Create a Personal Budget in 7 Easy Steps

If your financial situation is out of control it may be time to create a personal budget. This could be the decision that gets your finances back on track because it takes back control of what your money is doing.

You want your money to work for you not your creditors, which is exactly what it is doing if you are living payday to payday. Instead of paying interest to them why not make it yourself?

A personal budget will do many things for you.

The most important thing it does is let you make informed decisions about how you spend your money.

It will show you exactly what you income and expenses are and lets you make adjustments to ensure a sound financial future.

Other then taking the time to get started, creating a budget is relatively easy.

You will need a notebook or legal pad and a pencil. Draw a line down the middle of your paper, label one side income and the other expenses, and you are ready to go.

1. Gather up your last three months worth of pay stubs and any other records that show income. Total them up and divide by three to get your average monthly income. That number gets written down at the top of the income column.

2. Now for the fun part. Gather up all your bills, credit card statements, and checkbook register and start itemizing a months worth of expenses in the expense column. For those bills that fluctuate each month you can use the three month method as used in step one to get a solid average. Add all those expenses up and write the total down at the bottom.

3. This is the step most people fear. Compare your income to your expenses and see which one is more. If you expenses are higher then your income then you have a problem that needs to be fixed. Chances are you are making up this shortfall with credit of some sort. You can't build a sound financial plan if you are in debt, it's that simple.

4. Now that you have everything written down it's time to look it over carefully. Target unnecessary expenses and start cutting them. A budget gives you the power to free up money that can be used for more important tasks.

5. You can also use your newly created budget to start prioritizing your debts and which need to be paid off first. This gives you a game plan to get out of debt while actually being able to see positive results, which is a major part of good money management.

6. As you get better at budgeting you can start to refine and track your long term financial plans. You can manage savings accounts, investments, emergency funds, and retirement accounts using your personal budget.

7. Patience is required when first starting out because it won't work perfectly those first few times. Most people need 3 or so months of budgeting practice before they start to really get the hang of it.

Your financial future is in your hands. Nobody can build it for you.

If you create a personal budget you will take the first step to attaining your financial goals.

5 Hot Property Investing Tips

1)    Using property experts
Just because you have bought and sold a couple of houses with profit, does not mean you are an investment expert. Don’t listen to friends and family blindly – usually they have an opinion about investing, often despite that fact they are not doing it themselves. Property investing is too important an expenditure to take chances with – talk to property experts, investment advisors, finance brokers and study property reports before you make a decision.

2)    Waiting for the price to come down...
Property generally always goes up in value. It may plateau or slip back a few %, but across the board – prices are steadily claiming. So, if you wait until the prices from 10 years ago return, you will wait a long time. You are in most cases better off buying now rather then in 6 months,  as often you will pay more down the track – effectively reducing your capital growth. Having said this, the best time to invest is when you are ready to do so. Sooner than later is usually best.

3)    Emotional vs commercial decision
When selecting and deciding on an investment property – do yourself the favour of approaching this simply as a commercial decision based on figures, returns, vacancy rates etc, not what colour the walls are, whether you would want to live in it or that it is in easy reach so you can mow the lawns on a weekend. The more emotionally detached you are, the better it is. Investing is done from the head, a home is bought from the heart.

4)    Old vs New
Unless you are a tradesman or have loads of time to spare to perform renovations, repairs and maintenance, you probably are better off buying a newer investment property. Apart from the work and expense, your depreciation schedule is more substantial on a new property than an older one. After all, it is all about letting your money do the work – work smarter - not harder.

5)    Managing the Property Yourself
Unless you are rather experienced in this area and have access to the industry tools to ensure you do end up with the best tenants possible – don’t do it yourself. Firstly, if you do select a ‘lemon’ for a tenant, this can easily turn into a lengthy process in front of the tenancy tribunal, with loss of rent, loss of access to the property, presentation costs etc.  Once again, you want to work smarter not harder. So, get a good property manager to look after your investment. The percentage you pay them should outweigh any losses through your own tenant mismanagement and peace of mind is worth a lot!

Eight Ways to Raise Money For Investing

When you are new to investing you may have little or no funds with which to invest with. Let's take a look at several ways to get access to money so you can begin your investment career sooner rather than later.

1. Savings - The old fashioned way like you were told to do as a kid. Remember, all great investors are great savers. If you are not saving money now then you are never going to become wealthy until you start saving. Make sure you pay yourself before you pay anybody else. Simple but powerful words.

2. Sell something - In this modern society we live in where we just have to own the latest of everything. Well the good news about that is that you are bound to have plenty to sell. Put an add in the newspaper or the easiest way, E-Bay. Now the harsh reality, stop spending money on things you don't need. Wait until you have real wealth then pay cash for them.

3. Tax - Minimize your tax as quickly as possible. The wealthy don't become so by paying lots of tax. Get yourself a great accountant and get good advice on how to lower your taxable income. There are plenty of ways to do this. Starting a side business is a great idea. Pay your expenses and spend, then pay tax from what is left over. It is much better than being taxed and then spending what is left. This will send you broke, quickly.

4. Income - Tomorrow you are going to see your boss and get that pay rise. However, first you need to get your reasons down on paper why you should get a rise. Write down some good solid reasons why you should get one. If you don't deserve one then take a long hard look in the mirror. If you can't do your best working for someone else how are you going to give yourself the best? Be the best that you can regardless of what activity you do and the rewards will come. Ask for 10% extra. If you don't get it but you know you are worth it, then get another job. Only you will know if you are worth it.

5. OPM (Other peoples money) - The most successful business people in the world today always use OPM, always. Do you think Donald Trump puts up his own money to finance that new tower? No way, he never puts up his own money. Use the banks, or do vendor finance deals. Borrow, beg or (actually, you better not steal) borrow some more. As long as the investment pays more than the interest things will work out. You must do due diligence here. Good debt is the key here and I will do another article on good debt shortly.

6. Using equity - So you own a house or part of a house. Excellent, then you have valuable equity which the banks love and in Australia you can release about 80% of that equity. Should you spend that equity on a holiday like the rest of the herd? No. Put that money to work in property or shares and allow yourself to have the income that it produces.

7. Parents equity - Times are getting tough, that is for sure. Talk to your parents if you can and explain that it a new world for young and smart investors. Go over everything and show the folks exactly how your chosen strategy works and how you both can benefit. Profit share with them if you like. Better yet, teach your parents and give them a better retirement. It is your duty.

8. Superannuation - Are you satisfied with the institutions taking care of your life savings with various financial planners and fund managers getting massive trailing commissions? Then start to manage your own SMSF (Self Managed Super Fund) and put it to work harder and smarter. There are some awesome opportunities out there right now and you can find one that resonates with you. Pay for good advice here. I repeat, pay for good advice.

So there you have it. Eight ways in which to get a leg up in your new investment journey. You might not be able to do all eight ways, but I'm sure you can access at least four of them.

Six Tips for Money-Making Hobbies

You can make money from your hobby.


Whether you knit, or write, or make photographs, or grow a vegetable garden, or tinker with cars, or build web sites, or collect ancient coins — you can make money from your hobby.
I’m not saying it’s possible to get rich by playing your violin at weddings, or by weaving baskets from pine needles, but earning money from a hobby is a nice way to get paid for doing something you would do anyhow.


This article is the first in a series that will explore how to turn a hobby into a source of side income. In the weeks and months ahead, I’ll describe general best practices, discuss potential pitfalls, and provide case studies culled from my friends, and from the stories of readers like you. (If you’d like to share your experience, please drop me a line.)


First, by way of introduction, here are some ground-rules for making money from hobbies.


Focus on something you love

Pursue something you’re passionate about. Choose a hobby that you enjoy, and find a way to make money from it. Don’t choose a hobby simply because it might make money and then dive into it with that aim in mind. You should be doing this hobby because you love it; any side-income should be secondary.


I love to write. I was struggling with debt. I began to read personal finance books, and then to summarize what I’d learned for my personal web site. From this, Get Rich Slowly was born. Now I make over a thousand dollars a month writing about personal finance. But I didn’t start this for the money — I started this because I was passionate about the subject.
Keep it fun. Don’t let it become a chore.


Be creative
If you’re interested in making money from a hobby but don’t know where to start, think outside the box. What skills do you have that others don’t? Define the term “hobby” broadly. Find something that you can do that most others cannot, something for which other people might be willing to pay.


At my day job, I have a customer whose wife loves to cook. She turned this hobby into a part-time job as a personal chef. She prepares meals in advance for wealthy clients. She spends a few hours a day preparing a week-long menu for people who pay her handsomely for her time.
I have a friend who likes to travel. One day he discovered that he could subsidize his journeys by writing about the places he visited, and by taking photographs. Now every couple of years he takes an all expense paid vacation. He’s doing something he’d do anyhow, and it doesn’t cost him a dime.


Don’t force it

Your hobby will not make you rich. In most cases, it won’t even net you enough to allow you to quit your day job. It’s quite possible, however, to earn enough money to make the hobby self-sustaining, to keep yourself in new tools and equipment.


My brother builds speakers and works with audio equipment as a hobby. He makes some money at it. (“Spending money,” he says.) Jeff notes, “It’s not hard to make money from a hobby. What’s difficult is trying to turn it into an actual business. Moving from a hobby to a business is a pain-in-the-ass.”


Often when you try to take your hobby to the next level, the joy goes out of it. Suddenly the extra income just isn’t worth it. When I tried to turn my computer-building hobby into a business, I hated it. There’s a balance to be achieved, and if you can find it, you can have a fun while earning extra income.


Don’t underestimate your ability
It’s easy to discount your abilities. When you truly love something, your prolonged experience can give you skills and knowledge that you don’t appreciate.


For example, I have a love for early 20th-century American pop culture. My brain is filled with facts and anecdotes about once-famous recording artists. I sometimes find myself under the impression that everybody knows who Billy Murray was, or is familiar with the song “Ukulele Lady”. But this isn’t common knowledge — it’s specialized.


The same concept holds true for you and your hobby. Know a lot about Napoleonic warfare? Start a blog about Admiral Nelson. Spend time tinkering with bicycles? Open a small-scale bike repair service. Not everybody knows what you know. Don’t sell yourself short.


Market yourself

This can be difficult. In order to actually earn income, you need customers. But just as most people have a tendency to underestimate their abilities, they also tend be uncomfortable with self-promotion.


There’s no shame in mentioning your money-making hobby to friends, family, and neighbors. You needn’t be pushy. Just mention it at natural points in the conversation. If you’ve decided to do some woodworking for cash, mention this when your uncle mentions he wants to buy a new bookshelf.


Marketing can be subtle, but it’s an absolute necessity if you hope to earn money from your hobby. People need to know you’re available before they can hire you.


Hone your skill

Practice, practice, practice. The more time and energy you’re willing to devote to your hobby, the better you will become. The better you become, the more likely that you’ll be able to earn money from it.


Photography is a terrific example. If you’re willing to make a hundred images a day, you can improve your skills quickly, especially if you teach yourself about composition. You may never become a professional photographer this way, but you can develop your skill to the point where you can sell images to stock photo agencies, or enter (and win) photography contests.
Some people are born with natural talent. Most of us have to work at it.


Conclusion
Why should you care about making money from hobbies? Remember: the wealth equation has two sides. You accumulate wealth by reducing expenses and by increasing income. Often we only focus only on our careers when it comes to “increasing income”. But there are other ways to make money. One of the best is to harness a hobby.

6 Tips For Trimming Your Budget

With the economy in freefall, everyone is concerned about spending too much money. 

We all need to save money but a lot of times people don't know where to start.

We have a lot of expenses.

With spiraling costs it is difficult to live on a shoe string budget.

Many people are losing their jobs and yours might be next and so it is wise to curb our expenses.

How do we do that? Here are some tips that can help you save some money;

1) Cut your credit card into four pieces and throw it into the trash. 

This plastic money has created havoc in the lives of people.

The way it lured people to swipe and get wiped has left many people in financial mess.

Actually we end up buying things which we don't need just because of credit cards.

Pay only cash when you visit a super market or mall.

That will help you in only buying stuff which you need.

If you are using credit card, only use it to the extent that you can pay it off in a month's time.

Keep your card expense to the minimum.

If you have more than one card, try and close the others.

Keep only one card and deal only with a single lender.

2) Make a list of expenses you have every month. 

The ones that you have to pay.

Not purchases you could do without- mortgage payments, utility bills, education expenses, medical insurance payments, and so on.

See how much extra cash you are left with. Save 10% of it.

3) Before going grocery shopping, check online at your neighborhood stores as to what the rates are. 

Utility items like meats, poultry, veggies, fruits have an expiry date within a week.

Go on the last day to buy.

You are sure to get these items at half the price.

Also look out for sale and discounts.

Nowadays online stores offer many discounts.

Log on to avail them and reduce your expenses.

Why should you pay more for the same product?

4) Reduce your outings and eating at restaurants.

This is another major expense that we can do without.

Going to a cinema hall is very expensive. Instead wait for the DVD to come out.

You can watch the same movie at less the cost.

5) Use a car pool to go to work. 

If your friends live in your neighborhood then you can plan to pool.

This will help you save on gas as well as you will be doing a big favor to the environment.

6) Lastly try to earn residual income. 

The internet has opened up a Pandora's box.

There are immense opportunities to earn some extra cash.

Internet marketing, having your own website and earning through Adsense, selling on Ebay are some of the ideas for making money online.

Whatever it is there are immense opportunities to earn money.

So not only can you cut down on your expenses you can also learn to earn automated income.

After all extra cash doesn't pinch?

There are many ways people can cut their budget and save more money.

Mostly it is by eating out less and reducing your discretionary income.

This is the hardest part people to do- we are built to be consumers.

However, if you plan on cutting your budget you really need to make hard choices.

Everyone has fat in their budget they cut.

18 Personal Loan Tips

If you're thinking of borrowing money to buy a car, boat, debt consolidation, home repairs, medical bills or anything else for that matter, here are some red hot tips to make the process much, much easier.

1. Avoid unsecured loans if possible

Avoid using unsecured personal loans if you can put up some security for your borrowings. This will get you a lower interest rate. A home equity loan, or redraw of extra repayments, allowing you to borrow against the equity built up in your own home or an investment property, is the best option of all, and could get you finance at up to 5 percent less than a personal loan.

2. Be honest in loan applications

Be honest about why you want the loan. Your bank may be able to offer you a loan option that better suits your circumstances. There are an increasing variety of different types of personal credit these days; car loans, commercial loans, leases, home equity loans, are just some of the examples.

3. Can't get a standard loan? There are alternatives

If the banks, building societies and credit unions won't lend to you because you're self employed, newly arrived in the country or have a poor credit history, consider the booming non-conforming and "low doc" loan market. A number of non-bank lenders offer loans which especially cater for this type of borrower. The interest rates on non-conforming loans are generally higher but come down after a few years of on-time repayments.

4. Check your statements for errors

There are claims that more than 50 percent of loan statements contain calculation errors. Simple mistakes, like the entry of the incorrect balance or the application of the wrong interest rate at the wrong time can be costly and mostly favour the lender. We all make mistakes, even bank computers make them and that's why borrowers should keep a close eye on loan statements. Various software for your home PC is available that can run a check on your statements.

5. Consider smaller lenders too

When shopping around for a car loan, consider community banks, credit unions and other smaller financial institutions which might be more approachable, and offer lower interest too.

6. Do you have to take out a personal loan at all?

Think twice before borrowing money without security. You may have a better option already available; home equity extension to your home loan, a new loan that uses your property as security, a credit card, or even a rich relative!

7. Do you qualify for a 'relationship discount'?

Relationship discounts are available from banks and credit unions for those borrowers who consolidate a range of banking business with the one institution. Home and personal loan interest rate discounts, term deposit bonuses, savings account fee waivers and credit card annual fee waivers are commonly offered.

8. Don't just take the dealer finance

        Don’t accept loan or lease finance offered by a car dealer before comparing the offer with        finance options offered by your bank or other credit providers. Dealer finance might be less hassle but you could well end up with an expensive loan and more restrictive terms and conditions. The same goes when buying furniture or any consumer goods where finance terms are offered.

9. Don't make multiple applications

Don’t fill out applications at several financial institutions and have all of them checking into your credit history. This can make you look desperate and lower your credit score.

10. Don't rely solely on comparison rates

All lenders must now include "comparison rates" in advertisements for their home loans and personal loans to help consumers get a feel for their total cost - fees and the interest. Don't rely solely on comparison rates when choosing a loan and beware of their shortcomings. They only take into account fees and interest rates, not the features and how suitable the loan is for your circumstances.

11. Have the right information when applying

What you will be required to supply in any application for lease finance will depend on whether the lease is for personal or business use.

Personal lease applications will require:

·        proof of current employment

·        income details or tax returns

Business lease financing requires more detailed information and may include your:

·        balance sheet

·        tax returns

·        cash flow projections

·        business plan

Confirm with the lender what you will need before the interview.

12. Have you considered a credit card?

Consider also a credit card as your source of credit. Interest rates are generally higher but credit cards are easier to secure and offer greater flexibility of repayments.

13. Honesty counts

Be honest about why you want the loan. Your bank may be able to offer you a loan option that better suits your circumstances. There are an increasing variety of different types of personal credit these days; car loans, commercial loans, leases, home equity loans, are just some of the examples.

14. Keep accurate records

Keep accurate records of your deposits and ATM transactions. It is also wise to keep copies of your loan application and approval documents in a safe place.

This is the best way to avoid hefty fees which may be charged by a bank when its customers want to see copies of their cheques or loan files.

15. Know what interest rate applies

When offered car finance, either lease or loan, always be sure you know what interest rate applies. Lenders often ‘sell’ you their finance packages by quoting the monthly repayments only. This may disguise a high interest rate.

16. Look beyond the banks

Get a feel for what's on offer across the wide range of financial providers around these days. Credit unions, building societies, mortgage originators, community banks and boutique online or telephone banks may offer better interest rates or lower fees than the big banks because they are anxious to win new business or they are non-profit organisations.

17. Try lenders with whom you are a regular customer

Take advantage of the human factor. Being a familiar face may earn you some slack if your credit background is smudged.

18. Understand what's on offer

Is the interest rate fixed or variable? What up-front, annual or ongoing fees are charged?

IDBI Bank Loan Against Property

At IDBI Bank realise how important it is to raise money in the face of exigencies. We help you through these difficult situations through our customer friendly Loans against property (Residential & Commercial) product. Loans could be used for:

• Education
• Business
• Marriage
• Purchase or improvement of property
• Medical treatment or any other personal need.

Maximum amount possible is Rs 500,00,000 subject to repayment capacity and value of property.

Check the FAQs for more details. 

• Tenor up to 15 years
• Attractive Rate of Interest
• Maximum Funding
• Interest rate on daily reducing balance
• Fixed and floating interest rate options
• Simple documentations
• Personalised doorstep services
• Free legal and technical assistance

Applying for a Loan Against Property is absolutely simple. Just call our Phone Banking numbers and our representative will contact you at the earliest.

For further assistance
Please contact your nearest Branch /Retail Asset center or Call :
1800-22-1070 (MTNL / BSNL)
1800-200-1947 (Mobile/Other)

12 Tips For Getting Your Bank Loan Approved

1. Keep in mind that to stay in business banks need to make loans.

 Do not be afraid to ask for one. That is what the  loan officer wants you to do. To increase your chances of getting a loan, look for a bank that is familiar with your industry and who has done business with companies like yours. Seek out banks that are active in small business financing. Some banks lend on a conventional basis (lending money without government  support), while some banks participate in government programs (in the form of government participations involving direct government funds or loan guarantees). However, be aware that banks often demand stiff collateral requirements for start-ups.

2. As an entrepreneur, make sure that you are thoroughly prepared when you go to your banker's office to request a loan. 

You need to show your bankers that a loan to you is a low-risk proposition. Have on hand a completed loan application, copies of cash flow and financial statement projections covering at least three years, and your cover letter.

3. Learn to anticipate every question that he or she has.

Remember, the combination of information and preparation is the most powerful negotiating tool in the world. A confident and thoroughly prepared borrower is four times more likely to have his or her loan approved than a borrower who does not know the answer to some of the basic questions a banker asks. To show the extent of your preparedness, your business plan should also include answers to your banker's questions. These questions normally are:

• How much money do you need? Be as exact as possible; although adding a little extra for contingencies will not hurt. 
• How long do you need it for? Be prepared to go into detail about what the money will do for you and why your business is a good risk. 
• What are you going to do for it? Businesses use loans for three things: to buy new assets, pay off old debts, or pay for operating expenses. 
• When and how you will repay for it? Your cash flow projections should provide a repayment time frame. Convince the banker of the long-term profitability of your business and your ability to repay the loan by using your financial projections and business plan. 
• What will you do if you do not get the loan? 

4. Do not take an apologetic and negative attitude.

Keep your negativity in check. Present yourself as an entrepreneur who can and will repay the loan. Boost your image by providing your loan officer with any promotional materials about your business, such as brochures, ads, articles, press releases, etc.

5. Dress in a professional manner for the interview. 

 This is a business transaction, so treat it as such.

6. Do not stretch the truth in your loan application. 

 Broad, unsubstantiated statements should be avoided. The lender can easily check many of the facts on your application. If you cannot support statements with solid data, then don't make them. Do your homework and spend time doing research to be able to support everything you say, including every single number in your projections. It is best to keep projections, assets lists and collateral statements on the conservative side.

7. Be sure all your documents are neat, legible and organized in a cohesive and attractive manner.
 
Type all your loan documents. Handwritten documents look unprofessional. Don't forget to include a cover letter.

8. Do not push the loan officer for a decision.

Doing so might result in a rejection. Your banker cannot make a decision until all your documentation is complete. To ensure a speedy decision, make sure that your application is complete.

9. Be confident.

An attitude of confidence enhances your chance of getting the loan. Show that you can make a success out of the money that the bank will lend to you. Visualize in your mind the positive results of your bank application.

10. Keep trying one lender after another until you get your loan.

To improve your position as you change bankers and banks, the best way is to ask for a referral from a successful entrepreneur. Before you decide to approach a bank directly, find an associate, friend or acquaintance that is in good standing with the bank to give you a good referral. Bankers tend to deal more favorably those who were referred to them by their best customers.

11. Failure to discuss risk in your application.

You must remember one thing: there is no business without risk. If you do not discuss risk, the bankers will assume that you haven't thought about risk. Let's face it - try as we might, we cannot plan for everything, for every contingency, for every turn of events. Bankers would want to know if you have planned for the major risks and how you intend to manage it.
Then, there is also the risk of too much success. The demand for your products or service may exceed well beyond your expectations, and they would want to know how you intend to handle success.

12. Remember that the first loan is usually the hardest to get.

Bankers prefer to lend money to borrowers who have borrowed at least once and have paid back at least one loan on time. They are not venture capitalists that make high-risk loans regardless of the profit prospects of your business. Bankers prefer to lend to low-risk, low profit ventures than to high risk businesses or those with no record of accomplishment.