Suggested Expenditures and Savings for a Single person living alone

Where the money goes?
Allocation

Rent
20-25%

Food, travel and other must-spends for living
20-25%

Savings and investments
20-25%

Auto loan
5-10%

Emergency
5-10%

Miscellaneous spending
5-10%

Pay yourself first

When you get a chance, pay yourself first. When the salary or any income comes in, plan on automatic savings to transfer a certain small amount to get transferred from checking account to savings account.

Even I do that. I have set some automatic savings on every month 5th and 10th - for some minimal amount like $100 or so will get transferred from my checking account to my savings account.

If you have any not-often-reachable bank account, you can have an automatic transfer happen every specific interval of time. This will make sure that before you pay your bills and do expenditure, your savings account will get paid and there will a substantial amount of money get accumulated.

After you target an amount in savings account and if you have reached, make use of that amount or invest the money in appropriate places like money market, mutual funds or invest in real estate etc.,

PruICICI Invest Online - Mutual Funds Online

This is just to inform you all that Prudential ICICI company is providing a feature of investing online on all of the mutual funds, including Systematic Investment Planning.

Prudential ICICI is a venture being sponsored by Prudential, an UK based company and ICICI, our well known respected and trusted indian financial company.

You can invest in mutual funds online, wherever you are. then why wait?

Check it out here

Thrifty Savings - but useful

It may not seem like much, but keeping your computer monitor on all the time, will cost you $.60 cents a day, or $18 a month. Keeping your cell phone and battery charger plugged in may cost you $1.50 a month. And the night light? That'll cost you $.50 a month if you keep it on 24/7.

How I reduced my expenses

While I was calculating my budget, I realized there were small holes, through which money were going out.

When I tallied, I found out the holes. I did close or rectify one by one to close them.

One was my cable company Comcast, who was pulling lot of money from my pocket. So I removed my cable connection even though I have the internet connection with them. I have various alternatives than the cable TV, so I removed the cable.

I read various hints to save the gas and how can use my car efficiently to make sure car is good and it drinks less gas. that was one another effort for saving some money.

Monitored the Credit card account statement online and made sure there was no spam or unwanted debits from my account. In fact, I called the credit card company for the annual fees and all, which I am not supposed to pay. So I got the refund.

I cancelled my current phone company Vonage and switched to SunRocket, because I was being billed more than I was told. SunRocket was much cheaper than Vonage. Even though I called Vonage to tell them, I did not get a good response.

There are some more things I did, which I shall discuss in my next article in the same lines.

Roadside Maintenance Assistance of your car

I was happily starting to home this evening, after my long work day, in which I have worked hard and completed many of my tasks for the day.

I went to my car and checked that a needle kind of a thing had punctured my car's tire and my car was flat! Well, what would I do?! I need to take it to a car mechanic. As far as, I know, I don't know any mechanic who would be open more than 6 PM in the evening.

So, I called my Road Side Assistance service - AAA, in which I am a member. Note this point. They talked to me very nicely and accepted to come down to pick me up and give me a ride and also tow my car to the desired destination - it is my apartment.

I have a spare tire, but that is not inflated enough. So, it is not possible to inflate it right now and use it. It is going to cost me more, since I did not have my spare tire inflated. It is my mistake!! I will have to do two shunts by my friend's car to get the spare tire inflated and fit it to my car myself. And then drive the car to the service station to get the original tire fixed. If this plan, not going to work, then I will have to pay more.

Atleast good that I am a member of AAA.

Well, the lesson here is -
1) Remember to subscribe to AAA, when you buy a new car or used car.
2) Always have your spare tire inflated to 60 PSI - that would have helped me right now.

Right now, let me continue waiting for the AAA guy to come and help me.

Advantages of Post Office Monthly Income Scheme

Premature closure of the account is permitted any time after the expiry of a period of one year of opening the account. Deduction of an amount equal to 5 per cent of the deposit is to be made when the account is prematurely closed. Investors can withdraw money before three years, but a discount of 5%. Closing of account after three years will not have any deductions. Monthly interest can be automatically credited to savings account provided both the accounts standing at the same post office. The interest income accruing from a post-office MIS is exempt from tax under Section 80L of the Income Tax Act, 1961. Moreover, no TDS is deductible on the interest income. The balance is exempt from Wealth Tax.

Advantages of National Savings Certificate NSC

Tax benefits are available on amounts invested in NSC under section 88, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for any year can be treated as fresh investment in NSC for that year and tax benefits can be claimed under section 88. NSCs can be transferred from one person to another through the post office on the payment of a prescribed fee. They can also be transferred from one post office to another. The scheme has the backing of the Government of India so there are no risks associated with your investment.

How to build your credit score?

Credit Score is a score ranging from 300 to 850. This number is being provided by Fair Isaac Company, after consolidating various parameters from the credit bureaus Experian, TransUnion and Equifax.

Here are few points to build your credit score in a period of time:

1) Pay your bills on time - best would be immediately.
2) Use your credit card for only 20-30% of your credit card limit.
3) Do not open too many credit cards.
4) If you have opened too many credit card accounts, do not close them, unless it is highly needed.
5) Pay the credit card bills in full, without paying any interest.
6) If you do not have a credit card, open now, then only you will have a credit scroe!!

I guess these points should have been helpful for you. If you maintain a good score, then obviously you will get loans with lower interest, otherwise the creditors will rip you off.

Personal Finance: Investment Basics

Here are some investment tips for you - three types of basic investment:

Aggressive and looking for highest growth, with high risk and high gain. But If you try the same long term like 10-20-30 years timeframe, you have a bright chance: Stocks

Moderate, decent income in a reasonable intervals of time and medium risk and medium gain and the timeframe would be 4-6-10 years: Bonds

Low risk, low gain, but Safe Money and looking for 0-3 years investment timeframe: Bank Savings

You could mix the above with varied percentages to fit to your needs. We will discuss more about "at what age how much percentage anybody should invest?"

Moreover, this investment basics does not include anything about Real Estate! Will cover them in the forthcoming articles...

Personal Finance: Every cent and dollar matters!!!

This article is about your personal finance.

Be aware of every cent which goes out of your pocket. Being aware of the money you have and where it is going gives you more idea, knowledge and awareness about the money you have. More awareness and knowledge gives more control and intelligence to you. It allows you to make important decisions without any problems.

It is very important you log and maintain the files either soft copy or as a ledger for your home itself. Your home has to be run like a business. Need to be aware of the income and expenditures. Need to log them periodically. Accounting is not a big deal.

It has very few parameters and it is very easy to manage in home. Personal finance is no big deal!! If you spend time and want to have control over your finance, you can do it!! We are no experts, but we can definitely help!

If you have any questions, please mail us!! Mail at mailto:info@newmadurai.org

Thank you

Ideal Savings Budget Plan

Ideal Budget Plan:

It does not matter how much you earn.
If you can control your expenses, then your financial future is great!

Housing and Debt: 30%
Taxes: 25%
Insurance 4%
Saving and Investment: 15%
Living Expenses: 26%

Madurai Money Advice

This quote is teaching lot of lessons -

The amount of money you have has got nothing to do with what you earn... People earning a million dollars a year can have no money and... People earning $35,000 a year can be quite well off. It's not what you earn, it's what you spend (save.)"

Paul Clitheroe

Money Saving Tips for everyone

Money saving tips for everyone - 1

Make sure your office and home/apartment is nearby.
Office should not be more than 10 minutes drive. This will help in couple of ways.

Time - You can save lot of time, if you reduce the commute time. People travel by train or by bus or by their own car or motorbike.
People commute from 10 minutes to 30 minutes to 1 hour and some people even 1.5 hours. Look for an apartment near the office. Do not live far away from office.

For any home need or personal work in home, you can manage by being close to the home and office. Lot of things could be managed, even if you are in office.
You can drive to home and achieve it.

Money - You could lot of money - commute cost - could be gas/petrol/diesel price. Or it could be the bus/train fares.

How to become RICH and build wealth!!!

All about investment, financial planning, mutual funds, stocks, shares

Contrary to popular belief, building wealth doesn't necessarily require a large inheritance or an unexpected windfall. What it takes is planning, perseverance and good investing habits. The following time-tested financial plan strategies may help put you on the road to building your own wealth.

Use SYSTEMATIC INVESTMENT PLAN to see the potential benefits.

Have a financial goal
Spend time planning your financial future and know what you're working towards. Set clearly defined weekly, monthly, yearly and lifelong goals. Whether it's owning your own home or early retirement, you have to know where you're going if you want to get there.

Evaluate your financial goals regularly
While establishing your goals is an important step, regular evaluation of them is also critical. Just as your life changes over time, so too will your goals and objectives. Marriage, the birth of a child or even a job change are just a few of the events that may require you to revisit your goals and the investment strategies that may help you achieve them.

Spend less than you earn
Living below your means is one sure way to have the money you need to save and invest. Get into the habit of spending less than you earn and paying yourself first through a systematic investment plan. This way the money is invested before you have a chance to spend it.

Minimize your debt
Every dollar you spend paying interest on debt is money lost. Even a 10% return on investments isn't going to amount to much if you are paying 18% in interest charges. Instead, consolidate any debt you have to one credit card. By setting a target date and establishing a regular payment amount, you can reduce your debt and eliminate unnecessary interest expenses.

Invest early, wisely, often and as much as you can afford
Even a small amount of money invested wisely has the potential to grow into a big return over time. This is because investing early allows you to take advantage of the power of compounding gains.

Seek out the professional guidance you need
Developing and maintaining an efficient investment strategy takes time, knowledge and resources — a combination that is not easy to come by. Your financial advisor is there to provide the professional, objective guidance you need to create a plan that addresses your investment needs and can be changed as your life does. Taking advantage of this expertise is a critical step in helping you realize your goals.

Personal Finance: Emergency Fund

Always be sure to make and keep an emergency fund of Three Month Salary in a safe savings account. This money has to be reachable and we should be able to take it out anytime you want.

If the emergency fund is not a three month salary, at least you should have the expenses needed for three months and to support the family and the money to pay your credit cards in this period of time.

If you don't have emergency funds, your credit cards will suffer and it will lead to severe credit card debts.

If you are a family man, with your non-earning wife and dependant child/children, then definitely emergency fund is needed.

Personal Finance: Control your expenses

There are various ways you can save and increase your personal cash flow.
Controlling your expenses is one way of increasing your earnings.

Maybe you can't control your spending when you walk into an electronics store - or maybe you always have to have an extra pair of shoes and get tempted to buy the extra pair of shoes, even though you have three pairs already. It is all about controlling your senses, documentation and clarity in thought.

If we have sat down and calculated in our excel sheets about how much money is coming in and how much money is going out and what is the cash flow and what is my earning potential, then we won't do the mistake of buying something which is not needed or which is not affordable, considering the money we have in hand.

Key Investment Ideas for Middle Class Folks

Well, this is year end and we are in December, which happens to be the last month of the year. After this month, we have a fresh new year and new month of the new year starting.

We can do lot of things, before we start the new year. I would mostly talk about better investing here...Some key points to remember while you invest are -

(i) If you are young, single and started earning, that is the best! You can do wonders in your finance side.

(ii) First priority is to close or reduce all your debts. If you have increased your credit card bills, just try to close them as soon as possible. It is waste to pay interest for credit cards. Try to avoid them.

(iii) If you are an important person in the family and an indispensable bread-winner, be sure to have an insurance. It is the important stuff. Many ignore this, but it is highly important.

(iv) Couple of options for investing -

(a) Mutual Funds
(b) NSC, KVP and other post office schemes and small savings schemes
(c) LIC insurances such as Jeevan Shree, Jeevan Anand etc.,
(d) Real Estate
(e) Stocks and Shares
(f) Provident Fund
(g) Little Donations!!

HAPPY INVESTING and BECOMING WEALTHY!!

thank you

High Yield CDs - Certificate of Deposit - Good for this year 2007

This is to convey to all of you that this year 2007 seems to be a good investment option.

I suggest you visit BankRate.com for all the comparison charts of the Certificate of Deposits provided by various banks in USA.

There are some banks who provide more than 4%, but some provide like 1%. Please be aware of the hidden charges and penalty charges when you buy a CD.

Happy Investing!!

Thank you

Madurai Personal Finance: Set Financial Goals

In the back of your mind, you know you'd like to retire, save some money for your kids' educations, go on a vacation or two and do a few other things. But writing these plans down can help give clarity to those goals. Keep these goals handy, so when you're tempted to spend, you can decide if it's really worth the trade-off.

The financial goals might be:
College studies for children
Marriage arrangement for children
House or Land Buying
When to retire
Medical Expenses for you and spouse
Buying a movable or immovable property
Starting a small businessetc.,

Be sure to list down your financial goals and stick to it.

INSURANCE, INVESTING, MUTUAL FUNDS, STOCKS and SHARES, SMALL BUSINESS, 401K, Provident Fund, NSC, NSS, KVP, Savings, Certificate of Deposit, Real Estate investment

Is it good to take loans from Retirement Savings Accounts?

Is it good to take loans from Retirement Savings Accounts?

Well, Good Question!! The answer is YES and NO. YES: If you take loan from your own Retirement Savings Account, you pay interest to yourself and it is good for you. It is like challenging yourself with some more commitment, while you achieve what you want now, instead of waiting for your retirement amount, if you are just 40 years old right now. NO: If you take loan from your own Retirement Savings Account, you are breaking your own retirement money, which is not good from another perspective. Also, if you loose your job, and if you are not able to end up in some other job sooner, it becomes difficult to pay back the whole loan amount. The above views are personal. please research, while you make a decision. Thank you