Do you have a financial safety net? It’s something worth thinking about and setting up. What will happen to you and your loved ones if you lose your job for a few months? What if you get into an accident that may prevent you from earning a living? Or what if some unexpected expenses come up. Do you have anything in place to make sure the bills continue to get paid and your family is taken care of?
If not, now is the time to get started. But where do you actually start? Having three to six months’ worth of living expenses tucked away in an interests-bearing account is a good beginning. Figure out what your family needs to comfortably live on if all income stops. Then start saving as much money as you can until you have built up this safety net.
Put the money you usually spend on going out to eat, going to the movies, buying the newest TV and Tech gadget and the likes into your savings account until you’ve saved enough to have a comfortable cushion. Take make this step go even faster, add any bonuses, tax refunds etc. as well.
Don’t just stop there. Make it a goal to add to your safety cushion as you can and come back and revise your numbers from time to time. Your living expenses may go up or down over time and you can adjust how much you need to set aside in quickly accessible money accordingly.
Life and disability insurance are another important part of your financial safety net, as is your retirement money. Do you have a plan in place to continue to cover your living expenses (or those of your family) when you can no longer work? Call up your insurance agent and go over your current coverage. Make sure the insurance you’re paying for will pay out what you need and if not, make adjustments.
Once you have those two parts of your safety net firmly in place, consider investing any additional savings into higher interest bearing accounts. While you may not be able to access any money invested here right away, it will come in handy when you’re dealing with a long term financial emergency or are ready to retire. The plus side is that there are plenty of investment vehicles out there that will get you a much better return than your plain savings account at the bank. Talk to your financial adviser and come up with a plan that’s right for you, your family and whatever the future may hold.
Many times, certain things happen unexpectedly wrong. The place where we live burns so rapidly all in one go, there comes an earthquake, our car strikes into something, or we get bit out of sorts, there comes a possibility that we have to suffer such loses for which we have to pay heavily that even we can’t afford. Due to efforts of some people in the past years, we are now able to overcome those storms without being involved in any risk factor. We can help each other by spreading the risk among us as a group, and that’s what insurance does.
Let us first tell you what exactly is insurance and how does it work?
What is insurance?
Insurance is a promise by the insurance companies that they would compensate for specific losses occurred by ill-fate i.e. any natural disaster, illness, death, fire etc.
If we buy an insurance policy it will reduce the rate of risk factor by being transferred from us to the company. In actual, the there is no complexity in Insurance. It’s a simple way to proceed. We have to pay a particular amount to as insurance company that is known as Premium. In case, if certain tragedy happens, that can be enveloped by policy words, either lost or damaged items can be repaired or replaced by our insurer or they pays wholesome amount of it.
Kinds of insurance you need
Everyone knows many kinds of insurance exist such as life insurance, health insurance, car insurance, rental and home insurance, etc. but you do not need every kind of insurance. The exact type of insurance you need can be decided by your circumstances and your outlook. Before buying any insurance, you must mention following four questions directly;
- Explain the risk I would be insuring averse to?
It could be a sudden death factor, burning at home or car being stolen or being severely sick and under treatment.
- Mention the number of chances for it being occurred
There exist a small probability of fire at home but if it happens, you have to pay heavily for it. The risks of car being stolen are high but it won’t cost you as high as losing your home.
- What will happen if it occurs?
What happens if you die or your home gets fire or your car gets stolen? Will you be able to bear the expenses?
May be you have enough balance saved to overcome the cost or maybe you surely want to use your balance for this.
Purchasing insurance from the providers of insurance will help you to buy around and compare quotes and cover. Maximum tasks for this are being done online. There are many different types of insurance covers and insurance policies. The insurance brokers and companies are always available for you help. They will explain how the policies work; they can find you one suited to your circumstances and even help in claiming. All these insurance companies, insurance brokers and financial advisors have to follow the protocol and get registered on the official government website Financial Service Providers Register (FSPR). Please note that this is for New Zealand only and varies from state to state and country to country.
Here are the few tips that you must keep in mind when buying a policy.
- Read the policy carefully.
- Always choose the right excess.
- Have an emergency fund.
- Be honest and tell the truth.
- Shop around.
- Don’t double up.
- Combine insurance.
- Look for a credible.
- Take precautions.
Right cover is the key
All the insurance policies are not same. They have different rules and regulations. It’s better to compare policies as the decision will become easier for you. Go for the right cover as two policies can have same price. For example, a trauma policy will only cover certain named diseases, not all illnesses or injuries. There are few cheaper house policies which cover specific events such as fire, theft etc. but not all risks.
Also, some policies will pay for the damaged or stolen items. Others may only pay ‘present value’. If you want to know all the details, go to Insurance Council website. All insurance policies have different conditions and exclusions. These exclusions are for unfavorable events that take place without your control.
The crux of this discussion is that read the policy carefully. Know the terms and conditions in detail. Clear your mind; otherwise you may be paying money for policy that will not help you when you need it the most.
In a perfect world, you would call an insurer and get fixed what is broken. But the world we live in is not perfect. Here, the process of claim is a little more complicated than that. There should not be any misunderstanding about the claim. Your claim will vary according to the type of insurance you need (home, life, health etc.).
The procedure for every insurance claim is quite same with a slight difference. Claims for home owners and car insurance require same basic steps. Claims for health insurance are slightly different.
Make the right phone call. No matter what kind of claim you are filling, get in touch with your insurer as soon as possible. The faster you get the ball rolling, the sooner you will receive the outcome.
Fill out the required forms. After you have contacted your insurer, they will send you few forms to fill. Many insurance companies give facility to fill online forms which makes process much smoother and quicker.
Get your damages assessed. Most insurance companies will ask you to get damages priced by an approved party to make sure that they are paying you a right amount.
Cover your deductible. You have to cover your deductible in full before insurance company will fork over its share of the total cost.
Make sure that you contact your insurer soon after the damage happens. The settler may choose to settle the claim by paying a sum of money. They may or may not repair or replace the items that have been damaged. In most policies, there is a value you have to pay as the first step of the claim. Be honest as insurance companies are wary of fraud and they will investigate if they have a slightest doubt of betrayal.
The amount of time it takes to settle a claim depends on different factors. It also depends on the severity and complexity of damage, how you quickly contact the insurer, how soon an adjuster is available, whether the company is handling multiple claims at once such as in case of natural disaster and so on. Considering all these factors, it is hard to tell the average time for claim settlement. The best thing you could do to settle claim in a timely fashion is to file as soon as possible and stay in constant contact with your insurer.
To understand the meaning of a consumer, we should look at the definition of it. In simple words, a consumer is a person or any organization that buys products or services. It may also refer to hiring goods and services. They are the end users in the distribution chain of goods and services. Sometimes, the buyer and the consumer are different people. For example, children are the end users of toys but their parents buy toys for them. Therefore, in a market, buyers and consumers can be different people.
In a marketplace, consumer buy products for their own use. They are the final consumers. They do not buy products for further manufacturing or sale. Specifically, people engage in buying and evaluating products to satisfy their needs and wants. Consumers are the key figures in market place. All the activities in the market depend on the consumers only.
We can say consumers are the most powerful entity in the market as the whole market business depends on them. Makers of goods or marketing professionals spend their lives studying behavior of consumers. The study of the process of buying and discarding goods is called consumer behavior.
Let us come back to our main concern. We have talked about consumer, but what does it take to be a smart consumer?
There is a difference between consumer and a smart consumer. A smart consumer knows what to buy exactly and from where. He does not beat about the bush. He has a strategy to follow. You can also become a smart consumer. It is an easy task. All you need is a little observation and more effort to buy your desired product. A smart consumer follows a plan. Few steps that we have gathered for you on your way of becoming a smart consumer are listed below:
- Set a goal (confirm your buying product)
- List available resources (places from where you can buy)
- Choose from the resources (from where you will buy)
- Form a plan of action and then follow it.
Sales persons spend a career studying their consumers. They easily know if you are an easy mark. There is a huge difference between a sucker and a smart consumer. Do not be a sucker. Instead, use your money wisely and be a smart consumer. Their goal is to find out what makes you tick. They easily understand what compels you to buy a certain product. In a market place, marketers study their customers using test marketing, sophisticated analytics and outside consultants. They are intelligent but you have to be smart. Here we are giving you five signs of a smart consumer.
If you can easily walk past a sale sign, there is a pretty good chance that you won’t fall for a fast sales pitch. It is hard to resist, especially for women, a sale sign anywhere. These companies study you like a lab rat. If you can resist their corporate moves, you are a smart consumer.
Patience is the key to becoming a smart consumer. There is a huge difference between “a want” and “a need”. You should know the difference between the two. Always buy the product that you really need. We want thousand of things but cannot buy all of them. It is wise to buy only needed items. So be patient with your wants.
Politeness is the trait of a smart consumer. Believe it or not, smart consumers know that their manners are the way to get what they want. If you want a special discount or a special consideration, rudeness will rarely get it for you. Always be polite in your manners. Smiling, making eye-contact and saying “please” and “thank you” are the best ways to win over the sales person.
Do you always read the end-user agreement or the contract? If yes, you are already a smart consumer. Suckers only want the product they desire, they do not care about the agreement or contract. If someone catches you reading the fine print on a product, they will understand that you are not an easy prey.
If you immediately give an impression that you are willing to spend your money, you will be an easy mark for them. The sales staff will be drawn to you and they will not let you go until you have spent a big chunk of your money. Do not buy an overpriced and overhyped item. They profit from your ignorance. A smart consumer does not become a part of bandwagon as everyone invites you to become a part of the crowd by using it too snob appeal. So know it all before going to buy any product.
As a consumer, you should also be aware of your rights.
- Right to safety: Protection from products and services hazardous to your health.
- Right to be informed: You should be provided with useful and truthful product facts.
- Right to choose: Selection of goods and services at a fair price.
- Right to voice: if you have a problem purchasing a specific product, it is your right to be heard.
With rights come responsibilities, consumers should also be aware of their responsibilities.
- A consumer should use the product safely.
- Use the information on the product wisely.
- If you have any concern regarding the product, express your concerns to those who can help you.
- Choose the product carefully.
- Educate yourself about the product.
- Consume your product in a healthy environment.
If we move further, there are also consumer protection laws. Most of the consumers are unaware about the laws. Firstly, consumers should be aware of the consumer protection. Consumer protection stands for group of laws specifically made to ensure the rights of consumers. They also manage if there is a fair trade, healthy competition and accurate information in the market. The government organizations such as the Federal Trade Commission in America and Better Business Bureaus in America, Canada, and England etc. provide services to consumers for their protection from frauds. Consumer protection contributes and gives a healthy space to effective markets so that their business can grow.
A smart consumer is always aware of his rights and responsibilities as he is the key figure in running big businesses. He should be aware of consumer protection policies, laws and regulations as they help increase consumer welfare by ensuring that businesses can be held accountable.
We are always hasty in spending money and then tormenting ourselves for doing so. There is always not enough money. As a result, we keep wondering about “How to save money and become a smart consumer?”
The word “economy” does not mean that you will become poor and live on streets. Being economical means living within your means and cutting all the extra expenditure. Saving funds means being a smart consumer who spends smartly. This will give you an idea about spending less and saving more.
One of the main social problems in consumers is the financial illiteracy. They do not know how to spend wisely. We are capable of earning but we waste our earnings irresponsibly making unnecessary purchases.
Learning to save a chunk of money is everyone’s desire, but it becomes difficult to implement it sometimes. Do not worry. It is a difficult task but not impossible one. Just learn a technique to save money. We are offering few valuable tips on saving money intelligently.
How to save money?
First of all, you should understand the meaning of saving money. It does not mean to save cash only. It means to have a discipline and motivation to work for it. Earning is everyone’s cup of tea but not everyone can save money. You need a power of will for effective savings. Try to adopt a mediocre way. Do not spend too much and do not save too much. Spending too much causes damage to your home budget. And saving all is not wise either. First you need to know why you want to save money and for what purpose.
People have different goals. They want to save money for different purposes. Someone wants to go on a vacation, someone wants to buy a new laptop or a tablet, and someone intends to buy a new home or an apartment. Maybe you need money for a long-term goal i.e. for your children’s education etc. When you have a clear vision of what you are collecting, the process will be much easier to follow. Instead, make a deadline and start saving. For example, you have to buy a computer, set a deadline of one year. After one year, you will have enough savings to buy a new computer. Everyone has a different vision. Everyone can choose what suits him more. It is said that 20% should be set aside for savings every month, 50% for the items you need in daily life and 30% for your personal use.
After you have saved enough money to buy your desired product, now you can buy easily. But here is the trick, do not get fooled. This is a test of your smartness. A smart consumer will have a thorough plan to buy his desired product. We have gathered here few important ways to make you a smart consumer.
1. Buy from reputable store
Buy from a well-reputed place. Reputation is important when it comes to businesses. Whether it is just a small-scale shop or a big renowned business, if you have a good reputation, people will trust you and recommend you to others too. Everyone wants to buy an authentic and a good quality product. Therefore, have your research with you when buying a product.
2. Get recommendations
It is wise to get recommendation from people you know about the product you want to buy. If you are shopping online, read comments on their page, get feedback from the people and try to communicate with them. Also you can ask your own people, family and friends to give you suggestions.
3. Research thoroughly
Before buying any product, complete your research first. Try to find out the reputable store, a good quality product and genuine price. Research the features of the product and its alternatives before putting any money.
4. Buy only what you need
Do not become an impulse shopper. Make a list of things that you need as well as what features you are looking for. This way, you only buy what you need and consume what you can. Do not go for your wants as there will be many. Focus only on your needs and you will be a smart consumer.
5. Check warranty, exchange or return policy
Warranties and guarantees are important before making your final purchases. You should be fully aware of what to do and where to go if you encounter any problem after the purchase. Ask right away the store about the return policy or exchange offer of the product. It is best to keep the sale receipt in case you need it afterwards.
6. Read product reviews
Product reviews are one of the ways that can help you in buying what you need exactly. This will be helpful to decide whether the product is right one for you and if it will suit your needs. You can compare prices, brands, features as well as read about the product’s good and bad points. It will also give you information about the kind of company you are dealing with, their customer service, technical support and other details.
7. Be an early bird
If you have your research and you want to buy your desired product, then do not be late. Try to buy it as soon as possible. Maybe prices become too high after few days. You should have a sharp sense of timing. Have you ever noticed how the prices of cinema tickets tend to be cheapest in the morning and most expensive at night? Go early and you will be paying less for the same quality of service, and be able to skip the crowds too.
8. Record your expenses
Make a special notebook or use your phone to write all the expenses that you have made. This will help you keep the detail of your spending and you will be able to cut-off if you have wasted your money.
A smart consumer is always a responsible shopper. Doing your research will help you in deciding. Because sometimes, a good deal is more than just a price tag, it’s the company, the service, environmental impact, and even the shopping experience. All it takes a little more time and effort and, and sometimes some observation to become a smart consumer.
Debt is one of the few stressors in life that does not go away easily. Most dangerous thing about debt is that it gives so much stress that person falls victim to chronic diseases. Most stressful things in life-a car accident, death in the family, a divorce-happen and then they are over. Our bodies react to these losses and bounce back. But owing someone money completely becomes inescapable.
But if we take a closer look at the emotional, psychological and behavioral studies, it shows that there are healthier ways to spend money and decrease the debt, which will ultimately reduce the stress we feel.
We have gathered few important tips that you can follow to decrease your debt and increase your savings.
The first thing you should avoid is to create more debt. Increasing debt will not take you anywhere. Instead, try to pay-off your entire debt in minimum chunks of money. Although, it won’t get you out of your debt but atleast, you will not be increasing your debt. Make possible to pay-off the debt entirely in just one shot. If you can’t, it’s fine to pay the minimum on your credit cards.
- Pick one debt and pay-off completely
It’s good if you have only one debt to repay, but if multiple debts are lingering on your head, it is better to choose the one with the highest amount. In this way, a huge burden will fall off from your chest. Or make a big payment from your account every month to repay debt if you can’t do it all at once. Do the same for another debt and so on.
Building an emergency fund when you have already a debt to pay-off seems dull. But it will give you an edge in emergency situations. An emergency fund can actually keep you from creating more debt by providing you with a safety net you can use in an emergency. Usually, the perfect emergency fund is six to twelve months of living expenses. You should atleast make $1000 in the short term.
- Request for lower interest rate
Ask your creditor for lower interest rate on your debt. Higher interest rates keep you in debt for longer period. Your hard-earned money goes towards the monthly interest charge and not towards your actual balance. If you have a good credit history, you will easily be considered for lower interest rate request.
- Put more money towards the debt
The more money you put towards your debt, faster you will be paying off for your own good. Create your monthly budget and try to find ways where you can cut your expenses and add them to pay your debt. You can also come up with the money for your debt by selling few expensive things in your home.
- Use retirement fund or life insurance policy
Both choices are risky. Use these options when you find no other way. You may consider pulling money from your retirement fund but your savings will fall short when the time of retirement comes. Also, borrowing from your life insurance can also be considered but it will affect the death benefit your beneficiaries will receive.
Getting a second job or doing second shift on work is common way for people to pay-off their debts. No one can actually make it but if it does work for you, you will be debt-free before you can even imagine. For this scheme to work, put your extra shift money into the debt repayment. These extra hours are not permanent. Once you have paid-off all the debt, just sit back and relax. You will be back to your normal routine.
- Make settlements with creditors
Debt settlement is also the solution if your accounts are past due or you owe more money than you could repay over a few years. Ask the creditor to accept a one-time, lump-sum payment to satisfy the debtor. Sometimes, creditors who agree to a settlement offer also agree to cancel the rest of the debt, but they typically accept these offers on accounts that are in default or at risk of defaulting.
- Speak with a credit counselor-it’s free
If you are really struggling with your debt and you cannot manage anymore, try credit counseling. It’s absolutely free. They will help you in finding programs that can help to deal with your debts. A reputable and honest credit counselor will explain all the options that you can avail to clear your debt. Many people do not know about the debt-repayment programs but are relieved when they come to know about it. Speaking with a non-profit credit counselor about your options is confidential, non-judgmental and a better escape.
If the debt repayment has drained all of your savings, it’s time to build your savings again. Before you pay for anything else, put aside some money into your saving account. The secret to increase your savings –whether it’s earmarked for your emergency fund or another savings account-is to pay yourself first.
Here are few tips to paying yourself first to increase the savings.
- Make a habit to save every month. It doesn’t matter if you save a single penny every month; it’s about commitment you make. If you make it a habit, it will help you towards a healthier financial future.
- Consider saving as the necessary work. Make it a priority in your monthly budget.
- When you reduce or eliminate an expense, or save any money on grocery or shopping, put it in the savings account. Any fund, bonus, raise you get should be put in the saving account.
- Always go for the job that gives you maximum benefits for example a good life and health insurance, any extra favor, free transportation etc. The less you pay for these extra things, the more you will be able to save for yourself.
You already know a lot about credit cards. You’ve heard that consumer debt in this country-particularly credit-card debt-is at an all-time high, while our savings rate is lower than ever before. You realize that the boom in online shopping, with its absolute dependence on credit cards, is further fueling their use. You are well aware that running a balance on your plastic-and paying the unconscionable interest rates that come with it-is one of our most basic and widespread financial blunders. And you suspect that the sheer volume of direct-mail credit-card solicitations with low teaser rates must be devastating the forests of northern Idaho.
Still, credit cards are a fact of 21st century life, and it only makes sense to understand how to use them wisely. While it’s probably impractical to keep all plastic out of your wallet, it is prudent to limit the number of cards you have, and, of course, to pay all balances in full every month. Indeed, having only a traditional American Express card, which doesn’t allow you to carry a balance, can be an excellent way to impose fiscal discipline on you and your family-although, as the Visa ads point out, not everyone accepts American Express. For the rest of us, who do occasionally dabble in credit-card debt, here are a few ways to keep your habit under control.
1. Take advantage of frequent-flier programs tied to credit cards.
One must keep in mind that interest payments on a high balance can quickly turn “free” flights into outrageously expensive ones. At a dollar per mile, running up a debt of 25,000 may get you a plane ticket, but it will also saddle you with $4,500 in yearly interest payments, assuming an 18% annual rate.
2. Look very closely at credit-card offers before you bite.
Obviously, most of those 2.99% and 3.99% rates will be in effect for only a few months. But there may be other catches as well. Making a late payment, even if it arrives only a day after it was due, may immediately trigger a permanent rate hike. Also, low initial rates sometimes apply only to transferred balances, and you could get charged a fee for making the transfer. Check, too, to see whether there is an annual fee, or charges for exceeding your credit limit or even for closing an account.
3. Avoid amazing grace-period tricks.
What you’re looking for is a provision that says you’ll never be charged interest as long as you pay your bill in full by the due date. But some cards have no grace period, calculating interest from the moment you make a purchase, while others give you only a limited time after making a charge before interest is imposed. That period of 20 days or so may end before your payment is due.
4. Don’t forget to cancel cards you no longer use.
If you don’t, they’ll show up on your credit report, and that could be a problem, particularly if you’re applying for a home mortgage. Your would-be lender may be reluctant to make a loan to someone who has a cumulative credit-card limit of $50,000, $100,000, or even more.