feed the pig - about savings

Check out feedthepig.org, which is an initiative by AICPA.

Good for all of us, in terms of financial health.

5 ways to save money in our day to day life...

5 easy ways to save money every day...

1. Get food from home: Be sure to include snack foods like muffins, fruit and cookies for morning and afternoon breaks as well as a lunch. If you also drink the office brew or bring a thermos of coffee, you can save $10 to $15 a day. If there’s no lunchroom at work, eat and read the paper at your desk or take your lunch to the park. You’ll be healthier as well as richer.

2. Take public transit or car pool instead of commuting in your car alone to work: Depending on where you live and how far you commute, you’ll save money on gas, parking, insurance and wear-and-tear on your car. And cutting out the daily drive to work and back will cause less stress on the environment – and you.

3. Go out for dinner just once a month: Cook food that will last a couple of evenings, and keep some frozen dinners, canned soups and pasta sauce on hand for evenings when you are tired and short of time. Cutting back on eating out and ordering in can save you as much as $200 per month.

4. Get rid of your cell phone: By eliminating or severely restricting your use of your cell phone, you can save about $35 a month, depending on your current plan and use patterns.

5. Cancel subscriptions to magazines you don’t read and cable or satellite TV services you don’t watch regularly: Cutting back to the magazines and channels that are essential to you can save you $100 or more per year. You can save even more by cutting your newspaper subscription back to weekends only and getting your news at work, on TV or online during the week. You’ll have less paper to recycle, too.

How to become rich (millionaire)?

Few key points to remember for becoming a millionaire...

1) Make financial security a priority.
2) Spend less than you earn.
3) Save and invest regularly.
4) Pay down your debt.
5) Own a home.
6) Maximize your incomes.

Income Tax Saving Schemes - India

Income Tax Saving Schemes

National Savings Certificates (NSC)
National Saving Schemes (NSC) is one of the popular Income Tax Saving schemes which is available throughout the year. It can be operated by single, joint, or minor with his/her parent or guardian. There is a return on this scheme at interest rate of 8%. The minimum investment limitaion of the scheme is Rs.100/- and with no upper limit. Other investments can be done in multiple of Rs. 100/-. This scheme has a mturity period of 6 years. It is transferable and also there is a provision of loan on the basis of this scheme. Under section 88 of the Income Tax Act, 1961 any person can take benefit in income tax on amount invested in this scheme and under section 80L of Income Tax Act, 1961 there is a provision of benefit on interests coming from scheme.

Public Provident Fund (PPF)
Under this scheme, there is a return at the interest rate of 8% p.a. The minimum investment limit is Rs. 500/- and maximum limitation is Rs. 70,000/-. It can be opened any time throughout the year. It can be operated either single or jointly. In case of minor, with parent/guardian. There is also a facility of nomination in this scheme. This scheme has a maturity period of 15 years. The first loan can be taken in the third financial year from the date of opening of the account, or upto 25% of the amount at credit at the end of the first financial year. Loan amount can be returned in maximum of 36 installments. A person can withdraw an amount (not more than 50% of the balance) every year. Under Section 88 of Income Tax Act, 1961 there is a provison of tax benefit by investing in this scheme. Interest on this schme is tax free.

Kisan Vikas Patra (KVP)
Money invested in this scheme doubles in 8 years. There is a minimum investment limitation of Rs.100/- with no upper limit. This scheme is available throughout the year. It can be operated either single or jointly. In case of minor, with perent/ guardian. Facility for nomination is also available under this scheme. Currently there is no tax benefit on investment under this scheme.

Post Office Scheme (POS)
It is one of the best Income Tax Saving Scheme. It can be operated by either single or jointly. In case of minor, with parent/ guardian. It is available throughout the year. There are several types of post office schemes depending upon the type of investment and maturity period. Post office schemes can be dividen into following catagories:

* Monthly Deposit
* Saving Deposit
* Time Deposit
* Recurring Deposit


Special Schemes For Retiring Person
Government Employees : There is a return at the rate of 8% per annum. The minimum investment is Rs.1000/- and maximum, amount equal to the total retirement benefit. Maturity period of this scheme is 3 years. According to Income Tax Act, 1961 interest on this scheme is tax free.

Public Sector Employees: Under this scheme there is a return of 9.5% payable half-yearly on 30th June and 31st December respectively. There is a minimum investment limitation of Rs.1000/- and the maximum limitaion is the amount equal to total retirement benefit. It can be operated by retired PSU employees in his/her own name or with the spouse, jointly. In this scheme, there is a facility of premature encashment. Entire balance or part thereof can be withdrawn after the expiry of three years from the date of deposit. Maturity period of this scheme is 3 years. According to Income Tax Act, 1961 interest on this scheme is tax free.

Postal Life Insurance For
This scheme is in operation for the last 117 years. This scheme started in 1884 as a welfare measure for the employees of Postoffices & Telegraphs Department under Government of India to the Secretary of State (having dispatch No. 299 dated 18-10-1882). But after few years, various departments of Central and State Governments were extended its benefits. Now it is open for employees of all departments of Central as well as State Government, Nationalized Banks, Public Sector Undertakings, Financial Institutions, Local Bodies like Municipalities and Zila Parisads, Educational Institutions aided by the Government. According to Income Tax Act there is also a provision of special relaxation in income tax on the basis of investment done in urban or rural areas.

Dividend
According to Income Tax Act,1961 there is a provision benefit in Income Tax if assessee has an income as a dividend on investment in any of the following:

* Shares
* Mutual Funds
* Unit of UTI

This dividend can be given by any company or coperative society.

Source: SurfIndia.

Avoid getting into debts - Say "No Debts"

Getting into debts is one of the things, everyone goes through OR in fact many of us stay all life. In most of the middle class families, there might be no time, you might be out of debt.

Falling into debt is very common and it happens because of a 'fulfilling desire' thing, which cannot be avoided - from a philosophical perspective.

If we make sure we live with what we have, then we won't get into debt. It is all because of getting to a next stage, when we are not ready in life to reach there.

For example, buying a car or a home, when we are not ready to do it. Buying a home is fine, which relieves you from the taxes etc., but buying an expensive car, when you are cannot afford.

Buying more items, which you might not even need and if you make your credit card bill not payable by the following month and you keep passing it on to the next month and you pay high interest, then eventually you will fall into the debt net.

If we try to prevent, before anything wrong happens, then we can avoid lot of calamities. here are some simple pointers to keep in mind easily...

1) Whenever you buy anything, think about two points - (a) can i afford it? (b)If so, is it needed?

2) Pay your bills or urgent credit cards first, then only go for your personal shopping or to fulfill your desire. Because credit card bills first.

If you don't follow the above, you will keep on digging hole under you and every month you keep on try to close that hole under you. As months go by, you will not have money to fillup your hole enough, so you go deep down under, out of which you cannot get out and if you come out it is going to be a tough challenge.

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.,

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.