Basic Mistakes In Financial Planning

The importance and value of personal financial planning you probably already know from our seminars and webinars. Today we offer to talk about the main mistake that people in the process of drawing up such plans.

The first mistake - this is an unrealistic goal. Of course, we all want a lot of things at once: the apartment, but no one, and a new car, and travel four times a year, and children learn in the best universities of the world, and to provide loved ones in full, as well as any does not deny. Dreaming, as they say, not bad! But the goal must be real!

As an example, consider the goal: to accumulate 1 million per year. How real is it? The answer will depend on the resources that man has today. Do you have a salary, which could delay a decent amount every month? Is there a financial reserve to start investing? Do credit obligations and whether the system is organized to generate additional income? ..

Remember! Before you decide on the purpose and its value, it is important to assess the current financial capabilities and financial instruments that you want to use. Competent analysis will help to understand how the real goal you set, and whether you have enough resources to achieve it.

The second mistake - is unrealistic deadlines. Consider the same example: 1 million per year. Now, let's talk. In principle, save 1 million, even with unfavorable financial situation may be, but is it possible to do this year? ..

Having defined the goal, realistically assess possible! Plan a date based on your financial capabilities.

Basic Mistakes In Financial Planning

What happens if the objectives and deadlines are unrealistic? Our brains can not figure out what to do to achieve them. He does not see the strategies and options, are not able to understand the methods of achieving. The goal becomes unattainable, and goes into the category of illusory dreams. No action - no motivation. As a result, we are "spit" on purpose and forget about it. Would you like to forget their purpose? We do not think! Then consider our recommendations.

Many people, when they make a financial plan does not take into account inflation. Do not lay that expenditures and revenues will grow, and this - the third error in planning. If you run one or two years major changes can not see it in five years, inflation will be strongly evident and affect the achievement of objectives. Those funds that you persistently hoarded in many ways, may not be enough for realization of its goals. Therefore, it is necessary in the planning and definition of objectives to take into account the average percentage change in inflation and to reflect this in financial terms.

We already wrote about the importance of assessing the assets and liabilities, and so little attention to the reduction of liabilities is another serious mistake in planning. Actions orderly repayment of credit and debt should be written and implemented. For advice and strategies to get rid of liabilities, as well as augmentation of assets, it is better to turn to a professional financial adviser.

One of the basic principles of financial management is a regular investment, and if you successfully exploited this advice and become an investor, it is required to consider in terms of their income from this cash flow.

Well, the last recommendation - start thinking about securing a comfortable old age for yourself now! Even if you have 20, 30, 40 years and it seems that old age is still very far away, it needs to be concerned about his future. Start to create a "safety cushion".

Today we discussed the basic mistakes in personal financial planning. Using this knowledge, you can create an effective strategy for achieving personal financial freedom and prosperity. For more tips and advice, please contact a professional consultant Agency for International Investment "Rich!"

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How To Start The Path To Financial Success?

With the key financial skills that will make you richer. That is why the Agency for International Investments "rich," has decided to become the general sponsor of All-Russian Olympiad for high school students financial market, which has been held annually since 2008.

Just last Olympics was attended by over 24,350 students from 83 regions of the Russian Federation. Many of the participants have continued their education in the financial sector and is successfully working in the financial market.

Why is this project important? Because, unfortunately, the Russians still know little about how to create sources of income and prefer to take out loans, paying crazy interest.

Meanwhile, bankers do not hide their true goals, as evidenced by the recognition of Chairman of the Board Alla Tsytovich Uniastrum Bank on Banking Forum Adam Smith in London. According to her, the problem of banks that there is a whole category of people who do not want to live on credit. "The question is, how to drive in the credit bondage, that they finally began to take out loans," - she specified.

A senior vice president of BIN Morsin Peter, referring to international experience, added: "As citizens of the retail loans are planning for a year or two, but we are interested in the longer term, for example, ten years, or people transferred their debts from one generation to another ".

Unlike bankers, we offer you to receive interest, and not to pay them. That's why we sponsor the Olympics on the financial market, and we hope that the younger generation will never know what it means to live on credit.

Finally 5 good tips from billionaire Warren Buffett: 

1. Stay away from credit cards.
2. Invest only in yourself and remember that the money does not create man, but man - is the one who created money.
3. Live as easy as possible.
4. Do not chase the brand, wear those things in which you feel comfortable.
5. Manage your life for yourself, it's your life, not someone else's!

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How To Save Money By Using Credit Cards?

The absurd at first glance the question. All have long known that loans and credit cards - this is continuous costs. What kind of savings are we talking about here? It turns out - you can!

Each of you, probably, saw for various reasons, a particular store or supermarket arrange promotions and significantly reduce the price of a product or group of products. At such moments the coffee, which usually costs 240 dollars can be sold for 150, vermouth, sold in a nearby store for 650 dollars, you will be offered at 450, and if you take two packages of detergent or cleaning agent, the third you give as a gift. Such shares exist and prices are real.

What usually does in such a situation, the ordinary man? He picks up two packages of powder to get the third free, it takes one or two cans of coffee, and so on ... Few takes longer because the amount of money earmarked for the expenses, all limited and if buy coffee , it is not enough for meat, etc. .d. In this situation just can bring real benefits to the credit card.

Interest rates on card loans now account for an average of 19-23 percent per annum. Buying, say, coffee for 150 dollars instead of 240, you put yourself in a savings of 60%, if we consider the amount that you spend. Thus, even if you pay off the loan as much in a year, the bank will pay for the coffee, taking into account the interest on the loan, 184 dollars 50 kopecks, and 55 dollars 50 kopecks will be your income from savings. With a small amount of banks, but with 10-20 - already quite palpable. Because, to repay the loan, even if the parts you sooner than one year, means additional savings on interest, and your income will be higher. We can not lose sight of the fact that food prices are rising, inflation in obedience, and thus will continue to rise in price and coffee (vermouth, powder, etc.), and your income from savings will increase.

Your income from the "credit" will be even higher if you get a credit card, which implies bonuses for calculations on it. In recent years, banks are increasingly offering maps, providing a return of the money spent on your account or transfer of a certain percentage to your mobile. Paying a card for a bargain, you earn not only discounts, but also get a bonus from the bank. 

How To Save Money By Using Credit Cards?

As you can see, by using a credit card you can really get the income from savings. It is only important to consider the following points:

1. Pay attention to the real interest rate on the credit card. Hit the nearest bank with an effective rate of 45% per annum is not necessary. On the market for a bank offers to bet 19-23%.

2. Buy items that you use regularly, not sporadically.

3. Buy products with a long shelf life, shelf life that does not end soon.

4. Try to get a credit card, which implies bonuses for calculations on it, to generate additional income.

5. Do not forget to make timely payments to repay the loan. To such redemption does not cause you psychological discomfort, you can save money on them whenever taking the new packaging that you purchased. And, the better to postpone an amount equal to the current value of the goods in the store. So you, first, will repay the loan, and secondly, at the end at the hands you will have a tangible monetary income. And the income that you can hold in your hands, and then to spend on yourself or anything you need, always pleasant theoretical paper income.

Good luck, happiness and prosperity to you!

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How To Build a Personal Budget

Many are wondering how to build a personal budget. American Learnvest.com portal offers step by step instructions on how to clean up the personal finances.

1. Assess your income:

Perhaps you have a very respectable salary, but after the taxes you have to only a fraction of that amount. Spending on the life you have what is left after all the tax deductions, as well as pension and insurance contributions.

2. ... And The Cost:

Your budget should be two items of expenditure: fixed and unfixed. The amounts of fixed costs remain the same each month - for example, the rent for the apartment, cable TV or the Internet. Accordingly, the non-fixed costs are subject to change - in this category, for example, includes food, utilities and transportation. Fixed costs are more predictable, and non-fixed, you can plan more flexibly - for example, if you want to save something.

However, even the fixed costs and are subject to change may be reduced. For example, if the rent for an apartment is too high, you can find cheaper housing.

Here is a sample list of items of expenditure.

Fixed costs:

- Rental fee;

- Loans (if any);

- Cable TV;

- Mobile connection;

- Internet access;

- Gym.

Floating charges:

- Utilities;

- Medical services and medicines;

- Products;

- Restaurants;

- Alcohol;

- Laundry service;

- Travel / leisure;

- Beauty salon;

- Clothes;

- Transport;

- Entertainment;

- Cafe;

- Caring for pets;

- Gifts for family and friends (birthdays, holidays);

- Charity.

The Desires And Needs:

Remember as a child my mother to explain to you the difference between "I want" and "I need" when you want brand new inline skates? It's time to freshen up this lesson in his memory, because not all expenses needed. When deciding for yourself, you need this or that purchase, ask yourself: "Do I live without ... next month?" If the answer is "no", then the purchase is necessary and you should be included in the budget. To the need to include rent, food, utilities. Surfing the restaurant and entertainment will surely make your life more fun, but these expenses should be secondary to your budget. Any extra money to spend on it - great, but do not forget about spending priorities. 

3. What do we spend the money:

Make a list of all your income and expenses - learn checks and balances, find out what you spend your money. Here's a sample list: 

How To Build a Personal Budget

Income:

Costs:

- Pension contributions;

- Savings (do not forget to lay a "rainy day");

- Rental fee;

- Utility services;

- Repayment of credits (if any);

- Cable TV;

- Medical services and medicines;

- Mobile connection;

- Internet access;

- Gym;

- Products;

- Restaurants;

- Alcohol;

- Laundry service;

- Travel / leisure;

- Beauty salon;

- Clothes;

- Transport;

- Entertainment;

- Cafe;

- Caring for pets;

- Gifts for family and friends (birthdays, holidays);

- Charity.

5. Savings:

Never too late to start making savings. No more excuses - start today. Savings - a great start-up capital and an investment in your future. Then you say to yourself, for it is "thank you."

6. How to save?:

You can save on a lot of things. Here are a few tips:

Drink more water. Avoid carbonated drinks - and you, and your wallet will feel better;

Eat at home. At the restaurant leaves a lot of money - and if you live in a big city, then the cost of a meal in the restaurant, respectively, increases;

Make a shopping list and stick to it strictly. Resist the temptation to shop.

And yet - do not forget to turn off the lights when you do not need, go bigger and smaller use the machine, and most importantly - always remember the ways to save money, you know that.

7. Use computer programs for managing personal finances:

Now the Internet can download a variety of programs, with which you can calculate their costs and plan your budget. Often use such software.

8. Strictly adhere to the budget:

It is not only the right to make a budget, and stick to it religiously. At the end of the month check against its costs and how they coincide with what you had planned earlier this month. If at first you did not work - not terrible, all comes with experience.

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The Seven Deadly Sins In Terms Of Finances

In the traditional seven deadly sins have financial equivalents. If you indulge in one or more of them, the problems with finances can not be avoided. Site CreditCards.com advises how to not give in to temptation, and make a choice in favor of virtuous behavior.

1. Greed:

Insatiable desire to possess more and more wealth (and buy them for credit funds) can lead to huge debts. Specialist in Public Relations from the State of North Carolina Melissa London said that a few years ago after divorcing her total debt for six credit cards amounted to 25 thousand. Dollars. It recognizes any and all financial sins, including greed, "I dined sumptuously with friends, pamper yourself and fill your wardrobe first-rate designer clothes." The most frivolous purchase, which the lady did - it's not even one, but two pairs of expensive shoes from Christian Louboutin. "I do not know why I bought them - after all, I did not work and stayed home with the children. But I really needed those shoes on a 9-centimeter stiletto "- recognizes London.

Those who prey to the temptation of overspending, Vice President of Public Affairs of the US National Organization for Credit Counseling (NFCC) Gail Cunningham advises realistic look at their own finances. "It is important to honestly assess their means to recognize that the resources are exhausted, and to determine the personal financial strategy. And greed - a recipe for disaster, "- she adds.

2. Gluttony:

Overeating - disaster of our time: just look at the obesity epidemic in the United States and around the world. But according to Larry Uindzheta writer, author of the book "You have not because you want to be poor: how to stop surviving and start to prosper» (You're Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead), gluttony easier indulge in when you pay for it by credit card. "Once I was standing in line at the airport the woman, who wanted to pay for a chocolate bar card, but the card is not accepted," - he leads a vivid example.

Instead of paying cards for fast food or a bottle of soda (and then pay exorbitant interest rates), better manage cash or refuse such expenses at all. According Uindzheta, "if you do not have paper money for chocolate, it means that it is you really did not need." However, Cunningham argues: "Reduce costs is easier than to abandon them altogether."

3. Envy:

The desire to have new things - such as friends, neighbors, or even TV stars, can also become a temptation for cardholders. "We are inclined to watch the others on TV and say to yourself:" I want it now! "- Confirms Uindzhet. "The next day, after the passage of the TV show celebrities on the red carpet at the opening ceremony of" Oscar ", shops make record revenues. Clothing - one of the most frequent reasons for envy "- says the expert.

Owning a new-fangled gadgets can also cause a feeling of envy, adds Steve Rhode, head of consumer finance site GetOutofDebt.org. One of his clients, a student wanted to buy iPod just because all of his friends have been the player. "He wanted to buy a gadget, using credit card, but his card account have been devastated. I told the client: "Do not use plastic for this purchase" - concludes Rod.

Cunningham, in turn, advises to buy the object of his jealousy only when the buyer is sure that soon will return the debt by credit card, otherwise the envy bring to the debt.

4. Lust:

Sensuality - in all senses of the word - does not lead to good, including in situations related to credit cards. "In the case of financial lust - is an unquenchable thirst to buy all new and better time after time" - confirms Cunningham.

However, sometimes it is the most ordinary lust. Steve Rhode once advised a client who persuaded his wife to have an operation to increase the bust for 15 thousand. Dollars. In this kind of money he did not have, and the operation was paid for by credit card. "I asked my client why he did it, to which he replied:" They're so good look! "- Says Rod.

The Seven Deadly Sins In Terms Of Finances

If you still can not resist his desires, the experts recommend at least wait until you are on it means.

5. Sloth:

Laziness can result in a delay of credit payments, lack of clarity in the financial situation and the very high payments on loans. Melissa London argues that the cause of a large part of its debt was inaction, "I was lazy to inquire about the status of their loan balance and to take responsibility for their money."

Professional financial advisors recommend that you carefully study all the statements on the cards immediately for penalties, errors or fraudulent transactions, as well as to immediately pay all the bills. "If you are lazy with respect to their own money, it's really a problem. You have to work very hard and finally solve it "- confirms Gail Cunningham.

In addition, clients should carefully study the market of credit cards in search of the best deals. "People are often too lazy to look for the most advantageous offer for yourself. But this often does not even need to leave your bank, but just be ponastoychivee and agree on the best conditions for themselves. It requires perseverance and a few phone calls - five, six or seven "- explains Larry Uindzhet.

6. Anger:

Anger can cause a lot of trouble, if the credit card becomes an instrument of the former site of a spouse or lover. Financial experts have even invented a special term for this kind of action - "the cost in retaliation."

Among the clients was Uindzheta couple who suffered because of this problem. The wife was fond of shopping on the internet auction site eBay, and she has a closet was occupied by these acquisitions, which she hid from her husband. He eventually learned this secret, have not found a better way to "even the score", but to go out and buy a motorcycle, says the expert.

Usually exorbitant spending do not remain unpunished. In the case of the couple said their costs have resulted in even greater debt. "They could not afford any all this nonsense with eBay, or a motorcycle," - confirms Uindzhet.

7. Pride:

Personal finance experts say that pride - a common cause not only climbing into debt, but at the same unwillingness to seek help from.

For New Yorker Tiffany Black says that was too proud in his student years and never asked her family to help with the purchase of textbooks, food, clothing, and even tickets for the journey home during the holidays. "I just used a credit card. And if I did not behave well recognized that I needed help, then maybe I would not have done such debts, "- says Black, whose result was 12 credit cards and 27 thousand. Dollars of unpaid debt.

In addition, because of false pride clients often do not seek help from professionals and specialists in finance, adds Cunningham. "In a stressful situation, people often decide that themselves right. But to delay seeking help - hence exacerbate the problem. The sooner you consult a professional, the better, "- she advises.

The key to getting rid of the financial sins - an honest look at the real situation in their own finances, as well as its behavioral motivations. "Money matters means not only money, there is always something else. Sincerity and awareness in relation to their finances - the first step to getting out of debt, "- he concludes Rod.

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Learn How To Save Money Personal Finance

At a time when wages are reduced, and prices are rising, it is difficult to force myself to make savings. There are some simple tricks you can use to work out at this useful habit.

1. Act on autopilot. You may have heard the phrase: "Pay yourself first of all." This is the best way to learn how to save money: with the other accounts as it writes a check to his advantage. Keep a separate account for different occasions (to repair cars, vacations, retirement savings).

You can also automate the savings to each pay a certain amount is transferred to your personal account. $ 20 a month, which will be invisible to the general budget, will output 480 dollars a year. Also, try to increase the amount of contributions every six months.

2. Accumulate detail. Perhaps a student you had a special bank where you pour small coins. Remember this rule. If you have children, you tell them that you can buy when the piggy bank is full. You can exchange the change in the bank notes or use it for payments in vending machines (just make sure that there is no exchange fees or they are low).

This process can add to your annual budget of a few hundred dollars. In addition, you will loose your wallet from heavy coins.

3. Forget about your raising. You have added the salary? Wonderful! But before you spend your money piled on, increase the amount of savings (see number one way). If you scroll to the accounts of the annual premium, that means you have broken the annual inflation rate, and if you have increased the service, the money you still have enough.

Rather than spend a raise, invest in something really important for you - for example, pension funds, or family vacation.

4. Stick habits. You paid a car loan a few years and finally paid in full. Rather than spend the released funds, pretend that it is still repay the loan, only to himself.

You can automatically transfer money into a savings account; If you want for years to come, they will come in handy when it's time to change the car. Imagine paying for a new car, this is a great motivation. 

Learn How To Save Money Personal Finance

5. Who has found that and money. We all sometimes happens to find money in the pockets of old coats to get forgotten fees and so on. Rather than squander this money in a shop around the corner, add them to your savings. Anyway, this amount does not make the weather, but it can help you become one step closer to the goals you set for yourself.

If, however, found the temptation to put money away is large, divide the amount into two parts: one half to have fun, while others are still adding to a savings account. So you make yourself a nice today and invest in your tomorrow.

Savings should not be difficult. The above small tricks to help you reach your goals faster than you might think at first glance.

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How To Protect Your Personal Finances During Disasters

Wherever you live, there is always the likelihood of earthquakes, hurricanes or terrorist attacks. The media publish materials on how to protect themselves and their families in such cases, but it should take care of the protection and personal finance.

Firstly, it is necessary to present different scenarios and what steps you need to take these situations. For example, imagine what you would do if you were a few minutes warning that your house will be destroyed during the disaster. Or less extreme scenario - the house will remain intact, but you will in a few days will be forced to live without electricity, telephone and transport. Imagine that you have survived in such circumstances and count in your mind, what things are and what information you may need.

The usual safety measure - a small suitcase with essentials that you can take with you in case of evacuation. This bag is put first aid kit, water bottle, a flashlight, a battery-powered radio, a fabric mask and so forth.

But most people do not think about what to do to protect such personal finance situations. Here is a sample list of what you need to bring along in case of emergency:

• Wallet, which must be cash, driver's license, credit cards and health insurance. Keep all the necessary papers to you in an accessible place, so that they can quickly bring a if necessary. Do not forget your passport;
• Cash. Make untouchable money supply. You'll need it, because the money for daily expenses are spent quickly, and run to the ATM in extreme conditions, may not be able to; In addition, the device may fail in such circumstances;
• Cell phone, smartphone, various gadgets like iPad. Certainly you need to take and charger, do not interfere, and a solar-powered charger. All of these devices is better to put on recharge in the evening, so that they are fully charged in the morning;
• A list of numbers of your insurance policies (property, a car, a life insurance policy and so on.). You can write them not only on paper but also add to the phone memory;
• A list of numbers of your bank accounts (pension accounts, deposits) and credit - mortgages, car loans . Be careful with passwords on your online accounts: this information should not get to the strangers. If you store the data in the phone, zaparolte them;
• The key to the bank deposit box, if renting such.

How To Protect Your Personal Finances During Disasters

Here are a few steps that should be taken:

• Keep documents (wills, copies of contracts, insurance policies, and so on.) In a safe place, preferably in a fireproof and waterproof box or home safe;
• Examine your insurance documents. Find out what will be the size of insurance payments and optimize the terms of the agreement, if the payment will seem inadequate;
• Keep in mind that at the time of the disaster, you may not be a source of income - especially for freelancers. So you definitely need money for a rainy day;
• Not spending all the credit limit on credit cards - it can come in handy in case of emergency;
• If you have a car, did not hurt to have a spare can of gasoline - perhaps in the case of unforeseen circumstances, you can not fill the car.

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