We’ve already mentioned this quickly when talking about warranties, but one of the worst things is to have your finances all in order and then not being able to find important financial documents when you need them, such as insurance policies, warranties or bank statements or income stubs for your tax return. Come to think of it, is it even possible to become financially organized without having your home administration organized? Hmmm maybe not.
Having a proper, up-to-date and easy to understand filing system, doesn’t just guarantee less stress and time lost when you are looking for things. It also ensures you don’t waste money on a new product if your old one still had a guarantee on it, allows you to quickly check you still have the right insurance, stops you forgetting to pay outstanding bills and makes is easy to check your credit card statements are all correct.
In this step you are going to set up a home administration to make sure you’ll never end up in a situation where you can’t find your important financial statements. Continue reading →
Enough about your finances. Let’s for a moment not talk about you anymore but about others who are less fortunate than you and who could do with even just a tiny fraction of your wealth. Yes I know that you have so many plans and that you want more money and that you really will start giving to charity some time soon, and that you are just waiting til after you get that promotion as then you’ll have some more breathing space but with your debt, and mortgage and financial obligations you really can’t at the moment….
Remember step 31 though? In which we spoke about how you will never have enough money? Not now, not tomorrow, not next year? If you don’t remember or if you are convinced you really honestly hand-on-your-heart don’t have money for charity, please return to step 31 now, reread it and see if you still feel the same after reading it. If you do, read on anyway as you will learn that you can give to charity without giving money. If after reading until the end you still believe you can’t give in any way, then okay…ignore me.
But if you truly understand step 31 AND really want to give to charity, remember that doesn’t have to be hundreds of dollars a year. It is a little like saving money: start with it early, even if you can only contribute $1 a month, or $10 a year. That is not only still $10 a year, but it also gets you into the habit of giving so that every time when you can, it will be easy to just increase that contribution, to make space for it in your budget and to remember that there are so many who are less lucky than you and to whom your (however small) contribution can make a big difference. Continue reading →
Wow okay, I know, tax planning might sound even more boring or complicated than our previous “introduction to taxes”. But what’s the point knowing about taxes if you don’t use that information to your advantage? And if you think that tax planning is again for the rich and famous only, you’re wrong … Most legislations are designed is such a way to even give the ordinary man and woman some tax relief in certain areas. You should use those as that is what they are for.
Now let’s start with the single most important first requirement for this step: never, ever, not in a million years avoid paying taxes or try to mislead the tax authorities. Don’t ever even think of it. The tax authorities are smarter than you and you’ll end up in jail and that is NOT worth the extra money you might be getting or think you might be getting. Besides that, it’s morally wrong. Just don’t do it.
Good, now that is sorted, let’s have a look at some very basic tax planning principles you might be able to apply to your own life, that might help you save some bucks. Just keep an eye on that fine line between tax planning and tax evasion though as if you get carried away with it too much, you might end up on the wrong side of that line. Continue reading →
So you might have thought pensions and insurance sounded boring. Well then taxes sounds probably even more dull to you..Yet in order to manage your money well and plan for a secure financial future, you need to have at least a basic understanding of taxes. And with basic I mean a little more than just, “yeah I know the government takes out some money on whatever I earn”. Eh… right, but that’s not enough to use that information to your advantage.
In this step we will look at a quick overview of the various taxes that you are most likely liable to at the moment or potentially in the future. Every country varies tremendously in terms of which taxes apply, how high they are, whether they have a flat rate or a scale and what the exclusion terms are. This step is therefore only meant to provide an overview of possible taxes around the world: you’ll have to do some work afterwards yourself and find out the rates for your country or state.
Taxes are of course meant to fund the main expenditures of the government, such as national security (police and army), infrastructure (roads and sewage), legal system, health care, education system and also to pay anybody working for the state. Now let’s look at the most common taxes that exist:
Income tax is charged on the income of individuals and companies. Many countries use a scaled tax system in which the more you earn the higher the percentage you pay. Income tax can be divided into the following categories: Continue reading →
When you make a big purchase such as a new car or appliance for your house, the selling company often provides a warranty on the product. The warranty is a guarantee for a set period of time during which the manufacturer promises a correct functioning of the product and to replace or repair the product if the product is faulty.
Warranties are very important to understand and keep as they can save you a lot of money and worries if you ever need them. This step will look at warranties and extra warranties in detail, so you can assess any current warranties you have and to allow you to compare and evaluate warranties on any future purchases.
What a warranty typically includes
Normally a warranty will specify and /or include the following:
How long it is valid for. For some products this might be no more than 6 months, other products might be covered for several years.
What circumstances might void the warranty. The manufacturer often includes reasons why a warranty might cease to be valid, such as not having done regular maintenance check ups and servicing or using the product incorrectly.
Services included: what happens if the product is faulty? Will it be replaced, repaired or will your money be refunded?
Services excluded: this might not actually be stated in the warranty, but make sure you find out what is not included if your product fails. Think of costs to do with transporting the product to the shop or factory, labor charges etc.
Does it include costs you might have as a consequence of the product being faulty? For example if your washing machine floods your house, will the damage to other objects and furniture be covered, or if the fridge-freezer breaks will you be reimbursed for any of the contents gone off?
A disability insurance provides you with financial compensation in the event of a disability that stops you from going back to work. It covers your future wage by paying a certain percentage of your wage, often around 60-70%, either until you are able to go back to work again or for as long as the policy contracted states that you are entitled to the compensation.
There could be several reasons for somebody being unable to work, including illness, medical conditions or after an accident. The difference with a medical insurance is that the latter only covers your medical bills, not the fact that you no longer have an income to support you financially. In some cases and countries social security might offer a disability coverage, but conditions vary greatly and it might not kick in until after a certain time, sometimes not even til after a year.
Do you need disability insurance?
The chances of becoming disabled before retirement age can be 2 – 3 times higher than the odds of dying before retirement age so there is a relatively big chance you might become disabled at some point. Due to this high chance, disability insurance tends to be fairly expensive. There are several situations in which you might not need disability insurance, including: Continue reading →
Car insurance, also known as motor or auto insurance, is often obligatory to have in order to use a public road. Most countries distinguish between insuring a driver and insuring a vehicle, and in some you insure a car regardless of its drivers (as long as the driver has the car owner’s permission to drive it), whereas in other countries you might insure the driver regardless of which car they drive.
Characteristics of car insurance:
A car insurance generally has different parts to it and whilst the terms used for these coverages can vary from one country to the next, most insurances use a similar classification system. Continue reading →