I believe this is the situation many, if not most, of us faces these days. With the uncertain economic outlook, retirement planning can be a little bit trivial. The question may of us ask to ourselves is: “How can I find enough money to safe for the future when today is already difficult enough?”

Take heed – here are a few suggestions you and I can benefit from to help our money-saving endeavors easier (although not that easy to achieve.)

First of all, to get things work out your way initially, you must have the willingness to make a few changes, especially in your mindset and financial policies. In fact, it all comes down to one, single big change you must make: making a commitment. Without a commitment – and the right financial planning to go along with such commitment – most likely nothing will never change, ever.

Here is what you should do. Make a commitment to yourself (or to your loved ones) that you shall do whatever it takes to change things for the better. Make a commitment that no matter what, you have to make your financial situation better.

For sure, the change wouldn’t happen overnight. So, give yourself a reasonable time frame through milestones and goals-setting to make it happen. Write down your commitment, and put it in your most-commonly visited place, e.g. your office desk, your bedroom, etc.

Next – get ready to make things happen! Here are some tips for saving money to get you started in your retirement planning; these tips will work wonders even when money is tight:

First, take some time to read your commitment each and every day. The more you believe in what you are committed to, the more you will be willing to take action and start seeing results.

Second, find and think of ways to make extra money. Here are some suggestions:

- start your own business
- sell stuffs around your house that you don’t need any more (tips: do a garage sale or sell them on eBay!)
- get a part-time job
- make money online (hot!)

Third, take out your checkbook and start writing down a list of your expenses for the last three months (or at least for the last month.) You have to write everything, as hidden things are often pile up quite a lot. Next, you must decide which expenses you can eliminate (I’ve warned you before – this won’t be easy!) You must also decide which ones of your expenses that can be reduced:

- cable TV
- cell phone
- internet service
- newspapers
- magazines
- entertainment
- eating out
- luxuries
- anything else you can live without

Be creative. Be honest. And be committed!

Last step – secure your excess cash in a place (e.g. bank account) that you know you would ‘kill’ yourself if you lay your hands on it.

To sum it all up – For your retirement planning, you need to be committed, follow the right money-saving strategy, and secure your excess money in an ‘untouched’ account. Repeat and rinse. You will soon see you are becoming a master of personal finance and will most likely build up a retirement fund in an amount that you are actually surprising yourself for being able to commit!

To note, your retirement account is not your investment account. Unlike what many think, your 401K plan and similar retirement plan is nothing more than an investment account (which means they follow how the money market moves.) Again, consider separating your retirement account with your ‘retirement’ account.

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Calculate how much u can borrow

You can use a “how much can I borrow for a mortgage” calculator to find out how much loan you can borrow. The calculator requires the following inputs:

• Your total monthly income before tax deduction
• Monthly payment towards your existing debts
• Your monthly credit card payments
• Child support and monthly alimony
• Your desirable rate of interest ,time period of the loan (years) and down payment
• Yearly property taxes and insurances you expect

Factors determining the amount you can borrow

When you apply for a home loan, you often think about “how much can I borrow for a mortgage”. The maximum loan you can get is the amount your lenders think you can manage. The maximum loan amount that you can be offered depends on:

• Your gross monthly income: Your income is used to determine how much monthly payment you can afford.
• Your outstanding debts: Lenders consider your existing debts and how much monthly payment you make towards them.
• Debt to income ratio: The debt to income ratio can be a front-end ratio or a back-end ratio. Your gross monthly income divided by your new home loan payment (including the principal, rate of interest, property insurance and taxes) gives the front-end ratio.
Back-end ratio is your gross monthly income divided by the portion of income that goes towards paying your monthly liabilities (including the new mortgage payment, existing loan payments and credit card payments). “How much can I borrow for a mortgage” largely depends on these two ratios.
• Loan to value ratio: Loan to value ratio is the loan amount (the purchase price of the property minus the down payment) divided by the purchase price. Lenders evaluate this ratio to determine the loan they can offer you.

If you are concerned with “how much can I borrow for a mortgage”, you must work on improving your credit score by eliminating negative listings on your credit report. This is because lenders consider the score to approve you for a mortgage.

Image by lilinhah.

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The information presented in the credit report must be presented in a way that it can be compared. Furthermore, it is important to get information, which will help you manage your credit scores and improve your credit situation along with assistance from the ones that have offered you the credit report.

The information contained in your credit report will influence lenders to decide if you will get the credit or not. The credit report includes how prompt you are in paying bills, collections information, and bankruptcy. If your credit report contains errors then it will determine the sum you will pay for your mortgages or car loans. This information will also affect the time in which you might get a job because employers check your credit report when applying to a job. For these several reasons and for others it is important to make sure there is absolutely no mistake in your credit report.

The only way you can know if your credit report is correct is to check it regularly. The government gives you the right to get a free credit report from each of the credit bureaus (Equifax, Experian, and TransUnion) every year. You can get your free credit report very quickly by accessing the Web. As an example, Equifax offers 30 days free trial to get your FREE 3-Bureau Credit Report and FICO Score of your nationwide credit reports and receive alerts within 24 hours of key changes.

After you obtain your credit report, you have to check it for errors. If there is something wrong in it, you have to contact the credit report agency that provided the inaccurate information and ask them to correct it. Add to your demand your address to be easily identified. To sustain your affirmation send them proofs like the copy of the documents that indicate the correct data. Explain to them why you want your correct information to be filled in and ask them remove or correct the false one.

 

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Now where did I put that thing?

Do you know what one of the most important stuff you have right now is? You guess it right: your mobile phone. Just admit it – Today, life and work without mobile phone would be misery, if not a disaster. Most likely than not, you are also ‘required’ to upgrade your mobile phone to allow you to be more effective and efficient in doing your work (and socializing.)

One question I should ask you: How many mobile phones do you have at home? Your answer might be one, but I’m not sure there isn’t more. Aren’t you forgetting something? Have you check your drawer, shed, attic or somewhere else in your house where you stash your unwanted belogings (a.k.a. junks)?

You might find this cluttering your house: your old mobile phone(s.) Many, including me, have their old (and obsolete) mobile phones at home. Why? Because throwing them away is such a waste of money. Moreover, throwing them away to the garbage bin can damage the environment and get you into trouble with the laws (not enforced in all places of the world, though.)

Logically, you would want to sell your mobile phone, instead of keep it or throw it away. You could make extra money from selling your old mobile phones. But how do you sell them, and where?

One solution: sell mobile phone online.

Where to sell your old mobile phones at the best prices?

There are actually several mobile phone recyclers to where you can sell your old mobile phones. Your problem would be on how to know that the money you receive is the best you can get out of your sales. Finding out is not an easy task, and it could very well be time consuming.

This is where mobile phone comparison sites, such as SellMyMobile.com, step up.

SellMyMobile.com, currently serving the United Kingdom market, allows you to compare and get the best prices for your old mobile phones. You can sell mobile phones on the site easily, following these 4 steps:

1. Enter the make and model of your mobile phone – e.g. Nokia 6300
2. You will be presented a list of prices offered by the recyclers, with the best prices listed on top – Naturally, you should sell to the recycler offering the best price.
3. Upon your selection, you will be given forms to complete and you will receive instructions on how to send your mobile phone via freepost.
4. Just wait for 1 to 3 days to receive your payment via cheque sent to your address.

How can this site a solution in your personal finance endeavor?

Your personal finance endeavor involves managing your life better, aside of the obvious: financial planning. You should find a way to turn any liabilities (yes, your old mobile phones lying around are liabilities!) into something good, in this case, extra cash. In some part of the world, disposing electronics – including mobile phones – require you to pay a certain amount of money – another strong reason why you should sell your old mobile phones.

Do you want something a bit more creative? If so, you can start by collecting old, unused mobile phones from your colleagues, family and friends. You can also get old mobile phones on a dime in garage sales, if you prefer. You can then send your collected mobile phones to SellMyMobile.com to receive some nice amount of money. A great idea, isn’t it? All you need to do is to make sure that there are recyclers accepting the mobile phones model and make you have, otherwise you pile yourself with ‘junk.’

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It is a good idea to present children the evolution in investing and market trading. I remember my first approaches to this subject were at eleven yeas old. At that age, I used to hate everything that was about money, but many of my childhood friends were enthusiastic about receiving money as a gift. My parents explained me that they had a job because they needed money to pay the bills and to sustain family needs.

As parents, you need to teach your children to spend money wisely. Likewise, as parents, you should offer your children options – options to seek their paths to take to be self-sustained; Paths to seek ways to be financially independent – and ultimately, financially free.

Those being said, regardless what you do as parents, you need to teach your children the world of jobs and entrepreneurship. Some of you would say that jobs are better than starting out businesses, some would say vice versa. Again, the key is, no matter which one you perceive better, you should teach (and allow your children to learn) about both worlds.

Children must know from early age that in our world, everything that we do has a price, but there are also things that you cannot buy with money such as friendship, loyalty and others. I would teach my children that someone gets money when he works on something for it, and the money are the payment for what he does – no work, no pay. I would also teach my children that someone can also gets money if he/she makes his/her money to “work” on themselves – this can be achieved through investing (and yes, I truly think that saving in banks is NOT investing – it’s little or no return on investment and I’m not sure why people think banks would care enough to give you more from your savings.)

The key is this: As parents, you need to encourage an environment where your children can learn and talk about money as much as they want. I do understand in some culture that money is not something to talk about over family dinner, but this has got to be change – People fall into debts because they lack of understanding about how money and investing work – they make careless money-related decisions. All start from one situation: no-talks-about-money-subject policy.

You wouldn’t want to get your children in such position, are you?

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Hiring a bookkeeper is resource-intensive. Unless you are a wealthy person in need of help to manage your personal finance, you should consider to Do-It-Yourself your personal finance management. Moreover, hiring an ‘outsider’ would put you in a risk of plenty of personal interference that could emerge.

If you really want to avoid the monthly payment to the bookkeeper then it all starts with knowing where you are and you can easily determine where you are going. All this financial planning stuff can be done with some paper or using a template with your favorite spreadsheet package.

Nevertheless, plan your personal finance yourself requires a few processes.

First establish a yearly and monthly household budget. Take record of all your expenses whether daily, weekly, monthly, quarterly and yearly. It will shock you as to the length of things or items you expend money on.

Next keep track of all the actual spending and income against the budget you developed earlier. It will help you determine the seasonal aspects of your expenditure. Then over a period of time you would be able to streamline these aspects to assist you maintain a respectable cash flow. The plan is that have money in the bank to pay your expenses but still leave some as your retained earnings. The bank money is for the payment of bills and the one left acts as a cover in cases of emergency spending.

The account at the bank is so crucial that you have to keep track of activities on it. Have a bank register which records all deposits, withdrawals from the bank, ATM, debit machine and check withdrawals. Then do a reconciliation of the register with your monthly bank statements so that you know any differences. It also helps you determine the exact amount of money you have at the bank.

Also take note of your spending through credit cards and other lines of credit. Be very diligent in having one or two credit cards but not multiple. Make a breakdown of all your transactions to separate the normal expenditure from unexpected occurrences.

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The transfer of money between two parties simply describes what debt is all about. It is always accompanied by terms which determines the period for repayments. The mode of payment is also enshrined in them. Debt is always accrued whenever an item is bought. What actually happens is that we don’t seem to recognize this debt if the cost of the item is small and we readily have the capacity to pay.

However, in the event that it requires some bigger amount where we may be unable to pay, there will usually be some long-term debt repayment. Whiles some may require a few months, several others can take you many years. One can’t discount the fact that debt appears an inevitable thing even though many people out there feel just uncomfortable because of the repayment that will be required of them.

Such people will always try to make upfront payment when they buy items. It would be good of you to pay for school fees, drive a used car and even rent your apartment so long as the money is available. Depending on your lifestyle, there are a lot of debts that may come your ways.

You should also be in the know that everything bought either appreciate or depreciate in value over a given period of time. For instance, just the moment after buying a brand new car and taking it away from the dealer’s parking lot, you could lose a significant percentage of value. In such a situation, if the car is sold, the money you will accrue might not even be able to pay for the remaining of your auto loan balance.

At other times, you might have used the car for years before finally selling it off. The value may not be enough in order to cover the actual loan. To this effect you may have to take a loan in addition to make sure the original auto loan is covered. This is a typical example of bad debt. Good debt will rather allow you to make extra money after sales since the item is expected to appreciate over time.

So, to sum it up – Good debts put money in your pocket, bad debts take money out from your pocket (as taught by Robert Kiyosaki, Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money–That the Poor and the Middle Class Do Not!)

Image by svilen001.

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I just realized a while ago that one of the biggest misconceptions in your personal finance’s cost-cutting endeavors is DIY. DIY is thought to be less-expensive than buying printed products in stores or buying/hiring someone to print for you. In fact, in some cases, DIY is a bad practice in budgeting for your personal finance.

In printing, you might get things at lower cost by doing DIY, but quite often you forget to consider your time, energy, electricity and other materials for the DIY purposes. Quite often, discount printing service such as PsPrint can offer you a better overall resource-saving that is budget-friendly.

Printing stickers for your kids’ school project doesn’t always come cheaper by DIY. Instead, ‘outsource’ your sticker printing to printing services can save a lot of time, even money, on your side. More examples: If you are going to send greeting cards to your friends and family with your pictures in them, it is probably better for you to get your printing job done with the help of discount printing service provider that can offer you low-quantity printing solutions. For your business needs, you can also ‘outsource’ your Business checks printing with the help of a discount printing service.

Let us consider Pareto’s 80-20 law – DIY can cost you 80% of your time for only 20% result, whereas getting the job done by a discount printing service can get you 80% job done using only 20% of your time – Just think about this and you’ll realize how much time we waste in order to minimize our spending.

All in all, following some common sense can avoid you from unnecessary uses of your limited resources.

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About budgeting tools

If you are preparing your personal budget, you require a budget tool that would help you to figure out what are your expenses on monthly basis. For example payment of rent, electricity, water, internet, phone bill, groceries, shopping for clothes, fuel for your car, movies and DVDs.

On the other side, the budgeting tool will also give you an account of your earnings in the form of salary, property income, investor income or any other income.  So, this tool will help you in making an assessment of your earnings on one side and expenses on the other side. This is a personal budgeting tool.

Another budgeting tool which will help you to manage your finances and this tool would detail your expenses, savings, credit card bills and a complete list and pattern of your spending.   With the help of this tool, you can assess where you are spending more and can make suitable changes in that area. Controlling your expenses is also a budgeting tool that that helps you to make an assessment about monthly expenses.

Budgeting software and online tool

There are plenty of web sites on Internet which will guide you to download budgeting software programs. Once you install the budgeting tool software in your computer, you can work on it by entering your income, expenses and savings.  This work sheet will help you to identify where exactly you are spending more money and how you can lower your expenses and stay within your budget limit. One personal budgeting software Money Estate recommends is Money Tree.

Another type of budgeting tool is online budgeting tool. Some of the best budgeting tools available online is free to use. Money Estate’s choice for this online budgeting tool is Mint.com. Mint.com downloads and categorizes your balances and transactions on daily basis – automatic – and present them in graphs and stats for getting a better view on your personal finance.

It will also help you to cut your costs and would give a clear picture of your personal finances.   So next time when you are working on budgeting tool search for software that suits your needs and that helps you to maintain your budget.

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There are plenty of reliable and good sources available to help you to get rid of debt. Whatever may be the reason of debt, if you have your lost job because of job layoff or any other unforeseen factor, you can easily come out of the problem.

Tips to get out of debt

Here are some practical tips that can save you from the threat of personal bankruptcy:

• This is the must-do in getting out of debt: create a monthly budget for your expenses.
• After receiving your salary, sit at your desk and prepare a neat work sheet which lists monthly bills, purchase of groceries and your daily expenses.
• First consider paying off all those balances on your credit card which are carrying higher interest rate.
• Try to cut down unnecessary expenses which may include dining out frequently or some other luxury expenses.
• Always use cash in small amounts instead of using credit cards.  Use it only when you have to buy jewelry, car or a television set or such other product items which are more than four figures in amount.
• Try to maintain your credit card limit. See that your paychecks are directly deposited and keep a limit of withdrawal for each week or month.
• Evaluate your expenses and earnings and maintain an account.  The more careful you are in using your earnings, the more good for you in savings as well safe to get out of debt.

If you need help in getting out of debt…

Firstly, you should find out the sources of companies, agencies who give you proper guidance and support for you.

Secondly, approach them with honest presentation and with a sincere request to help you to get out of debt. Discuss and put forth all the necessary information that they require but ensure that you are with good and friendly people who would be willing to help you with the best remedy.

The remedy they provide should be useful to you and must not create any further debt problem to you. Therefore, you must make a good selection of debt relief company for the present and for your future financial plans.

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