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Monthly Archives: March 2017

Personal Finance Software

In one word, yes, it is possible to save money. The key is in knowing how to save it. And this is not some ancient wisdom passed down as a family secret. It simply is getting your hands on some financial management software to help you manage your incomes and expenses.

A financial management software or tool helps you make a list of all expenses and incomes and then lets you calculate your net worth. It will also help you see at a glance where most of your money is being spent. Once you cut down on your expenses and make some cost cutting measures, you will soon see a surge in your savings. So, you see, it is not hard to make savings in today’s consumerist culture. It all comes down to keeping an eye on when you are spending, how much and on what.

The key is of course, a strict adherence to the budget set out by you in the financial tool. If you do not stick to it, then no force in the world can help you save money.

In the short run it may seem like you are saving only a tiny amount but, just as a drop of water added many times fills up a bucket, a few dollars saved every month eventually adds up to considerable amount of savings. So, key is to be persistent and follow the instructions provided by your financial management tool.

All about Money and Decisions

One of my clients recently said, “It is all a risk. How do I know if this new idea is worth funding?” What’s true is that if you didn’t want any risk you would still have a job that pays you a steady and consistent paycheck. You would know exactly how much you would get every two weeks. In a small business it is different. In order to minimize the risk, you make projections based on a plan. The plan is based on a vision and a map of where you want to go and how you plan to get there. Once you know your plan, there are certain things you have to spend money on in order to make it happen. Hiring people to help you, setting up an e-commerce website or joining a networking group are all things that could help move your business forward if you do your homework and are willing to take the risk now for the benefit later.

A woman I worked with last year gave up her steady corporate paycheck, put out a shingle for her new consulting business and expected money to begin rolling in right away. She didn’t want to borrow any money so the stress began around how to get more clients. Poor decisions then followed around spending money on her business. She didn’t want to spend any money until she was earning more. It’s the chicken or the egg thing. She decided to not join the chamber, not take a small business seminar and not build a better website. This is a trap that many self employed people fall into. It could be that the new website or seminar is exactly what she needed to help grow her business but her fear took over.

People Reluctant to Spend Money

Whichever way you look at it, if the consumer feels prosperous, sooner or later it often leads to the dreaded inflation, the thing most governments want to avoid at almost any cost. So, it`s ironic that we are now in the situation in which the economy has ground to a halt, the banks have been forced to lower interests rates to virtually never-known-before lows, inflation in some places is turning to deflation, and many of us have more money in our pockets than before the credit crunch took hold. Paying much less for our mortgages, and with the lower rate of VAT now at the standard rate of 15%, down from 17.5%, has made many people better off. So, why aren’t we doing what the government wants us to do-spend?

First of all, why are we being encouraged to spend our money? Because recovery will be consumer-led. The consumer is the one who will kick start the economy once more. Car sales, house sales, clothing retail, holidays, they all depend on customers being prepared to walk through the door and purchase. Once house sales improve the numerous other items that go along with the buying of property such as home improvements, furnishings, extensions, patios, bathrooms and so on will also start moving properly. Once people start to buy, the government will of course reap the benefits of getting more tax in to the exchequer, mainly in the form of VAT.

The recent reduction of VAT is a two-edged sword. Most of us are acutely aware that as from next year the government will have to recoup what was lost in tax from this year. Whether they do that through direct or indirect taxes we don`t yet exactly know. But, claw the taxes back they will. Add all that to the fact that there`s so much uncertainty on the job front, many are hoarding their new found disposable income and putting their money into savings accounts.

Learn to Invest Money

Learn to invest. You have two options when it comes to learning to invest. You can learn by your own example where you can learn by the example of others. You can set up a brokerage account and start buying stocks based on your own decisions or you can read to learn how to do it and learn other people strategies would have succeeded already.

The honest truth is that you’ll probably fail at some point or another doing on your own. There is always look involved, but generally, you could fail miserably. On the other and, if you read from other people and see how they have succeeded and failed, you can learn from their mistakes and use that information to succeed.

This very moment you are learning from the mistakes of others. You are learning that some people decided not to invest. They just avoided it. Some are still working because they can retire and others are barely getting by in forced retirement. Learn from their mistakes and invest now.