Personal Financial planning is essential in one’s life, irrespective of the age he starts. So, the below mentioned planning process is for you, whether you are male or female, 20 or 50, single or married. Just get started right away.

Get Yourself a Financial Journal

Sounds foolish? Well, you have tried all your smart ways, why not this foolish one as well. And let me tell you, this is one of the most useful ways to have a plan. When you have your plan in writing, it’s more real, than a vague mental idea.

Create a Wish-list

After you finish with decorating the front page, list down all the things you want to achieve in your life on the next page. This list should, however, be pure financial. You cannot list down about having a new girlfriend, or improving relation with your spouse. If you want to do it, get a new journal. In this one, it’s just money.

Set Priority

According to your preferences, rearrange the list on next page, starting from the one you want to achieve first, then next, and so on. This would help you to know what you have to start working on, and what can be waited.

Set Target and Cost Price

The goals in your journal are your products. So, you are free to set your own cost price. If one of your goal says ‘want to buy a new car’, set the amount or your budget for that product, to be precise. Do it for each of them. Next, set a timeline to achieve it. If you don’t have a target to achieve in specific period, you would not strive to achieve it rigorously. Hence, based on your priority, set a practical time line for each goals.

Achieve

Start putting a tick, or cross, or strikethrough, or whatever you like adjacent to the goals you have achieved. You can do this by doing a small calculation and determining how much you will need every month to achieve the goals.

That’s it. Was that hard? Not at all. You can do it within a day as well. The only thing that kept you from doing personal financial planning is boredom and fear of loss. Throw all your fears, and start today. Live your life as you always wanted it to be.

I will be traveling to the other part of the world next month and planning a trip, for me, is quite alien as I am not a regular ‘explorer’. Hence, I have searched for many budget traveling tips and compiled a list.

• Discounts
  If you check properly, you may qualify for one or the other discount on air ticket, hotels, or food. You just need to check smartly.
• Guidebooks
  It may be a bit boring to follow a guidebook. But, trust me, these guidebooks have some of the most effective money saving tips while you are on a trip. You aren’t, but the guidebook is always local.
• Snacks
  Always carry snacks with you. Food in your flight is expensive. And so it may be where you land.
• Your bit of entertainment
  Journeys are boring. And if it’s long, it can bore you to tears. So, carry your entertainment like books, DVDs, music players, magazines, etc. It will also keep your kids busy, if any.
• Prepare for the weather
  Before you start your journey, check local weather predictions and carry outfits accordingly. This can save you loads of money.
• Carry an extra bag
  We often shop much when we are on a tour. And we purchase another bag to carry these things home. Quite small amount, but why to spend if you can save this cost. Carry an additional bag.
• On foot
  When on a vacation, we travel much around the city or country, which ultimately costs a lot. Though not every such cost can be eliminated, walk wherever possible.
• Prepay
  Many expenses like air ticket or for hotel room can be quite cheap if you can manage to pay few weeks in advance. You can save s much as 40-50%. And if you cancel your trip a couple of days before your schedule, they will happily refund the amount.
• Dual Purposes
  If you are on a business trip, extend your tour and plan a family trip simultaneously. It’s one of the best ways to save money on airfares.

Well, these are many favorite tips to plan a budget vacation. I don’t think any of have the potential to deplete the quality of my vacation. Let me know if you have more of such ideas.

One Time

One time income can be tax refunds, or rebate check, or birthday money, or something like that. However, it comes quite often then we realize and instead of spending it appropriately, we squander the amount. Let’s have a look at how we can utilize it.

If the amount received is below $50, use it for fun. You cannot do much with $50.

If the amount is between $50 and $100, you can use it pay some of your bills. Or maybe add it to your savings.

If the amount is above $100 and below $1000, divide it into two and use it to repay your debt or bills and add the other half into savings.

And if it exceeds $1000, it is highly recommendable to use it to repay your high interest loans, save for a new home, or pay huge bills.

Regular Income

You would ask how can regular be unexpected? It can. You get few income, you know it’s coming, but you don’t know when, hence it’s comes unexpectedly. This would include unexpected income rise, dividends on stocks, etc.

If you are buried under debt, a very logical step is to put this unexpected regular income to repay your debts. However, if you don’t have much to repay, you should save or invest this amount. You can utilize this amount for your 401(k), Roth IRA, traditional IRA, or other long term savings.

And if you have already invested considerable amount into these funds, you can invest unexpected income in other investment instruments like stocks, bonds, gold, or foreign currencies.

Do you have better ideas to utilize unexpected income?

I can return back the purchased items to the store I suppose. But then I seem to have lost my receipt in the holiday emergency (You know, a lot of relatives flooding your house with bag, baggage and gifts and you are so absent-minded about managing small things). So, the store will not accept the item and refund me my money. Ah! I can always give the item to my credit card issuer who’ll accept it within 3 months of the purchase. Mark this friend, even if you happen to lose the receipts of items or bought them online or even if the return date expired, your credit card issuing company can always come to your rescue if it’s got the return protection policy. Just read the fine print and it’ll be probably mentioned there, if the company has it.

The return protection policy of credit card companies is specially advantageous to those buyers who might want to return items bought from the store, after the normal period of expiry of the store’s return policy. American Express, Visa and MasterCard all have good return policies. They are going to take your goods if the store refuses to and you are going to get the cost price. But there may be some constraints and rules which seem to be fair enough to me. After all, the credit card companies are helping you in cashing on your items which may otherwise have been lying as a waste in your house. There may be limitations on the number of times you are allowed to return your gifts and refund your money or the time period in which you can do so. American Express also sees to it that every client is satisfied with the return policy. Visa’s return protection has $250 as the upper limit of refund for items returned and on the whole, in a year, you could refund about $1000 on the whole. It is necessary for the items returned to be in a good and working condition. If I’m not mistaken MasterCard seems to be offering greater flexibility when it comes to your claim on the goods returned. Not only goods that you are dissatisfied with, but also those that are damaged or stolen are worth a refund with the company. But the upper limit of the refund is up to $ 250 only and the claim should be made within 60 days of the date of purchase and only when the store from which it is bought refuses to accept it.

So, I’m going to my credit card company to get a refund on my extra timepiece, what about you?

The first 20% can be saved by driving and maintaining your car efficiently. Here is how you can do that:

1. Remember that faster pace means more resistance against wind. This friction causes your fuel economy to drop.
2. Drive smoothly with patience, less fluctuation in acceleration, and minimum usage of brakes. That doesn’t mean don’t apply brakes and start bumping your car everywhere. Apply when necessary.
3. Use of overdrive except you are ascending a steep slope.
4. Make use of cruise control, which means drive at a stable speed with stable acceleration and not using brakes, when on freeway. You cannot do this on hilly areas.
5. Don’t drag your car much at lower gears. Quickly move to higher gears and keep the RPM low.
6. While on a slope, go at a higher speed before climbing, rather than generating speed on the slope.
7. Don’t overdo warm-ups. Newer cars generally don’t need much of idling. 1 minute is enough.
8. Merge everyday jobs with short trips. This will save much fuel. All you need to do is stay alert and plan how you can consolidate trips.
9. To increase efficiency of your car, the engine needs to be maintained properly. Poorly maintained engines causes a drop of 20-25% in fuel efficiency.
10. You will notice improved aerodynamics with smooth edges. Hence, always keep your car cleaned. Did you know that sunroof is also a distraction in smooth aerodynamics?
11. Use the Formula 1 rule. Lighter car = increased speed and better fuel efficiency. With increase of each 100 pounds, the efficiency drops by 1-3%.
12. Get rid of the ice on your car, it jams the engine, increases rough friction and increase weight of your vehicle.
13. The tire pressure is very important factor in fluctuating fuel economy. It’s important to keep it inflated at the right level every time. Over inflated tire can burst easily, which eventually reduces the mileage. Under inflated tires drags your car at a slower pace than usual, reducing mileage again.
14. Make it a habit to change your vehicle’s oil on a regular basis. Less or old oil creates more friction.
15. While you are driving in the city at night or early morning, when the weather is cool and pollution is less, roll down the windows, instead of switching on the A/C. If it’s required, keep it low.
16. However, keeping windows open on a freeway increases friction and distracts the smoothness of aerodynamics. Keep the window rolled up and switch on the A/C at low level.
17. IF possible, don’t drive during peak hours, when traffic is usually high. Or you can opt a bit longer route but with less traffic.
18. As soon as realize you don’t need snow tires further, remove them because the suppleness exerts much pressure to haul the car.

These are small but really useful tips. Follow them for a week and you will definitely notice a 15-20% reduction in usage of gasoline. Next tip to save some money is by getting a 3% or 5% cash back card. A famous one is Discover Platinum Gas Card. Also, Citi Dividend Platinum Card offers 5% cash back at almost every gas station, grocery and drug stores. A website pumpandsave.com offers in depth info on how to use such cards.

It’s wiser to check where the cheapest gas is available at gasbuddy.com and gaspricewatch.com. However, it’s worthless if you drive at the cheapest gas station that’s 40 miles away. So, keep a watch on the prices at nearby stations, and visit the cheapest among them.

While you buy a car, instead of focusing just on amenities and looks, check out the mileage. Opt for a car that gives very high mileage because in long run, you will be left only with miles per gallon calculation. The looks and amenities would be obsolete soon.

Even if you have a car, it is not mandatory to drive it every time. You can occasionally walk, ski, ride a bike or scooter, or take public transportation.

These tips wouldn’t cost you anything, but will definitely assist you to save around 20-25% of your gas bill.

• Talk to friends who can help. Don’t be embarrassed to tell your friends that you are bankrupt. Ask them to help if you are in crisis, but be sure to pay them back as soon as you are comfortable with your money.
• Make a note of your damages. In this step it is necessary for you to jot down the monetary losses that you suffered. It should include your material as well as money loss. You might have made a mental note of this, but that will hardly help. By jotting down, you’ll get the exact picture. Contact your credit bureau or financial institutions for your credit report if possible.
• Set short, realistic, achievable goals of recovery. Your leap should be according to your stride. Recovery is a long process which can be achieved in small steady steps. Giant leaps can only make you fall and hurt you. Start making small but consistent savings and pay off high interest loans first. Clear off high interest credit card loans first.
• Budget your expenditure. Cut your expenses to meet only vital family expenditures. Don’t compromise with your health and don’t starve because neglecting these essential expenditures will only interfere with your general well- being. A non-essential club membership or plans to buy a second car can take backseat if possible. Don’t curb your entertainment expenditure totally because a bit of entertainment is recommended for your physical and mental well-being. Update your budget periodically. Your budget should match your current income   and expenditures and also the outside economic environment. Don’t overspend in times of better economic conditions because you’ve got to save for the rainy day.
• Look for opportunities for a second income. Take up some part time work or establish a side business to supplement your main income. This will help in cushioning your income and also build up your finances fast.
• Learn from past experience and set up a long-term savings plan. This recession must have taught you to learn from the past mistakes that you‘ve made. For example, not saving for retirement etc. Start saving for retirement. Keep aside some money every month as savings. Continue to lead a moderately budgeted life style. You don’t have to be very stringent with your expenditure, but balancing is what is required.

The above mentioned steps to recovery are not a magical path to guaranteed success. Your progress will depend on your present financial situation and the amount of losses that you’ve suffered. It will also depend upon how you work upon improving your finances. The economy might have injured you badly, but has not killed you. You still have life in you which you can turn to your best advantage. Use these recovery guidelines and be a survivor!

Tax Advantage

401(k) is known for the tax benefits that it offers. Your contributions for the 401(K) will be reduced from your gross income which will automatically lower your taxable income. Keeping this money in your savings or any unqualified account is going to make this taxable.  You’ll be charged on the interests and dividends that you get. So isn’t it better that you shift over that money. An IRA deposit does not lower your taxable income. As long as you don’t withdraw money from this account, your income will remain non-taxable.

Dollar Cost Averaging Benefits

The 401(K) contribution will help you in buying more shares at a lower price. Generally when the prices are high you buy less shares and vice versa, but with 401(k) contributions you can buy shares anytime without waiting for favorable market conditions.

Interest Multiplication Benefit

When you make 401(K) contributions you are making your savings multiply by the year. Your premium will accumulate interest and as years go by this accumulated interest will keep multiplying itself. Let’s say, after 10 or 15 years you’ll have a lot of money at your disposal.

401(K) Comes With Higher Contribution Limits than the Conventional IRA

With a 401(K) you can contribute up to $16,500 for a tax deferred account and if you are 50 years or above, you contribute $22,000. Compare this with conventional IRA where you contribute only $ 5000 after tax benefits and $ 6000 if you are 50 years or over that.

You should work out a good 401(K) plan with your employing company. Keep your financial balances good and your profile diverse. You are going to benefit from 401(k) insurance.

The benefit of the 401 (K) plan is that you are saving up a part of your income every month for your retirement. You might not otherwise have been motivated to save up. You might think that retirement is way away from you. Yes, you are valid in thinking that way because nowadays people think about the present more than the future. Times are uncertain and with economic conditions being so bad, you’ll always want to have money for survival today. The younger you are, the lesser the amount of money you need to stack away on a monthly basis on your savings. Start today, when you are young so that when you are old and retired you’ll have enough money to back you.401(K) plans are on the whole very beneficial and an effective means for saving your money in the present times.