HomeWith the salary and earning increase with slowest pace together with all the necessary expenditures have to be paid as well as the increasing of household expenses caused by high level of gasoline and food prices, there are something that we can save regardless the economic and financial situation of the country. In this article, we will discuss how to identify money saving strategies.
a) Unless your are unemployed, otherwise you should pay yourself first:
with 10% of your gross income deposited into savings first, then spend the rest prudently.
b) Pre-authorized checking arrangement:
Your employer will arrange to transfer your paycheck from your payroll account to your savings account, then pay your self first by withdrawing only 90% of your paycheck to your checking account for all household expenses.
c) Account for your expenditures.
i)Record down every expenditure.
ii)Carry only small amount of cash with you.
d) Be realistic
You must think clearly and carefully about your all expenditures.
e) Use credit cards wisely
i) don't be seduced you into buying items you don't need with availability of easy money from credit cards
ii) Always remember that the sky rocket interest rate of credit-card companies, usually between 20% to 28%.
iii) Any purchase made with a credit card should be regarded as a cash transaction.
f) Avoid unnecessary bank charges
i) Avoid non sufficient fund (NSF)charged by your bank. Always make sure that you have adequate funds in your account to cover check and pre authorized payments.
ii) Arrange for overdraft protection (the bank will charge you for this service) up to a pre-determined limit.
g) Establish an emergency fund
i) It is important to have assets that covers 4-6 months of living expenses and easily convert into cash.
ii) Invest the emergency fund into money-market funds, government bonds, and T-bills to earn interest.
iii) Do not use credit card or any form of loan as emergency fund, because the interest is to high to be comfored
iv) Do not put your emergency fund into an k401 or RRSP, any fund withdrawing from K401 or RRSP funds are taxable as incomes.
h) Understand the income tax laws
With the understanding of income tax laws that applied directly to your situation, you can improve your cash flow and your overall financial situation by paying only the minimum amount of tax required.
I hope this information will help. If you need more information of insurance or series of articles of the above subject at my home page at:
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