1.    Save Some Money Every Month, and Invest

Most people, as soon as they receive their paycheck, don’t even plan how to utilize the money. They simply keep spending. There is no harm even if you continue the habit to spending carelessly. Just save some amount every month and invest in products that would reap benefits over time.

2.    Have a Budget

Simply knowing where all your money goes every month will help you to identify useless expenses. There is, however, more to budgeting. You must set up financial goals and derive a method to achieve it. Budget would be a tool that would help you reach your goals quickly.

3.    Manage Your Credit Efficiently

Most Americans are depended on credit to a large extent. Imagining life without credit card, mortgage, vehicle loans, and so on, is dreadful for most. However, we fail to understand that this life, without credit, is the best one we can ever have. Even if you cannot eliminate credit, at least take charge of your debts and make arrangements to repay them.

Personal Financial Planning isn’t really a tough task. We have made it look difficult by including various tools, software application, complicated calculations, and so on. Keep it simple, you will attract money.

Few years ago, one of my friends asked me to pay bills online. Though it was a convenient option, I was scared about payment scams spread all over the web. However, later I found most creditors offer this service, through a secure website. I tried once, and it worked out well. That’s the solution I was looking for. I just wanted to get rid of my bills without involving in a messy process.

It’s been few months now since I first paid my bill online. In the following months, I learned few benefits you enjoy when you pay bills online. One of the most useful advantages, for a bum like me, is you never forget your due date. If you do, you can check it online whenever you want. In past, I had missed many payments, not because I was out of cash, but because I didn’t remember the deadlines.

It’s convenient. You don’t even have to move an inch to make payments. Simply login to your account, check the status; if it’s about to reach the deadline, pay bills online immediately, within few minutes.

Though, it doesn’t happen with everyone, I do it often. I sometimes overpay my bills. I would just pick up my past bills, and without checking the date, I would just write a check for the bill that I have already paid for. This can never happen if you pay bills online.

You can know whether or not the bills have been dispatched. Sometimes, when I can’t find my bills, I assume Jenny, my girlfriend, might have paid it. It was recently I found Jenny never pays any bill. She wants me to spend everywhere. Anyway, if you pay bills online, you can avoid such misunderstandings. You would know which bills have been dispatched and which among them is paid. It’s like having a payment manager, if there exists one.

So what are the requisite criteria for you to open and maintain a reward checking account? Firstly, you’ve got to use the direct deposit mode of transactions. Secondly, you’ve got to make e-statements. Thirdly, you need to use your debit card at least a dozen times. If you don’t do this, interest on your account balance is going to be withheld for that month. Otherwise, these are the benefits that you get. You are going to get about 4 % interest on an average, on the initial $25,000 and 1% interest on the money beyond the first $25,000. Your ATM fees are also reimbursed by $25 every month. You don’t need to maintain a specified minimum balance. The rest of the functions are the same as any other checking account. Even the norms for the federal deposit insurance are also the same.

Using your debit card so frequently is an issue that I’d like to consider whatever the perks, I may get in return. I’m sure you’ll agree with me. Beats me! Why should banks offer you as high an interest rate as 4% for your checking account when other regular accounts fetch you a maximum of only 1.5 % ? Is that for putting your debit card to frequent work? The reason is by opting for a reward checking account, you are giving huge profits to the bank. Let us see how banks benefit from your reward account:

• Whenever you use your bank debit card, the bank gets a chunk of the Visa or MasterCard fees that credit card holders pay.
• The bank is able to attract new clients by offering new accounts on high interest rates. It does not have to pay higher interest rate4s on existing accounts for this.
• The bank also tries to make profits on forfeited interests of those account holders who don’t fail to meet the stipulated criteria. There are many account holders who may fail to meet in the stipulated criteria, particularly of using the debit card a dozen times, every month, and the company makes profits from the forfeited amounts. Most people are not able to meet the stipulations and they manage to get only 2 % interest rates.
• Huge amounts of money which is about 7 times the normal, is kept in reward accounts which the bank uses on various investments and loans. Reward accounts enable the bank to hold huge amounts of cash.

Who should opt for reward accounts? These accounts are not going to be beneficial for everybody. Such accounts should suit your financial lifestyle. Using the debit card a dozen times should be an effortless target for you to achieve. If meeting it is difficult for you, you should probably not go for the reward checking account.

The FCC has decided to question the wireless service providers through questionnaires so that the customers are enlightened about the ETFs. This will enable them to be prepared for making such payments or take services from wireless service providers who do not charge ETFs. They can also use the information provided by the FCC to choose the service providers that provide the best services at the most economical prices.

A few days earlier you might have heard that canceling T-Mobile’s Nexus One is going to cost you $500, which is quite a painful amount! The major part of the fee is supposed to be going to Google as an equipment recovery fee. The T-Mobile’s ETF will cost an additional $50. So on the whole, you’ll be charged $550 which can be quite pinching.

Congratulations to FCC for taking the initiative at a time when more than 80 % communication companies are charging meaningless fees and customers are paying up in an equally insensible manner. This responsible step of FCC comes as a great relief to harassed customers who find the fee pretty burdensome on their weak pockets.

There is a necessity for more transparency in the fee policies of the service providing and facilitating companies. The criterion for payments should be stated in simple terms so that the customers understand them without any doubts and are not taken by surprise by fees that are not mentioned in the contract. The companies should provide about the termination charges at present and of prorated charges. All service providers are expected to be consistent with pro-rated charges. The pro-rated fee should be calculated on the length of time of the contract divided by the fee.

The FCC wants its answers from Google and the service providers by the 23rd of this month. However, the FCC wants to keep the answers confidential. Then why is the FCC not obliging to the requests for transparency of the information obtained? Well, the FCC knows its reasons best. But do you think it should keep the reports confidential or should it make them transparent?

Lending Club is one social lending website that has gained a lot of popularity in recent times. It offers loans to people with different credit backgrounds and it gives different investment opportunities to the lenders. Now let’s see the advantages you are entitled to when you go for social lending:

• A poor credit history might not get you a loan from banks, but social lending organizations don’t restrict loans to you. You’ll get the loan that you want but maybe you’ve got to pay a bit more than your counterpart with a good credit score.
• If you are an investor on the lookout for returns higher than that of CDs and stock, you can seriously think of investing in social lending which gives you higher annual returns on the P2P loans that you give out to borrowers. However, the social lending organization is going to charge some fee as service charge for this.
• A borrower’s loan grade is decided upon by his/her credit history and the reports given by the credit bureau. Those with bad credit histories have to pay higher interests and fees. The amount of late fee charged also depends on your credit record, the lower being for those who pay on time.
• Different social lending sites have different interest rates specified for borrowers. You can visit Prosper.com which has one of the best interest rate schemes for borrowers in the social lending industry.

Loopholes in the social lending system

• Social lending requires you to satisfy a lot of eligibility criteria for obtaining loan. Your state of residence, FICO score, debt to income ratio, credit history for a span of 3 years, revolving credit utilization should all be within their prescribed limits for loan.
• Even lenders have to satisfy eligibility criteria before being allowed to work with the social lending websites. Their state of residence, gross income, net income, and net worth of household commodities should all fall within the eligibility criteria.
• Risk of monetary loss is involved for lenders as borrowers might default payments. The social lending organization does arrange for partial compensation, but the entire amount of money lent is hardly recovered.
• The facts provided by the borrowers and lenders may not be genuine.
• Fees for certain services may be very high

Open

The opening time to trade in American stock markets is 9.30 am EST and closing is 4.00 pm EST. The market is operative from Monday to Friday, closed on bank holidays and weekends. The price of any given stock at 9.30 am EST is known as an opening price or generally termed as ‘Open’. Trading is also done in ‘pre-market’ hours i.e. from 8.00 am to 9.30 am EST and ‘after hours’ i.e. from 4.00 pm to 6.30 pm EST. The ‘open’ price is generally affected by these two trading sessions.

Prior Day’s Close

‘Prior Day’s Close’ is the price of any given stock at 4.00 pm EST i.e. closing period. However, it’s not necessary that the price of a stock mentioned as ‘prior day’s close’ would be same as next day’s ‘open’ because the ‘after hours’ and pre-market’ sessions is operative in between.

High

‘High’ refers to the highest price of any given stock in that particular given trading day.

Low

‘Low’ refers to the lowest price of any given stock in that particular given trading day.

Volume

‘Volume’ means the quantity of shares of a specific given stock traded in any given day. It is an important piece of information noted by traders and investors because if the number mentioned in volume is quite high, it becomes simple to buy and sell shares and the prices are bound to fluctuate. However, if the number of volume is low, it becomes quite difficult to get or sell a stock at the price comfortable to you.

Average Volume

This is an average of the quantity of shares traded of a specific stock during a long period, generally 365 days (or a year). Comparing this number with the ‘Volume’ of a stock at any specific day gives you vital information about the company. If the number is quite higher than the ‘average volume’, some significant information is or about to be revealed.

Market Cap or Market Capitalization

If the number of outstanding shares is multiplied by the amount of dollar that is equivalent to the stock price, you get ‘market cap’. There are 3 categories under which the listed companies are divided: large cap, mid cap, and small cap. A company is considered as a large cap when the above calculation gets an amount between $10 and $200 billion. It is mid cap when between $2 and $10 billion, and small cap when it is between $2 billion and $500 million.

52 Week High

This is highest level reached by the price of a specific stock anytime in past 52 weeks, or a year.

52 Week Low

This is lowest level reached by the price of a specific stock anytime in past 52 weeks, or a year.

Earning Per Share or EPS

EPS is calculated by dividing the company’s annual profit by the quantity of outstanding shares. For Example, the annual profit of company ‘A’ is $24 billion and the quantity of outstanding shares is 4 billion. The EPS calculated is $6.

P/E

P/E is Price to Earning Ratio. P/E is derived by dividing the annual earning each share of last year by the prevailing stock price of a specific stock. For Instance, if the stock price company ‘X’ is $55 and the annual earning each share for last year was $5. The P/E is 11. Price to Earning ratio can be used to compare the worth of like stocks, depending on the growth level.

F P/E

F P/E is Forward Price to Earning Ratio. As the name suggests, this ratio is used to determine the future P/E, specifically subsequent financial year, of any specific stock. For instance, if the stock price of company ‘Y’ is $55 and the anticipated annual earning each share for the subsequent year is $11, the F P/E is $5.

Beta

A tool used to measure how volatile a stock is compared to the ups and downs of the market, is ‘Beta’. Generally the figure of beta for any stock varies between 0 and 2 (excluding 2). If the volatility of the stock is in sync with the market, beta is 1. If volatility is more, beta is more than 1. If volatility is less than the market fluctuations, beta is lesser than 1. For instance, if the bet of stock ‘Z’ is 1.2, the volatility of this share is 20% more than the volatility of the market.

Dividend

A part of the company’s profit is distributed among the shareholders is dividend. This can be quarterly, half-yearly or yearly, depending on the profitability of the company. Usually, it’s given every quarter. It is given because you are a partial owner of the company.

Yield

Yield is nothing but the percentage of annual amount a shareholder receives over the price he paid to buy the stock (stock price). Generally the annual amount received is calculated by multiplying the recent dividend by 4. For instance, stock price of company ‘B’ is $160 and the recent dividend given per share was $1. So the calculation of ‘Yield’ is $1 x 4 / $160 which equals to 0.40. So the yield is 40%.

Shares

The total quantity of shares issued by the company for trading in American stock market is called Shares. Generally, the quantity is very high like millions or more.

Institutionally Own

Out of total quantity of shares issue in public by the company, some are bought by financial institutions. So the percentage of such shares is known as ‘Institutionally Own’. For instance, company ‘C’ has issued 40 million shares, out of which 2, 00,000 shares are bought by some mutual fund and insurance companies, the percentage of ‘Institutionally Own’ is 20%.

Read this article a couple of times and watch CNBC tomorrow to test yourself on how much do you remember.

But have you taken any steps to prevent further loss? What have you done to recover your losses? Do you have a back up plan? No? Don’t be a background observer. It’s your money, take charge today. Here is a 7 step plan to recover your losses:

1. Analyze your loss: Keep at track of all your losses, initial capital and the remaining capital. It is obviously very painful to observe the figures every time, but so is losing money. It’s better to jot down those figures before you realize it’s too late. Get the actual figures of the amount invested in all your assets, including your house, and the depreciated value. This will give you a clear picture of your losses and left over income. Also keep checking with the credit bureau regularly about your credit report.
2. Set your targets: You won’t reach anywhere if you don’t know where you are heading. The very next important step is to set a short-term goal and work towards it with discipline. If you know you have to repay your $5000 loan, don’t wait for an extra ordinary income or some bonus to arrive at your doorstep. It would just double your already high interest rates. Start saving a small amount every month and pay off your loan. Start today.
3. Rework on your budget: The second step sounds very simple and you can now easily payoff you huge loan. Isn’t it? No. It would never be possible if you are still stuck with your old spending habits. Start eliminating your superfluous expenses, if you want to save some real amount every month. Prioritize your shopping list, cut down your party expenses and do what ever it takes to save a penny. Generate a new budget for this month before you go shopping today.
4. Stick to our budget: Planning a new budget won’t help if you don’t adhere to it. At times, it may be very difficult to resist spending extra dollars due to your compulsive spending habits. But it’s time for you to change your habits, at least till you repay your debts. Resist, because you are the beneficiary. Take the pain because it’s your money.
5. Revise your budget every month: Yes, you have to do this. This will keep you reminding that you are on a recovery mode. Keep changing your budget according to your needs. If some expenses are useless, cut it out. Instead add some useful investments. However, make sure you are not raising your budget every month. A minimal increase will do, but don’t forget your targets.
6. Earn more: If you have time to spare, try not to indulge in unnecessary activities. Instead, take on additional work to double your income. You can do this by working overtime or working part time elsewhere or start a small home based business. Do whatever you like but generate money from your free time. Remember; do not fall for those ‘get quick rich’ schemes. We are devising a plan to earn more, not lose more.
7. Set your new targets: Once you see yourself achieving your short-term goals, set some long term goals. Try to generate a bigger picture of your goals. Re-analyze your losses and income, your improvement and goals. Try to switch your investment for high-risk to low-risk sources. Go for a retirement fund instead of stock market. Save every month and generate your own income.

These 7 steps mentioned above will not give you a quick financial boost. These steps are created to help you recover from your losses. The process can be a bit long and slow-paced, depending on the depth of your losses. Be patient and stick to the above steps obediently. And start the process without any delay. Remember, it’s your money.

The prepaid polarization does not seem to be favored much by the wireless service providers because they relied heavily on postpaid connectivity services for their income. But some of them have started concentrating more on the prepaid market now and as a result of this, there is competition amongst them for bagging the numero uno position of the service provider market.

When there is such a boom in the prepaid service sector, you’d naturally want to know the pros and cons of the prepaid subscription if you aren’t yet having one. Here’s what you’ve got to look for:

• If you want to see low monthly charges for your cellphone, the prepaid option is good for you. You need not pay a minimum of $70 monthly charge now as you did in your post paid schemes. The prepaid plans start from as low as $10 per month. If you are talking for 200 minutes or lesser, you could go for this. But there are some really good schemes for people who talk for 1000 minutes or more than that.
• The prepaid plans give you a lot of flexibility in terms of commitment. You can take up the one month talk duration scheme and assess the services. If you like them you can continue with the services or discontinue and switch over to another service provider. You don’t have this flexibility with the post paid scheme in which you’ve got to remain committed for a relatively long period of time, such as, six months or one year.

Subscribing For Prepaid Is Not Beneficial For You Under The Following Circumstances:

• If you are in the habit of making a lot of calls, or travel frequently, the per minute call talk charges, as well as  the roaming charges are higher than the postpaid plans. In such a case, a post paid connection is going to be very beneficial for you.
• Cell phone service providers provide expensive feature-loaded phones with post paid connections only. The wireless service providers don’t offer a lot of features like internet surfing with prepaid services. You can use prepaid only for conversing verbally most of the times. Voicemail, sending extra text and such features are generally not allowed with prepaid plans.

On the flip side, you’ll not be able to enjoy some premium wireless networking services. For example, the iPhone services don’t come with that. The roaming facilities are also pretty discouraging.

Charging Interest On 0 Percent Balance

You might pay off your credited balance by the due date, but even then you might be charged interest on it. For example, you buy a $ 1,200 computer with plastic money at a monthly installment of $400 each on an interest of 1%. After 3 months when you clear off your entire balance, you might be charged interest for an extended period because it covers the grace period for the payments. So, you’re paying up interest even though you’ve cleared your dues! This is not an individual rare case, but a policy followed by more than half the banks of the nation.

Switching Due Dates For Payment without Sufficient Notification

The other day, my credit company sent me a notice that the due dates were being preponed. To my dismay, I found that I received the notice a couple of days after the due date. I could make out that they had not mailed the notice well in time. I called up the company, and the officials out there say that I had to pay late fee because the due date was already over, and they really could not consider any reason for that. Banks and financial institutions play their tricks by changing due dates without notifying their customers properly to extract the penalty money.

High Fee on Increasing Credit Limits

When you ask for an increase in credit limits, your crediting companies might charge you a fee of $ 400- $ 500 if you want to increase your credit limit by $1000. That is almost 50 % of the increased amount. Now do you think that’s fair?

High Overdraft Charges Regardless Of Conditions

You might swipe more than your balance amount by mistake and another person might withdraw deliberately. But as the overdraft charge calculations are computerized, there’s no exemption for penalty for an accidental withdrawal. Some credit companies might waive this amount but otherwise you’ll have to pay the overdraft fee.

If you want to avoid overdraft penalty, you disable the over-drafting feature from your account. But did you know that some banks actually encourage you to go for over drafting? College students and others who were in-adept at handling finances are prone to over-drafting which results in getting penalized later.

Schools, colleges and the human resources development departments are coming up with money management programs to educate people. Financial literacy programs may be too formal for you. Especially, children might not want to indulge in serious programs. For them, educational interactive financial applications have been developed to make them financially literate. You can opt for those. But did you know that even a simple video game with small money transactions involved, which is primarily meant for entertainment, has a lot to impart in terms of financial education?

Firstly let me tell you that sitting indoors, playing a video game is a more budgeted option for entertainment then visiting bars and pubs during the hard economic times. Secondly you’ve got lessons to learn from the games itself. Take the World Of Warcraft (WoW), for example. In this game, players are allowed to interact only after they pay all their dues. So what do we learn? We learn that having no pending debts improves the longevity and quality of your business or social relationships. Next, when you earn gold in the game, you’ll realize how hard and time taking earning wealth can be. You get to learn managing your earnings of wealth. For example, the game necessitates that when you buy some quantity of something the quantity of another is also affected. This game also teaches you that the harder you work, the more you earn.

How much do you think a month subscription of WOW cost you? $.50 cents per day! That comes to $ 15 per month which is much less than what you’d spend on your family on a single day out.

Children and even adults have a lot to learn from these simple gaming experiences. I’m also reminded of the business games that we’d play with cards which would teach us some aspects of saving. I learnt good investment lessons from the business board game that my parents bought me for my 10th birthday.

The Oregan Trail is another game that is an inspiration in the present gloomy economic times which seems to be on its road to recovery now. This game is about a family that travels far and wide and encounters hardships to fulfill their goal (Manifest Destiny). The game teaches you how to cope up with your hardships even if you are poorly prepared for it. Can anything be more relevant in the present times than this lesson that lets you know that one should be hopeful about good times but should always remain prepared for the bad times? I personally feel, had we been more prudent with our money management and were more financially literate; we would have not suffered so much this depression. You agree with me, don’t you?