| State Your Ways Of Growing Your Savings!
, Money Educational Contest - Minimum 150 words
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Oct 16 2007, 05:18 AM
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Your Income - Your Spending = Your Savings
TotalCandor Saving Strategies
Did you learn this basic savings formula? Its simplicity provides the answer to a frequently troublesome question: ďHow can I save more?Ē As most people cannot control their income, there is only one possible answer: Spend less.
Now, how do you do that? It seems easy to say but hard to do. Below are ten great ways to start. Even if you take just one or two to heart, youíll be on your way to growing your bank account!
Strategy 1: Donít become emotionally separated from your money
Remember when a grandparent or special aunt or uncle gave you a dollar bill? You enjoyed simply having money, looking at it, and even counting it. You knew exactly how much you had and planned how you were going to use it.
How things have changed! Now your paycheck is direct-deposited and you charge most every expense. You donít have a clue how much money you have in your wallet until you find yourself at a place that doesnít accept credit cards.
This emotional separation from your money makes it much easier for you to spend more. Try using more cash for a while and see if your expenses go down. Handing over five twenties is much harder for most people to do than charging $98.47 on a credit card.
Strategy 2: Understand and be honest about expense classifications
Think of discretionary expenses as ďwantsĒ and non-discretionary expenses as ďneeds.Ē Since there is little you can do in the short-term to reduce non-discretionary expenses, traditional spending reduction focuses on limiting your discretionary wants. Often people think of too many of their expenses as needs. However, incorrectly labeling your expenses limits your ability to take advantage of other savings opportunities. Think about the decisions you make everyday: are the bulk of your purchases really non-discretionary needs or do you just view them that way? Remember, while eating is a need, eating out is a want.
Strategy 3: The time to lower your spending on needs was yesterday
Many people have trouble saving even while limiting their spending on wants because their expenses for their needs are too high for their income level. It is you that must care enough to review your spending priorities before making that commitment to an apartment lease, mortgage, or car. Just because someone will sell something to you doesnít mean or even imply that you can actually afford it. Although non-discretionary expenses were not needs at one point, once you commit, these expenses will require part of your monthly income for a long time.
Strategy 4: Enjoy free stuff
Depending on your interest and health, you can go on a long hike, sit in a park, talk with a friend, read a book or newspaper, lay on a beach, play sports with friends and so on. Many people feel they canít have a good time without spending a fair amount of money. But thatís based on whatís been successful for them in their recent past as opposed to a reality of life. When you were a kid or even a college student there were hundreds of days where you had no money to spend and you were as busy and as happy as ever. Can you try a day or two like that this month?
Strategy 5: Major on the major
Donít spend a lot of time evaluating minor expenses, like where to buy pizza. Rather, put major focus on major purchases. A car and a place to live are obviously major expenses. What else is major? Regardless of age, financial aptitude, or income, a good rule of thumb is that anything that requires you to finance the acquisition is a major purchase. Spend serious time evaluating these purchases, ensuring that you can actually afford what you are buying and that you value every feature and option youíll be paying for over the upcoming months and years.
Strategy 6: Enjoy being with people you like
Itís the quality of your friends that will make the evening not the quality of menu design or lighting of the establishment in which you choose to meet. If a few people talk about meeting up for dinner, itís okay if youíre the one to suggest meeting at a place similar to one you loved when you made less (or no) money. Such places cost a lot less than the new trendy yuppie place that just opened up. There are many people who will be glad to spend $15 on the eveningís food rather than $35 but just donít have the courage to propose the alternative to the free-spending organizer. Donít be surprised if one or two of these people thank youóin private.
Strategy 7: Donít blow off the recurring minor
Small expenses that recur arenít truly minor. For example, your cable bill, your cell phone plan, and potentially even your morning coffee are all recurring minor expenses. Estimate the costs of such expenses on an annual basis. Then, ensure you still enjoy a level of value in line with this cost. Donít try to change all you habits - but can you find one recurring expense to cut? Perhaps lose the premium cable channel you never actually watch? Or, switch from a latte to a hazelnut coffee? Minor expenses arenít really minor if they last for a long time.
Strategy 8: Spend with comfort on items or experiences you value highly
As in time management, you canít prioritize everything financial as highly important. Life requires choices. If you donít prioritize at the outset, in the end the choices will have been made for you because you wonít have money left for that next expense. Donít give up that control. Know what you truly value and spend on those with no guilt - enjoy! Know that only a very select few have unlimited discretionary expenses. If you are reading this, you are not one of those people. So while you should enjoy those experiences you value highly, hold back on discretionary expenses that donít provide you with that same emotional high.
Strategy 9: You wonít spend what you donít see
Create a forced savings program. If you have a friend that makes 10% more than you and you have the same basic lifestyle, donít you think he should be able to save 10% of his pay? Well, the same is true for you, because somewhere you have a buddy whoís looking at you the same way. Enrolling in your 401(k) is the easiest way to do this. If you are already in the habit of spending what you make (but no more), you will simply get used to spending less. In fact, you will have to because your net pay will be lower -you wonít have the temptation to spend what isnít actually in your checking account. The earlier in your career you participate in such a program, the easier it is to do successfully, so donít delay. When youíre just starting out, any pay is big pay.
Strategy 10: Constant budgeting isnít required
It is appropriate to prepare a budget at certain key times (like making a new or increased commitment to a non-discretionary expense). However, if you prioritize your values and commence a forced savings program, you will consistently meet any strict budget objectives you would put together.
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Oct 16 2007, 05:25 AM
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Start Small and Your Wealth Will Get Bigger
by: Stephanie Yeh
Weíve all heard the phrase, ďYou have to start somewhere.Ē Nothing could be truer of creating wealth and prosperity in your life. Sometimes the idea of becoming wealthy can seem so overwhelming that we donít know where to begin. After all, if weíre up to our eyeballs in debt or barely making it, how can we possibly think about getting wealthy?
Start small. This is one of the greatest wealth creating habits. If an oak tree can spring forth from a miniscule acorn, a money tree can certainly grow from a tiny bit of seed capital. Starting small can work in two ways to generate wealth: saving small amounts and investing small amounts.
Letís start with the savings end of the equation. If youíre spending equal or more than your income each month (and most people are), then you need to slowly decrease your spending. Itís easier than it seemsójust start small. Each month, choose one way in which you will decrease your spending. For instance, if you go out to eat once a week, see if you can cut that down to just once or twice a month. Are you saving a whole lot? No. But you ARE saving, and thatís whatís important. Itís also important that you donít spend more in another area of your life to ďmake upĒ or reward yourself for spending less in your chosen area. If you consistently spend less each month, you will eventually begin to make headway. This wealth creating habit will help you develop your wealth slowly but constantly.
The great thing about spending less each month is that the results are cumulative. Letís say the first month you decide to eat out half as much as you usually do, saving you $20 a month. The second month, you decide to spend less on entertainment by switching from your premium cable service to the less expensive service. This switch saves you $10 a month, plus you save the $20 from going out to eat less. You saved a total of $30 the second month, and $20 the first month Ė thatís $50 in just 2 months. Now, letís carry that further. If you were to reduce your expenses by $15 each month (cutting an additional $15 of expenses each month), by the end of the year you would have saved $1,170!
If youíve got thousands in debt looming over your head, $1,170 may not seem like much, but you have to start somewhere. Starting small and being patiently methodical is better than never starting at all! Plus, every month your level of savings increases until your small start becomes a giant tidal wave of savings. This will help you get out of debt faster and begin building your wealth. When you start saving, even in small amounts, you will have implemented another great wealth creating habit!
Oct 18 2007, 04:18 AM
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Growing Your Savings!
Growth of savings is based on 3 factors:
2- Interest rate
To make your savings grow, you must understand and utilize each of these factors.
The more money you save, the more you can grow. The single best way to increase the amount you put in principal is to make it regular. Every payday, cut a percentage of your check designated solely for savings. 10% is a good goal. If you can save more, great! If not, start with 1%. When you can save 2%, do so. When you can save 3%, do so, and so on and so on.
Regular payments also allow you take advantage of dollar cost averaging.
2) Interest rate:
Here's a question: lets say you just won the lottery. They give you two options: A large cash payout, usually much less than the stated winnings, or a yearly check for an amount smaller than the cash payment, but since it continues over 30 years you end up with more money.
Which do you choose?
In order to determine which is better, you need to see if the cash paid in a lump sum would yield an amount in interest greater than the yearly payment of the second payout option. Current savings account rates are pitiful, but many stable mutual funds have rates that could beat the return given by the yearly payout.
In choosing interest rate payments, consider that the higher the rate of return, the higher the risk. Risk is the likelihood that your account will lose value. If you don't understand enough to lower your own risk through diversification, pick up a good investment book or discuss with a financial adviser about meeting your risk tolerance. A good goal is meeting the market average of 12%.
By the way, paying debt correlates TO THE PENNY as if you had that same interest rate on an investment. So paying your 21% credit card is like getting that interest rate as a guaranteed return.
You won't be a millionaire overnight. But paycheck after paycheck, year after year will quickly add up. Compound interest will quickly add up. Find a financial calculator online and plug in your numbers to see how much you'll earn. I'll be a millionaire at 45 at my present rate, and my income is only a few thousand dollars above the defined poverty line. Its a great motivator.
Making your savings grow is important, if not, the value of money will be erode away caused by inflation.
When talking about making savings grow, usually investing is the most effective way of doing it. Investing can be of many forms (it is not exhaustive) :
1. Purchasing of an fixed asset, ie Property, hoping the price will rise over time
2. Investing in Fixed Deposit and Treasury Bills
3. Investing in Money Market funds.
4. Investing in Shares and Bonds.
5. Investing in Unit Trust.
6. Investing in REITs or DRIPs.
7. Buying of insurance.
It is recommended to set aside at least 3-6 months of salary as emergency funds to cater for any unexpected events, i.e. job retrenchment, hospital bills etc, before starting any investment program. To ensure liquidity and the value of money, place the emergency funds into Money Market funds. In most cases, it will keep growing and beats the inflation rate.
After setting aside the emergency funds, we can talk about on how to invest to make the savings grow.
How fast you want your savings to grow will depend on your risk appetite and investment horizon. A general guideline, if your investment horizon is long, i.e. 15, 20 years, go for Unit Trust that is aggressive. If the horizon is short, go for Bonds.
Investment is never easy, grab more knowledge from books and learn it with an interest. Nobody will fully take charge of your money other than yourself.
Oct 20 2007, 02:49 PM
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Ways of growing your savings.
First of all i would like to touch on the importance of savings.
Saving for a rainy day or to grow your saving tree is very important regardless of age, sex, race.
Everyone should first invest time on how to cut down your liabilities and focus on forced savings.
Example if i am earning 3,000 per month, after paying for my monthly expenses and also my existing liabilities, i would be left with $800. That would be my nett pay check.
Understanding your nett paycheck is the first step to smart savings.
If i am left with a nett paycheck of $800, i would definitely be saving more than 50% of it. Example if i am saving 80% of my nett savings, that would be $640 worth of forced savings.
IF you are going to put in 100% of your forced nett savings, your money would be like a turtle trying to outrun the rabbit in a race. Investing time in smarter investing of your savings like what you are doing reading this topic is one good time investment of your financial education.
If would use 20% of my nett savings for fixed deposit.
Fixed deposits yield very little interest, but it is better than putting your money in normal saving accounts. Fixed deposit ensure your money liquidity and when a great opportunity or investment comes around, you can get the money out from your fixed deposit easily and use it to grow more money and it earns better interest than the normal savings account.
20% into insurance with forced monthly savings. These type of investment offers you protection as well as savings. It is a forced saving method and sometimes you can double your money in 15 years time to fight against inflation and also offers little protection.
I would throw the rest of my money to moving bullish unit trust. Entering at the right time and low price can yield up to 20% in a year, much better than putting your money resting in your savings account.
These are the basics of increasing your savings but the bottom line is one should take good care of increasing his financial knowledge to keep up with time and inflation.
Having good financial education is never too late. Change your blueprint of savings and pratice forced savings. When your money gets bigger, the games is easier to play and it is all about numbers game but first, you must practice healthy good saving habits.
Always understand how much is your nett paycheck and start planning from there. Always pratice forced savings at least 80% of your nett paycheck. These are the basic ways to increase your savings and of course there are better and riskier ones out there like investing in warrants, forex, gold ,crude oil, stocks, real estate etc. But i will touch on the basic for now. The longest journey will start only from the first step
Remember the power of compounding is one of the most importatn essence in investing. Time has the power to make you very rich of very poor. You choose which way you want to move.
Staying on money making forums networking with like minded individual is one sure way to expand your network, staying motivated and knowing the atest updates and news on the latest money making venture.
Good luck to all the members here on DTM Forum. We are all here for the same reason, to make more friends , money and better invest our time learning and building.
To your success!
PS: I would recommend everyone watch this movie again:
Nov 3 2007, 11:51 AM
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EFFECTIVE WAYS OF GROWING YOUR SAVING[/b]
Tired of "experiencing cash-flow interruptions"? Want to increase your net worth? Here are 15 possible ways to keep thousands of dollars in your pocket this year.
By Jayme Ganey and Kyissa Markland
The best way to accumulate money is to stop spending it on things you want but don't really need, and to save and invest so your dollars will begin working for you. "Building your net worth doesn't require a small fortune, but you do have to change spending habits and practice more self-control," says Sherrin Ross Ingram, author of Wealth Mentality (Jourdan & Brown Publishing). By taking big and small steps, you can reduce expenses and achieve your financial goals. And if you follow just a few of these 15 tips, you can save $5,000 or more in just 12 months:
1. DON'T PASS UP FREE MONEY.
"You can't afford not to participate in your company-sponsored retirement plan. If your employer matches your 401(k) contributions, it is like free money," says Gail Perry-Mason, coauthor with Glinda Bridgforth of Girl, Make Your Money Grow! (Broadway Books). And if your job offers a pretax savings plan for medical or child-care expenses, Ingram adds, "don't pass it up."
2. PAY ON TIME.
Fees and penalties for late credit-card payments add up, and they take their toll on your credit rating, says Ingram. Pay more than the minimum due on credit-card bills so you can cut both the time you spend paying off the debt as well as interest payments.
3. DON'T BLOW A WINDFALL.
Avoid scratching your spending itch when you get a bonus, an income-tax refund, a holiday monetary gift and any other extra money. Use it instead to pay down debt, put it into a savings account or invest it.
4. SHARE YOUR SPACE.
Consider taking in a roommate, family member, friend or tenant to help cut rent or mortgage payments and utilities in half, says Bridgforth. If you shell out, say, $800 a month in living expenses, with a roomie, you can halve your costs and save $4,800 a year. The savings can be invested in your retirement account or socked away in an emergency fund.
5. GET A LOW-COST RIDE.
"Because cars decrease in value the moment they're driven off the dealer's lot, it makes sense not to invest too much money in them if your net worth needs accelerating," counsels Bridgforth. Expensive cars cost more to insure and repair, and their resale value can plummet significantly after three years, she adds. Compare prices and market values at edmunds.com, then shop around, and always negotiate the sticker price.
6. BECOME A LANDLORD.
The equity in a home is a large source of wealth, says Robert G. Allen, coauthor of The One Minute Millionaire: The Enlightened Way to Wealth (Harmony). "But owning rental property is a powerful wealth builder. You buy property and someone else pays you rent, which often covers your expenses from owning it," he explains. Meanwhile you increase your current monthly income, build long-term wealth, and receive tax deductions. The depreciation annual write-off on a $100,000 property amounts to more than $2,000, he points out.
7. TAKE A COFFEE BREAK.
With a luxury latte going for about $3.50, you could easily shell out more than $1,200 a year for that daily caffeine fix. Purchase regular coffee or buy a jar of instant and make your own at the office, and you'll save about $1,000 a year.
8. DON'T GET CLEANED OUT.
Dry-cleaning bills can put a big dent in a budget. Perry-Mason suggests that you save on cleaning bills by using Dryel-or some other do-it-yourself dry-cleaning product for lightly soiled clothes-or washing items in Woolite. If you spend, say, $20 a month on professional dry cleaning, do it yourself and save up to $200 a year.
9. CLIP COUPONS.
By snipping coupons from Sunday's paper, you often can reap a windfall because many stores will double the amount of the coupon. This can save you as much as $20 to $30 each time you shop, about $1,040 a year.
10. SAVE ON TALK.
You can save from $20 to $45 a month ($240 to $540 a year) by cutting off the extra features your telephone service provides or by switching to a company that charges two or four cents less per minute per call. "Many people are just too lazy to switch," Allen says. "But that laziness costs them."
11. BOX-LUNCH IT.
Take your own lunch to work; if you normally spend $10 a day, that's an extra $50 in your pocket on Friday, a saving of $2,500 annually. Leftovers from eating out or from last night's home-cooked meal can make great lunches.
12. REFINANCE YOUR MORTGAGE.
If you want to reduce your monthly mortgage payment to free up some cash, refinance at a lower interest rate if the estimated closing costs are low enough to make refinancing worthwhile. And if you can afford a higher monthly payment, go with a 15- or 20-year loan because you build equity faster and pay much less in interest, Bridgforth advises. For example, she points out, "with a $100,000 mortgage at 6 percent for 15 years, you pay $843 monthly in principal and interest, and $51,894 in interest over the life of the loan. With a 30-year mortgage, you pay $599 monthly but $103,961 in interest over the 30 years."
13. DON'T EAT ALL YOUR EQUITY.
"Excessively consolidating your credit-card debt into your refinanced mortgage or equity line of credit will devour your home equity and significantly lower your net worth," Bridgforth cautions. If you run your credit cards up again and again and remedy the problem by using equity from your home, you may walk away empty-handed when you sell.
The sticker price of any item is rarely the lowest price a merchant will accept, says Ingram. After you decide what an item is worth to you and how much you're willing to pay, then ask the merchant to give you "a better price." That way you'll know how much bargaining room you have.
15. PLAN AHEAD.
"The more long-range planning you do, the cheaper your life becomes," says Allen. For instance, if you buy an airline ticket less than a week before you're ready to travel, you will generally pay full fare. If you get it three months in advance, you can save up to 50 percent, he reveals. Buy it two weeks before and you can knock 10 to 20 percent off the purchase price.
Your 5 Step Budget Plan
A budget lets you see how to achieve your financial goals. Here are five steps for creating one that works for you.
By Tamara E. Holmes
1. Consider your objectives.
Do you want to buy a house, decrease debt, or save for your children's college fund? Write down your goals, along with the amount required, and the time in which you hope to achieve each goal.
2. Track spending.
For one month, track all money coming in and jot down each expenditure in a notebook. "It's shocking for some people who may think they spend $20 a week for lunch when, in fact, it could be $50," says Valerie V. Gay, a financial planner in Philadelphia.
3. Set priorities.
After your outlay for necessities, if most of your discretionary income each month is spent on movies and restaurants, it's time to adjust your spending. Allocate money for priorities, such as a retirement fund. And do save something, even if it's only $25 per paycheck.
4. Record your plan.
Your budget becomes real once you put it in writing. Another option is to use software such as Intuit's Quicken or Microsoft Money. Both will walk you through setting up spending categories and tracking your progress.
5. Personalize your plan.
Personal finance books can give suggestions for creating a budget, but it won't work if it doesn't resonate with your heart. For example, if you believe in tithing, your budget must include it.
Taking these steps will put you in control of your financial destiny. "At the end of the day, you want your money to be serving you and your goals rather than you serving your money," says Gay.
Nov 4 2007, 01:33 PM
New Money Maker
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First fix up a certain % of salary/income for savings [for profit, discussed below] and rest for daily expenditure [regular savings bank account].
Money for growing savings is actually divided for long term [ >5 years] and short term [max 1 year].
I would be depositing a major portion of savings into local bank for time based [fixed] deposit for more than 5 years. Signficant portion is invested here as there is no fear of loosing money here.
Short term - Risk based Investment
Here, i would be investing portion of savings in:
* Mutual funds, Stocks.
* Buy/Sell Shares
Iam not actually involved much in the above short term plan. As i would be investing only when time is ripe for investment.
So almost whole [or portion of] savings is actually put up in online money making trades. e-Currencies, which iam currently dealing with are Liberty Reserve, V-Money, e-gold. Actually iam not a FOREX expert [just a begineer]. Therefore, I am investing in long-term reputed companies like OT, minvestment and others. Compounding for a small period and then withdraw profit for next period is my stragegy. I rather ignore, quick rich scheme [or fast returns] HYIP. Anyway, its hard to find a program that lasts long. All are ponzi schemes.
Considering the risk involved in short term, a small percentage is actually set apart for short-term.