In this article we will discuss personal finance and how people manage their money. Personal finance is something that many people still do not feel educated enough about or able to understand. This can cause many problems when people find themselves unable to manage their finances and unaware of just what help is available.
While most people over the years have relied on social help i.e benefits or pensions, this isn’t something which can be relied upon as much today or even in future. This has been the case since the recession began and the cut backs took effect.
It is important when working out your budget each month that the person paid first is you followed by priority creditors (mortgage, secured loans etc). There would be no point in giving creditors the money you need to live and then having to go further into debt just to survive.
This is an important factor when working out your budget and it must be done. If payments are not made to priority creditors, then you could find it harder to get out of debt in the longer run.
It is important to make sure that you are protected against any changes which could cause debts to arise. This may be as a result of sickness which could reduce income or a family incident which could mean an increase in expenditure. One way which people can secure themselves against these factors is by having a savings account. By putting money way each month when times are good it can reduce the impact when you are struggling.
While there are fewer jobs than before due to the recession it may be worthwhile looking for a second job if you are struggling financially. This could offer the extra money needed to solve any money worries you have and may be a short term solution.
While most jobs are not able to pay enough to balance out the cost of living due to the recession, it could still help you put a little extra money in your pocket each month. The income from one job may not be enough to pay for the rising cost of food, gas, electricity etc which is why it is important to consider other options for income. This could be mean a second job which is part-time or even finding out if you are entitled to other benefits. The more options you have financially the better you may be prepared for the future.
Those who have money aside at the moment may have enough to start considering an investment into the property market. With house prices at rock bottom prices, if you have available income you can get a good deal if you are purchasing a house. This could be seen as an asset for the future or even just as extra income through rent. Another good source can be online as new innovative business options are arising all the time. It is advised though that caution is taken when looking online for extra income as people have found themselves the victims of scams.
Archive for January, 2012
Personal Finance – Tips and Support
Tuesday, January 31st, 2012Finance Job Interview Tips – Financial Careers Advice
Tuesday, January 31st, 2012
The best bit of advice you can offer anyone going for a finance job interview is to be prepared. The time you put into preparation will have a direct relationship with how well you perform in the interview and how likely you are to get the job.
Firstly, find out as much about the company as you can in advance. The more you know about the potential employer the better. You can never know too much and it will help in two ways. You will show you are an observant individual with an outwardly looking understanding of the industry and the knowledge you have learnt will show you know what you are talking about. Secondly it will also show that you have researched the company. This time commitment of the research also shows how keen you are on the position. Any recruiter is always going to appreciate pro-active candidates who show that they are keen to get the job.
Think in advance what questions they are likely to ask. Many financial job interviews follow a similar pattern, so think ahead about what they might ask. Draw up a mind map using both you CV and the job advertisement to decide topics. You won’t need scripted answers but the more time you have to think about answers the more likely you answer is to be what they are looking for. A few bullet points will give you a head start over the other less well prepared candidates.
Visualise your success. You can never underestimate the power of positive thinking. The worst that can come out of a financial job interview is you don’t get the job. You didn’t have a job when you entered the room so it shouldn’t be the end of the world if you leave the room without it. Understanding this and assuming you will do well can work wonders.
It is impossible to avoid tough questions; though as many financial job interviews are similar there are plenty of things you can bear in mind to avoid any unnecessary heart ache. It’s usually safe to assume the interviewers might adopt a “good cop/bad cop” dynamic even if it isn’t deliberate. By expecting this you can learn to respond to questions in they way the interviewer will expect and show how capable you are of dealing with difficult people.
If you aren’t sure how to answer a tough question, ask a follow up question. It will show a keen-ness to answer the question but buy you a little more thinking time. If you still don’t know the answers they want to hear don’t be afraid to admit it. It can look much worse if you answer incorrectly than admitting you don’t know.
If you are facing a tough round of questioning in your job interview it’s easy to ramble and forget to actually answer the question. So be careful not to lose your thread. If they notice you aren’t actually answering their questions they will think you are at best evasive and at worse out of your depth.
There is plenty to be gained from asking good questions in job interviews, it will show you are interested in the role and show you are curious to learn more. One good question to ask is about what they think the best and worse aspects to the job role. Asking questions like this enable you to gain a better understanding of the role.
Another good and unusual question to ask is about the company’s work culture. It shows you have an understanding of the work environment you feel most comfortable in. Similarly it shows a desire to understand more about the company beyond the jobs description.
Personal Finance – Understanding Personal Income and Expenditure
Tuesday, January 31st, 2012
“It takes as much imagination to create debt as to create income” quote attributed to Leonard Orr; if this is the case, then why is it that we create debts more easily than an income? well, most of us do, I know I do…I work so hard to create my income but on the contrary I easily get into debts.
In the last 5 years I have found myself getting into more and more debts, the more debts I get, the easier it gets for me to get to the next one and the next. My bank does not help either, the more debts I have, the higher the borrowing rates I am banded in, I guess it is because I am considered as a high risk to the bank.
Then there is overdraft charges, bounced direct debit charges, checks, late payments on my loans, utilities, mortgages all compounding into increasing my debt thus lowering my credit score and consequently increasing my APR…my debts feels like snow ball, free falling from a hill getting bigger by second, getting more and more out of control.
I took upon myself to look back at how I got into debts in the first instance; I knew if I have any chance of regaining control of my finance, I will have to know how I got in. It pays to understand how one gets into debt, and to do so, understanding income and expenditure is important.
Income is any earning that lands at your disposal, it may be money earned through paid employment, as business profit, or from investments. Expenditure (or sometimes known as expenses) is any transaction that takes away your earnings, for instance paying bills, mortgage, loans etc.
Income and expenditure chart, table or write up, (also known as cash flow) is a snap-shot of your earnings versus expenses. It is in essence looking at what you earnings (income), usually monthly against expenses (outgoing). An average person would not bother writing down his/her cash flow.
Using cash flow, it is easy to see how one gets into debt. When income is lower than expenses (also known as negative cash flow), the shortfall (deficit) has to be covered somehow from somewhere and for most of us it is covered by borrowing (loan, credit cards, store cards).
I began to learn that, if I am to avoid getting into debt, I will have to “live within my means”, i.e. at least break even between my income and my outgoing. To do this, I needed to master my will, guts and learn not to be ashamed of where I was, financially.
Most of the time, the pressure of conforming to other people’s expectations (keeping up with Joneses) is the one that gets us to live beyond our means, thus getting into debts. What we don’t understand is, debts have crippling effects and they are addictive in nature.
Robert Kiyosaki in his book cash flow quadrant (2000, p205) rightly said, “people who cannot control their cash flow work for those who can”; if we are to become free, we have to learn to control our cash flow and this begins by WRITING DOWN monthly cash flow account (personal income and expenses account)…it is surprising how those unplanned £5 expenses quickly adds up to £100′s plunging one down into ‘negative cash flow’.
The aim is to take control of the personal cash flow with the objective of creating income higher than expenses, positive cash flow (surplus) and use the surplus to get out of debt, invest to create more surplus and of course to ‘spend’ on pleasure. My personal motto is: “live within my means, then increase my means”, for pleasure, use surplus only…thus, no surplus, no pleasure.