How to be Financially Literate

Out of all the conversations that I have had while at the Bondi Bowling Club, this one has got to be the most valuable. While there I met a business savvy CEO who gave me some advice that I will share below.

It’s common for people to complain about financial pitfalls and although they may claim to have bad luck, financial literacy is important in such cases. To remain financially healthy, it’s imperative that one learns about how to manage their personal finances. All you need is to have some basics and you are good to go. 

How do you know you have Financial Literacy?

It’s simple to know whether you already have financial literacy or not. It is not necessarily that you enroll to a class as it’s something that you can do on your own. If you are able to understand how different investments work, you are able to set financial goals and be focused, you are able to budget your money regardless of how little it is and use your credit card without going overboard, you have gathered some financial literacy. 

How do you Become Financial Literate?

It’s possible to become financially literate as long as you are willing and you make effort to. There are numerous ways that you can achieve this. 

  • Enroll into Financial Classes

There are organizations training people on this and all you have to do is enroll for the course. Most have a fee to pay before starting to learn, thus it’s good to confirm in advance. You can opt to go to class or study online. Having an interactive course is an effective way to gain knowledge.

  • Read Financial Publications

The amount of financial publications available today in books, magazines and online publications is inexhaustible. This is one way that you can learn at your own pace until you understand all about finances. For example, you will find blogs that talk about personal finances from budgeting, investment income, investments and retirement planning among others. Thus, you get to learn about different financial aspects that will enhance your literacy. 

  • Take Advantage of Financial Management Tools

Thanks to technology there are such tools today that you can download on your smartphone. Such tools help in personal finance management such as budgeting. You know where you are spending unnecessarily and in a better position to invest more.

If you want to achieve financial freedom, you have to do your best to gain financial literacy. It starts with learning the basics such as budgeting through reading of financial blogs, books and enrolling to financial courses. Take effort and start leveling up your financial literacy today.

Worried about Your Net Worth? How to Increase It

Your net worth acts like a wakeup call or a confirmation that your financial health is on track. What is net worth? Net worth is the total assets that you own including retirement funds, investments and personal properties among others minus the liabilities such as mortgages, loans, and medical bills among others. This difference is your net worth. 

How can you Increase Your Net Worth

When you have ambitions, calculating your net worth from time to time helps you to determine how far you are and to come up with new ways to improve the situation. With a few strategies, you can increase your net worth. 

  • Pay Your Debts

Debts are liabilities that reduce your net worth. When debts are more than your assets, your net worth will be negative. This is the reason for paying your debts boosts your financial situation. Find a plan to increase repayment which shortens the payment period and reduces interest. When you borrow money, put it into an investment that you will not struggle with repayments.

  • Increase Your Income

When you have more streams of income and you spend wisely, it means that you will be able to invest more. Your assets such as bank and brokerage accounts, real estate investments and retirement funds will increase. Even with little investment, you will be boosting your net worth. 

  • Don’t Waste Your Money 

Separating your needs from wants help in spending money wisely. It means that you only buy what you need and not what you want. One big problem with people is that they can’t help impulse buying. They buy something just because they like it and they can afford it. Sometimes they don’t even use what they bought. Spend money wisely to increase your net worth. 

  • Continue Investing

Although the liquid money you have saved contributes to your net worth, its better where the money is working for you. You should invest more money than you are saving. This is because, when you invest, your net worth tends to grow more. The market has plenty of options for investments such as mutual funds, real estate, stocks, and retirement funds among others. Diversify your investments and it will be easy to boost your net worth.

Knowing your net worth helps in guiding you on where to put more money and where you stand financially. Financial health gives you peace of mind and by investing more, paying your debts and increase your income streams helps in boosting your net worth.

Why it’s Important to Set Aside an Emergency Fund in Case You Lose Your Job

Your financial security could be messed up when you do not plan for emergency situations in advance. Life can be quite unpredictable and how you expect it to turn out maybe totally different from how it turns out to be. A health problem, fire, job loss or accidents are unpredictable and can happen to anyone. To avoid the frustration that may come from spending during such occasions, it’s important that you have an emergency fund set up.

How Much Money should you Set Aside for Emergencies

This is a common question when financial experts talk about emergency funds. People want to know how much they can set aside whether it is for medical emergencies or they have lost their job. Some of the factors that may determine how much you set aside are your monthly expenses and also how much you earn. At least, keep aside an emergency fund that can support you for 6 months even when you no longer have an income.

What you should Avoid Doing

When you get an emergency especially when you have lost a job, you should never use a credit card to fund your emergency. You will just sink in debt and this is a sure way to have worse financial situations. Credit cards are costly considering that by taking advance credit, you will not only be paying back the money, but you will also add interest. There would be no point in doing this when you have a chance to keep some money aside for emergencies.

What to do

Once you have decided that you will be contributing some certain amount to your emergency fund, the other thing to do is ensure that you can access that money when needed. For example, there are some situations that cannot wait. You do not have a job and you get a medical emergency! There is no time to wait and since this is the case, the emergency fund should be easily accessible. 

Since no one knows when an emergency can happen, it is important that you be prepared for it. You may never be prepared enough, but you can do your best to contribute towards it. It will save you a lot of hassle and stress when that time comes. All you need is to sit down, consider your income, monthly expenses and how much you will afford to contribute.

Boosting Your Financial Health to Build Wealth

Wealth is created and if you want to build your financial health, you have no choice besides planning your personal finances. It could be that you have a big salary but you can never account for that money. The money is enough to sustain your family the entire month and invest but you end up in debts or from paycheck to paycheck. It could be that you feel that you do not earn but if you ‘stretch your dollar’ you will be surprised by how much you can do.

Cut Down Your Costs

The cost of living is going high and there is no sign that it is going down. Maybe your income is stagnant that as the cost of living goes up, you have to borrow money to meet your basic needs. You have to change the way you are doing things and this means cutting down your costs. You must have a plan and cut down on unnecessary things. Even on the basic needs, find a way that you can save on that.

Look for New Avenues to Earn More

Creating new avenues of earning money will go a long way in ensuring that the hard economic times do not hit you hard. If your budget has gone up by about say a 100 dollars, find a way that you will earn this amount or even more. This basically narrows down to knowing your value (at work) or starting a business especially if you have a lot of free time.

You can even opt to work online considering that you can work from anywhere and even if you are employed, you can successfully work online.

Create a Budget

How can you be a good financial planner if you do not have a budget? You need to plan your spending in advance to avoid overspending and even rule out on the things that you do not need. You should not spend your money without knowing how much you have. Track your expenses for about a month and make a list of what you need and how much you need to spend on each item or task. When you have a budget, you will neither be wasteful nor live beyond your means.

Pay Yourself First

Spending all your income and borrowing to make ends meet, will make you a frustrated person financially in no time. Earning money is not all about meeting the basic needs, paying rent, going on holidays and fueling your car.

You need to save for a rainy day and there is no better way than to pay yourself first when you receive your salary. Do not focus on just saving but rather invest so as to increase your wealth. Saving should be for emergencies.

Building wealth needs a plan. The plan involves creating a budget, cutting costs, investing and finding new avenues to earn more. Avoid being wasteful and borrowing money just to make ends meet.

Ways to Work on Your Financial Goals

Most people if not all have set financial goals. They have goals that they have to accoṁmplish within a specific time whether it’s setting up a business, investing or saving. However much one plans a strategy on how to achieve this, there are definite obstacles.

You might be tempted to use the money that you have already earned for other purposes, you give up as you believe there is no tool to progress or you simply forget all your goals. This is a common mistake that should be avoided because there are ways that you can have your goals on track. 

Review your plans every week

You should not think about your money only when you have the paycheck or at the end of the month. You may never know where you are financially. The best way to review your plans is to do it on a weekly basis. Have a pen and a paper, record your transactions to see the progress reconcile and review your strategy. This will keep you motivated to go on. 

Start with Simple Steps

Unless you have a lump sum, you cannot do everything at ago. Whether it is a debt that you want to clear, build a home or buy a car, you should go step by step. Start saving or investing little by little and with time, you will make it.

Do not start with complex goals as you might be discouraged before you even start. Instead start with the simplest goals. When you make it with small goals, you will be excited to move on to the big ones.

Plan on How to Reduce Your Debt

Debt can drag your goals thus you should have a plan to reduce it and eventually clear it. It might not be possible to clear it at ago but when you work on a strategy, it will become easier. Reduce your expenses and only spend your money on the must have things.

If you do not have extra income, you should work on a second job and stop borrowing or running up new charges. When you do this, it will pave a way to see you accomplish your financials goals.

Save and Invest

Do not wait to have thousands of dollars to invest. This will again derail your plans. Investing will help you make an extra income which will boost your financial status. If you find it a challenge to invest since you get your salary to your account, you can request for a standing order with your bank whereby the investment money will be deducted automatically before you receive the payment.

How Merchant Finance guide can promote Your Business Revenue

Merchant Finance is achieving increasingly acceptance among business, particularly equipment supplier, as an apparatus to expand their sales and increase their business revenue. A merchant finance program additionally benefits the buyers of the tools since they will have the capacity to get their equipment with nominal documentation and without squandering time with banks or other money-related institution.

What Is Merchant Financing?

In basic terms, a Merchant financing program includes loaning cash to your client with the goal that he can buy your equipment. For instance, your planned client wishes to buy $100,000 value of your machinery. In any case, since he is lack of $30,000 money, he is delaying in making the buy. In that capacity, you are going to lose a client. You can take care of this issue by loaning him cash. You can offer him $30,000 for an appropriate financing cost, and he can simply ahead and make the buy.

You may finance such offers either by utilizing your own cash or by going into associations with different budgetary suppliers.

5 Ways Merchant Financing make a profit in Your Business

Merchant financing can emphatically impact your business from various points of view

Boost your Sales

Merchant Financing is a decent method to build the offers of your product. Your sales representatives might do everything right – recognizing planned customers, organizing a meeting, pitching your item and doing opportune follow up. In any case, as a rule, the customer may drag out the whole procedure and at last, abstain from carrying out to buy your product.

One of the primary reasons this event is that the customer might be excited about your item, he will be unable to organize the fundamental cash to buy it. Thus, all endeavors of your sales representatives go to squander and your business would experience from down sales figures. This issue can be resolved through Merchant financing. By offering merchant finance together with the item, your sales representative will have the capacity to bring sales more quickly, leading you more revenue.

 

 

Defeat Competition

For example, you and your challenger are pitching to a similar customer, and he can’t choose which of you to pick, offering merchant finance can simply tip the balance in you prefer. At the point when the imminent customer understands that you won’t just give the product also the finance to buy it is definite to give you a mind-blowing edge over your challenger who does not give merchant financing.

Customer fulfillment

Your customer will additionally be pleased that he doesn’t need to experience piles of printed material and waste most of the time attempting to meet various banks for keeping the finance to buy your item. Interestingly, he will effortlessly have the capacity to buy the item from you with nominal documentation. This will not only make your customer happy but also he will try to approach you for the greater product in further very high.

Higher Cash Flow

In a customary sale situation, you may confront troubles in securing payment from your clients. They may drag out the bills and may even default. This can essentially influence the income of your business. In any case, merchant financing can settle this issue since the financing organization guarantees that your receivables are paid off rapidly once the sales are finished.

Get Interested

Not just will you have the capacity to make more sales and revenue through merchant financing, however you will additionally obtain interest on the selling you are making. Dissimilar to customary sales where you get the cash for the sales director, in merchant financing you get the cash in portions together with the profit. Thus, you can end up profiting from the sales through seller finance when contrasted with direct purchase choice.

When you are excited about setting up your own particular merchant financing program to expand your client base, you can connect with the different financing organizations who do go into such entrepreneurship. But, make sure to complete a decent check up on the reputation of these organizations to guarantee that they do legitimate and reasonable business. Finally, you clearly would not prefer to connect with an evil respectable financial association and cause issues for you and your clients.

Reasons why people struggle financially

If everyone wants to be rich and financially successful, then why isn’t everyone rich? The answer to this question is not simple. You see, there are a lot of circumstantial reasons why a lot of people are poor and struggling. It could be because they had no mentors or they didn’t have access to good education. Emotional issues can also affect a person’s performance in life and business.

Being poor is a state of mind. There are lot destructive behaviors, ideologies and mistakes that are currently anchoring a lot of people from achieving success.

In this article, we are going to be looking at some reason why a lot of people struggle financially.

People set impotent goals

Most people are unsuccessful not because they set lofty goals and fail to hit them, but because they set petty and unchallenging goals. If your goals are easy to achieve, then you have to raise your ambitions and standards. You need to have the drive and determination to go further than those around you.

On the other hand, don’t set unrealistic goals that are impossible to accomplish. Instead, set goals that will push you above your comfort zone. The right goal will help you become a better person and secure a better future for you. The proper goal will bring you riches.

Subscribe to ‘the secret’

The philosophy outlined in some books often do not yield any result. For example, the philosophy outlined in the book- “the secret” has led a lot of people astray. According to the book, the best way to achieve success is to go to a quiet place and sit down and imagine yourself receiving a check with a big number written on it. If you believe in what you imagine, the check is going to show up at your door.  Wait! Does this actually work? NO!

If you believe in this philosophy you are going to struggle in life. On the other hand, if you work hard and take continuous action to achieve your goals, you will become something in life.

Unable to run a business

You don’t have to feel bad or ashamed of yourself because you don’t have business experience. The truth is that nobody was born with business skills. Someone has to teach you how things are done. You must be very careful when choosing your mentors.

 

 

Final note

These are by no means the only reason why people are poor or struggling financially. Do some research to find out more.

How Technology is Changing the Finance Industry

Technology has shaped and changed a lot of things in the modern man’s life. One hugely impacted area has been the finance industry. They are many ways in which technology has changed how the financial services sector operates.

  1. Financial services are more accessible. Mobile service operators, for example, are branching into mobile money and have garnered a lot of popularity. So much so that billionaire and Facebook founder Mark Zuckerberg took a special trip to East Africa looking to scout potential new opportunities to take advantage of mobile money. We also see financial institutions going mobile with apps and USSD codes, issuing loans through mobile networks operators and more.

  1. Cybersecurity has become everyone’s issue, not just service providers. With multiple areas to log in to, applications, ATM and credit and debit cards, the average user is more responsible for making sure they safeguard their information and passwords. This has also caused banks work overtime to secure all those methods of payment and customers’ information. Pre technology, to secure your premises would involve asking your local locksmith, such as: https://fusionlocksmiths.com.au or a security service provider to ensure you were secure. Now a cyber security breach would make customers mistrust banks and leave them to their more secure competitors. And the word customer here applies to both their retail and corporate clients whose information if compromised could have a catastrophic effect on the banks’ operations and reputation.
  2. The creation of more IT related jobs with changes to the hierarchy. A bank’s IT department has essentially become financial experts themselves and very well respected for all they do on the regular. Banks handle a lot of sensitive information and these departments are always working to protect it all, monitoring everything and accounting for both internal and external threats.
  3. Most things have moved been digitalized. A few years ago when banks stored their data in a room, they hired guards to protect their files and they feared the occasional break-in in their branches. Currently, most of it has shifted into the virtual systems and enterprises are more concerned about large-scale attacks. And with the ushering of automated systems, from tellers to digital record keeping, there are more threats to assess and prepare for. If a leak occurs, a lot more than money is at stake.
  4. The phenomenon is known as the internet and more specifically cloud technology has opened a new world of opportunities for banks to operate all over the world. As a result, new financial hubs have been opened and business is now being conducted on a global scale. As more players take advantage of these opportunities, more data will be shared across these networks and this will significantly increase the attack surface area.
  5. Another huge change is the growth in various infrastructures to keep up with the growing number of clients’ demands and concerns over data and network security. With operating in many countries and increasing its customer-base come a lot of revenue but at the price of always having to update infrastructure to keep up with the demand. Banks are now proactively investing in IT infrastructure to make sure they are not vulnerable to internal or external attacks.

How to Get Out of Debt

Getting out of debt is something most people struggle with. People get into debt for various reasons. Sometimes it’s absolutely necessary to take out a loan to deal with situations that pop up suddenly like accidents and losing your job. While at other times, people just invite debts upon themselves by poor life choices like overspending, vacationing on loan and more.

Whatever the reason, it doesn’t matter what is done is done. What you should be focusing on is getting out of the debt hole. If you have no clue where to start, help is here.

Find out how much you owe

Everything has a starting point. The first step is finding out who and how much you owe in order to organize your finances. Make a list of all the debts you owe, including the 200 dollars your friend loaned you, but for some reasons, you ‘forgot’ to pay back and tally them up.

Create a debt payoff plan

Once you have the exact figures, map out your pay off debt reduction plan. Determine which debts to pay off first. But it’s always advisable to start paying off the huge debts that are, the loan with the highest interest rate. Redirect all your extra cash in paying that loan first and you’ll be shocked at how much money you will be saving at the end of every year.

After paying off that loan, focus again on the next debt with a higher interest rate, and the next until the very last one.

You can as well choose to settle the small debts first and then move in on the loans with the highest interest rates. This method makes you feel like you are making tangible progress and motivates you to stay on track.

Stick to the plan

Once you’ve settled on the plan that you see fit, STICK to it. It’s very easy to give in to temptation, but if you want to get out of debt, you need to sacrifice. You can start with;

  • Changing the behaviors that got you in that tricky situation.
  • Creating a budget & sticking to it.
  • Tracking every cent you spend.
  • Looking for ways to earn more money.

Financial Tips for First-Time Home Buyers

Buying your first home can be an exciting experience and at the same time, overwhelming. You might have done an extensive research on the do’s and don’ts, but still get saddled with the reality on the ground.

But before making a buying decision, ask yourself these questions;

  • Am I ready to buy a house?
  • Is buying a house the best option?
  • How much do I need to buy a home?
  • Should l pay cash or get a loan?
  • Do I have enough money to make a down payment?
  • How much house can I afford?
  • How is my credit score?

Are you ready to take the plunge?

Buying a home is not something you decide overnight. It’s a huge investment, so you need to evaluate if you are financially and emotionally ready to buy a home.

Is it the best option for me?

Buying a home isn’t always better than renting. You should weigh your options first. And also remember, money isn’t the only factor that is put into consideration. Things like location, lifestyle, marital status, convenience, flexibility should also be taken into account.

How much do I need to buy a home?

The price of the house isn’t the only amount involved in the buying process. Other costs include;

  • Down payment.
  • Contingencies like Inspection and appraisal.
  • Closing costs such as title charges, settlement fees, lender fees.
  • Prepaid expenses.

Cash or loan?

Both options have pros and cons. If you decide to pay cash you won’t be tied down with monthly repayment and have a peace of mind knowing you are the owner of the house. But on the other hand, you’ll; miss an opportunity to improve your credit score, sacrifice liquidity and tie all your money in one asset.

#Tip:  To get the best mortgage rate, compare rates from multiple lenders.

How much do you have for a down payment?

If you cannot afford to pay cash, how much have you saved for the down payment of the house? Generally, the mortgage standard is a 20% down payment. If for one reason or another you can’t come up with that kind of cash, you can still buy a house with a conventional mortgage loan. But for you to qualify, you must have a steady income, a fair credit score and a realistic debt-to-income ratio.

But always remember your credit score plays a vital role on how much loan you can qualify for.

How much can you afford?

Before you start house hunting, figure out which house you can comfortably afford. This is perhaps the most important thing you should think about before making any hasty decisions. It’s also best to get pre-approved by your mortgage lender before going shopping.