Where You Should Spend The Money

A good budget should allocate income for the following four main purposes.

(1) Charitable Purposes

Charitable purposes include:

  • Relieving poverty, sickness or the needs of the aged
  • Advancing education
  • Advancing religion
  • Other purposes beneficial to the community. Examples are charitable giving to the disabled and orphanage.

Muslims practice zakat giving. It is a 2.5% levy on most valuables and savings held for a full year if their total value is more than a basic minimum. In Christianity, a tithe paid as a contribution to the church. Traditionally it is one-tenth of income. Today, tithes are normally voluntary based on the concept of “freewill offerings”. Dana is the practice of cultivating generosity in Hinduism, Buddhism, Jainism and Sikhism.

There are also non-religious organizations that encourage charitable giving to help the needy. Examples are National Kidney Foundation, United Nations Children’s Fund and World Wildlife Fund.

(2) Emergency Fund

During an economy crisis, businessmen may suffer business loss and may lead to lay off employees to reduce expenses. Businessmen need time for their business recovery and employees need time to seek a new job.

An emergency fund is a fund built up to protect you from temporary short-term income loss. If you are employed, emergency fund equalizes your three to six months expenses should be sufficient. If you are on own business, you may need longer time for your business recovery. Thus, the fund should be able to cover your living expenses for more than six months.

An emergency fund should be highly liquid that allows quick access to it, which is vital in emergency situations. You may consider to save it in a fixed deposit account or low risk unit trust fund.

(3) Invest for Future

Future purposes could be:

  • Retirement Planning
  • Children tertiary education planning
  • New car or property purchase
  • Other luxuries

You must first identify your goals, followed by goals prioritizing, then find out what is your number for each goal. By understanding your personal investment risk appetite, set up your investment portfolio and plan for regular saving amount.

Warren Buffett says: “Do not save what is left after spending but spend what is left after saving.”

(4) Current Living Purposes

Current living expenses include:

  • Tax payment
  • Mortgage and hire purchase (not more than 30% of total income)
  • Insurance premium (life, fire and auto insurance)
  • Quit rent, electricity, water, television, telephone and internet bills
  • Car maintenance, road tax, petrol, toll and parking fees
  • Food, clothing and medical
  • Expenses for children, parent and domestic maid
  • Hobbies and Vacations
  • Expenses for festive season, wedding, funeral and gifts


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Tips Saving For College Bill

Fall is in the air-no, wait, it’s hot humid and summer-like. Okay, fall isn’t quite in the air but the fall semester for school is gearing up; especially for those college-age children. Parents of college-age children all around the world have almost physically felt the sprouting of more grey hairs due to the surmounting college bills that are rolling in. So what can these financially stressed out parents do to rein in somewhat those college expenditures?

Here are a few ideas that may help with those oh so tight college budgets. Unfortunately, these won’t be able to help with all the sticker shock for parents sending their children off to college but there are a few areas that a little frugality can make a difference; such as saving on textbook purchases. Try these textbook-saving ideas and maybe you can feel a little financial relief in your college spending.

• Half.com – Parents and students trying to find and purchase for reasonable prices the long list of college textbooks can find relief when browsing through this site. This site has one of the largest varieties of offerings in the area of college textbooks. The other bonus, parents can simply type in the ISBN (the coded bar number assigned with the printing of the book, colleges usually provide this on the required textbook list) and voila, tons of offerings at different prices appear for their query. Then they simply need to choose their condition-grade level (this is based upon the condition of the book and whether it has writing, highlighting, creased pages, or damage and will directly affect the price). A tremendous amount of money can be saved by using this option of purchasing off Half.com.

• eBay, Amazon – These two online retail, resell sites of gently used merchandise are also great sites for finding, at a more pocket-book friendly price, those much-needed textbooks for college. Many college students, some who weren’t as lucky as you to read this article and find textbook saving ideas, were forced to spend full-value for their textbooks; so they-if their thrifty-will resell them online to the next wave of college students that are taking the same classes requiring the same textbooks.

• Renting Your Textbooks – A new option for college students in the area of textbook buying is being able to choose the option of renting their textbooks instead of buying. Many textbook selling sites make this option available to students, including Half.com and most college bookstores. But beware, there are caveats to the renter that they should be fully aware of before agreeing to this method of textbook purchase. Things such as: losing the books, damaging the books or late fees can end up making the cost of this option more prohibitive than the benefit. So read your “terms of agreement” statements carefully if you wish to reap the full benefit of this choice.

The cost of college education, unquestionably, has skyrocketed but there are areas that parents can find some savings. As in any other area of our financial life being an informed consumer can really pay great benefits for the total of that college bill. The buying of textbooks though doesn’t have to be the financial hardship that it would have been with a little research


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All About Budget

The budget is the basis for any form of financial stability, from household to business to country.

So what is a budget and how will it help?

It’s not a magic fix to money problems, quite the reverse, it is a tool to help you see where the problems are. If you’re overspending then a budget will help you see where your problems are, but it won’t fix them. That’ll be down to you to spend less. There’s no other way to do it.

But it can make a big difference in telling you where your money is going. That £2 a day on a coffee, £3 on a sandwich and £8 on a pack of cigarettes? That comes to £4745 per year. Surprised? That’s where the budget will help you.

How do you set up a budget?

There are two routes to go down, you can either build your own budget or use a template. I would always recommend building your own budget, it’s tailored to exactly what you want see and is as simple as you make it. The problem with templates is that they can be incredibly hard to customise and get the information that would be useful to you.

That being said, there are good budget templates available on programmes like Microsoft Excel, there are great apps available for all phones and plenty of websites that will let you budget online for free. If you’d rather stick with something pre-made then this is the route to go down. Make sure you check out some reviews before committing to a format. You don’t want to waste time setting up your finances in an app that you stop using after a week!

From here I will focus on the very basic steps to create your first budget.

Step 1

The most basic version of a budget is simply a list of your expenses. Make a note of everything you spend, from the pack of chewing gum you bought when walking through town to the new car you’ve waited years for. Write it down. This will start the habit of noticing what you spend. How many times do you spend that 50 pence on chewing gum? How long did you save for the car? The simple act of recording this will start you being more conscious about your expenses.

If you find yourself forgetting then follow this one simple step.

Keep. Your. Receipts.

If you’re ever asked if you want a receipt, the answer is yes. You don’t throw that receipt away until you’ve recorded the expense. With pockets bulging with receipts, or a pile building up on the desk you will soon remember to keep records.

Step 2

Once you’ve got in the habit of recording all your expenditure it’s time to dig into that raw data a bit more. Divide your expenses into categories, just broad ones to start with as you can worry about subcategories later. A simple division would look something like this.

  • Food
  • Travel
  • Bills
  • Rent
  • Miscellaneous

Start recording each receipt into a different category. This is the time that using a spreadsheet becomes a lot easier than a paper copy but if you’re not familiar with the software then stick to paper!

Over the course of a month, this will allow you to see how much you’re spending on each category.

Step 3

Now is the point that we get a bit more complicated. It’s time to set your budgets for each category.

Some of the categories, such as rent or bills, will be for a fixed amount so these can’t be set. So take your whole monthly income and take away these fixed costs. The remainder is what you have left to allocate. Let’s have an example using the categories above.

Alan earns £1000 per month.

He pays £500 in rent and £200 in bills.

As these are both set costs you need to take these off the £1000 before splitting the budget.

This will leave Alan with £300 per month to split between the final categories of Food, Travel and Miscellaneous.

How you do this split is entirely down to your circumstances but make sure you give yourself an exact figure to aim for!

Step 4

Sticking to your budget is the hardest part. Once you’ve spent your allocation for the month you have to stop spending money in that category, although for obvious reasons this isn’t always possible. If you’ve no money in your budget for food and still a week to go before the end of the month then you can’t starve. But when you buy food, make sure that the extra comes out of the allowance for another category.

These imbalances will happen frequently to start with as you learn which things cost you the most. Take a look back at where you’ve overspent and underspent at the end of the month and adjust your budgets accordingly. Prioritise the things that are the most important, food being a primary example, but don’t go overboard. If you can buy food on a lower budget by shopping more sensibly then maybe that extra money could go towards something more fun?

As you get used to budgeting you’ll get better at it in several ways. After a while you’ll know roughly how to split the budget into categories and which ones need more money in but you’ll also get a feel for what you can afford within your budget. You’ll automatically check yourself when shopping, to ask whether this means you’ll overspend and once you have set targets it is much easier to motivate yourself to meet them.

The important thing to remember is that budgeting is a habit. It takes time to form the right behaviour patterns but when you start following the process automatically the difference can be fantastic.

Budgeting gives you control over your finances and gives you the ability to make informed decisions about what to spend your money on and when you can afford it. Some of you will be content to keep this to a monthly level, being assured that you can meet your bill payments. Some of you will end up with a much more complicated budget breaking down your expenditure into weekly and even daily intervals, matching your costs down to a penny. Either way, it can give you more comfort and peace of mind when managing your finances.


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How To Save But Still Entertain

Are you currently looking for an effective way to get rid of your cable subscription? In the past few years, some new alternatives have emerged. These are viable and will allow you to maintain your entertainment, while also saving money! Of course, only one of these options will be right for your particular situation. Below, you will be able to find a breakdown of these options.

Sling TV or KlowdTV

Some demand live television! Unfortunately, there aren’t many ways to watch live television online, without breaking the law. SlingTV and KlowdTV are two excellent options. KlowdTv is a little new to the game, but is quickly establishing itself as a leader. It offers a small number of channel options, but these can be purchased separately, which is definitely cool.

SlingTv is bigger and bolder. With this streaming service, you can watch all kinds of awesome channels, including AMC, SundanceTV and even HBO. Unfortunately, some have reported performance issues with the company’s service. However, they have improved their servers in the past few months, so they’re consistently getting better.

On-Demand Services

Also, there are many on-demand streaming services, such as NetFlix, Hulu Plus and Amazon Instant Video. Each of these is absolutely wonderful in their own way. As far as new content goes, Hulu offers the most current, but the other two are great alternatives. Each provides original content and some of the shows, including Orange Is The New Black, Moone Boy and Transparent, are great. If you happen to shop frequently with Amazon, you really should consider becoming a Prime Member.

This will save you money on shipping, allow you to receive your items more rapidly and give you access to hundreds of movies and television shows for free. Regardless of your choice, each option is significantly cheaper than any package offered by the majority of cable providers around the country.

Consider An Antenna

If you’re interested in cutting the cord all together, you could install an antenna in your home. You’ll need an over-the-air antenna. Thankfully, they’re fairly inexpensive. Take note that these antennas are no longer massively large like they used to be. Instead, they’re small and compact. In fact, the majority of them will rest on your television stand and won’t be too much of an eye-sore.

With over-the-air- antennas, it is possible to receive twenty or thirty channels for free. The quality and quantity of these channels will depend on your location, as well as the quality of the antenna selected. Still, for twenty or thirty dollars, you’ll never have to pay for cable ever again and that is a wonderful thought.


At the end of the day, there are plenty of viable options out there and you will definitely want to consider them all. By utilizing one or more, you will be able to enjoy your favorite shows and movies at home, without shelling out fifty, sixty or more dollars a month for hundreds of channels that you’ll never watch!


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How To Review Budget

Regardless of whether you opt to become a leader, or prefer to remain an involved, concerned and committed member of an organization, your ability and effectiveness will be positively enhanced, and your actual degree of personal responsibility, is often directly related to your willingness, ability and understanding of the essentials of organizational budgeting. While nearly every group mandates creating and approving an annual budget, very few do so in a way that actually makes the group more effective. Wouldn’t it make sense, therefore, if groups dedicated time and effort, to training their constituents, and especially their leadership (and most involved and concerned members), to all the essentials and necessitates of the various aspects of budgeting, and how to use it effectively? With that in mind, this article will briefly discuss five things you should know and understand, before you prepare, consider and review a budget.

1. What are the needs, priorities and goals for the organization? Budgets should never be created in a vacuum, but rather must be tools for evaluating needs and priorities, and allocating the best proportion of time, money and other resources, in the most efficacious manner. Since effective groups constantly evolve, this is a significant reason why the method most used for creating budgets (which, unfortunately, is generally merely taking the previous year’s document, and adding a certain percentage). Great budgets address how a group should operate and create plans and programs, etc.

2. Carefully evaluate both revenues and expenditures: Are you optimally and efficiently raising revenues, as well as spending as you should, rather than falling into the trap of, too much, too little or just right? Is your fundraising performing as it should, and running on the proverbial, all cylinders? Avoid being myopic, and just cutting across the board, but rather, use zero-based budgeting, so you can evaluate every non-contractual area of either income or expense!

3. Review the actual revenues and expenses from the past two years: Don’t merely guess in some areas, or resort to either wishful thinking, or speculation. Look at what has been raised in the past, and pay particular heed to what’s been spent, and see if you can get more bang-for-the-buck.

4. What works and what needs addressing: This area of consideration is often a fine line, because while one must avoid panic and using the throw the baby out with the bathwater approach, similarly, you must realize that even great ideas often need a degree of tweaking, so they don’t appear to be stale, or merely the same-old-same-old. Remember how important it is to ask relevant questions, and get as much detail and explanation as possible, so you best understand what you are reviewing!

5. Make your budget a working, living document, guide and plan: A budget, and the entire process, can be perceived either as a living, working document, or merely a time consuming, relatively worthless one. The choice is yours! Prepare a quality budget, follow it, and use it to address goals and priorities, through the year.

Budgeting may not be the most interesting process or exercise, but it is an important and relevant one. It’s a matter of how seriously you take it, and how deeply you look at what’s going on around you!


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Save Money and Enjoy Life

Did you know that there are some simple ways to save money by doing ordinary things? There most certainly are! What in the world am I talking about? I will explain in this article.

My first tip is for when you go grocery shopping. Are you aware that the generic brands of the foods you normally buy are just as tasty as the name brands? This is true! In fact, very often the generic (or store-name brand) of a particular food item tastes better than the big name brand. Best of all they cost far less. Also at your supermarket, do not be afraid to buy whatever items they have on sale at the time. You can pick up some really great stuff this way. Remember to clip coupons out of your weekly local newspaper. Chances are good that your supermarket advertises in there. You can find out what is on sale and clip your special coupons at the same time.

Tip number two. Do not be afraid to shop at your neighborhood dollar or thrift store! Whether it is a big store like Walmart or Target or a smaller dollar store, you will get some incredibly good merchandise on items like clothing, household stuff, personal care merchandise, or edible goods. Many neighborhoods also have small, independently owned discount stores with wonderful deals. Just because you buy your products from a discount store does not mean they are inferior! Shopping at a thrift or discount store no longer carries the stigma it once did. More and more people are realizing you can save money on everyday items and still get good quality.

Do you know that it is possible to dine out now and then and not spend a fortune? How, you may ask? It is simple! Look in your local newspaper for specials they are running. Independent restaurants as well as fast food and mid-sized restaurant chains will frequently advertise this information. If you are online and/or use a Smart Phone, a lot of places will offer special coupons that you can use when you visit their establishment. Do not fear stopping in a buffet-oriented restaurant. Some of the best food can be sampled this way and will cost you less money. The same thing holds true of clothing and other retail stores. Look in your paper and online for special discounts and offers. A plethora of merchants now take advantage of Internet use to bring in customers. They will advertise special deals that you can print out or call up on your Android phone to buy their goods and save money at the same time.

Traveling on a budget! It is no longer necessary to stay at home and vegetate! It is entirely feasible to save money and travel at the same time. Websites such as Orbitz or Travelocity offer discounted airfares and lodging accommodations for exactly this purpose. Take advantage of them. It is also possible to buy some food and beverages at a local supermarket and store them, as many hotel rooms have small refrigerators. Then you can dine in your room or have a picnic at a nearby park. You will enjoy the views and save money by not eating out at restaurants on your whole vacation. Take advantage of these opportunities too! Save money and enjoy your lives at the same time! What could be better than that?


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Easy Tax Preparation

We all know that preparing for tax day is a daunting task. There are certain tips you can follow to make your tax preparation manageable. Here are five of those tips to make the process seamless.

Keep the Two Worlds Apart

As a general rule of thumb, you want to keep any new projects or jobs separate from what you’ve already got going on. You don’t know how successful your new business will be, so play it safe and keep a separate bank account for all of your dealings.

Hiring Employees vs. Subcontractors

Part of tax preparation is making sure that the proper forms are signed. Not only is it crucial to hire those who will make a difference in your company, but you also want to make sure you’re having them fill out the proper paperwork. There are two main forms, the W2 and 1099 for subcontractors.

Employees are those who work scheduled shifts and are paid on payroll, while freelancers come and go as projects are needed. The W2 should be given to the regular shift worker. If you fail to provide the proper paperwork, you could face hefty penalties. Be sure to understand the type of workers you have and which paperwork you need to have on file for each type.


If you read your books carefully, you’ll find there are many shortcuts and tricks that may help you claim deductions. You can get a deduction for your startup’s expenses, such as ordering supplies, buying space, etc. There is a $5,000 limit, so make the most of it.

Double-Check Payroll

Taking in an employee is a big decision that usually benefits the employee and lightens the employer’s workload. However, as mentioned earlier, it’s important to make sure all the proper paperwork is filled out on time. Social Security, Medicare, and Medicaid are examples of important programs that the W4 and W3 forms account for. Make sure you are up to speed on what is expected of you regarding these regulated fees.

Claim Depreciation

In your annual tax preparation, you can legally claim depreciation on your businesses’ cars, computers, patents, copyrights, and more. These are all tangible items that could lighten your tax obligation each year something depreciates.

Tax preparation is not the first thing most businesses think of when starting out; however, it is definitely an important factor that could cause a lot of headaches and unnecessary battles if you are not fully informed of what your responsibilities are.


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Factor Of Tax Policy

Globalization has been an increasing trend for businesses looking to expand. By growing into foreign markets, a company expects to increase revenue and earnings to stockholders over the long run. As this has happened, globalization has made taxation more complex than it had already been. Countries developed taxation in attempt to grow domestic economies; however globalization has changed the design of certain taxes and the extent of compliance. Some nations have chosen to raise taxes, while others have lowered tax rates to attract individuals and businesses in an effort to boost the domestic economy. Taxes are put in place to have individuals and corporation paying their fair share, but that is not what is happening in many areas around the world.

The mobility of capital across nations is leading to less revenue through taxation. In The Impact of Globalization on the Characteristics of European Countries’ Tax Systems, Lukovi cites a belief that taxation should be implemented using a multilateral approach instead of a unilateral one. This would certainly help the effectiveness of taxation across foreign borders, but still would not solve all problems. Around the globe, countries are at different stages of development, thus have different ideas on how to implement tax policy for their own good. Due to that reason, it is unrealistic to believe that a unitary tax system could be obtained. If a unitary system were implemented, related companies would be taxed as a single entity and tax havens would be eliminated.

Higher tariffs offer an alternative that is easier to tax and have increasing compliance. In contrast, higher tariffs discourage trading amongst nations in which certain resources are still needed. Consumption taxes, such as sales tax and excise tax, reduce the ability for taxpayers to play tricks in attempt of tax avoidance. “The small open economy is less reliant on taxing profit and income, and more reliant on consumption taxes and taxes on international trade, reflecting the fact that a well-designed tax system based on consumption taxes may create fewer economic distortions than many forms of tax on corporate profit and personal income” (Lukovi 120). When it comes to income tax, in the United States, it can be taken advantage of by making sure to receive income that is taxed at lower alternative rates, like qualified dividends among other financial assets.

Corporations have used numerous techniques to reduce tax liability, one of which is establishing branches in low-tax dominions. The Organization for Economic Cooperation and Development (OECD) is trying to improve the international taxation system. “Another proposal could eliminate a rule that allows companies to have a warehouse in a country without establishing a tax residence there. That could hit Amazon.com, which reports its European profits to tax haven Luxembourg thanks to the warehouse exemption” (Roll Call). This is one of countless examples of corporations, as well as individuals, finding ways to succeed in tax evasion. Individual countries are the ones that need to take action in the end as the OECD does not have enforcement authority.

It is unfathomable how many corporations do not pay taxes. “In the USA between 1996-2000, around two-thirds of transnational corporations (TNCs) paid no tax at all, and over 90% paid below 5% of their total income. From 2005 to 2006, of the 700 largest firms in the UK, 220 paid no UK tax at all” (Strauss). This shows that there are loopholes in many tax systems, and that clever businessmen will find ways to minimize tax liability. Administration for tax policy gets complicated when corporations have a residence in a handful of nations.

Globalization has made the solution to tax policy quite cloudy. Taxes can very much alleviate the effects of poverty. Whatever the best way to set tax policy internationally is, there needs to be increased coordination between territories. This involves communication of information across nations to ensure that potential tax revenue is not lost. A step closer to a unitary tax system will help the effectiveness of taxation as avoidance and evasion would be more difficult to achieve.


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How To Manage Your Tax

It seems like every year there are more do-it-yourself tax preparation software options as April 15th draws close. While there are plenty of reputable, efficient, and convenient options, an informed consumer should consider the pros and cons of e-filing before going through with it. For many people, the cost of hiring a certified public accountant or other professional to handle your tax preparation is greater than the return. If you do choose to file for yourself, you should know the pros and cons and be wary of common pitfalls that can trip up even the most intrepid of self-reliant DIYers.

The pros of self-filing are probably self-evident. The biggest benefit, of course, is that you’ll save money, at least up front. It is also a good way to acquaint yourself with your personal finances and take a hard annual look at your income, spending, and budgetary practices. Some people also get a certain peace of mind out of it. You know the saying, “If you want something done right, do it yourself?” Well, that’s all well and good, but it certainly has its limits. When it comes to yard work or thank you cards, it’s a solid philosophy. Open-heart surgery, on the other hand, is probably best left to the professionals. Gauge the seriousness in terms of the financial stake. If your adjusted gross income is under $57,000 per year and you only have one or two income streams, the Internal Revenue Service can direct you to some free or low-cost options. If, on the other hand, you run your own business, qualify for some deductions, or source your income from many independent sources, you might want to think about professional tax preparation services.

For one thing, you should assess the amount of time it will take you to file yourself versus the cost of having a professional tax preparer file for you. Many people look to save money, but few people consider that their time has value. If you have a couple of days worth of work to put together your return, would that time be better spent working on your actual career? The biggest factor, of course, is the bottom line. You may think that it’s expensive to hire a professional, but in many cases, it can be extremely costly not to hire a professional. The fact of the matter is that the tax code is a veritable labyrinth of deductions, exemptions, and credits built up over time, often for the benefit of very narrow interests. If it costs you $500 to hire a CPA, but they can get you $1500 more on your return, it’s a no-brainer.

Again, maybe you’re a student, only work part-time, or have a single modest paycheck with taxes automatically deducted. But if there’s a chance that you could end up getting more in the long run, professional tax preparation is worth every penny.


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