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7 Money-Saving Tips That Are Easy to Forget

These days it seems everyone is exploring new and novel ways to save more money. But sometimes in our quest for fresh ideas, we tend to forget the basics that served us so well in the past.

When that happens, it helps to take a step back and brush up on those tried-and-true methods that we may be neglecting.

If you’re in need a frugal refresher, here are seven classic money-saving tips that are worth another look:

Buy used

Let someone else take depreciation on the chin.

Buying used cars, secondhand appliances in good working order, even gently used clothes and books is one of the single best money-saving moves a person can make.

But buying used takes some forethought and strategy. Don’t wait until you need an item to buy it; instead plan ahead.

Ask yourself, “What will my family need three months or six months down the road? What should I keep an eye out for now so I don’t have to pay retail when it’s crunch time?”

Scour thrift stores for great winter clothing bargains during the dog days of summer. Pick up a used patio set from the classifieds in autumn.

Understanding what your future needs will be makes buying used a whole lot easier.

Lighten up on the utilities

I’m a child of the ’70s and I distinctly remember the first energy crisis.

It seemed like overnight the country developed an energy conscience, and stickers started appearing around every light switch in my school – “Conserve! Lights Out!”

Those little labels made a big impression on me back then (as did my parents’ own long-standing house rules).

I still watch the utilities closely today — turning off lights when I leave a room, using dimmer switches, and keeping the thermostat set at reasonable temperatures as the seasons change.

It’s an easy thing to forget in the mad dash of modern life, but keeping utility costs in check is an immediate way to save money and reduce our carbon footprint at the same time.

Skip the latte (sometimes)

A dear friend of mine has an interesting habit. Even though he considers himself frugal, he likes to treat himself to small pleasures every now and then.

Trouble is, “every now and then” has recently turned into every day.

It goes something like this: On his way to work he’ll tell me, “I think I’ll treat myself to a latte this morning,” and $4.35 later, he’ll stroll out of the coffee shop, treat in hand.

Now, don’t get me wrong: What fun would life be without a little indulgence?

But for the frugal-minded, a treat that happens every day is no longer a treat — it’s overhead.

Would the treat be any less delicious if he made it at home and skipped the retail markup and the long lines?

We all have our own “latte factor” in life, and remembering to keep our treats in line with our budget is always a good thing.

Buy in bulk

It’s easy to forget just how much savings can be gained through buying in bulk.

Rather than focusing on sale prices for individual items, compare prices per ounce or per unit. Just keep three things in mind when buying in bulk:

  • Buy what you have room enough to store (or share).
  • Buy only those products you’re sure you’ll use.
  • For perishable items, make sure you’re not buying so much that you won’t have time to use it before it goes bad.

Ride a bike or carpool

It might sound like a cliché, but getting in the habit of commuting to work by bike a few times a week or using a bike for local errands is a great money-saver.

Besides avoiding the expense of fuel, wear and tear on your car, and parking, biking is a free cardio workout.

Over time, you’ll build stamina and muscle, work off stress, rest better, and maybe even make fewer trips to the doctor’s office.

Though carpooling isn’t necessarily heart-healthy, it can be budget-friendly.

Explore joining or setting up a carpool program where you work and sharing commuting expenses with co-workers who have similar schedules.

Sharing the cost of fuel, parking, tolls, and other expenses helps everyone and helps the planet a little bit too.

Learn a money-saving skill

What if everyone decided to learn one money-saving skill every six months? How much money could we save individually and collectively?

If you’re focused on frugal living, explore hobbies and activities that can help your bottom line and be enjoyable too.

Learn to plant a vegetable or herb garden, try your hand at basic car and home repair projects, or learn to refinish furniture.

Over time, your portfolio of skills will not only add to your Renaissance appeal, it’ll help save you some serious cash.

Save the raise

Believe it or not, raises still happen from time to time.

If you can make ends meet on your pre-raise salary, consider pocketing the extra and putting it toward your retirement savings or another interest-bearing investment.

Remembering to not let each salary increase carry a commensurate standard-of-living bump is a relatively painless way to save. Try the same approach with your tax refund or quarterly bonus.

What do all of these money-saving tips have in common? What’s the universal theme?

That the details matter. Small expenditures are easy to overlook as we focus on big expenses like mortgage payments, student loan debt, or credit card bills, but it all adds up.

It’s worth remembering: Being vigilant in all areas of our financial lives — from the big stuff to the small stuff — can make a real impact on our bottom lines.

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5 Finance Management Tips for Small Businesses

While starting a business, revenue fluctuations are common and owners struggle to have a steady income. Rising manpower costs and spends on technology add to the burden of managing finance better.

To ease up their life, small business owners can follow the below finance management tips that will help them to sail through initial finance-related challenges and even help them foresee them. Tapping into the latest technological solutions at the earliest will prove helpful and business owners should not ignore them.

1. Use Cloud Computing Solutions

Latest reports suggest that more and more small businesses are adopting for finance management solutions available on cloud due to the many free or low-cost options available and lower barriers to entry. The trend is fast catching on as spending on technology is proving to be far more affordable instead of hiring more people.

Managing bills and finances is a complicated task and can get stressful as well. Lots of companies are seeing the opportunity to help small business in this area. There are several accounting software available on cloud which help in not only sorting out the finances better but also help in taking effective business decisions.

2. Have Better Supply Chain Management

To efficiently manage supply chain, small business owners should ensure that there is tight supervision in the process and check that they rule out the possibilities of middle men who may add up to the extra costs. Efficient supply chain management would be more prevalent to B2C. Such businesses should reassess the supply chain process from time to time.

3. Be Ready for Risky Times

The global financial crisis in 2008 has taught businesses to be prepared for all possible type of risks. Hence, risk assessments should be an integral part of business and finance planning. Small businesses should be extremely careful while managing cash flow and ensure they have a risk strategy in place in case there is any turbulence in the business environment.

4. Go Paperless

One can be surprised with the amount of saving one can do by deciding to go paperless. Not only will it ensure cost reduction in the business but will also help you do your bit for the environment. Clients will love to partner with businesses which are more aware of the societal and environmental needs.

5. Latch on to BYOD Trend

It is unlikely that new businesses haven’t got bitten by the Bring Your Own Device (BYOD) bug. Smart entrepreneurs are using and also promoting the use of gadgets like smartphones, tablets during work hours which helps them close on things faster.

An AMI report states that spending on smartphones in India among SMBs increased steadily. According to AMI’s 2013 India SMB ICT & Cloud Services Tracker Overview, 55 per cent of small businesses and 43 per cent of medium-sized businesses currently have BYOD policies implemented.

The report also states that SMBs enjoy several cost benefits with the implementation of such policies. These include cost savings on hardware, increased employee productivity as they are able to access their devices anytime anywhere.

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Got married? Here’s how to plan your finances with spouse

Marriage marks a new beginning for the husband and wife. This new beginning brings its share of responsibilities that need to be actively managed. Some of these responsibilities are money-related. Money, handled carelessly, has the power to damage relationships. Therefore, it is absolutely essential for couples to talk about how they will individually and jointly manage their incomes in order to meet their life goals.

How do you assign responsibilities? How much insurance should you buy? How do you segregate and aggregate expenses? How do you work towards life goals such as having kids, buying a home, and building a retirement corpus?

In this article, we’ll look at entry points to money-related conversations that couples should have in order to avoid misunderstandings, strengthen their bond, and to race towards achieving life goals that will no doubt involve having large amounts of money.

Talk about expenses, fix responsibilities

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Your expenses will certainly increase after marriage. Therefore begin your financial talks by understanding what your regular and non-regular expenses are, and what each partner could do to settle these expenses or what each partner could do to even reduce these expenses. Do exercise caution and sensitivity while talking about personal or lifestyle expenses, since questioning such expenses may imply questioning your partner’s mindset. The core idea should be to get rid of unnecessary, wasteful spending and to find more money to save and invest.

Talking about who is responsible for which recurring expense—like settling an electricity bill, or keeping track of EMIs—would reduce the burden of tracking and settling on one partner. If both spouses are working and have separate sources of income, they can plan and distribute their expenses, thereby distributing financial pressures as well.

Get yourself risk covers

530x300-i-want-to-get-insurance-15a-1 Once you have a life partner, it is your responsibility to protect them from uncertainties and risks. The first step towards risk mitigation is understanding the potential costs you’ll bear when your risks become reality. How would you, for example, raise funds for a medical emergency? Or, how would a dependent wife have an income if the husband were to pass away suddenly? Insurance provides the protection you need from such risks.

Your life policy should be adequate for providing long-term financial security for your dependents. Opt for a term cover. If you’re a 30-year-old earning an annual income of Rs 500,000, you can opt for a crore of Rs. 1 crore for annual premiums around Rs 12,000.

Buy health insurance with critical care riders to cover all the members of your family and avoid spending lakhs of rupees in any medical event requiring hospitalisation or treatment for a critical illness like cancer. If you already have insurance covers, make sure you update your nominee details after your marriage.

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When you have children, include them in your family health cover as well. Additionally, you could also consider covers with a permanent disability rider that would financially protect you in a situation where you are unemployable and unable to earn an income.

Another form of risk cover is building a contingency fund. After marriage, the husband and wife should mutually determine the size of a contingency fund to meet emergencies like loss of job, prolonged illness, accidents, damages, or any other form of financial pressure. Both spouses should be aware of the fund and have access to it so during an emergency.

Invest smartly to jointly achieve life goals

invest-in-yourself Investing in the right instrument and at the right time is vital to achieve life goals. It’s wonderful to have a life partner helping you in working towards these goals. Your investments should consist of diversified assets with an ideal combination of risk, return and liquidity while also increasing tax savings wherever possible. Your investments should help you achieve not just personal goals – like finishing your education, going on a world tour – but also family goals like buying a house, putting your child through college, or building a retirement corpus. As a couple, you must discuss how you could individually and jointly contribute to the achievement of these goals while retaining sufficient liquidity to short and medium term expenses. This would lead you into discussing the investment options available to you: deposits, mutual funds, PPF, stocks, etc. Do also talk about inflation. Since 1971, the average inflation rate in India has been around 7.5%, therefore it is important for your investments—or at least a part of your investments—to grow quicker than 7.5% in order for you to achieve your goals.

Managing loans

loans As couples, do make it a point to disclose details of credits and debts. You may have lent money to someone, and a person in your family should know about it. You may have taken a loan yourself, and you should disclose to your spouse how repaying the loan affects your finances. If you haven’t taken a loan, do discuss the possibility of taking one in the future—for buying a home, for example. If both partners are working, they may want to combine their incomes to jointly take a loan and thus jointly take advantage of tax benefits while simultaneously making it convenient to repay the loan. Also, remember than marriage comes with responsibilities that would need you to occasionally spend beyond your means. Credit cards are the easy way out of such problems, but avoid the temptation to max out on your card and always—always—repay your card bills on time and in full to avoid falling into a debt trap. Higher loan rates and debt burden results in tainted credit records which can impede your family’s ability to access credit in the future.

Review your plans

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It is not necessary that the plans you come up with are perfect. Every now and then, tweaks may be required. Therefore, review your plans regularly and discuss how both of you can make the plans better. Sometimes, your life goals could change, and this may require large-scale changes to your financial plans. What is important is that the husband and wife remain on the same page as far as their individual and joint goals are concerned.
If you’re confused about how to save and invest, do consult a professional investment planner to help you draw the best money plans.

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5 Tips for Beginning Investors

It’s never too late and you’re never too old to start planning for your future. Sure, as savings account is the obvious go-to for when you’re trying to put away for a rainy day or retirement, but there does exist another way to stash your cash. Here are some basic steps to set up a simple, “set and forget” beginner investment portfolio .

1) Put safety first .

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Before you invest in anything, you should have money in the bank that you can easily get to in an emergency (say, your car breaks down) or that you can use for a new car, a trip abroad or even a house. Kip-linger generally recommends that you have at least enough in a cash reserve to cover your expenses for six to 12 months. Savings accounts are paying almost nothing right now, but you can eke out 1% or so in top-yielding accounts.

2) Build a solid base .

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For longer-term money that you don’t need right away—such as money in your 401(k) plan or IRA—you can afford to take risks in the stock market. The best thing to do when you’re starting out is to stick with mutual funds, which let you spread your risk—or diversify—by investing in a lot of different stocks.

The best funds to start out with, in my opinion, are index funds, which try to match a particular benchmark, such as the broad-based Standard & Poor’s 500-stock index or a total stock market index. Another benefit of index funds: They have very low fees, which means more of your money is working for you and not for the company that manages the fund.

Note: Peter, you asked about exchange-traded funds, or ETFs. An ETF is a kind of index fund. There are hundreds of ETFs that invest in all kind of indexes, some well known (such as the S&P 500) and some so obscure that you’d never need them. They are popular because their fees are even lower than those of index mutual funds, and you can trade them throughout the day like stocks.

3) Aim for a target .

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Another broad-based way to invest is a target-date fund, which you probably have access to through your 401(k) plan. That’s a one-stop fund with a mix of stocks, bonds and other assets that are tied to the date of your retirement and gradually become more conservative as that date approaches. If you go this route, a target-date fund is probably all you need.

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4) Add a little spice .

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With actively managed funds, managers use their own judgment to try to get returns that beat the stock market. That’s tough to do, and some managers are better at it than others. The trick is to pick the best ones that have staying power. At Kip-linger, we try to do this for you by choosing the Kip-linger 25, our 25 favorite actively managed funds. If you have index funds as a base, you can use actively managed funds to complement your portfolio.

5) Take a flier on stocks?

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In some ways, stocks are the most fun to invest in, but they also require a lot of research to choose the right ones. And, of course, if you invest in any single stock, you’re taking on more risk than if you invest in a mutual fund that holds shares in many companies. For someone in your position, I’d recommend starting with a solid fund foundation. Then, if you have extra money and want to take a flier on a stock (or stocks), you can do that.

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5 Ways to Make 2016 Your Best Financial Year Ever

A new year can mean a fresh start in many areas of life – including the area of money management. If one of your New Year’s resolutions is to have a financial makeover, you’ve come to the right place. Here are five money moves you can make that will help you to have your best financial year ever.

Create a Financial Plan

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A successful financial year begins with a great plan. You can create a simple, yet effective, financial plan at your kitchen table with a notebook, a pen and Internet access. Here are the steps you need to take to create your financial plan:

  1. Start by considering your financial goals. What’s important to you in life? How does money relate to your highest priorities? By determining what it is you want out of life and how much money it will take to achieve those goals, you can begin the next step in creating your personalized financial plan.
  2. Assess your current financial situation. Write down every asset and liability you own, and from there determine your net worth. Having a clear picture of where you’re at financially will help you determine how to get where you want to be financially.
  3. Map out a path from point A (where you’re at financially) to point B (where you want to be financially). Determine what you need to do to reach your goals  and set a plan in place to do so.

By creating a simple financial plan, you’ll do wonders in making your money do what you most want it to do in your life.

Start Thinking Big Picture

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When managing money, too many people think short term instead of big picture, therebysquashing their financial goals and dreams before they even begin to achieve them. For instance, they squander $30,000 of hard-earned income on a brand new car instead of investing that money for a plush retirement.

Or they make takeout meals a way of life instead of cooking at home and using that money to save for a down payment on a home.

The Solution

When making daily spending decisions, gauge the value of the dollars you’re about to spend against your financial dreams and goals. Will that daily latte truly bring you more joy than being able to retire at 60? Will that brand new car be worth the opportunity cost you’re giving up investment-wise?

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When you start considering your short-term, immediate gratification purchases against the background of your greater dreams and goals, you’ll begin to realize how little joy those purchases bring you. As a result, you’ll begin making spending decisions that bring true, long-term value to your life.

Educate Yourself

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The Internet and your local library offer a college degree’s worth of education on how to grow your wealth and reach your financial goals. As you work to make 2016 your best financial year ever, choose to turn off the television, set aside your smartphone and spend an hour each day educating yourself on successful personal financial management. The benefits you reap will be priceless.

Surround Yourself with Like-Minded People

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If you’re working toward a financial goal of debt freedom or financial independence, it’s important to surround yourself with people who are striving toward those same goals. Hang out only with perpetual spenders, and you’ll likely be drawn back into a life of mindless spending. However, if you find people to spend time with who have your same goals in mind – whether that be people in real life or online via financial blogs and Internet groups – you’ll gain extra momentum for changing your financial picture big time.

Choose Perseverance

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Once you have a solid plan in place for reaching your financial goals, success lies simply in the form of perseverance. Don’t let yourself get distracted from your plan by new and shiny things or by short-term rewards. Instead, keep your eye on the prize (the achievement of your biggest financial goals) while still living life in a way that brings you joy. Life goes by fast, and with a solid plan and the willingness to persevere in achieving that plan, you’ll find you’ll reach your financial goals in no time.