Wednesday, 30 November 2011

The Importance of Saving of Money

Saving of Money or Money Saving has become a very important aspect of Personal Finance . It is very important for an individual or family to save money for channelizing expenditures related to Personal Finance . Money Saving can be done on a personal level as well as on a banking level . On a personal level , money can be saved at home by storing it categorically in various places like safes or cupboard lockers . On a banking level , money can be saved into facilities like Savings Bank Account or Fixed Deposits .
            An individual or family should know where the money is spent . A record of the next month should also be kept . Every purchase occurred should also be noted . A bill or receipt for particular branded items should also be demanded from the shop keeper . Ultimately at the end of the month , account for every single amount of money should be kept .
            Notes of money can also be divided and kept into various envelopes according to their amount and denomination , based on the type of expenditure to be carried out . On such envelopes , names of the particular source of expense can also be mentioned by names of such as Milk Vendor , News Paper Vendor and so on .
            Various grocery items can also be bought from Government Sponsored Retail Stores as items over there are sold at subsidized rates than their actual maximum retail price . Thus , the total bill amount  arising out of the grocery shopping will be a bit less than expected . It is also better to buy food items like fruits and vegetables from Government or Private Sector Supermarkets as they can be bought at a reasonable amount , rather than having to pay more while buying from AC Malls .
            Even on a banking level , a certain amount of money can be saved into Savings Bank Accounts and Fixed Deposits . A Savings Account is meant for keeping one’s money in a safe manner and it earns a small amount of interest every month. This account requires either a low minimum balance of around Rs. 1000 or may require no minimum balance at all . This depends on the type of bank and the type of account .
            On a banking level , a Fixed Deposit is also another way of money saving . A Fixed Deposit Account allows a person to deposit his or her money for a fixed period of time , thereby earning that person a higher rate of interest in return . Fixed deposits also give a person a higher rate of interest than a savings bank account can . In developing countries like India , many people prefer to opt for investing their money into Fixed Deposits than into Stock Market Equities .
            Even in financial life , a person should avoid car loan or a credit card debt which is unsecured , as they can drain out money savings and are bad personal finance practices to follow . It is also better to avoid unnecessary buying of new gadgets and other such recreational items like toys , books , antiques and so on , if the need does not arise . Cutting down expenses on travel expenses is also essential , as a holiday trip can also be planned at a later point of time , when there is enough money saved for it .
            If such kinds of steps are carried out in the saving of money , then it would be a big boost for an individual’s or family’s Personal Finance Expansion .

Role of Online Shopping in Personal Finance

In today’s Computer Era , Online Shopping has become an important and fast growing process , which can greatly help in handling Personal Finances of an individual or a family . Online Shopping is the procedure through which consumers can directly purchase services or goods over the Internet , without the need of having any middle party service . It is a type of Electronic or E – Commerce Facility . The two most prevalent types of Online Shopping Models are B2C or Business-to-Consumer , where a consumer interacts with a Business Entity online ; where as B2B or Business-to-Business is where a business entity interacts with another Business Entity online . B2B Commerce is also known as B2B Hub for Online Market Exchange .
            Online Shopping started during the E – Commerce 1 Period also known as “Dot Com Era” , between the year 1995 and 2000 . During that time ,, Inc. was probably the First Multinational Company in the world to launch it’s Online Shopping Website in 1995 . Then in 1996 , eBay Inc. which is a C2C Enterprise launched it’s Online Shopping and Auction Website in 1996 . In this way many other multinational companies also known as MNCs of  USA and other countries have launched their Online Shopping Websites over the past fifteen years .
            There are various advantages of Online Shopping over Traditional or Physical Shopping for consumers be it individuals or families . Consumers can save upon their time , money and energy as Online Shops are open for twenty four hours a day and many consumers can access them through their Internet Connections , from their home or workplace . Expense and time on a visit to a conventional shop is saved in this case . Some online shopping sites also have more flexible return policies to compensate rather than the physical retail shops .
            There are various disadvantages of Online Shopping over Traditional or Physical Shopping for consumers be it individuals or families . There is a lack of ability to inspect an Online Shopping Site before purchase , consumers are at a higher risk of fraud because of an online merchant than in a physical shop . Online Merchants also take the risk of fraudulent purchases using stolen credit cards at times .
            The procedure of Online Shopping is quite simple for consumers . Here , first the consumer has to visit the particular online shopping site , where various goods and services are usually listed in categories . Then the consumer has to chose a specific category , where items can be listed further into sub categories . Then from a sub category , the consumer has to choose a particular item of his or her choice to buy . After choosing that item , a list of similar items will be displayed in front of the consumer to choose . Then it’s up to the consumer to avail that service or product through online auction or instant buying . After choosing that payment option , the consumer may be required to register with that shopping site by opening a user account over there . Then further , the consumer can go ahead with the online credit or debit card payment method and finally purchase the particular item or service from the shopping website .

            In this way , we can see that Online Shopping has become a method of modern Electronic Commerce procedures . Thus , it's becoming very prevalent among people be it individuals or families in handling their Personal Finances , when it comes to shopping expenditure .

Tuesday, 29 November 2011

Usage of Credit Cards in Personal Finance

A Credit Card today , has become a very convenient way of handling Personal Finance for an individual or a family . Credit Card is also known as Plastic Money and is one of the most important inventions of the 20th Century , which is being used rampantly even in the 21st Century all over the world .
            Credit is the procedure of selling services or goods to a buyer , without the buyer having to pay in Cash . Thus , a Credit Card is a standard size smart card usually made of  plastic that consists of a machine readable code . It is a convenient way for cash , in offering credit to a customer and is issued by a financial enterprise like a bank or service provider . An internet information says that John Biggens of the Flatbush National Bank located in Brooklyn , New York was the inventor of the credit card issued by a bank way back in around 1946 . The internet also informs that the introduction of the First Credit Card in India is claimed by the Central Bank of India , in 1980 by the name of “Central Card”.
            There are various advantages of using Credit Cards for improving one’s Personal Finances . By Credit Cards a customer can make purchases of high amounts without having to carry so much of cash in hand . Credit Cards also enable a customer to withdraw cash from Automated Teller Machines known as ATMs , anytime and wherever they are located . Credit Cards also provide the facility of accurate recording of various purchases by a customer into a Single Statement .
            Apart from advantages , Credit Cards also carry some disadvantages . At times Credit Cards can turn a person into a spendthrift , resulting in over spending on redundant expenditures . If a Credit Card is lost or stolen then it may result into unwanted expenses or fraudulent charges . Thus , Credit Cards must be handled carefully .
            The procedure of using a Credit Card is stated as follows . When a purchase on any goods or services is made , the credit card user agrees to pay to the bank . The goods or service provider swipes the card over the Point of Sale or “POS” machine . The card holder agrees to make the payment by signing a receipt with a record of the card details and also indicates the amount to be paid or by entering a personal identification number also known as “PIN”. A Credit Card can also be easily used to make transactions on the internet . The goods or service provider needs the customer’s name on the card , the credit card number and the expiry date , a CVV code which is at the back of the card & signature panel's last 3 digits , in processing of an online order .

            It is very important also for an individual or a family to also see that which bank can offer the best credit card keeping in view various points like Annual Percentage Rate , Length of Grace Period , Credit Reward Points and Credit Limit to improve one’s Personal Finances through Credit Card Usage .

Friday, 25 November 2011

Today's Youngsters and Personal Finance

In today’s time , it is said that the 21st Century belongs to youngsters , which comprise of kids , teenagers and youth . It has become very important nowadays to provide knowledge of Personal Finance within youngsters also , so that they can start spending and utilizing the money given to them by their parents in an efficient manner . The following are some steps which parents can teach their child or children regarding Personal Finance .
            One way is to make a child aware that how much does a thing cost . If the family bread earner is a Service Man or Service Woman then the child should be told that how expensive an item of his / her choice can be . The child should also be told about things like Month Ending , when the monthly income money usually amounts to it’s minimum and unnecessary expenditure on leisure items like toys should be avoided .
            Another way is to tell a child not to unnecessarily demand for money for spending on leisure items or services , whenever they like . If a child is given pocket money by his / her parents then the child should be also be given with a piggy bank for storing the received pocket money as this encourages the child for storing and saving money . If the child is not given pocket money then the parents should tell the kid that his / her demand which involves monetary expense will only be fulfilled , if the parents think that it’s justified . The child can then be prevented from becoming arrogant and will understand the important aspect of Personal Finance that is Money Saving , when he / she will enter into teenage which is a very crucial phase of an individual’s life .
            When a youngster turns into a teenager , then the parents can also open a Savings Bank Account in the child’s name for the saving of pocket money . Parents can also encourage their child to go for a Summer Job , which can be like a training for the teenager and he / she can also get a stipend for that Part Time Summer Job . By this the youngster can save his / her earned money also into the Savings Bank Account opened by the parents . After Piggy Bank Savings , this Bank Account Savings is the next step towards a youngster’s Personal Finance Understanding .

            Lastly , when a youngster turns into a fully grown youth and is in college , the parents should train him / her in how and where to invest money , to handle Personal Finance more efficiently in the future . Here , providing practical knowledge about various financial services like Fixed Deposits , Mutual Funds and Stock Market Shares is very important for the youngster to know . These are some steps which parents and their youngster children can exercise so that youngsters can also become well aware of their Personal Finance Utilities . If steps like these are applied by youngsters then they will have to face minimum problems in their future life and they can also be prevented from turning into spendthrifts , as overspending of money is bad for Personal Finance .

Thursday, 24 November 2011

The various aspects of Personal Finance for Individuals and Families

Personal Finance is the Usage and a set of principles of Corporate Finance in an individual’s or family’s monetary affairs . It is aimed at Financial Security and Financial Independence so that an individual or a family can be ready to face any kind of monetary emergency and can also spend on their fixed expenses . Important terms related to Personal Finance are like Emergency Loan and Vacational Loan to name a few .
The popularity of Personal Finance in today’s time is increasing ever than before , especially in Developing Countries like India because a consumer has started spending money ever than before . This utility is very much prevalent among the Middle Income Families in countries like India , where in many cases there is only a Single Bread Earner to earn money for himself or herself and for the rest of the family . Another possible reason is rising inflation , where Taxes and Prices of various items are increasing in a manifold manner as compared to peoples’ incomes . Keeping such factors in mind , Finance Utilities like Personal Finance and Home Loans are gaining prominence in today’s time .
            As Personal Finance has gained popularity over the years , various companies in Europe and US have opened up in this sector . In Developing Countries like India also , various companies have opened up in the sector of Personal Finance . Such companies provide facilities like Vacational Loan and Medical Loan . With the help of a Medical Loan , an individual or a family can cover medical expenses on things like Medicines , Medical Treatment and General Physicians’ Fees . On the other hand , a Vacational Loan can help in covering Travel Expenses , Accommodation Expenses and other Miscellaneous Expenses .
            Nowadays , with the progressing of the Information Technology or IT Sector all over the world , Personal Finance is being worked upon over here also . Many IT Companies are now developing Softwares on Personal Finance for various financial organizations like banks and insurance companies . “Microsoft Money Essentials” and “Quicken Starter Edition” are examples of such Personal Finance Softwares .
            In the world of Internet also , Personal Finance is fast catching up among people . Now individuals as well as Groups of people are posting their blogs and reviews on various social networking sites . They are also posting their blogs on various blogging sites and blog sections of various finance based websites . It’s due to this reason that now lots of material on Personal Finance is available in various Search Engine Websites and most of the online reviews are free to view and download . Very few reviews follow the Paid Subscription Model .
            Nowadays , various softwares for Personal Finance are being developed and introduced for “Mac OS X” , which is the Operating System designed for Mac , precisely Macintosh Computers , made and sold by Apple Inc . The latest version of “Mac OS X” is 10.7 and softwares like “iBank” and “SEE Finance” are based on Personal Finance , which are meant for download from the Internet .
            Even in markets , many books on Personal Finance have been launched by various renowned authors who are economists . These books cover topics like Debt Avoidance & Reduction and Money & Profit Generation to name a few .