Tough times are ahead and money matters. A better way to survive financial stress is to be prepared. Financial services are always available. Even so, it’s handy to come prepared with basic knowledge making it easier for discussions.
Credit Cards. They may be convenient but they only delay more expenses and also encourage cardholders to overspend. Paying $150 seems painful unlike the card machine-swiped card with the same amount. The difference is when the card statement arrives with the charge fees. They should be eliminated.
Credit Risk. This is the risk of loss due to a debtor’s non-payment of any line of credit or loan. Be warned that the higher the return, the higher the risk.
Debit Cards. They are better alternative to credit cards since money used is available in one’s account. This makes cardholders able to manage their purchases.
Debt Consolidation. Managing debt is equally important as managing savings. Consolidating it into home-equity loan, for example, should be considered for other unsecured debt or a $5,000 or more in a credit card with the assumption that the loan can be paid. It’s best to talk to a finance adviser for different options relevant to the situation.
Financial Banking. Some people have a range of savings and transactions with a bank. Each transaction has a level of fee charges. All accounts should be assessed as these fees can build up over time. The important thing is to be aware of the rules involving these transactions, including savings and checking accounts, to minimize bank charges.
Financial Budget. The only certainty is change – changing tax laws, economic crisis, changing markets, investment products. It doesn’t have to be as complicated like a professional financial analysis seasoned with ratios from financial statements and other reports. By reviewing and completing down where money comes and goes, hard-earned financial resources can best be used and tracked.
Financial Buffers. The world has become a place of increasing uncertainty. This is why smart financial investors build safety buffers. These include being way ahead in loan repayments, having adequate financial insurance, and reinventing all dividends and distributions to build equity faster.
Insurance. Nobody likes paying insurance, but it’s a protection from financial calamities, natural and otherwise, such as accident, sickness, fire and theft. There are always available options to choose from. Others incorporate insurance with superannuation. Annual financial check-up should always include a review of insurance.
Managed Fund. When money is invested in managed fund, it’s pooled with many other investors, managed by experienced fund managers.
Net Worth. This is the difference between financial assets and debts. Smart money managers try to increase their net worth by acquiring more assets and by reducing debts.
Net Worth Statement. This is an assessment where one is at in his/her financial situation. It is a blueprint for future strategies, including a list of current financial assets and debts.
Life is not all about money, however, it’s important to keep it in perspective.