TOP 5 MONEY SAVING TIPS
The economic recession in America & Europe have led everyone right from middle income employee to top executives to save money. I think our careless spending and financial illiteracy have led to financial crises. It is essential for every earning individual to have the basic knowledge of how to save a part of their income. Saving money is all about controlling our spending habits and compelling ourselves to plan our finances well for the benefit of ourselves and our respective families who depend on us.
Here are some money saving tips which will definitely help you in savings.
TIP #1
Be economical & Pause for a thought
Always do CBA (Cost Benefit Analysis). Do not spend lavishly. Make a list of what you have to buy. Priorities the items mentioned in the list. The four-day wait works. If you are about to buy something which isn’t a necessity, and you have a little quiet voice somewhere whispering to you, listen to it, and wait four days before you make the purchase. It gives you time to compare prices elsewhere, or to come up with an alternative, or even to decide that you don’t need or want it.
TIP #2
Maintain Expense Register
Have Bulls eye. Always keep a close watch on your spending habits. By doing such will know you where you are spending your money. This will help in reducing your unnecessary spending. Try to cut your spending on luxuries. Drink coffee in home rather in a restaurant. A cup of coffee in a restaurant will be 5 times expensive than a normal cup of coffee at home Always maintain an expense register where you note down every single transaction you have made during the day. At least try for a month. You will notice that you can cut short various spending or postpone it.
Go through your bank statement. If you don’t already know how to do it, learn how to balance your bank statement. Work out how much money you have each month. It does NOT tell you how much money you have. A bank statement is just that: a statement from the bank telling you what has gone through your account at the bank so far that month.
TIP #3
Planning/ Budgeting
Make income/ expense register. Write all the sources of income on one side and
the expenses on the other side of register. This will help in to determine whether you are running out of deficit or you have surplus. Always plan before you go to supermarket. Make a budget for every month. Try to manage your expenses within the budgeted amount. This is essential for families and individuals and can be the fastest way to save money. You will instantly see your incomings and outgoings once you create your budget. You will not be able to save money unless you know how much money you have coming in, and how much money you have going out. Once you have prepared a budget of incoming money and outgoing money, you WILL be able to identify areas where you can save.
TIP #4
Market Research
Beware that a sale is not always sale. Before buying any product do some homework. Visit various websites & store to know the true prices of the same products. Various stores offer various discounts. Choose the store which offers you the same product at lowest price. Once you have researched the true price of a product (any product) you are in a good position to take advantage of a sale, special offer or discount and really save money. “Buy one get one free”, “50% off”, and “Huge Discount” will only help you save money if the actual price you pay is lower than you would pay somewhere else for exactly the same product.
TIP #5
Grab Discounts/ Rewards
It is always preferable to buy goods for cash rather than buying in through credit cards. As credit cards seems to be very lucrative option but is costly affair if not used cautiously. Using your debit cards or cash cards will get you much more discount than credit cards offer. There are many reward cards that pay out in cash or points that can be redeemed for travel or products. Many of these cards don’t have an annual fee. Buy goods electronically & use ECS facility or net banking facility. Various banks provide discounts & rewards for using such facilities.
…..and the lists have no ending. There are various such small steps which we can do and it will definitely help in savings. It has rightly been said that “Penny saved is Penny Earned.”
PROFILE OF AN ENTREPRENEUR
In my last we have discussed about of being an entrepreneur. Now this article is deals with profile of an entrepreneur. You don’t necessarily be a family member of businessmen nor should possess a MBA degree. What matters is common sense i.e. business mindset. Even a school drop out can become a successful entrepreneur. We have the living examples right from Microsoft’s Bill Gates to Wall-Mart’s Sam Walton.
An entrepreneurs profile will not be complete unless until they possess the following qualities:
1. Self-confidence
It’s the #1 attribute. Its confidence, confidence & confidence. There is no exception 
to this rule.
2. Risk Taker
Entrepreneurship is about taking risks. It’s about reaping the risks and the reward that comes from all this, but within the articulated guidelines of a business.
3. Scarifies
Scarifies is the hardest part to par with it for an entrepreneur. Many businessmen start their business in the prime of their careers after being recognized as great managers. A great manager means bulky salaries, perks & luxurious life. But for an entrepreneur it’s applying CBA (Cost Benefit Analysis) theorem. It’s flying in an economical class, living in a hotel which is economical sometimes even less than $50. Its all about sacrificing luxury lifestyle, being economical with your expenses which lead to success. Do not compare with what you have left behind.
4. Freedom & Discipline
Entrepreneurs love freedom but are also much disciplined. They like taking instructions from more competent people & customers. Freedom however comes with great responsibility and accountability.
A good entrepreneur is an highly disciplined person.
Freedom to an entrepreneur means the ability to choose a life of business & goals consistent with stake holder ambition.
5. Money
Its always been said & is correct that money matters. Same is the case with entrepreneurs. They just love money. Entrepreneurship is generating more wealth from wealth. Its about creating legacies in many walk of lives.
A lesser fact is that 65.8% of the empire is owned by charitable trust. The Bill & Melinda Gates foundation is arguably the world’s second richest charitable organization with assets that stood at $26.9 billion in 2006. Without affection for wealth it wouldn’t be possible.
INTERNATIONAL FINANTIONAL REPORTING STANDARD: AN INVESTORS OVERVIEW
The emergence of multinational corporations has not only boosted India’s growth story but has boosted the demand for capital from all around the world. India is one of the world’s favorite investment destinations and is already witnessing huge capital inflows all around the world.
Its not always possible & feasible for multinationals to prepare different sets of financial statements abiding each countries laws and regulations. Hence their was need for a common reporting standards which will be same from all over the world. The answer to this is International Financial Reporting Standard (IFRS). IFRS will overcome cross border geographical boundaries and will have no impact as an investor whether from India or any where in the world.
History: Birth of IFRS has been a series of incidents. It all started in 1967 with International Accounting Standards formulated by International Accounting Standards Committee (IASC). In between 1984 -2005 IASC & various accounting regulators all around the globe issued new accounting standards & revised old ones. Norwalk’s Agreement between IASB & FASB in 2002 stressed on formation & implementation of IFRS. Finally in June 2003, Ist IFRS was published titled “IFRS-1 – First time adoption of International Financial Reporting Standards”. At least 100 countries and 30 others including India will adopt or converge with IFRS over next 2-3years.
Indian overview: In the era of globalization, India cannot insulate its economy from development taking place around the globe. High quality financial reporting is the fundamental for an effective integrated capital market.
In India, the Institute of Chartered Accountants of India (which issues & governs accounting standards in India) is on the way towards converging of its accounting standards with IFRS. The ICAI has already started the process of issuing IFRS equivalent accounting standards (AS) & revising the existing standards & guidance notes to bring them at par with IFRS.
Why this convergence?
Converging with IFRS will have multiple benefits for Indian entities especially those who aspire to go global. The new converged standards will serve the objectives like that of providing timely & useful financial information about companies for stakeholders to assist in decision making. According to Sir David Tweedie, chairman, IASB, “The goal is to create one single set of accounting standards that can be applied anywhere in the world, saving millions for firms with more than one listing and allowing investors to compare the performance of business across geographic boundaries for the first time”. Some of the benefits are mentioned below:
• IFRS provides more compatibility among sectors, countries & companies. Its universal appeal can improve & initiate new relationship with investors, customers & suppliers across the globe.
• IFRS provides momentum to cross border acquisitions, enables partnerships & alliances with foreign entities.
• IFRS gives better access to global capital markets & reduces the cost of capital.
• Converge with IFRS means adoption of global financial reporting language that enables your company to be understood in a global market place.
• IFRS allows companies to benchmark themselves against their peers worldwide & allows investors & others to compare the company’s performance with competitors globally.
• IFRS will improve the quality & consistency of information, avoid multiple reporting & reduce the cost of the finance function.
How IFRS will be implemented?
The IFRS Task Force formed by ICAI has proposed the adoption of IFRS in a phased manner for listing entities & public interest entities as well as for all other entities operating in India from accounting period commencing on or after April1, 2011. A press release was issued by the ministry of Corporate Affairs on 22nd January 2010 for setting out road map for convergence with IFRS. According to press release IFRS will be implemented in 3 phases starting from April1, 2011 as shown below.
Phase 1: The phase 1 companies will have to prepare their opening balance sheet as on April1, 2011 converging with IFRS. It includes companies which are part of NSE index (Nifty 50) & BSE Sensex (BSE 30). Companies whose shares or others are listed or not having net worth of more than Rs.1000/- Crores.
Phase II: Phase II companies will have to converge their opening balance sheet with IFRS as on April 01, 2013. It includes those which are not covered in phase I & net worth exceeding Rs.500/- Crores.
Phase III: Listed companies which are not covered in phase I or phase II are covered in this phase. These companies have to prepare converge balance sheet with IFRS as on April 01, 2014.
Note: If the financial year of a company commences at a date other than 01 April, then it shall prepare its opening balance sheet at the commencement of immediately following financial year.
Challenges in adopting IFRS
Every change brings along with it a degree of apprehension & therefore, it needs to be ensured that these apprehensions are addressed early to ensure effective & efficient transition. IFRS pose great challenge to drafters of financial statements & auditors. IFRS may have material impact on reported results, which could lead to stock price volatility. International standards setting may be hindered by stakeholder’s divergent interests. Other important challenges would be educating investors and analysts about impact of the IFRS.
Conclusion
The adoption of IFRS will not only reduce the barriers to both trade and the flow of capital but also the investors will have access to more reliable financial data to compare and analyze corporate performance in multiple jurisdiction.
MONEY MATTERS!
In the globalised and fast moving world everyone is busy in fulfilling their greed of earning more money. Most of the people often allow the power of money to control them. The people starts getting up earlier in the morning and working harder, but they fail to understand that ‘Money is the root cause of all evils’. There is the financial cycle which goes on and on. Every one faces it right from childhood till death. As we grow up we go to school, college, and get attached with a company or start our own business. With our growing age our thirst for money also grows up and we are now trapped in Rat Race for rest of the working days. They work for the owners of their company, for the government paying taxes, and for the bank to pay off bills and mortgage. More money does not solve the problem; in fact, it may actually accelerate the problem. Money often gets you in debts instead of helping you to get out of debts. Money often puts a spotlight on what we do not know.
It has found that with the age group of 20- 35 most of the people like to hang out in pubs, purchasing branded garments, cars, house, going for weekends with your loved one and many more. To fulfill that they work hard earn a lofty amount and spend it like anything.
The people purchases more than that of their paying capacity. Easier credit cards and loan facilities from financial institutions encourage the people. When we ask people why they need money? The most common answers we find that they want to get rich or ‘I m in debt so I need to make more money.’
The recent sub prime crisis and bankruptcy of major banks and financial institutions like Bear Stearns, Lehman, AIG, and Washington Mutual are the examples of excessive credits given to the people. To avoid these problems most of the financial institutions have started Debt Counseling for its customers as a ‘goodwill gesture’.
Debt Counseling is one of way to pay off your bills and to get out of debt. “It is a corporate social responsibility initiative.” Debt counseling centers offer advice for all categories of credit—credit cards, personal loans, home loans, and so on. Their services are creditor-neutral, that is, they help you out no matter what institution you borrowed from.
HOW DEBT COUNSELLING WORKS?
Debt counsellors make a holistic assessment of your situation, and give you an appraisal of the costs involved—interest rates, fees, all the fine print. For instance, credit cards are the most expensive kind of debt, with annual interest rates of 42% to 49.36%. When you add the charges, they work out to more than 50%. The next step is to list payments that you, the borrower, can make—dues, equated monthly installments, and so on. The centre can help you request creditors to restructure loans. So, for instance, you may end up with a longer repayment schedule but more affordable EMIs. For example a negotiated repayment at 8% simple interest over 36 months. “It’s a win-win situation for banks and customers.” Banks avert a messy recovery process, and get at least the principal back. And borrowers get help paying off dues. All of this, though, applies only if a bank is convinced the borrower is truly willing to pay off bills, and genuinely cannot stick to the original schedule. It (the initiative) has been able to discern people facing genuine difficulties from intentional defaulters.
BEST STRATEGY
Don’t pay the minimum due on your credit card; pay the full amount each month. Don’t take an expensive loan to pay off a previous loan. If you have more than one loan, pay off the most expensive one first. So it makes sense to pay off credit cards, then personal loans, then lower-interest debts. If you must borrow, do so against a security such as property or shares. Such loans (14% to 16% interest) are cheaper personal loans (19% to 21%). And lastly, if you can borrow from helpful relatives to pay off your debt, do so!