My Personal Finance Blog

Once you know how to initially set up a family budget, figuring out what kind of budget you need is the next step. A common mistake is thinking there is only one kind, but in reality there are budgets that can help your monthly family spending, help create financial safety or help you and your family achieve your financial goals.

As I’m sure you’ve already read our article on how to set up a family budget, the next step is here- figuring out if you need a comprehensive, problem solving or planning budget.

1. Comprehensive Budget (used for general family budgeting)

i. This family budget can also be referred to as a Master Budget. This budget is for families on a limited income who is trying to limit spending. This budget would include making lists of your spending, with categories and exact numbers broken down by month. This comes in most handy when you need to cut down your family expenses because you have all your information in an organized list in front of you.

ii. This budget can also be used to review your spending over a long period of time, which is referred to as an overall budget.

2. Problem Solving Budget (used for creating financial safety for a family on a budget)

i. This type of family budgeting tool works off the comprehensive budget when you notice you are having problems keeping your spending down in a particular area. You create a more detailed list of the area so as to see exactly where your money is going and what areas you can afford to stop spending on.

ii. This budget is known for finding problem spending areas in a family budget and fixing them.

3. Planning Budget (used for achieving your family’s financial goals)

i. This budget works hand in hand with your family investments. If you are planning your budget specifically around an event or time in your life, this budget can help. It adds an extra category to your initial family budget for your goal.

ii. First, you pay for all other necessary expenses (rent, bills, groceries, etc.). With the leftover money, decide on an amount to set aside in this column for your investment. This is a category that does not show money spent, but money saved.

iii. This plan can be used for family savings as well as investments. This column does not need to be geared toward a specific goal; instead, it can be family savings or money for emergencies. Either way, it is an important category for both family budgeting and investing.

A bank credit card is a financial tool that can act as a form of revolving credit. A consumer, who uses a bank credit card, must pay back the money after a period of time, along with some interest. Sometimes, the bank waives interest charges when the balance is paid completely each month.

Any U.S. citizen who is above eighteen years of age is eligible to obtain a bank credit card. Despite this, many banks issue bank credit card only after opening a bank account. The consumer needs to maintain a good credit history and his income must meet the bank’s criteria.

Most of the U.S. banks verify the details written in the consumer’s credit card application form before issuing the bank credit card. This is usually done by contacting the consumer in person or by telephone. Some banks even assign agencies to check the consumer’s credit history. It is always advisable to have a copy of the credit report from any of the major national credit bureaus before applying for a bank credit card.

When the application is approved, the bank sends a Personal Identification Number (PIN) that serves as the key to obtain cash from an ATM. A PIN is a highly confidential number known only to the consumer; it is unique to every bank credit card. In most cases, the consumer can obtain a bank credit card within ten business days upon approval of the application.

With the advent of online banking, it is very easy to apply for credit cards online. It is a more secure method, as it protects the consumer’s personal financial information. Some U.S. banks provide additional benefits such as insurance, credit card protection, rebates, and discounts along with the credit card.

Even when the consumer has bad or a damaged credit, it is possible to obtain a secured bank credit card; to do so, the consumer is required to open and maintain a savings account to act as collateral for the credit line.

If you would like to lose a little weight and generally get into better shape, like many of us would, then it is very simple. You must consume fewer calories by eating and drinking than you exepend as a result of physical exercise. Do this consistently over a period of time and you will be certain to lose weight. There is no big secret, no wonder drug and no miracle health supplement involved.

Basically, if you want to lose weight, then you need to eat and drink less (diet), burn more calories (exercise) – or both. The best solution, without any shadow of a doubt, is to do both. Taking regular exercise will increase your metabolic rate – the rate at which you burn calories. As long as you exercise on a regular basis then you will burn calories at a greater rate when you’re not exercising, for example sitting watching the TV, typing on your computer or even sleeping.

Of course, just the thought of exercise is enough to put many people off – but there’s absolutely no need to avoid exercise, it doesn’t mean that you need to get al hot and sweaty. Walking is one of the very best exercises that you can do – and most of us do it on a daily basis. You just need to walk a little more often and a little further and you will soon reap the rewards – and there are many health benefits available to those who walk on a regular basis.

According to health and fitness professionals, we should try to walk 10,000 steps every day. That equates to a distance of between four and a half and five miles for the average person. It sounds like a long way – but you may be pleasantly surprised at how easy it is to achieve. Don’t forget – 10,000 steps is the total distance per day – it includes the normal walking activity that you carry out as you go about your daily business. You aren’t starting from scratch.

Leave the car in the garage and walk to the shops, work or school – or get off the bus one or two stops before you reach your final destination and complete the last leg of your journey on foot. If you do decide to take the car then just park it in a faraway corner of the parking lot so that you need to walk further. Forget the lift and take the stairs from time to time. At luchtime take a ten or fifteen minute stroll around the block. It all adds up.

Other than a comfortable pair of shoes, no special equipment is required to start a walking exercise program. However, investing in a pedometer may be worthwhile – especially if your walking is broken up into short sessions throughout your day. It will help you to monitor your results and keep you motivated.

If you are able to fit longer walks into your day then you might also want to think about getting an mp3 player if you don’t already have one. The miles and the time will pass much faster when you’re walking along listening to your favourite tunes.

We’re all shopping for good safe investments for 2011 and beyond, but be careful in your search for the best. Some that look like good investments aren’t safe at all. Others are just relatively safe.

Good safe investments have been scarce for years as interest rates have fallen to record lows. In 2011 and beyond the future course of interest rates could separate the best from those that only appeared to be good investments. Here we define safe or fixed investments, and then look into the average person’s best alternatives in each of the three basic categories on the safe side of the fence.

Safe investments are fixed in nature vs. variable investments like stocks, real estate or commodities. Your income or interest rates, principal, or both can be fixed and maybe guaranteed by the government. You are basically acting as a money lender to a borrower like a bank, government entity, or a private enterprise like a corporation. In any case, the borrower offers terms for payment of interest and for repayment of their debt to you. Your three basic choices in the safe or relatively safe investments arena: CASH EQUIVALENTS where only your PRINCIPAL (money invested) is fixed, BONDS where only INTEREST RATES are fixed, and SAVINGS VEHICLES where BOTH principal and interest rates are fixed for a period of time.

Taking them in order, the first category is often simply referred to as CASH. Examples include bank savings and money market accounts, and money market mutual funds that invest in high-quality safe short-term money market securities for their investors. Safety with high liquidity is the signature here. You can get your principal back intact quickly and easily. These will be especially good investments for 2011 and beyond if interest rates go up because your interest income is not fixed and should follow suit. Your best investments here will be money market funds where your interest income automatically goes up with interest rates. Banks raise rates at their own discretion.

Bonds have fixed interest rates that do not change for the life of the security. They pay higher interest income and were good investments for years as rates were falling. These are basically long-term debt securities that trade in the open market like stocks do. Bonds promise to pay back your principal when they mature… but maturity can be 20 or 30 years away. Meanwhile your principal or the value of your bonds will fluctuate. The longer the term until maturity the greater the influence of changing interest rates. The value of bonds will fall if rates go up in 2011 or beyond, which only makes them relatively safe investments.

The best investments for the average investor in the bond department, looking down the road, will be short-term to intermediate-term bond funds. These hold bonds that mature in a few years vs. long- term funds with average maturities in their portfolios of 20 years or more. The latter pay more interest income and might look like good safe investments if you look at their performance records. But remember, the trend in interest rates could change drastically in 2011 and beyond. We’ve been hovering near all-time lows in interest rates and highs is bond prices. Don’t be the last to get the word when the party is over.

Some safe investments like bank certificates of deposit (CDs) and Savings Bonds come with fixed interest rates (for a period of time) and government guarantees for safety of principal. If the rate offered on a certificate or promissory note looks too good to be true, check to assure that it’s insured by the government. Some advertisements are misleading. The best investments here simply amount to shopping for good interest rates without locking in a rate for too long. If rates go up and you liquidate early you face penalties. Stagger your maturities. If you lock in a rate of 2% for 5 years or more, you won’t be a happy camper if rates go north. For the very best investments here look to your stable or fixed account if you have a 401k or other retirement plan that has one.

Finding good safe investments for 2011 and beyond can best be accomplished by putting together your own package consisting of the best investments from each of the three safe and relatively safe options just discussed. For most people this means a combination of money market funds, shorter-term bond funds (with average maturities of 7 years or less), and CDs with various maturities. This way you can make the best of it while interest rates are low – without putting yourself at significant risk if rates take off in the not too distant future.

When a person moves or transfers his or her assets and funds from one retirement plan account to another retirement account, that process of transferring or relocating his or her saved assets or funds is known as direct transfer.

Direct transfer is a phenomenon that has changed with the growth in technology. It is done mainly with the help of computerized systems today, but the process still takes a few days or more to complete. When a person leaves his or her job for a new one, it is very much possible that the person’s new employer follows the same or similar retirement plan as the person’s earlier employer did. In such a case, the person can easily transfer his or her funds from their previous to his or her new retirement account which is offered by the person’s current employer. Under such circumstances, the person does not have to pay extra taxes on his or her assets and funds that have been transferred because the transaction made counts as a direct roll over. A direct transfer can be offered to you by many different countries such as the United States of America or the United Kingdom.

With such new age methods, more and more people can take advantage of retirement plans that offer a higher rate of interest or any other form of benefit that will help them to construct or accumulate more assets or funds in the person’s plans over a chosen period of time. Retirement accounts should be very secured and reassuring for the person. The moment he or she thinks that their current retirement plan account is not secure or not as secure as another retirement plan account that the person might have come across, he or she should immediately change his or her account to a more reassuring one.