Tag Archives: personal finance

Money lessons for students and teenagers

money management

The odds are you graduated from high school without being taught or have basic knowledge of money management. Not many schools teach students how to manage their personal finances or the basics of money management.

If you are struggling to make ends meet, is it simply a task of either earning more or spending less. It is important to be disciplined and make sure you pay your rent and bills first from your paycheck. When you are shopping, try avoiding any impulse purchases and when it comes to any big-ticket items like a vehicle or computer, take 30 days to decide before making the purchase.

Here are few quick tips to help you brush up on your knowledge and skills of personal finance.

Basics of budgeting – The key to budgeting is to know how to list and prioritize your spending and savings. All students should create a realistic monthly budget, identify how much money is coming into your bank account, then prioritize your spending. Remember to always save a percentage of your income. Don’t forget o keep tabs on your spending.

Understand the time value of your money – If you can save a small amount of money daily, this will do wonders for your long-term financial wealth. Taking simple steps to save money will allow you to accumulate money over the long-term.

Understand the difference between a saving account and checking account – As the word states, a saving account is an account to deposit money and watch it grow. A saving account is not meant for daily use to pay your expenses, this is your checking account.

Avoid building up any debt – If you accumulate debt via students loans, auto loans, or credit cards, can cause major damage for your personal finances. If you miss any payments can tarnish your credit profile or score, and in some instances difficult to recover from. Always keep your first credit card and make sure to make payments monthly.

Understand how credit works – Building a high credit score will mean that you will be seen as a trustworthy person in eyes of banks, insurance companies and auto lenders and retailers. Start with a checking and saving account, and once you are offered a credit card make sure to make monthly payments in full to build your credit score. Before a applying for a credit card or mortgage, for example, check your credit score beforehand.

Don’t be afraid to haggle – There is no shame in trying to haggle for a better deal. Ask retailers if they have student policy and discounts. Look for coupons or specials when making a purchase. Search for better deals to compare pricing online.

Understand the dangers of debt – Debt is part of life and unavoidable. In some instances it is also necessary. Understand that credit card interest rates are very high and debt can spiral out of control very quickly. Managing personal debt is probably the most vital lesson you need to learn.

Shop around for the best financial products and deals – Before jumping into any purchase it is important to understand the choices you have and on offer. Do some research before opening a bank account and don’t be afraid to switch institutions for a better deal.

Always check you bank statement – Try getting into the habit of checking you’re monthly bank statements when they arrive and look for any unexpected charges.

What is compound interest – Compound interest is a very powerful and grows your wealth quicker than thinks but can also make it harder to clear any debts.

Start saving for retirement early – It is recommended to take at least 10% of your paycheck and place it in saving or in a pension fund for your retirement. Start saving early in your career and you will have the security to retire and have a comfortable life.

Invest your money properly – Learning to invest is one of the main ways to making more money and building your real wealth. There is no quick get rich scheme. Invest your money and grow your wealth slowly, diversify and reduce the risk of your investments, avoid any unnecessary fees, and invest with zero emotions. Perhaps consult and get advise from a fund manager.

Watch out for identity theft – Young adults are more vulnerable than any other age group for having their identity stolen. Remind your child to guard personal information, password-protect phones and laptops, and shred credit card offers or other mailed applications.

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Easy and painless money saving tips

Money Management

No matter where you are on your financial journey, it is possible for everyone to turn their financial life around and save money. Often all it take is a few steps in the right direction but, like most things, the first step is always the hardest.

I have created a list to help you get started. None of the money-saving tips will be life-changing steps on their own, but over time they can make a huge difference if you are capable of implementing more than one. Some are easier to adopt, while others will take a bit more effort and discipline on your part.

Not all the money-saving tips will apply to everyone, but if you select a few and apply them to your lifestyle spending habits, you will quickly find that you will be saving more money than you thought possible.

Here goes:

  • Transfer banking accounts to a different institution and take advantage of perks, reduced fees, and earn more interest.
  • Save all your change and be surprised how much money you can accumulate at the end of the year.
  • If you are a hoarder of things, then stop collecting and start selling your things on websites like Craigslist.
  • Sign up with every free customer reward program and get rewarded for shopping.
  • Instead of buying gifts rather make them yourselves. Use the web for ideas and suggestions.
  • Implement the 30-day no purchase rule. Before buying anything, give yourself 30 days to decide before making any purchase.
  • Before going grocery shopping you should make a list and stick to the list.
  • Instead of eating out with friends rather entertain at home.
  • Don’t toss that shirt with a broken button, rather repair it. Basic sewing jobs can be done by anyone.
  • When you spring clean your closets and home, instead of dumping everything rather have a yard sale.
  • Drink more water. Not only does this have great health benefits, it is also a financial benefit.
  • Avoid convenience and fast foods at any cost.
  • For those smokers out there, for heaven’s sake (and your health) QUIT SMOKING.
  • When you cook make more than one batch which you can freeze and eat another day.
  • When you leave a room turn off the lights.
  • To save on the electrical bills install CFLs or LED lights.
  • Install a programmable thermostat, keep your doors closed, and make your windows are well sealed.
  • Make sure you service your car and change the air filter.
  • Stop using your credit cards.
  • When you plan your grocery-shopping look for daily deals or coupons.
  • Compare prices at different grocery store and see which store gives you the best value.
  • Avoid those spending sprees after a stressful day. Don’t purchase things to make you feel better.
  • Cancel all those unused subscriptions. How many of you are actually making use of your gym membership.
  • Buy used good when you can. Often, with a bit of clever shopping, you can buy things from reputable used equipment stores.
  • Avoid getting sick and wash keep your hands clean and avoid medical bills.
  • Do your holiday shopping after the holidays and find those deals.
  • Instead of buying name brands rather buy generic store brands.
  • Stick to reliable, full-efficient vehicles when purchasing your next vehicle and save on fuel.
  • Avoid going to the mall and window-shopping to avoid temptation.
  • When purchasing an item, take a few second and ask yourself if you really need it or not.
  • If you have an extra room think about renting it out on say Airbnb.com. Also a nice way to meet new people and culture.
  • Cancel all this magazine subscriptions.
  • Eating a healthy breakfast will provide you with energy for the day and curb your desire for big, expensive lunch. It is also very healthy, quick and inexpensive.
  • Don’t feel that leftovers are just inferior rehashed of meals.
  • Instead of going out to eat each day at work, rather make a healthy lunch at home and take it to work.
  • Instead of hiring contractors to fix things, try to do it yourself.
  • Use your freezer and buy those special 2 for 1 offers.
  • If you are looking for entertainment try check out the free events in your neighborhood and town.
  • Regularly check your vehicle tire pressure and save on fuel.
  • Start a herb and vegetable garden. Nothing better than being able to eat your own homegrown food.
  • Instead of driving make use of public transportation and save on full and parking costs.
  • Instead of waiting for something to break do your own home maintenance.
  • Buy in bulk when shopping for your staple non-perishable goods.
  • If you are going on a road trip rather pack food for your journey instead of stopping ate restaurants along the way.
  • Go through your cell phone bill and cancel the services you don’t use.
  • If you are thinking of buying a car, it is a good idea to look for a used model in good condition. Remember a new car loses value the minute you drive it out of the show room.
  • Spend time with you HR department at work and learn about the benefits your company can offer you. you might be surprised.
  • Don’t speed when you are driving. Rather leave a little earlier and improve your time management skills.
  • Don’t be afraid to ask to waive any fees when signing up for anything. Worst that can happen is that you get a no for an answer.
  • Be humble and use brutal effective coupon strategies. You will be surprised how many rich people use coupons these day from shopping to restaurants to entertainment.
  • Protect your home, appliances, and electrical devices with surge protectors.
  • Cancel all those cable and stiletto channels you don’t watch or need.
  • Get off the couch and do more exercise like walking or jogging.
  • Use online banking to for paying bills and other banking services to avoid spending on stamps, checks, and unnecessary teller fees.
  • Most of all never give when you are struggling with debt. Search the web for personal financial articles for advice and suggestions.
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Money saving tips for graduating students

Personal finance
Over the last few years, the labor has improved providing recent graduates the confidence of finding a job and making an income. How to manage your personal finances is one of the most important skills to learn and often forgotten during college. Life after graduation signals a new world of opportunity and responsibility. Graduating students need to be smart with their money and be aware how they spend their disposable income and plan for the future.

There are many things you can do and learn to manage your personal finances. Here are a few ideas:

Create a budget – The first step to managing your personal finances is a budget. A monthly budget that you stick to is essential for long-term financial health. A budget will also help to understand how quickly expenses can add up.

Always keep an eye on retirement – You might think that you are too young to plan for retirement, you have only started working. The earlier you start saving to better your retirement and lifestyle be down the line.

Create an emergency fund – It is advisable to create an emergence fund for any unforeseen circumstances that might or might not happen to cover your essential expenses.

Start building your credit score – Building credit and emanating your credit score over time will help show that you are a responsible borrower and worthy of loans. Keep your oldest credit card open, pay your bills on time and avoid maxing out cards.

Buy the most important things first – Create a list of thing your need and then rank their importance based on your immediate needs. Determine the expenses that matters most to you and see if you can fit that into your budget.

Pay all your bills on time – By paying all your bills on time will avoid any penalties and late fees. Don’t forget the effect it will have on your credit history.

Buy a cook book for idiots – After rent and transportation, the next biggest expense is food. learning to cook and eating in is one of the easiest ways to save money.

Reward yourself and your lifestyle – Put away a little bit at a time and use this for special events. Perhaps a concert or weekend getaway.

Invest your money in stocks and build your long-term equity – Don’t be afraid to invest your money in the stock market because you feel that you lack the understanding of how the stock market works. Start small to get a feel for investing. Growth of your investments will help fund your retirement and others things you will want during your lifetime.

Get rid of your debts – If you are one of those graduate student with a student loan, make sure you are paying at least the minimum balance on all your loans and more if you can. A good rule of thumb is to aggressively pay down any debt with the highest interest rates first.

Be honest and live within your means – Avoid spending your money and paycheck on happy hours, lunches out and expensive exercise classes. Be deliberate about how you spend and save. Don’t assume you can make it up later.

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How to avoid harming your credit score

Credit score and rating
One of the most important factors of your financial life is your credit score. Your credit score is the most important factor in determining your interest rates and creditworthiness.

Credit scores are used by banks to determine credit limits, loan rates, and mortgage rates. Certain service providers use your credit score to determine the risk type of customer you are whether or not you should pay security deposits. Insurance companies use credit score to determine your monthly premiums.

It is important to know what you can do to improve your credit score, but you also need to be aware of what actions will harm your credit score. Listed below are few things you can do to protect your credit rating.

  • Paying credit cards late
  • Not paying your credit card bill at all. While this mistake is obvious, almost everyone makes it once.
  • Running up large balances on your credit cards, even if you pay it off every month.
  • Having creditors charge off your account when they think you won’t pay.
  • Having creditors pass on your debt to third party debt collectors.
  • Defaulting on loan you have taken out.
  • Ignoring or missing errors on your credit report. Check your credit report periodically to see if there are any inaccuracies.
  • Paying your rent late. Landlords have the right to report you late payments even if it is few days late.
  • Filing for bankruptcy can devastate your credit score.
  • Assuming your spouse’s credit rating ad actions have nothing to do with your.
  • Thinking you don’t have to pay your credit card balance when there items in dispute.
  • An increased debt/credit ratio is when your balances suddenly spike, but you have not been extended a new credit line
  • Having private or government liens against any property you own.
  • While it may seem counter intuitive, steering clear of credit and debt isn’t the responsible thing to do either.
  • When you co-sign a loan for a relative or friend, you open yourself up to blow-back from any bad activity that happens down the road.
  • Bouncing checks is similar to missing credit payments, a consistent inability to make payments through a checking or debit account.
  • Not paying your mortgage payments and having your lender foreclose on your home.
  • Borrowing money just to boost your credit score.
  • Racking up credit card debt early in life.
  • Having a court pass a judgement against you to force you pay a debt.
  • Maxing out your credit cards or going over your credit limit.
  • Closing credit cards that still have a balance on the account.
  • Closing old credit cards. It is better to have a long history of credit.
  • Applying for multiple credit cards or loans.
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Students encouraged to avoid debt and manage finances responsibly

KwaZulu-Natal Finance MEC Ina Cronje
KwaZulu-Natal Finance MEC Ina Cronje

 

KwaZulu-Natal Finance MEC Ina Cronje tells students at the Durban University of Technology to take action and be more responsible and manage their personal finances and spending habits to prevent qualifying and entering the labour market with massive debt on their shoulders.

Cronje, talking at a workshop on financial education for government bursary holders and students, enlightened students of the fact that national student loan debts have exploded in the last 3 years. She advised students to take more control of their spending habits and monthly budgets and realize that it was in their hands to minimize their financial debts while they are still young.

Recently their have been media reports with regards to the number of students who own credit cards raising questions and concerns pertaining to students creating debt for themselves, and in some cases even being black-listed, prior to completing their degrees and earning a salary.

Cronje told students that the pressures stemming from financial stress is capable of having significant consequences and in some cases have an affect on their odds of succeeding at university. She reminded students that while they held any debt they would never be free and will continually be at the mercy of debt collector or agencies. Most importantly of all, debts translates into poor credit records that can take a considerably long time to rectify. “Relying on friends, family and government to stay alive does not mean freedom. The road to financial freedom is to get rid of debt and start saving and investing to build your own wealth” she said.

According to recently available research studies carried out by Student Village and Unisa’s department of marketing and retail management, has revealed that national student debts more than doubled over the past few years. Furthermore, student owning credit cards has jumped from 9.5% in 2010 to 20% in 2012. Somewhere around a quarter of all students nationally are presently in debts and the vast majority of spending is on clothes.

While encouraging students to act more responsibly and manage their personal finances significantly better, Cronje at the same time questioned the ethics of retail stores and banks for granting credit cards to students who are not working or earning an income. In many cases, a students only income is an allowance from their parents or bursaries from government and private companies”. She called on all retails stores and banks to act responsibly and do their due diligence and check the financial backgrounds of all clients prior to granting any credit.

Cronje also gave a bit of career advise highlighting the fact that employers, financial institutions and government will not employ an individual for a position that requires trust and honestly when dealing with cash or finances if they don’t have a clean credit record. The primary reason being to avoid the possibility of theft and also to protect their clients.

“When one is in financial trouble, it becomes very tempting to put your fingers in the till,” Cronjé said.

Source: SAnews.gov.za

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