share what money means to you. From this discussion you will gauge each other's attitude towards money (e.g a means to enjoy life, something to save for the future) which will helps as you map out your goals. Write down your financial goals. "It's nice to dream of having a three - bedroom house, good college education for the kids, and vacation home in Tagaytay. During your money talk, agree on financial goal you will pursue. Then write the corresponding fall park figure for each so you will have an idea on how much you need to save up in order to meet your goals. Be honest about what you own and what you owe. Since you are no longer two but one, your properties and debts become his as well, subject to certain provisions in the Law. Tell each other how much debt you owe so that you can both strategies step to meet debt obligations. Make a Budget. Given your financial goals and your day - to - day expenses, prepare a workable budget given your combined income. Set aside a set amount of savings which will be used for an emergency fund and for the fulfillment of your financial goals. Then cap an amount over day to day expenses and find way to spend with your monthly budgets. Decide who will hold the purse. Some households have husband holding the money and paying for everything, others have wives doing all of these. Agree on who will disburse money for household expenses and who will actually go to the bank to pay the bills. This will avoid any misunderstanding in the future.

Manage your expenses

How to manage your everyday expenses while saving? List down your monthly income and expenses. Its a one way of identifying where your money come from and where it goes. List down all your sources of income every month so that you can plan your savings and expenses properly. Next, note down all your expenses for the month. It doesn't matter, how big or small the amount are, just write it all down. Keeping track of all your spending will show you if you are in the right track budget wise or if you are spending too much on thing that you don't really need........ Analyze each item in your expenses list. Ask your self: "Is there an item you can quit spending so much on? Is there a cheaper alternative you can tap?........ Open at least two bank account, money kept on hand is easily spend so better to deposit it at the bank. Get another account for your daily expenses and get another account four your emergency fund. When you separate your money into different account, they become easier to manage. If you follow this, sinisiguro ko sa inyo, that time will come mabibili ninyo ang dapat bilhin at hindi nyo kailangan mangutang......

Where does your money go?

Often, after doing the Personal Income and Expenses Statement portion of our workshop, participants realize they are spending more than they are earning. I suggest that you prepare two PIES one for your actual monthly expenses and another for your projected monthly expenses. Be honest and give accurate numbers or close estimates. Identify all your sources of income and all your expense items. Once you have identified your expenses items, categorize them accordingly. The categories could be: fixed committed expenses living expenses like rent and utilities, other committed expenses education, loan payments, etc., discretionary/optional expenses things that will not cause a major change in your lifestyle if you forgo them. After you have categorized your expenses, you will realize that a significant portion of your money is spent on discretionary expenses. Some examples are cell phone load, online gaming, and entertainment. I suggest that you always carry a small notebook to keep tabs on your expenses. At the very least, you should identify, label, and categorize all your expenses so that you know where your money is going....

Value of money - teach your child

Who among us would like to see their children grow up to be financially responsible? Every parent does. We all desire to see out children become financially independent someday in adulthood, able to provide for their own families and secure their future. Learning to be financially responsible does not happen overnight. It best to start while your children are still young, with something as simple as taking them to a bank to open their own savings account.... Here are some tips:

>Talk about what money is for. Small kids may think that money grows on trees or comes out of the ATM or wallet and is for buying candies. Discuss with your kids that money is for buying the family need and if there is some more left for the family want. Tell them that money is earned parents work so they can earn money. No work, no money. No money no food and toys.

>Pay for needs first. Since money is hard to earn, families should prioritize paying for their needs first. These include food, clothing, tuition fees, transfortation, rent or mortgage, electricity and the like. Tell your children this is why a budget is necesary, so that needs may be prioritized and met. As for wants - those that can wait, such as a new game console think twice about getting them and only buy them if you can afford to.

>Encouraging Saving. Children can be taught to save even if they are still young. First, tell them why it is important to save to have some funds in the future when you need them. Second, give them a coin bank where they can put some money away. Third, open a bank account for them so their savings can grow. For bigger kids transfer some of their money to higher yielding investments as savings accounts give only minimal interest.

>Give allowance. Since people learn more by application than by studying the theory, allow your children to learn money matters the practical way by giving them an allowance. Kids in the upper preschool years can be given 10 or 20 once a week or so, with which they can buy something in school during recess. You can increase the amount in grade school. The purpose of the allowance is to teach kids that they can use their money in two ways; save or spend. And they will find out that if they save they will have more money tomorrow. By spending, they will also learn to choose items carefully. The more expensive item will use up more of their money, leaving them with less. And if they choose the cheaper item they will have more money left.

>Model good behavior. Children looks up to you and watch what you do. Practice good money habits yourself by saving not overspending by paying your bills on time and buying wisely so they can imbibe these habits too. As they grow, they will bring these good money habits with them.......