My Personal Finance Blog

With Christmas behind us, 2011 looks as though it could be a tough year money wise. January is therefore the perfect time to review your finances and start a plan to keep out of debt.

Christmas is traditionally the time for overspending and indulgence, but with January already upon us, credit card bills will soon start appearing on the doormat.

And with 2011 predicted to be a difficult year for family finances with increasing costs of living and many incomes reducing in the wake of the government cuts, now is the ideal time to review your finances and make sure that you avoid debt problems.

Understand your current financial position

For many people, reviewing their finances can be a daunting task. But giving yourself a financial makeover does not have to be difficult. There are some easy steps to follow:

The first thing to do is understand exactly what your financial situation is.

This sounds like common sense, however, I am constantly amazed at how many people go from month to month with very little idea of how much money they have coming in and the living costs they have to pay for.

If you do not do this already, you should identify your monthly income and essential expenditure budgets by listing all of your monthly income and living expenses. The Beat My Debt expenditure guide will be a great help with this.

By deducting your essential expenditure from your income, you will be able to see how much you have left over – your disposable income – either to save or pay any unsecured debts.

No outstanding debt – plan to save

List separately any unsecured debts that you have outstanding and which need to be paid.

If you have no outstanding unsecured debts you are in an enviable position. If you are not already, you should then take the opportunity to start saving so that you have money available if and when you face financial challenges down the line.

If you do not find saving easy, then the best way to achieve it is to plan to save.

By this I mean you should first decide how much of your disposable income you want to save each month. Then arrange to save this amount at the beginning of the month.

I recommend saving your budgeted amount as soon as your money comes in as if you wait until the end of the month, all too often the money you had planned to save will already be spent.

Affordable outstanding debt – get a savings safety net

If you have sufficient disposable income every month to maintain any monthly debt repayments, the standard advice is then to try to pay off more to reduce your debts as fast as possible.

However, if you have any spare cash, unlike many other financial advisors my advice is to first save this money to build up a savings safety net.

Set a target safety net amount. This could be £500 or even £1000.

This safety net can then be used if you face any financial difficulties such as an unexpected car repaid bill or your washing machine or fridge freezer breaks down without having to increase the balance on a credit card.

Once you reach your savings safety net target amount, then is the time to direct your spare cash to paying off additional amounts of your debt so that the debts are paid off more quickly.

Outstanding debt which you cannot afford to pay

If having reviewed your income and expenditure, you find that you do not have enough money each month to maintain your required debt payments, you need to take action or risk getting into a significant debt problem.

Not having enough money to pay everything each month means that you must be maintaining your expenditures by increasing your borrowing. Perhaps your overdraft or a credit card balance is slowly increasing.

If you allow this situation to continue for too long, eventually you will get to a point where you are at the limit of your credit facilities and face not being able to make your payments.

It is best to take action before getting to this point by using a debt management solution such as a debt management plan (DMP) or individual voluntary arrangement (IVA) which will help reduce your debt payments to an affordable amount.

Take action

Whatever your financial situation, January is the ideal month to review your financial circumstances.

If you feel you are struggling financially, taking the opportunity to carry out a financial makeover is now more important than ever with the financial difficulties set to face everyone in 2011.

If you follow the simple steps outlined above, you will be far better equipped to deal with the New Year.

You will ensure that you either keep out of debt or start a plan to get back in control of debts which you already have.

As a beginner one would be very excited to know the way the procedures of investment works. This excitement can work for the future so always put this excitement in understanding the smart tricks so that you can be an excellent investor. Having guidance is the primary need of a beginner, so always consult people who have knowledge in the field of investments. Consulting a professional would be the best you can think of, as he can guide you all your way to the best and effective investments. If you have a habit of regular withdrawals and have enough liquidity with good anticipations, go for the money market accounts (MMA). The money here would be insured.

Stock investment completely depends on the investors. If they agree to manage to reap their investment rates, they can reach sky with that approach. It is all about being alert and keeps a sheer watch on the markets. People good with analyzing the statement of finance have a better scope in markets during market hours. Value investing would not be a good alternative for people concerned with capital interests. Growth stocks can be beneficial. Mutual funds could be an appropriate alternative for people who like to invest the money and forget. You will get the desired money after a period of some years. One can get interest incomes regularly with bonds if he/she chooses them for investing.

Beginners can indulge in alternative investments like commodities and trading can enhance your portfolio and can build your relation with the traders. It is a great option for the experienced investors.

Finance problem is one of the most stressful problems that people in the world are facing. Without money people can’t do anything. That is why it is important for people to plan their outcomes and incomes. But there are times when the plan doesn’t go the way that it is supposed to be. And when this happens, it can be quite stressful. Now rather than getting a loan from a friend, it is better that people get from a company that offers loan. Some people might be thinking that the problem will get worse if they lend money from a company because the cost of the interests is usually expensive. Well the fact is that it depends in which company that they use. Payday Loan online can be a solution for those who needs money quickly. It is reliable and also simple to get. The rates and interests are also low so people don’t need to worry about it. For those who thinks that getting a payday loan will just add more problem has too think twice. Payday loan can bring advantages to people and make problems easier. For an example, people don’t have to delay their payments because they don’t have any money. This will cost them cheaper rather than they have to wait another month to pay plus the charges which is usually very expensive. The paybacks that payday loans online offer are also easy and they will sure give enough time. Each person faces different problem and that is why there are many options of payday loan that people can choose. Whichever option that people choose will be helpful as long as people use the money that they have lent wisely. So now people can change their minds about payday loan and try to get one their self.

Today’s economy gives us plenty of reasons to have more than one source of income. The reality is that we are always is some form of economic turmoil so for our personal finances to not suffer we must always have Plan B and Plan C in action. If one of your incomes is lost then you have others that will replace it. Being ahead of the game means little or no lost income.

How does someone find an additional source of income? My best advice on this is to start with something you enjoy or something is related to your current line of work. It is much easier to have a passion to put in the extra time necessary to create a second income stream if you love what you are doing.

The future economies of the world will center on information. The things that you have learned in life have value to those people who have not learned those things yet. A lot of times we place no value on what we do know because we accept the fact that everyone knows it as well. Use the value of this information and get paid for it.

Build an online presence of who you are and what you know so that people will seek you out. Your value is greater as someone who people look for as opposed to someone who is looking for people. You do this through social networking on sites like LinkedIn and Facebook. Tell your story on these sites and seek out those that might want to know more about you.

Next thing that you can do is investigate online internet marketing. Learning how to capitalize in the virtual world will give you multiple streams of income opportunities. Once you have a handle on being able to market yourself online, the number of information and digital products that you can market are endless. I personally hate the term automatic income because the only real automatic income takes lots of money and has a very low return. That is a savings account. Other than that you must be involved in some way to get a great return. You are not exchanging time for money you are investing your time instead of cash.

Finding a good source of training to become an internet marketer is important. Most services are merely trying to get you to buy their product and then they try to get you buy their next great idea. Make sure that their marketing plan is to help you succeed and not just for them to succeed. Programs that are more hands on giving will help you grow your income streams.

Remember again that as you grow your income streams that you must diversify and not just count on one area of expertise. If you are automotive related you understand how that economy cycles from selling new cars to the upkeep of current cars. But when the economy is down maybe you need to help your automotive customers find retirement advice. Be versatile, because once you have a customer they will turn to you again if you have given them a reason.

For more advice on personal finances and growing more income streams check out the resource box below. You can also find help with retirement planning and building a savings plan there as well.

Marriage is on of the most important decisions you will make in your life. If you are lucky enough to have found someone you want to spend the rest of your life with, make sure you take the steps to ensure your marriage success. Nearly 50% of all marriages end in divorce. Even more staggering is that about 90% of marriage breaks have their origins in money problems. It is important to have a joint financial plan which both parties agree to and are comfortable with. Fully understanding what the financial future holds is important. When questions arise within the marriage the “plan” can be used to address and mediate these problems.

The first question that needs to be asked is “Who is responsible for handling the money?” This is a question that most people never consider before tying the knock. There is often an assumption that the other person is handling everything and then you find out that no one is controlling your finances. It is important that, as a couple, if you are planning on investing, that you have the financial stability to be able too. Make sure you decide on who is going to handle the checking, savings, investment, and emergency accounts. Who will be responsible for doing the investment research and monitor your growth. In addition, plan on having regular meetings in which you chat about your finances and investments. Couples usually do not discuss money unless they are in the middle of an argument and obviously nothing can be resolved then.

Another issue that will directly affect if, when, and how you invest is if both people are going to work. If both people are going to work will it be full or part time. This is important because having a budget and knowing exactly what your expenditures are, will reveal what available funds you have to invest. Additionally, if you have children who will be staying home with them? Obviously two incomes can allow for more investing however a single income, if used correctly, can be manipulated in such a way that it covers all necessities, a few luxury, and long term investment.

The topic of joint or separate checking accounts is a conflict which a married couple probably won’t see until well into their marriage. At that point the problem is unresolvable. Make sure you decide if you will have joint checking, savings, investment accounts or will each person have their own. Many people share a joint checking and saving which money from both incomes is deposited into for household expenses. Then there can be joint investment accounts which will benefit the whole family. Due to companies offering their employees 401K and IRAs, those should be kept separate.

Make sure you chat about what each person’s long and short term goals are. After ten years of marriage you don’t want to find out one person has longed to retire early and sail around the world while you have envision something much less adventurous. Knowing long and short term goals will allow your financial advisor to diversify your investments in such a way that each of your retirement dreams can be achieved.

Most pre-marriage planning has to do with the wedding. Very few people have the foresight and the will to actually plan a marriage. Take the time and effort to openly discuss money and investments. Being true partners before marriage and solving the conflicts before they happen will not only make your wedding day less stressful but may, in the end, save your marriage.