Business and Finance Corner

Posts Tagged ‘debt’

Whatever your job, and regardless of income every month, should be better managed to avoid a deficit. Management and proper financial planning will give the solution of financial problems. Including developing self-sufficiency, particularly for women heads of households.

Steps that can begin women in managing finances:

1. Paying off debt
Although financial management already cluttered, not too late to fix it. Especially if you have the amount payable for patchwork. Start setting aside money from revenue to pay debt. However the debt to your obligations. Unpaid debt, will gradually destroy your credibility. Your reputation is at stake if the liability (debt) still not settled. Allocate a maximum of 30 percent from a month to pay salaries or debt repayments.

2. Save
Convince yourself, that regardless of the value of income, so can be set aside for saving. Allocate funds 10-20 percent of income for savings. To be able to carry out this plan, limit consumption. Women often tempted by any of the goods purchased is actually not too important. In fact, sometimes only carry the influence of friends or a trend. Begin firmly to yourself, by making the priority needs of a much more important.

3. Emergency Fund
Prepare also a reserve fund as an emergency fund. There will always be unforeseen needs, such as serious illness and should be treated. Hospitals need not cost a bit right? Start setting aside funds amounting to five percent of monthly income. Prepare an emergency fund up to six months ahead. As a precaution, make a special passive account for emergency funds, or acting as a savings. Separate accounts are passively activated from the special account for everyday needs.

4. Insurance
After deducting the monthly routine needs, paying debt, saving, and preparation of emergency funds, the remaining income can be used to buy insurance.

Polar life insurance for the head of the family. Anyone who has become the backbone of the family, woman or man, should have life insurance. Because if anything happens to the head of the family, family life can still walk and given of insurance for a specified time.

In addition to life insurance, other insurance types that can also be given priority among health insurance. Also insured property, let alone used to do business, such as kiosks or stores.

5. Investment
Set aside money for investment, should be done after obligations have been fulfilled. The simple shapes, if you have more funds, invest your money in gold. But you should be careful when investing gold, notice and understand the value of sales and quality.

Allocating money for investments can be taken from other revenue sources. As THR, bonus, inheritance, or other income outside the main income. Many kinds of investments, the risk varies, as well as with its investment in the future. Should identify more carefully before selecting an investment product.

If all five of this obligation has been fulfilled, monitor expenditure and adjust the plan that has been built. Disciplined use the money to be key to the success of financial management. 5 Obligations in Managing Money

Whatever your job, and regardless of income every month, should be better managed to avoid a deficit. Management and proper financial planning will give the solution of financial problems. Including developing self-sufficiency, particularly for women heads of households.

Nini Sumohandoyo, Corporate Marketing & Communications Director, Prudential Indonesia said, women are often denied could never spare the money. Including to save let alone invest. In fact, by reducing the consumption of goods that are less important (with limited financial conditions), such as jewelry or clothing different variations of the model and color, women can set aside Rp 300,000 each month.

“By leaving money USD $ 300 000 only, women can save money, have insurance or other investments,” said Nini, on the sidelines of financial planning and management training for 300 women street vendors, held by Indonesia at Wisma Prudential Mandiri, Jakarta, Wednesday (14 / 7 / 2010).

Nini describes steps that can begin women in managing finances:

1. Paying off debt
Although financial management already cluttered, not too late to fix it. Especially if you have the amount payable for patchwork. Start setting aside money from revenue to pay debt. However the debt to your obligations. Unpaid debt, will gradually destroy your credibility. Your reputation is at stake if the liability (debt) still not settled. Allocate a maximum of 30 percent from a month to pay salaries or debt repayments.

2. Save
Convince yourself, that regardless of the value of income, so can be set aside for saving. Allocate funds 10-20 percent of income for savings. To be able to carry out this plan, limit consumption. Women often tempted by any of the goods purchased is actually not too important. In fact, sometimes only carry the influence of friends or a trend. Begin firmly to yourself, by making the priority needs of a much more important.

3. Emergency Fund
Prepare also a reserve fund as an emergency fund. There will always be unforeseen needs, such as serious illness and should be treated. Hospitals need not cost a bit right? Start setting aside funds amounting to five percent of monthly income. Prepare an emergency fund up to six months ahead. As a precaution, make a special passive account for emergency funds, or acting as a savings. Separate accounts are passively activated from the special account for everyday needs.

4. Insurance
After deducting the monthly routine needs, paying debt, saving, and preparation of emergency funds, the remaining income can be used to buy insurance.

Polar life insurance for the head of the family. Anyone who has become the backbone of the family, woman or man, should have life insurance. Because if anything happens to the head of the family, family life can still walk and dinafkahi of insurance for a specified time.

In addition to life insurance, other insurance types that can also be given priority among health insurance. Also insured property, let alone used to do business, such as kiosks or stores.

5. Investment
Set aside money for investment, should be done after obligations have been fulfilled. The simple shapes, if you have more funds, invest your money in gold. But you should be careful when investing gold, notice and understand the value of sales and quality.

Allocating money for investments can be taken from other revenue sources. As THR, bonus, inheritance, or other income outside the main income. Many kinds of investments, the risk varies, as well as with its investment in the future. Should identify more carefully before selecting an investment product.

If all five of this obligation has been fulfilled, monitor expenditure and adjust the plan that has been built. Disciplined use the money to be key to the success of financial management.

It was hard to believe if any man in this world which is free from bondage of debt. For instance, buying a home in need of funds so that forces us to get into debt. Not to mention the cost of school children to college. Often, these conditions make difficult to escape from the hands of debt. How do I fix this?

The good debt
Talking about debt, ideally not reach 36 percent of your gross income. And, this benchmark is usually viewed by the bank when it will lend money to spend, put it to the house.

However, it is also wise if you stay out of debt because it means that all earnings will be sucked in to meet the needs of big budget so there was no reserve fund for emergency purposes.

If so, what should be done by couples when faced with debt?

First, know what is meant by good debt and bad debt. Definition of good debt is anything that you need, but can not be obtained, except by selling all assets.

Examples of good debt is to buy a home. The reason, less likely to pay off the purchase of homes at once. But do not be too ambitious in buying dream home, make sure you have calculated in financial terms during the installment lasts. Clearly, the lower your loan, also shorter time installments.

Beware of bad debt
So, what is called a bad debt? He is a good or service that is not really necessary, but you want it, when earnings did not suffice. Characteristic is usually purely for instant consumption, making your net income shrinks, removing the possibility for investment or a bigger income. Worst cases of mismanagement of this case is the use of credit cards that are usually high-interest.

If you do not want bad debt, which must be done is simple, namely to know where the analysis of spending patterns and that’s not important or not needed. For example, when I went shopping for a monthly, you are often tempted to buy an electronic device or accessory, which does not need to be purchased. Avoid this habit to establish intent or a detailed list of groceries from home.

Divert also mindset when shopping. Do not think, “I’ve worked hard, I deserve to buy clothes for many millions or beach vacation to X which cost tens of millions”. But in fact, your credit card debt has soared, reaching millions. Would not be better diverted funds to pay the mortgage?

It is not allowed, you know, use a credit card. However, a better use for the needs of large or sudden. Like when the ill family member, a credit card could be used to pay for treatment advances in hospital while waiting for the fuse of health insurance claims.

Do not forget to always pay credit card bills. Try to pay higher than minimum payments, yes. However, it is better if you prioritize paying credit card bills with the highest interest and specify a limit on payments per month without disturbing the other primary needs.

There are still options
So what if the debt has been climbing, is it too late? The important thing is do not panic because it will not solve the problem, even complicate. Stay focused on main goal, ie pay it off.

Although it took a long time and have to sacrifice some secondary needs, in the end all for your good, right? Do not also continue the habit of debt, no need to panic if you see something you want to buy. Always think carefully, whether you really need it? If yes, you can save money or if you are saving less reliable, just follow the program in a bank savings plan.

Finally, it must be noted that basically is not how much fresh funds owned, but is there a way to make your money “work hard” so that it can generate more money as investments.

It has become a common phenomenon that many of our colleagues, or the people around us who often complain that their messy financial condition. Financial planning is actually an essential activity that must be done by everyone and this is what will differentiate between groups of people who always stuck by the lack of liquidity and a group of people who can enjoy life.

1. Diagnose the financial condition
The first step that needs to be done in preparing the financial plan is to diagnose the condition of our current personal finances. Must be considered in diagnosing the financial condition is the amount of total revenue, total expenditure, the amount of assets and liabilities are debts that we have.

Real asset is anything that gives the results or our support of productive activities. Simple example is the house we live in and the vehicles that we use can be classified into an asset because it supports our productive activity, while the villas, stereo sets, acoustic guitars, golf clubs and a second vehicle which we rarely use, certainly not an asset category. Savings and investment is one of the real intentions yielding assets.

Debt is a common thing done and really not something to be feared. Debt is essentially adding our purchasing power by appealing to our revenues in the future into the present.

Matters more in terms of debt is the type and amount of debt repayment obligations that must be our responsibility. Home loans and productive vehicle is clearly a type of debt is reasonable and can be tolerated, but credit card debt is a type of debt that absolutely must be avoided. Interest rate credit card debt reaching an average of 35-48 percent per year and this is clearly a burden our financial liquidity.

2. Own Emergency Fund
The second step in preparing the financial plan is to check the availability of emergency funds that we have. Emergency fund is a fund which should be available at any time if unforeseen expenditures arise.

The amount of emergency funds to be held in the financial planning varied, ranging from 5 to 20 times our total monthly expenditure, depending on the load that we bear. When we were still single, then simply have a five-month emergency fund total expenditures, while more and more members of our family, the greater the emergency funds that we must prepare.

Types of investment options for an emergency fund is an investment which are liquid and have a level of investment risk is relatively small. Investment in an emergency fund is not for the purpose of growth but rather on the availability at any time and are not cracked by inflation. It must be realized that the size of this emergency fund should be increased in line with the increase in our standard of living.

3. Make a List of Expenditures
The third step in preparing the financial plan is to create a list of expenditures. At this stage the absolute do is check for this type of expenditure which we live.

Broadly speaking the types of expenditure can be divided into four sections, namely the obligation to pay debts, routine expenditures such as household expenses, electricity, telephone, etc., investment and personal expenditure.

Must be clearly distinguished between routine expenditure and personal expenses. Routine expenditure is the kind of expenditures that absolutely must be done to support our productive activity, could not be saved without degrading the quality of life and can not be avoided, while personal spending is the kind of expenditures that must be sacrificed if there is a decline in income.

Investments must also be a priority in the allocation of “expense” we. This investment is useful to improve our quality of life in the future. Investments will acquire assets that we have and be a source of passive income.

Investment culture should be done early start, how small of our revenues. The amount of the allocation “expense” for the minimum investment is 10 percent of our total revenue. In order for this condition is reached, the allocation of investment rather than from the rest of our income after deducting the expenses, but had been allocated as soon as we receive revenue.

It must be realized that the investments that give high returns but have always had a high level of risk and the risk level should be fixed in accordance with the characteristics of our risk tolerance. The more established the condition of our economy, then the asset allocation in the form of investment must be getting bigger, until, in turn, we can achieve financial freedom if the results we receive from our investment in working assets have exceeded or at least close to the results of our productive work.

Personal spending is the only type of expenditure which may and should be sacrificed when there is an increase the percentage of expenditures in the three headings of other expenditures. Postal delays and reductions in private spending will not reduce the quality of our lives and not harm our financial condition in future.

Once we fix our financial situation then we should enter the fourth step, which is planning a short-term financial goals and our long-term. In determining the short-term financial goals and long-term financial goals should be clearly outlined to be achieved and the range of time to achieve it.

Target goals should be realistic and of course adapted to our conditions. Long-term target and then broken down into short-term targets and strategies for achieving that goal.

One of the most decisive factor of success in achieving financial goals is the commitment and order us to obey pre-determined strategy. Financial planner professional from the banking world can be engaged to organize our financial goals.

The grade of home foreclosures has increased rapidly in latest years, forcing a lot of people to empty the houses of their dreams because of every month mortgage payments they cannot pay for, while making many loaners wealthy in the procedure. President Obama’s lend change programs provide sound resolutions to serve those of us

Obama’s lend change plan, titled the Home cheap modification Program was declared on March 4, 2009 and assists nine million householders decrease the payments debt on their mortgages by changing their lends. The government has invested 75 billion dollars into this plan to service householders in financial pressure due to their great mortgage payments.

President Obama’s lend change programs include a work by which loaners change surviving lends, thus giving householders shorter rates of interest, and letting the every month cash to reduce, without them requiring to refinance their surviving lends. This lend change program is contingent on householders having saved their payments latest and not going into failure.

As an inducement, there going to up to 1000 dollars in a finance for Performance Success Payment that borrowers can get all year and for adequate to five other years. President Obama’s lend change plan is planned to bridge the latest breach among what the householder has been clashing to finance and new, shorter attraction payments that will let them to stay in their houses and save families together.

Debt, a term has been widely known and used in life. If we have limited amount of money while the bills are very frightening, owing money is always coming as the “best” alternative, for some people. But, for some others, debt might not give solution, but indeed it triggers another problem to overcome. Which categories are you?

In global crisis lately, it is worried debt will be a life style, especially among lower and middle class societies. Consolidating with debt is already offered by many financial securities, but it is best for us to prevent ourselves from debts according to these four firm excuses.

Little by little and getting skyrocketing

Are you never afraid of running up debt and then waking up in the morning with headache? Because a whole night you are thinking of the skyrocketing debts and no money to pay them all. Remember, little by little and before you glance, your debts going uncontrolled.

Independent

Once you depend on others, it will grow laziness and the pleasure of dependence. Scarily, you never realize you just begin your dependence phase and no more willingness to be independence while you enjoy being under others’ umbrellas. What a tragic fact.

Temporary joy

Now you are free, debt saves you already. But you can not avoid due time and you have to obey it. It means the joy is temporary. Why having something fun for temporarily?

Why you give up so easy?

Life is full of chances. Don’t believe it? It is because you are living in your box and afraid of getting out from the comfort zone. Feel the fresh air, look at the blue sky at so many places and you will see how many opportunities have been provided by God, and we, as beings, merely need to give the best tries, over and over.