Financial Education

Just like any form of education, financial education requires us to learn and be taught. Reading and listening to individuals that have what you want is one of the greatest ways for us to get ahead in our financial life.

Robert Kiyosaki, the auther of the book Rich Dad, Poor Dad, teaches the idea that there is a great need to change our outlook on finances and money. He emphasizes the need to aquire assets not liabilities. All of his books, audio files and games are designed to help anyone get ahead financially.

The need to educate and to continue to educate ourselfs financially is key to financial freedom.

To see more products from Robert Kiyosaki visit Richdad.com

How Much Debt Do You Have?

Looking at how much debt you have can be scary or pleasant, depending on your situation. MSN Money has a great tool that will help you calculate how mush debt you have.

Click Here To Calculate Your Debt

Knowing how much debt you do or do not have is very important. Knowing this information can help you to eliminate debt or can be a slap in the face for you to stop spending. On the other hand realizing that do not have as much debt as you thought can open your financial eyes to new investments or show you that you can put more money away for retirement. No matter your situation, knowing and managing your debt is key to financial freedom.

High Interest Savings Account

Most everybody has a savings and checking account and most everybody earns less then 1% a year on the interest rate that is associated with their savings account. There are plenty of banks out there that offer a lot higher of a rate for your savings account. This is a no brainer. Why earn 1% on your money when you can be earning 3% or higher with no extra fees. http://www.managingmoney.com money.com has a great list of banks that offer a lot higher rate then your local bank.

Check out their list

This is a great way to earn some extra money through out the year by just simply moving some money around.

The Richest People in the World

Forbes.com has a list of the most wealthy people in the world. There is always a lesson to be learned from those individuals that are successful. Here is the current list of the top 20.

THE BILLIONAIRES

1. Warren Buffett
2. Carlos Slim Helu
3. William Gates III
4. Lakshmi Mittal
5. Mukesh Ambani
6. Anil Ambani
7. Ingvar Kamprad
8. KP Singh
9. Oleg Deripaska
10. Karl Albrecht
11. Li Ka-shing
12. Sheldon Adelson
13. Bernard Arnault
14. Lawrence Ellison
15. Roman Abramovich
16. Theo Albrecht
17. Liliane Bettencourt
18. Alexei Mordashov
19. Prince Alwaleed
20. Mikhail Fridman

Click Here for Complete List

These are the examples that need to be followed to increase personal wealth. Click on their names for their bio and more information.

Creating a budget

Feedthepig.org, is a great website full of many resources to help you save money and create a stable financial future for yourself. Their site contains a great article on creating a budget.


Establishing a Budget

Do you ever wonder where your money goes each month? Does it seem like you're never able to get ahead? If so, you may want to establish a budget to help you keep track of how you spend your money and help you reach your financial goals.

Examine your financial goals

Before you establish a budget, you should examine your financial goals. Start by making a list of your short-term goals (e.g., new car, vacation) and your long-term goals (e.g., your child's college education, retirement). Next, ask yourself: How important is it for me to achieve this goal? How much will I need to save? Armed with a clear picture of your goals, you can work toward establishing a budget that can help you reach them.

Identify your current monthly income and expenses

To develop a budget that is appropriate for your lifestyle, you'll need to identify your current monthly income and expenses. You can jot the information down with a pen and paper, or you can use one of the many software programs available that are designed specifically for this purpose.

Start by adding up all of your income. In addition to your regular salary and wages, be sure to include other types of income, such as dividends, interest, and child support. Next, add up all of your expenses. To see where you have a choice in your spending, it helps to divide them into two categories: fixed expenses (e.g., housing, food, clothing, transportation) and discretionary expenses (e.g., entertainment, vacations, hobbies). You'll also want to make sure that you have identified any out-of-pattern expenses, such as holiday gifts, car maintenance, home repair, and so on. To make sure that you're not forgetting anything, it may help to look through canceled checks, credit card bills, and other receipts from the past year. Finally, as you list your expenses, it is important to remember your financial goals. Whenever possible, treat your goals as expenses and contribute toward them regularly.

Evaluate your budget

Once you've added up all of your income and expenses, compare the two totals. To get ahead, you should be spending less than you earn. If this is the case, you're on the right track, and you need to look at how well you use your extra income. If you find yourself spending more than you earn, you'll need to make some adjustments. Look at your expenses closely and cut down on your discretionary spending. And remember, if you do find yourself coming up short, don't worry! All it will take is some determination and a little self-discipline, and you'll eventually get it right.

Monitor your budget

You'll need to monitor your budget periodically and make changes when necessary. But keep in mind that you don't have to keep track of every penny that you spend. In fact, the less record keeping you have to do, the easier it will be to stick to your budget. Above all, be flexible. Any budget that is too rigid is likely to fail. So be prepared for the unexpected (e.g., leaky roof, failed car transmission).

Tips to help you stay on track

• Involve the entire family: Agree on a budget up front and meet regularly to check your progress
• Stay disciplined: Try to make budgeting a part of your daily routine
• Start your new budget at a time when it will be easy to follow and stick with the plan (e.g., the beginning of the year, as opposed to right before the holidays)
• Find a budgeting system that fits your needs (e.g., budgeting software)
• Distinguish between expenses that are "wants" (e.g., designer shoes) and expenses that are "needs" (e.g., groceries)
• Build rewards into your budget (e.g., eat out every other week)
• Avoid using credit cards to pay for everyday expenses: It may seem like you're spending less, but your credit card debt will continue to increase

Removing Debt

Most people have either multiple credit cards, car loans, personal loans and not to mention a mortgage. Having many loans and lines of credit at the same time can be very dangerous. The money that you owe can get high very quickly. If you are in this position or you just want to pay off some of your loans quicker, here are some basic tips that you can do to help get rid of some unwanted debt and monthly payments.

• Focus on paying off the loan or credit card with the highest interest rate first
• Doing this will save you lots of money in the amount of interest that you pay every month. Most credit cards carry a interest rate over 13%.
• Apply all extra income to the highest rate loan or card that you are focusing on
• Make the minimum payment on all your other lines of credit, this will help you pay off the highest rate loan or card the quickest. Spreading your money out over lots of payments does not go very far.
• Stop spending
• Sounds easy but this is the hardest one to do. Always ask yourself, "Do I need this". Just by putting $30 on your card can cost you a lot more in the long run.
• Move what you owe to a lower rate or consolidate
  
• If you have high rates on your lines of credit look around for offers with lower rates. It is easy to find a credit card company that will give you 0% for a year or 2. This is a great way to really take down your debt, because you just went from 12% to 0%. You can also consolidate multiple loans that have a higher rate to a lower rate.
  
• Look for ways to increase your monthly cash flow
• This is always tricky. The easiest way to do this is review your monthly payments such as Internet, utilities, TV and many other forms of payments and decide where you can cut the fat. You will be surprised at where you can save. Take that money you save and pay off debt or invest it.
• Ask a professional
• It is never a bad idea to get your self a financial adviser. They can help you in your situation with investing and saving money. They can also create a custom plan for you and your family.
  

What to do with your tax refund????

Yes it is tax season, and hopefully you have already filed your taxes and are waiting for your refund. The question is what are you going to do with that refund no matter how big or small it may be. Tax refunds can help you knock out some debt that you have or give you some money to invest.



Paying off debt such as credit cards and car loans is always one of the best investments that you can make. The average credit card interest rates is 13.29%, getting rid of any debt at that high rate is a great investment. Paying extra money on car, personal or recreational vehicle loans always helps you to get rid of monthly payments and reduce your over all debt.

Even if you are not a skilled investor there are many areas where you can put some money that are safe and give you a much better return then your savings account. Most banks and credit unions offer 3 month, 6 month and 1 year CD's (certificate of deposit) that carry an average interest rate of 5%. These are insured bu the FDIC and offer a great return for a small amount of money.

What ever the amount of your return is, the temptation is to buy something new or go on vacation. Remember that this money can help you get a leg up on your finances or jump start you in paying off debt.

Tips for Retirement

Set a Goal - "I think I can save $25 a paycheck." It's easy to procrastinate so set up a "painless" payroll deduction for saving. It doesn't matter if the money goes into a 401(k) plan, an IRA or into a plain, old-fashioned savings account, just start saving. You can start with a small amount and increase it whenever your circumstances allow - like when you get a raise, your car payments end or you get a bonus. Pay yourself now, you'll thank yourself later.

Open an IRA - IRAs are easy to get, easy to contribute to and easy to save with. Most Americans can set up an IRA - whether it's a traditional IRA or a Roth IRA - and save on taxes. Find out more about IRAs from your bank or financial institution or the resources below.

Learn About Your Employer's Retirement Plan - If you are covered under your employer's retirement plan, your employer is required to give you a plain language explanation of the plan called a "summary plan description." It describes your rights under the retirement plan. To get a summary plan description, ask the plan administrator or your employer.

Review Your Individual Benefit Statement - Your individual benefit statement shows your total plan benefits and the amount that is vested, or fully owned by you. To get an individual benefit statement, ask your plan administrator or employer.

Sign Up for 2006 401(k) Contributions - If you are covered under a 401(k) plan, you may have to designate the amount of money you want taken out of your salary and contributed to your 401(k) account by the end of 2006. The 401(k) limit is $15,000 for 2006 ($20,000 if you are 50 or older in 2006).

Take Your Required Minimum Distributions - If you are 70-1/2, you are generally required to receive a required minimum amount from your qualified retirement plan or IRA by year-end.

Review Your Social Security Statement - The Social Security Administration likely sends you a Social Security Statement each year about three months before your birthday. This statement is your personal record of earnings on which you have paid Social Security taxes and a summary of estimated benefits you and your family may receive as result of those earnings. These benefits include retirement benefits and protection in case you become disabled or die before retirement age. For more information and to request a Social Security Statement, go to www.ssa.gov.

Learn About Your Spouse's Retirement Plan - Many retirement plans provide benefits for spouses. For example, your spouse's plan may provide that you will receive an annuity unless you consent to distribution in another form. Before signing, read and understand any waiver or consent forms for your spouse's retirement plan distributions.

Basics of Banking

CNN Money often has great personal finance tips. This list of tips I found very helpful.

1. Money in a bank account is safe.
A bank is one of the safest places to stash your cash since your account is insured against loss by the federal government for up to $100,000 per depositor.

2. You pay for the convenience of a bank account.
Banks pay lower rates on interest-bearing accounts than brokerages and mutual fund companies that offer check-writing privileges. What's more, bank fees can be high - account costs can easily add up to $200 a year or more unless you keep a minimum required balance on deposit.

3. Inflation can eat what you earn from a bank.
Even at a low rate of inflation, the annual creep in the cost of goods and services usually outpaces what banks pay in interest-bearing accounts.

4. Not all interest rates are created equal.
Banks frequently use different methods to calculate interest. To compare how much money you'll earn from various accounts in a year, ask for each account's "annual percentage yield." Banks typically quote both interest rates and APYs, but only APYs are calculated the same way everywhere.

5. You can get better rates
Certificates of deposit (CDs) offer some of the best guaranteed rates on your money and are insured up to $100,000 each. The catch: you have to lock up your money for three months to five years or more. If interest rates fall before the CD expires, the bank is out of luck and must give you the rate it quoted. If rates climb, you're stuck with the lower rate. Also with rising interest rates, money market accounts can become an attractive option, too. They pay more than banking accounts and you don't have to lock up your money for a specific amount of time.

6. ATM fees can take a significant bite out of your budget.
The convenience of using automated teller machines is an increasingly pricey one. On average, the fee your bank charges you to use another institution's ATM is $1.37, according to a Bankrate.com survey in fall 2004. That's on top of the average $1.75 that the other institution will charge you to use its ATM.

7. Getting the best deal takes work.
You won't get a great deal on a car if you just walk into a dealer and plunk your money down. Likewise, you won't get a great banking deal unless you comparison-shop and ask about price breaks. For example, a bank might offer free checking if you are a shareholder or if you direct deposit your paycheck.

8. Use the Internet to shop for bank services.
You can use the Internet to compare fees, yields, and minimum deposit requirements nationwide. Sites like Bankrate.com allow you to search and compare the highest yields and the lowest costs on banking, savings, loans and deposit rates nationwide. You can also search by geographic location or use CNNMoney.com loan center.

9. Banking online can make bill-paying easier.
Electronic bill-paying can save you the monthly hassle of paying your bills. And if you couple online banking with a personal-finance management program, such as Quicken or Microsoft Money, you'll be able to link your banking with your budgeting and financial planning as well. But be careful. Some vendors only warn the consumer of price hikes in the fine print of a bill.

10. You can bank without a bank.
A number of financial institutions offer accounts that resemble bank services. The most common: Credit union accounts; mutual fund company money market funds; and brokerage cash-management accounts.