February 2010 | Moneyhacker

Setting Up a Savings Plan

Article written by Sherin Dev; Follow on Twitter

Setting a savings plan ensures the life of any individual put in a safe side. As a thumb rule, one should start the savings plan at the earliest or at the time of getting the first salary. This would help the wealth creation happen in a smooth and gradual way. Here are some steps to setting up your savings plan in a better, successful way.

1 Start as Soon as Possible

This is the golden thumb rule every individual should bear in mind. Savings plan should start as early as possible. Never believe the myth of waiting for the ideal time to start your savings plan. If do such, we are never going to start the savings but always extend the same to another time. It is simple for our mind to find lots of excuses for the same. To get a better grip to your finance, start the plan as early as possible.

2 Understand Your Cash Flow

One should have right grip and understanding on his own cash flow happening yearly and monthly. This can be easily done through budgeting. If a right budget in place, it is easy to understand the cash flow in each week, month and year.

3 Manage your Monthly Savings

Take a decision to save maximum money at the end of each month. For an example, if you are able to save $250 in the first month and $275 in the second month, increase it till reaching an amount of the maximum possible by you to save in each month. This figure can identify by gradually increasing in each months savings. This would not only make you as a good money saver and ensure you are saving the maximum.

4 Pay to You First

What this means is that, whenever getting your paycheck, ensure your first check goes to your savings account with an amount decided in the previous step. You can even do it automatically by deducting the amount directly from your salary. If that not works, set to transfer the amount from your checking account to savings account in a monthly or weekly basis.

5 Contribute More Whenever Possible

Now you have a sum that goes to your savings/investment account in a weekly or monthly basis. Is that your stopping point? Never do that mistake. Instead, increase this amount time to time to save maximum. Whenever getting increments, bonuses or compensations, ensure you are saving maximum. Once if you have finished with paying a loan or any other debts, from your next month, send that amount also to your savings or investment account.

6 Review Your Plan at the Same Time Each Year

Having a savings plan itself not going to do better always. You have to review the plan time to time to identify any errors or tune it in a better possible way. This would ensure the efficiency of your plan. You can review the plan at the end of each year or beginning of the financial year. It is your own decision when you want to review the plan in each month.

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Get Financially Organized Through Connecting to Moneyhacker

Article written by Sherin Dev; Follow me on Twitter

Dear readers, I have started MoneyHacker on 3rd November 2003 with an intention to provide maximum information and knowledge on investment and personal finance to the readers. In the middle of 2008 I have made MoneyHacker as a free blog by removing its copyright to UnCopyright one. My intention is to provide readers to the freedom to use the contents in this blog as they wish. There is not limit of copying, publishing, printing or distributing any contents from this blog. Of course, I have posted very valuable information for users to have better idea on financial planning, investments, money management and more. I have also shared my personal success stories, practices and failures I have made with finance or investing to give more better ideas to the MoneyHacker readers. I have posted regularly for readers and new visitors a lot and lot to get new knowledge and practices. My blog post archive almost filled with all kind of information that a person required to have through references or study on personal finance, investing and money management.

Only disadvantage I have seen in me is - my language. Yes, I am not a native English speaker, but write-ups in MoneyHacker helped me a lot to personally improve my writing and speaking skills and now I am confident, I can stand with any native speakers.

Winston Churchill once said, "If you have knowledge, let others light their candles with it". This quote attracted me a lot and I decided to take that path. My first action was to release the copyright on my blog which later made it as an UnCopyright blog. I have posted articles on various subjects on personal finance and referred a lot to write new articles. An interesting fact revealed in my study that, blog readers are more interested to collect better ideas that learn something directly from any blog or site. This truth influenced me a lot and I started sharing ideas than step by step learning articles.

However, I have identified that I am providing a very small part of information from the vast world of personal finance. This fact forced to me think how I could able to provide maximum information to the readers. I finally identified the best approach to reach this goal through twitter. I have created two twitter accounts to provide maximum information to the readers. In the first account called as @Moneyhacker, I am sending tweets on each 15 minutes packed with excellent information and links to the best resources on personal finance, investment, money management and lots, available anywhere in the world.

In the second account @Mhackers I have dedicated to update links and successful ideas on entrepreneurship. It also updates with ideas on small businesses, personal and home business, and additional income generation ideas, in each 15 minutes.

Yes, I have twitter accounts but, how could you take advantage from it. I highly recommend you to follow me in either @Moneyhacker or @Mhackers or both. If you are not a twitter user, create an account at Twitter now and follow me as your first member. I will have a facility to follow you back immediately without fail!

Remember, simply following this account not going to give you maximum benefits. But, ensure you have created a list in twitter and added these accounts to that. List would ensure you are getting all my resourceful tweets and never miss any of the important information on personal finance, investment or even on entrepreneurship ideas. I am sure and promise you that, once become a follower of MoneyHacker, you will surprise with the valuable information you are receiving time to time. My efforts has packed with everything that you need to become financially successful and organized in a better way.

In case if you don't have twitter account and don't want to create one at this time, you still have option to get my tweets time to time. Become one of my fan in my Facebook or connect me through LinkedIn. This would also ensure you will get all my tweets.

Remember, I love to provide you ideas and points that any particular lessons. This would be your best friend or future steps to the right knowledge. As a follower of mine, you can ensure you are not missing any best resources available in the net today!

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How to Make Your Life Financially Stable and Successful

Article Written by Sherin Dev; Follow me on Twitter

Friends, do you know the amount of money people spends as commission to financial planners each year to design their personal financial plan to lead financially sound life? It would be more than the total budget of some European countries! If you are the one among them, who spend lots of money to professional financial planners, you probably have received below eight advices, if you had approached a right financial planner. Yes, today, I would bring your attention to understand eight core points which turn people to financially stable and sound life.

Moreover to just read and move from points to points, after each of these points, take little time to assess yourself to understand where you are standing in your life, based on these points. Does you have right financial plan in picture? If yes, is it going to the right direction with a fail proof structure? If not, what best you can do to tune it in a fantastic way? Take a note of all questions reaching to your mind while reading each of these sections to work on the basis each to get right answer and knowledge. Before you move to next point, identify whether you are comfortable with previous one. If you found you have not completed the required as per any of the below points, bring a piece of paper and pencil to draw a neat plan to ensure you have not failed with any these points.

Here are those eight points which would light up your life to a healthy financial plan:

- Living in Budget

Are you living in a well planned, perfect budget? Are you a strict follower of your monthly budget? As the startup, check whether you have a well planned, working, monthly budget in hand or not. If you have one, assess whether it meets all the requirements or not. Assess and note each resource where you are getting money and where it is going as expense. Moreover to that, identify the awareness of your family members to the budget and how comfortable they are to follow the budget. Once if you haven’t prepared good monthly budget, start your workarounds to prepare the same now itself. Draw your income from all possible places and all regular and unexpected expenses in a sheet of paper. This would help you to identify and eliminate unnecessary expenses to save lots of money at the end of each month. Once you start follow this practice, next is to enhance the budget time to time by adding and removing various elements from and to.

Remember, having a good budget in place and living in it is the primary step to the financially sound life. It is of course, the first advice you are going to get from any qualified financial planner. Creation of a budget is not hard once you have understood the real idea behind it. So, prepare your budget now, if you don't have one. Check, re-check and fine tune it to eliminate any possible errors. Once have done. It is your time to move ahead to the second point.

- Having no Debt Any Way
Debt is the biggest enemy to financial planning. Thus, debt management should given utmost priority into the financial planning. Any person who pays more than 65% of his monthly income to clear the debt, considered with huge debt trap. One of the best financial planning advices here is, never start your investments or money saving steps if you have debts. Instead, work hard to eliminate the debt first. Once become debt free, move further to your personal financial planning process.

Identify the most dangerous debt in the basis of interest rate. Prioritize and work to eliminate one by one. Tighten your budgets to pour maximum money to kill each debt gradually. Start your home work right now. Identify your debts based on its interest rates; prioritize it in a piece of paper. Bigger interest rated debts should come at the top of your list to eliminate first. Identify possible money sources and start pumping money to eliminate the debt one by one. Yes, clearing off debts is a time taking process. But, you should follow it any way. Or else, any of your invested capital along with its earned profit finally goes to pay off the debt! Here is a fantastic article for your reference.

- Precaution to Meet Emergencies

Emergencies are situations that cost you money by come as unexpected! This can happen to anyone including your family members. To lead financially safe life, you should be always ready to meet such situations. One of the best possible options to deal with such emergencies is creation of a sufficient emergency fund. But is that alone sufficient to all? Creation of emergency fund could protect you from emergencies that come whenever you are alive. If you have died, your family members would be in trouble. To meet such situations, take the best possible option by getting protected with sufficient insurances. Self, family members, vehicles, assets and belongings all should be protect well with sufficient insurance covers.

It is the time to take a home work. As usual, take a paper and write down the details of your emergency fund, insurance details to you and family etc. Next, assess whether you have protect each and everything through sufficient insurance covers. If not, prepare for a plan to get protected from up and down and from all the sides to confidently deal with any kind of emergencies. Once have a plan, go ahead for your insurance needs. Come back again to the next step once you have done.

- Identifying Your Financial Goals

We are reaching to the core side of financial planning. We are starting the financial planning through identifying financial planning goals. Goals can be short, medium or long, depends on person to person. Some of these goals I have generally found is, higher education of kids, build a home, holiday, buying a car, kid’s marriage, retirements etc... Remember, anyone can set goal. You don't be the one in that group. Your plan should be very realistic and possible to meet. Without a goal, whatever you do finally come as a big failure. Never run blindly without knowing the finishing point. Here is the core of family financial planning.

- Right Investments

Getting knowledge on investments and investments instruments are really easy. But, combining them to meet particular goals is really difficult. Friends, at this point, my best advice is to take advice from efficient financial planners.

- Utilizing Resources and Skills in a Better Way

Any person who moves with any plan should assess his capabilities and weaknesses prior to the start. This would help him to identify whether is he able to meet the goal or further preparations required. You should be the one such kind. Understand your skills in a better way. This would help you to identify right paths and meet your goals better than others who moved with less preparation. For a better example, you can utilize your skills and resources in a better way to create more income than your regular income. Skill based part time job, business etc... Read this 3 way income suggestions

- Teaching Kids on Money

It is just a title. But, if you are the chief of your family, and the main head of financial planning for you and family, it is your duty to ensure each of your family members including your kids, have good awareness on money and how to manage it efficiently. This knowledge help you a lot to save more money. Here is a reference.

- Knowledge as Frugal

Remember every action in a family directly or indirectly related to money. Identify the sources where you can apply regulations and habits to save money. People can save lots of money on electronics, electricity, water, shopping, banking, households etc through using it properly. This article could help you a lot in that.

Once you have completed each of the above sections, I am sure; you are ready to a stable financial life. Reference and advices can help a person to an extent. Final success always depends on person on how he works and how serious he is. My best wishes to each of you who have read my own story.

Image courtesy: Frank217

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