3 Numbers That Will Improve Your Financial Status

By Jenna Lee
culled from:usnews.com

Tackling these numbers may be painful now, but you'll be glad you did in the end.

You can't neglect a few key numbers if you want any chance of financial success.  

Our society is obsessed with numbers. We’re given numbered grades and GPAs all throughout school, we rely on numbers to track our weight and even our very identities are tagged with a Social Security number from the day we’re born.
We don’t blame you if you’re sick of numbers.
However, there are a few important aspects of your financial situation that you simply cannot ignore. Neglecting these figures could be catastrophic, but proactively working on them could lower your stress level, save you thousands of dollars and minimize future financial fiascos. While working on your finances may be painful now, it should be well worth your efforts in the end. So take a deep breath, and dive right into these three important numbers:
Debt Level
At the time of publication, the average U.S. citizen carries over $56,000 of debt, according to the U.S. National Debt Clock. How do you compare?
Unless you’ve scored a 0 percent interest rate on all your loans, the longer you avoid your debt, the more you’ll have to pay in the long run. If you’re sitting on a huge debt load, it’s best to address it as soon as you can.
How to improve: If you’re struggling with a large amount of debt, it’s best to formulate a game plan instead of making random payments and hoping to eventually pay down everything. There are a few popular strategies people like using. If you’re looking to save the most money, the Debt Avalanche method may be the best for you. This strategy involves paying off the balances with the highest interest rates first. On the other hand, if you simply need motivation to start paying off your debt, you may want to consider the Debt Snowball method instead. This strategy suggests paying off your smallest balances first, as you’re likely to feel good about paying a debt off and will want to continue paying the rest of your balances.
Whether you choose the Debt Avalanche method, Debt Snowball strategy or a completely different method, the main hurdle is simply getting started. Evaluate your personality and financial situation, choose what you think will work best and get started paying down that debt!
Credit Score
As far as numbers go, your credit score is probably one of the most important numbers that will ever be attached to your name. It may not seem that powerful, but as mentioned earlier, your score could actually cost or save you thousands of dollars, as it is used to determine the interest rates attached to your loans and credit cards.
How to improve: The first step to improving your credit health is knowing what factors are used to calculate your score. In many scoring models, the most important aspects include your on-time payment history, your credit card utilization rate (calculated by dividing your total credit card balances by your total credit limits) and how many derogatory marks you have on your report. Because lenders often care about those three aspects, making your payments on time and keeping your balances low are some of the best things you can do for your credit. In addition, pull your credit reports regularly, dispute any major errors that could affect your score and avoid making common mistakes like applying for too much credit or not using your cards.
Improving your credit health can take time, so don’t be discouraged if your score doesn’t go up right away. Just keep practicing good credit habits, and eventually you should reap the benefits of your hard work.
Savings Amount
A 2014 Gallup poll of over 1,000 adults found that 59 percent of American adults are worried about not having enough money for retirement, and 53 percent are worried about not being able to pay medical costs in the event of a serious illness or accident. In fact, people are more worried about retirement and emergency medical situations than not having enough money to pay off debt and not having enough money to pay for rent or a mortgage. If you lost your job today, would you be able to financially survive for a few months while you searched for a new one? Have you begun saving for retirement?
Starting to build retirement and emergency funds early in life could help ease these worries. Compound interest is a very powerful tool that can work to your advantage, and saving early could grow your money into amounts you never dreamed possible.
How to improve: In many cases, saving money is a matter of prioritization. If you automate your accounts to send money to your emergency or retirement fund before doing anything else, you won’t be as tempted to spend that money on things you don’t need. In the financial world, this is called “paying yourself first,” as you’re saving money before doing anything else with it.
If you have no money to save, evaluate where your income is going and see where you can cut back. Do you really need that daily morning coffee? Can you walk instead of driving to the local supermarket? Have you checked to see if there are any coupons for your purchases?
Alternatively, if you have some free time, why not put your talents and passions to good use and try to make some extra money? Fiverr and TaskRabbit are both great ways to make money on the side, and many consumers get paid to take surveys. The opportunities to save money are practically endless – all you need to do is go for them.
The Bottom Line: Whether you love numbers or hate them, one thing is clear: They can’t be avoided. However, by working on your financial situation now, you may be able to prevent financial catastrophes in the future.

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How to Manage Your Finances

culled from:wikihow.com

Part 1 of 4: Make a Budget

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   For one month, keep track of all your expenses. You don't have to limit yourself; just get an idea of what you spend money on during any given month. Save all your receipts, make note of how much cash you need versus how much you expense to credit cards, and figure out how much money you have left over when the calendar turns. 

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   After the first month, take stock of what you spent. Don't write down what you wished you had spent; write down what you actually spent. Categorize your purchases in a way that makes sense to you. A simple list of your monthly expenses might look something like this:
   • Monthly income: $3,000
   • Expenses:
     • Rent/mortgage: $800
     • Household bills (utilities/electric/cable): $125
     • Groceries: $300
     • Dining out: $125
     • Gas: $100
     • Emergency medical: $200
     • Discretionary: $400
     • Savings: $900
3. 
   3
   Now, write down your actual budget. Based on the month of actual expenses — and your own knowledge of your spending history — budget out how much of your income you want to allocate to each category every month. If desired, use an online budgeting platform, such as Mint.com, to help you manage your budget.
   • In your budget, make separate columns for projected budget and actual budget. Your projected budget is how much you intend to spend on a category; this should stay the same from month to month and be calculated at the beginning of the month. Your actual budget is how much you end up spending; it fluctuates from month to month and is calculated at the end of the month.
   • Many people leave significant room in their budget for savings. You don't have to structure your budget to include savings, but it's generally thought of as a smart idea. Professional financial planners advise their clients to set aside at least 10% to 15% of their total earnings for savings.^[4][5]
4. 
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   Be honest with yourself about your budget. It's your money — there's really no sense in lying to yourself about how much you're going to spend when making a budget. The only person you hurt when doing this is yourself. On the other hand, if you have no idea how you spend your money, your budget may take a few months to solidify. In the meantime, don't put down any hard numbers until you can get realistic with yourself.
   • For example, if you have $500 dollars allocated to savings every month, but know that it'll consistently be a stretch in order to meet that goal, don't put it down. Put down a number that's realistic. Then, go back to your budget and see if you can't tweak it to loosen up cash somewhere else, and then funnel it into your savings.
5. 
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   Keep track of your budget over time. The hard part of a budget is that your expenses may change from month to month. The great part of a budget is that you'll have kept track of those changes, giving you an accurate idea of where your money went during the year.
   • Setting a budget will open your eyes to how much money you spend, if they haven't been opened already. Many people, after setting a budget, realize that they spend money on pretty petty things. This knowledge allows them to adjust their spending habits and put the money towards more meaningful areas.
   • Plan for the unexpected. Setting a budget will also teach you that you never know when you'll have to pay for something unexpected — but that the unexpected will come to be expected. You obviously don't plan on your car breaking down, or your child needing medical attention, but it pays to expect these contingencies to happen, and to be prepared for them financially when they come.

Part 2 of 4: Spend Your Money Successfully

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   When you can borrow/rent, don't buy. How often have you bought a DVD only to have let it collect dust for years, without using it? Books, magazines, DVDs, tools, party supplies, and athletic equipment can all be rented for smaller amounts of money. Renting often saves you the hassle of upkeep, keeps room in your storage, and generally causes you to treat items better.
   • Don't just rent blindly. If you use an item for long enough, it may be best to buy. Perform a simple cost analysis to see whether renting or buying is in your best interests.
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   If you have the money, pay a high down payment on your mortgage. For many people, buying a home is the most costly and significant payment they'll ever make in their lives. For this reason, it helps to be in the know how to spend your mortgage money wisely. Your goal in paying off your mortgage should be to minimize interest payments and fees while balancing out the rest of your budget.
   • Prepay early up front. The first five to seven years of a mortgage are generally when your interest payments are going to be the highest.^[6] If you can, take your tax return and funnel a portion of it back into your mortgage. Paying off early will help increase your equity fast by lowering your interest payments.
   • See if you can't make bi-weekly payments instead of monthly payments. Instead of making 12 payments on your mortgage in a year, see if you can't make 26 payments on your mortgage instead. This will allow you to save thousands of dollars, provided there aren't any fees associated with it. Some lenders charge significant fees ($300 to $400) in order to give you the privilege, and even then only apply the payment once a month.
   • Talk with your lender about refinancing. If you can refinance your loan down from 6.7% to 5.7%, for example, while still making the same payments, go for it.^[7] You could knock off years on your mortgage.
3. 
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   Understand that owning a credit card may be very important for establishing credit. A credit score of 750 or above may unlock significantly lower interest rates and opportunities for new loans — nothing to sneeze at. Even if you rarely use the credit card, it's important to have one. If you don't trust yourself, just lock it in a drawer.
   • Treat your credit card like cash — that's what it is. Some people treat their credit cards like unlimited spending devices, running up balances they know they can't pay off and only making the minimum monthly payment. If you're going to do this, be prepared to spend significant amounts of your money on interest payments and fees.
   • Shoot for a low credit utilization. A low credit utilization means that the debt you put on your credit card is proportionally low to your overall limit. In plain English, that means that if you have an average monthly balance of $200 on your credit card but your limit is $2,000, the ratio of your debt to your limit is very low, about 1:10. If you have an average monthly balance of $200 on your credit card but your limit is $400, your credit utilization is going to shoot through the roof, about 1:2.
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   Spend what you have, not what you hope to make. You may think of yourself as a high earner, but if your money doesn't back up that statement, you're shooting yourself in the foot acting like you are. The first and greatest rule of spending money is this: Unless it's an emergency, only spend money that you have, not money that you expect to make. This should keep you out of debt and planning well for the future.

Part 3 of 4: Make Smart Investments

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   Familiarize yourself with different investment options. As we grow up, we realize that the financial world out there is so much more complicated than we envisioned as children. There are literally options to trade imaginary items; there are futures to bet on things that have not yet happened; there are sophisticated bundles of stock. The more you know about financial instruments and possibilities, the better off you'll be when it comes to investing your money, even if that wisdom consists only of knowing when to back away.
2. 
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   Take advantage of any retirement plans that your employers offer. Often, employees can opt into a retirement 401(k) plan. In this plan, a portion of your paycheck is automatically transferred to a savings plan. This is a great way of saving, because payments come out of their paycheck before it's cut; most people never even notice the payments.
   • Talk with your company's HR representative about employer matching. Some larger companies with robust benefit plans will actually match the amount of money you put into your 401(k), effectively doubling your investment. So if you choose to put in $1,000 each paycheck, your company may pay an additional $1,000, making it a $2,000 investment each paycheck.
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   If you're going to put money into the stock market, don't gamble with it. Many people try to day trade in the stock market, betting on small gains and losses in individual stocks every day. While this can be an effective way of making money for the seasoned individual, it's extremely risky, and more like gambling than investing. If you want to make a safe investment in the stock market, invest for the long term.^[8] That means leaving your money invested for 10, 20, 30 years or more.
   • Look at company fundamentals (how much cash they have on hand, what their product history is, how they value their employees, and what their strategic alliances are) when choosing which stocks to invest in. You're essentially making a bet that the current stock price is undervalued and will rise in the future.^[9]
   • For safer bets, look at mutual funds when buying stocks. Mutual funds are bundles of stocks collected together to minimize risk. Think about it like this: if you've invested all of your money in a single stock and the stock price plummets, you're screwed; if you've invested all your money equally in 100 different stocks, many stocks can completely fail without affecting your bottom line. This is basically how mutual funds mitigate risk.
4. 
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   Have good insurance coverage. They say that smart people expect the unexpected, and have a plan for what they'll do just in case. You never know when you'll need a large sum of money during an emergency. Having good insurance coverage can really help tide you over through a crisis. Talk with your family about different kinds of insurance that you can purchase to help you in the event of an emergency:
   • Life insurance (if you or a spouse unexpectedly dies)
   • Health insurance (if you have to pay for unexpected hospital and/or doctor bills)
   • Homeowner's insurance (if something unexpected harms or destroys your home)
   • Disaster insurance (for tornadoes, earthquakes, floods, fires, etc.)
5. 
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   Think about getting a Roth IRA for retirement. In addition to, or perhaps instead of, your traditional 401(k) plan — which is usually an employee retirement plan — talk with a financial advisor about getting a Roth IRA. Roth IRAs are retirement plans that let you invest a certain amount of money, and extract it, tax-free, after you turn 60. (Well, technically, 59 ½.)
   • Roth IRAs are invested in securities, stocks and bonds, and mutual funds, giving them the opportunity to grow significantly over the course of many years. If you invest in an IRA early on, the compound interest that you earn (interest on top of interest) will create significant increases in your investment.

Part 4 of 4: Build Your Savings

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   1
   Start by holing away as much of your expendable income as possible. Make savings a priority in your life. Even if your budget is small, tweak your finances so that you save around 10% of your total earnings.
   • Think of it like this: If you manage to save $10,000 per year — which is less than $1,000 per month — in 15 years, you'll have $150,000. That's enough money to put a kid through college, start a nice nest egg, or put a significant down payment on a wonderful house.
   • Start saving young. Even if you're still in school, saving is still important. People who save well treat it more as an ethic than necessity. If you save early, and then invest that savings wisely, a small initial contribution can snowball into a significant sum. It literally pays to be forward-thinking.
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   Start an emergency fund. Saving is all about frittering away expendable income. Having expendable income means not having debt. Not having debt means being prepared for emergencies. Therefore, a rainy-day fund can really help you out when it comes to saving money.
   • Think about it like this: your car breaks down and you suddenly have $2,000 in extra payments. You didn't plan, so you have to take out a loan. Credit is tightening up, so your interest rates might be pretty high. Pretty soon, you're paying 6 or 7 percent interest on a loan, which cuts into your ability to save for the next half-year.
     • If you had an emergency fund, you could have avoided bringing on the debt, and the associated interest rates, in the first place. Being prepared really pays.
3. 
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   When you've started saving for retirement and put money in your emergency fund, put away three to six months' worth of expenses.^[10] Again, saving is all about being prepared for the uncertainty of it all. If you're unexpectedly laid off work, or your company reduces your commission, you don't want to take on debt in order to finance your life. Setting aside three, six, or even nine months' worth of expenses will help ensure that you're in the clear, even if disaster strikes.
4. 
   4
   Begin paying off your debt once you're established. Whether it's credit card debt or debt left on your mortgage, having debt can seriously cut into your ability to save. Start with debt that has the highest interest rate. (If it's your mortgage, try paying off larger chunks of it, but focus on non-mortgage payments first.) Then, move onto your second-highest rate loan, and begin paying that off. Move down the line, in decreasing order, until you've paid off your entire debt load.
5. 
   5
   Begin really ramping up for retirement. If you're getting to be that age (45 or 50), and you haven't started saving for retirement, it's really important to start ramping up right away. Make your maximum contributions to your IRA ($5,000) and your 401(k) ($16,500) every year; if you're older than 50, you can even make so-called catch-up contributions if you want to pad your retirement savings.
   • Put a high priority on saving money for retirement — even higher priority than saving for your children's college education. Whereas you can always borrow money to help pay for college, you can't borrow money to help fund retirement.
   • If you're totally in the dark about how much money you should be saving, use an online retirement-savings calculator — Kiplinger's has a good one here — to aid you.
   • Consult a financial planner or advisor. If you want to maximize your retirement savings because you have no clue how to start, talk with a licensed professional planner. Planners are trained to invest your money wisely, and usually have a track record of return on investment (ROI). On the one hand, you'll have to pay for their services; on the other hand, you're paying them to make you money. Not a bad deal.

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10 Simple Steps To Financial Security Before 30

By Ken Hawkins

culled from:http://www.investopedia.com
Being financially secure enough to enjoy your life in retirement is the last thing on the minds of those under 30. After all, with the stress of all the expensive "firsts" that often come about during this period, like purchasing a car, buying a house and starting a family, it's hard to even think about saving for the future. However, working toward financial security need not be an exercise in self-deprivation, as many people assume. Attaining this goal even has some immediate benefits, as financial insecurity can become a serious source of stress - something 20-somethings have enough of already.
So can you achieve long-term financial security without sacrificing your short-term goals? Read on for 10 tips on how to do just that.
1. Have FunEnjoy yourself while you are young - you will have plenty of time to be miserable when you are older. Living a successful, enjoyable and happy life is about achieving a proper balance between time with family and friends and between work and leisure time. Striking a proper balance between your life today and your future is also important. Financially, we can't live as if today was our last day. We have to decide between what we spend today versus what we spend in the future. Finding the correct balance is an important first step toward achieving financial security. (For further reading, see Budget Without Blowing Off Your Friends.)
2. Recognize Your Most Important Financial Asset: YourselfYour skills, knowledge and experience are the biggest asset you have. The value of your future earnings will dwarf any savings or investments you might have for most of your career. Your job and future career is the most important factor in achieving financial independence and security. For those just entering the work force, future career opportunities are as bright as they've ever been. The large number of retiring baby boomers is expected to create labor shortages. There will be room for advancement as companies scramble to fill the positions held by these aging baby boomers. Those who are in a position to take advantage of these opportunities will benefit the most.
Look at yourself as a financial asset. Investing in yourself will pay off in the future. Increase your value through hard work, continual upgrading of skills and knowledge, and making smart career choices. Efforts to improve your career can have a far bigger impact on your financial security than tightening your belt and trying to save more. (To learn more, see Should You Head Back To Business School?)
3. Become a Planner, Not a SaverResearch has shown that those who plan for the future end up with more wealth than those who do not. Successful people are goal oriented: they set goals and develop a plan to achieve them. For example, if you set a goal to pay off your student loans in two years, you'll have a better chance of achieving this goal than you would if you merely said you wanted to pay off your student loans, but failed to set a timetable.
Become a planner. Set goals and develop an action plan to reach them. Even the process of writing down some goals will help you to achieve them. Being goal oriented and following a plan means taking control of your life. It is an important step toward improving your financial independence and security.
4. Set Short-Term Goals - Long-Term Goals Will Take Care of ThemselvesLife holds many uncertainties - and a lot can change between now and 30 years into the future. As such, the prospect of planning far into the future is a daunting task and in many ways, it's often an exercise in futility for young investors.
Rather than setting long-term goals, set a series of small short-term goals. These goals could be a simple as trying to pay off credit card debt or student loans in a matter of months. Maybe your goal is to contribute to your company's pension plan with a set salary reduction contribution each month. Setting short-term goals that will help you to advance in your career is important in helping you get ahead. Remember, these short-term goals should be measurable and precise. You can't win a race if there's no finish line.
As you achieve your short-term goals, set other short-term goals. Maybe you want to buy a house, earn a promotion at work or buy a new car. The constant setting and achieving of short-term goals will ensure that you reach your longer-term goals. If your goal is to be worth a million dollars by age 40, you cannot achieve this without first achieving smaller goals like having $10,000, $50,000 or $500,000.
5. Planning For Retirement: Fuggetaboutit?Just out of school, retirement planning is the last thing on your mind. So, if you have to for now, just fuggetaboutit. If you follow the other tips, you will not only be more financially secure and prepared in the short term, but you will also be financially prepared for the distant future as well. 
However, if you take a few steps now to start saving, like setting up automatic monthly contributions to a retirement plan like an employer-sponsored 401(k) or your own Roth IRA, compounding will work in your favor, which makes reaching your goal much easier.
If you implement this pay yourself first ideal, you won't have to worry about how much you're contributing; the most important thing is to develop the habit of saving. The rest will take care of itself. You can increase your contributions when your income rises or when you've achieved more of your short-term financial goals. (To learn why starting now can save you thousands later, see Understanding The Time Value Of Money, Compound Your Way to Retirement and Delay In Saving Raises Payments Later On.)
6. Make Sure Your Lifestyle Costs Lag Your Income GrowthMany new graduates find that in the first couple years of working they have excess cash flow. Still used to their more frugal student spending habits, it is easy to make more money than they need. Rather than using excess income to buy new toys and live a more luxurious lifestyle, this excess could be put toward reducing debt or adding to savings. As you advance in your career and attain greater responsibility, your salary should increase. If the cost of your lifestyle lags your income growth, you will always have excess cash flow that can be put toward paying down debt, making investments, saving for a home, or achieving any other financial goals you may have.
Where many people get into trouble is that they feel entitled to a standard of living that exceeds what they can afford. However, if you keep your standard of living below what you earn, you won't have to cut back to accumulate money; instead, you will naturally have excess cash flow because you earn more than you need to live on. In addition, keep in mind that trying to keep up with the Joneses is always a recipe for financial failure. For all you know, you may make more than the Joneses, who may be funding their lavish lifestyle with debt anyway. (For more on this topic, see Stop Keeping Up With The Joneses - They're Broke.)
The good life should be a reward for your hard work, good fortune and successful planning, not something that you are entitled to. Once you have established a certain lifestyle, it is psychologically difficult to lower it. It is very easy to raise it.
7. Become Financially LiterateMaking money is one thing; saving it and making it grow is another. Financial management and investing are lifelong endeavors. Making sound financial and investment decisions is important for achieving your financial goals. The more knowledgeable and experienced you are in financial matters, the fewer mistakes you will make.
Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life.
8. Seize the Opportunities: Take Calculated RisksTaking calculated risks when you are young can be a prudent decision in the long run. You might make mistakes along the way, but remember, mistakes are the lessons of wisdom. You often learn more from your mistakes than from your successes. Also, when you are young, you can recover faster from financial mistakes, and you have many years to recover. (Keep on reading about this in Retirement Savings Tips For 18- To 24-Year-Olds and Retirement Savings Tips For 25- To 34-Year-Olds.)
Examples of calculated risks might include moving to a new city with more job opportunities, going back to school for additional training or taking a new job at a different company for less pay but more upside potential. Starting a new company, working for a small startup company, or investing in high risk/high return stocks, is easier to do when you're young. Younger people can afford to take risk, and the same opportunities might not be available later in life. As people get older and assume more family responsibilities like paying off the mortgage or saving for the kids' education, many are forced to play it safe and are unable to capitalize on riskier opportunities that present themselves.
Taking calculated risks when you can afford to do so is necessary to get ahead financially. Playing it safe might be the bigger mistake in the long run.
9. Borrow Money For Investments - Never to Finance a LifestyleAs mentioned before with the Joneses, you should never borrow to finance a lifestyle you cannot afford. Using credit for a life you feel entitled to is a losing proposition when it comes to building wealth. The constant borrowing will assure that there is no money available for investing, and the added interest expense of borrowing further increases the cost of the lifestyle.
Borrowing money should be used only for investing - where your gain will outrun your borrowing costs. This might mean investing in the literal sense (for stocks, bonds, etc.) or it might mean investing in yourself for your education, extra training, to start a business or to buy a house. In these cases, borrowing can provide the leverage you need to a reach your financial goals faster. Borrowing to meet short-term desires is counterproductive. (To learn about your borrowing options, see Different Needs, Different Loans.)
10. Take Advantage of Financial FreebiesNot many things in life are free. If you belong to a company pension plan, take the free money it offers and make sure that you contribute at least up to the maximum of what your company will match.
You can also look for (legal) ways to take advantage of tax laws. For example, contributing to an individual retirement account (IRA) will result in a tax savings - in effect, the government is giving you free money to provide an incentive to contribute. There is also an incentive to invest in stocks because of favorable tax treatment on capital gains and dividend income.
ConclusionAchieving financial independence is a goal most people strive for. It is not necessarily easy, but it is achievable if you understand your priorities, set achievable goals and take the proper steps toward reaching them.

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A Student’s Journey to Finance His Way Through College – Kris Furbert

culled from:eselondon.ac.uk
“I knew if I wanted to do well in school I had to give up a lot, I had to make some hard decisions. I started working at the age of 10. I had two jobs in high school and was very independent. Most of the time when my friends were hanging out I was working, I don’t regret it because it made me the strong independent individual I am today.”
As 26 year old Kris Furbert, from St. George Bermuda closes his first year with the European School of Economics he reflects on his journey and discusses his educational accomplishments and how they’ve helped him become a strong independent individual.

After completing high school in Bermuda, Kris took out a loan from the bank and went to a boarding school in England. “I worked construction on my school breaks to afford my flights and to have enough spending money to last the term.  After I finished school I continued working construction and also at a bank to continue paying off my loans. Finally I got a job as a corrections officer for a correctional facility.”
Kris wasn’t satisfied with his job and wanted a change. He decided his short term goal was to earn his degree in Madrid and his long term goal was to find a career in accounting or finance but he didn’t have the resources to fund it. As a pro-active individual, he took an accounting course at Bermuda College and worked diligently earning high grades. “I was busy”, he admitted as he was still working and was also a member of the Bermuda National Rugby Team.
Upon completion of his accounting course at Bermuda College he immediately applied for scholarships from Government and private companies and was awarded three scholarships which gave him the opportunity to study at an international business school. “I was surprised at the responses I got from my applications and how well all of the interviews went.”
The first scholarship was from The Association of Bermuda International Companies (ABIC) and is awarded to students looking to work within Bermuda’s international business sector. The second scholarship was awarded by, The Bermuda Foundation for Insurance Studies (BFIS) who grant scholarships to individuals who wish to work within the insurance/reinsurance industry in Bermuda. As Kris’s career goal was to work in the finance field he was granted the award.
Kris mentions that the third was more challenging to obtain. “KPMG Bermuda, awards this to one individual every year who is looking to pursue a career in accounting. There were over 40 applications for the KPMG scholarship.”  A truly rewarding scholarship to earn it guarantees an internship with KPMG Bermuda during the student’s school holiday’s and automatically enrolls them into the KPMG Bermuda’s graduate program, where they fully support the individual on their way to becoming a Chartered Accountant (CA) or Certified Public Account (CPA).
“I chose ESE Madrid because I wanted to become fluent in Spanish. I think it will make me more of an asset to companies if I’m bi-lingual. Also, I like the flexibility to move to other campuses.” Through his course of study he began understanding and developing the fundamental skills to apply to his internship with KPMG Bermuda. He not only successfully completed his first KMPG internship but was asked to return in July 2013 for another.
Currently, Kris is preparing to begin an internship with XL Reinsurance in Bogota, Colombia. As an underwriting intern, he’s anxious and excited to spend two months with XL Re’s underwriting an Actuarial team and expanding his knowledge of the modeling systems and pricing methods for reinsurers.
Kris understood at an early age that with determination and hard work, anything is possible. He is a strong and independent individual on a path to success.
Please visit the ESE website for more information about studying for an undergraduate or postgraduate degree at one of ESE’s six centres worldwide, or about skills development via it’s international internship programme.

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6 Worst Financial Mistakes And Why You Made Them

culled from:investopedia.com

Good Intentions Can Become The Biggest Financial Mistakes

Your financial situation is a combination of every financial decision you've made up to this point. If you're like most, you have had very little or no coaching, so you're just learning as you go. This means while many of your choices may spring from good intentions, they fall flat as a result of poor planning or lack of knowledge. However, identifying your mistakes - and precisely where you went wrong - will help you avoid making more down the road.
 

1. Paying Off Debt With Savings

What You Were Thinking: The debt is costing 19%, the retirement account is making 4%, so by swapping the retirement for the debt you will be pocketing the difference.

Your Mistake: Withdrawing funds is easy, but it's very hard to pay back those retirement funds. With the right mindset, borrowing from your retirement account can be a viable option, but even the most disciplined planners have a tough time placing money aside to rebuild these accounts. When the debt gets paid off, the urgency to pay it back usually goes away. It will be very tempting to continue at the same pace, which means you could go back into debt again - but this time five years of savings will have been wiped out too.

If you are going to do it, you have to live like you still have a debt to pay - to your retirement fund. Keep that need-to-pay mentality you had with your credit cards, and create a plan to pay yourself back. 

 

 

 

 

2. Not Building An Emergency Fund

What You Were Thinking: Emergencies won't happen to you, and if they do, you'll make it through with the cash in the bank or by relying on unused credit cards.

The Mistake: Most households are living paycheck to paycheck and an unforeseen problem can easily become a disaster if you are not prepared. Many financial planners will tell you to keep three months' worth of expenses in an account where you can access it quickly. Employment loss or changes in the economy could drain your savings and place you in a cycle of debt paying for debt. A three-month buffer could be the difference between keeping or losing your house.

3. No Budget, No Plan

What You Were Thinking: Budgeting takes up too much time, it's boring and you don't go into debt anyway.

The Mistake: Your financial future depends on what is going on right now. People will spend 20+ hours per week on the computer or watching TV, but setting aside two hours a week for their finances is out of the question. You need to know where you are to know where you are going; this makes spending some time planning your finances a must.

 

 

 

 

4. No Insurance

What You Were Thinking: It won't happen to me and I don't want to be persuaded into buying something I don't need.

The Mistake: Medical conditions and deaths are never expected. The point of insurance is taking care of the people who depend on the income earner. If you live alone with no dependents, then you may not need insurance. If you have a family who depend on your income, then you should consider it.

5. Not Investing

What You Were Thinking: You have a hard time trusting others or you feel the markets are too risky.

The Mistake: If you do not get your money working for you in the markets or through other income-producing investments, you cannot stop working - ever. Making monthly contributions to designated retirement accounts is essential for a comfortable retirement. Take advantage of the tax-deferred accounts and your employer's sponsored plan. Understand the time your investments will have to grow and how much risk you can tolerate, then consult a qualified financial advisor to match this with your goals.

 

 

 

6. Ignoring Additional Income Opportunities

What You Were Thinking: My current job pays the bills and I don't want to take away from my personal time.

The Mistake: Nothing is guaranteed and everything comes to an end. Why wait until it's too late to do something about it? The bad times will eventually turn around, and jobs will be available. When you do have a decent paying job, cash in on your skills and earn as much as you can. It's fine to hold out during a recession, but when the economy is strong, get in there and get earning.

Worst Financial Mistakes

It takes many people a lifetime to build significant wealth, but it's much easier to lose it. It won't be one dip or one bad decision, but a combination of a good intentions followed by poor execution might make it almost impossible to recover. To avoid major pitfalls, start tracking where your money is, planning for problems, making more money and spending less. The bottom line is that you actually have to do it, not just think about it.

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4 Non-Traditional Ways to Finance a Business Purchase

By Bob House
culled from:inc.com

When traditional financing options aren't enough, many buyers must get creative in order to fund their small business purchase. Knowing how to utilize these newer, alternate types of financing can be especially important in today's tight lending market.

Securing traditional financing for a small business acquisition is rarely a slam dunk. Commercial lenders can be skittish about financing unproven entrepreneurs, and challenges relating to down payments and collateral can limit opportunities for seller financing or other traditional funding mechanisms (primarily, loans)
But a lack of traditional financing options doesn't necessarily mean that you have to call it quits on your ownership ambitions. Increasingly, business buyers are turning to newer, non-traditional financing techniques to fund the purchase of small companies and microbusinesses.
Alternative Financial Strategies for Business Buyers
Alternate non-traditional financing strategies allow you to secure relatively small amounts of capital using methods that fall outside of traditional lending or investment scenarios. Although many people assume that these financing sources are a buyer's last resort, that isn't always the case. In some instances, buyers pursue non-traditional financing because it offers benefits that traditional financing vehicles can't provide.
There are many different types of alternative financing opportunities available in today's business-for-sale marketplace. Some of the most common sources include:
Peer-to-Peer Financing
Peer-to-peer (P2P) financing networks are online investment platforms that appeal to buyers who can't obtain traditional financing because they may have a less-than-perfect credit history, or they simply want to speed up the loan process. Since P2P networks operate with low overhead, they sometimes offer lower interest rates than traditional lenders, and the administrative friction in the process can be a lot lower, and therefore faster, as well.
If you choose to go this route for a loan, you can do so via online companies like Prosper.com and LendingClub.com. On these sites, loan seekers request a specific amount (typically up to $25,000) at a specific interest rate, and lenders fund all or portions of the loan. Lenders are then paid back with interest over a set period of time.
P2P networks are just starting to gain steam with small business buyers, so do your research before you commit to a P2P funding strategy.
Crowdfunding
Over the past few years, crowdfunding has emerged as a viable funding strategy for would-be small business owners, creating opportunities to raise capital from large pools of contributors through sites like Kickstarter and Indiegogo.
In general, the most successful crowdfunding projects are rewards based. Since competition for dollars can be fierce, it's important to incentivize contributors with something of value, like early access to a product or service.
The drawback of crowdfunding is that it takes time and it can be difficult to attract enough contributors to meet your funding requirements. There is also some legal uncertainty about how the SEC will ultimately view and regulate these funding sources. But if you can pull it off, one of the side-benefits is that many of your crowd-funders will convert to customers after you have completed the acquisition, and you have already initiated the viral marketing of your new business.
Microfinance
Depending on how much capital you need, you may be able to finance your acquisition with a microloan. Microloans are different than traditional loans because they are smaller (usually $50,000 or less) and have shorter repayment periods (up to six years).
Small loan sizes mean that microloans can also be easier to obtain than traditional bank loans, making them an attractive financing option for buyers of micro or small businesses. Since commercial lenders typically don't offer these types of business loans, look for microfinance programs offered through the Small Business Administration (SBA) and microlending specialists like Accion.
401(k) Retirement Funds
It can be risky to use 401(k) or IRA savings to fund a business acquisition. But with the right strategy, it's possible to roll retirement savings into stock for the new business, circumventing taxes and early withdrawal penalties.
The upside is that you can leverage your own capital to fund the purchase of the business. But if the business fails, you stand to lose the money you were counting on to fund your retirement. Financing leaders in this space include Guidant Financial and Benetrends.
No financing mechanism is right for every small business buyer, and for some buyers non-traditional financing can be a big mistake. To avoid unexpected challenges, consult with your financial advisor, accountant, or business broker before you decide to utilize one of these alternative financing sources.

  

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6 Ways To Improve Your Financial Stability In 2015

by Melissa Burns






culled from:http://www.lifehack.org
Financial stability isn’t built in a day – it requires a lot of work and formation of correct habits. But before you can even start doing this work, you have to make some decisions and take action – and what time can be better for it than the beginning of a new year?

1. Eliminate Debts

If you have credit card, unpaid student loans and similar debt, you should try and get rid of them as fast as possible and avoid getting into further debt. Although sometimes getting credit may be beneficial (if you want to use it to make an investment), you should never ever, under any circumstances, get credit for consumption. If you can’t afford something pleasant right away, you shouldn’t buy it – it is as simple as that.

2. Create an Emergency Fund

Think about how much you spend on average every month. Then make it your first priority to put aside enough money to support you for at least 3-6 months in case you lose your primary source of income tomorrow. When you find out how hard it is to make it work, you will probably understand how dependent you are on your employer, which will serve as an additional motivation to work on financial stability.

3. Think about Auto Insurance

Is your car insured? If not, it is high time to get to it. You may say to yourself that you are a cautious driver, that you haven’t had a single accident throughout your life, or that you can’t afford it. But the truth is, you are not alone on the road. And while you can try to be the safest driver in the world, it doesn’t cancel the existence of all of the kinds of irresponsible drivers around – and all you have to do to get into trouble is to meet one. So study auto insurance quotes and make sure you’ve protected yourself against all eventualities.

4. Buy into gold IRAs

Gold is probably the only commodity that steadfastly withstood all the crises, recessions and perturbations the world sent our way – for the entire duration of the known history. If it is stability that you are after, then you have no better choice than gold IRAs – because in their case, you may be completely sure you are not going to lose your investments. Just make sure to steer clear of suspicious organizations, and you are going to be alright.

5. Save with your 401k

Many young people today put off the planning of their retirements until the last possible moment – which is the wrong choice, no matter how old you are. Moreover, if you start putting money away in your 20s, you will be amazed how much you will be able to save by the time you retire. So start immediately, and your best bet is probably your 401(k). Try to increase it to the maximum of what your company is ready to match – even if you have to live frugally right now, it will pay itself off in time. Do your research, protect your future.

6. Think about Your Family

However unpleasant the thought is, all of us are mortal, and sometimes that is evident in a more sudden and tragic way. If there are people who depend on you – your spouse, children, parents – you have to think about their financial stability in case something happens to you. Insure your life and health - write a will and don’t put it off.

You may think that in your life everything is alright and nothing can go wrong, that you have plenty of time to put off thinking about your financial stability. However, things happen – and you will do yourself a world of good if you start this year with making some hard and unpleasant, but totally beneficial, decisions.

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15 Warning Signs You Are Living Beyond Your Means

by Julia Melko


culled from;amerikanki.com

Nowadays most people are trying to improve their personal finances. Some people cut out unnecessary expenses, while others seek for some ways to increase their income. Living within your means actually makes good financial sense to be debt free. Check out these warning signs you are living beyond your means and start making some financial changes in your life right now.

1. You can’t pay bills on time

If you forget to pay your bills, it’s one thing. But, if you don’t have enough money to pay bills on time, you are overextended. Examining your spending habits and adjusting them can solve this problem. Perhaps, you can’t afford regular massages or weekly salon visits. So think it over.

2. Lack of a financial cushion

If you don’t have any savings account, it is one of the warning signs that you are living beyond your means. Money in the bank will support you after a job loss, a sickness and another emergency. When you live beyond your means, you spend all your money and you don’t think about saving them. Try to break this habit and you will free up money for a financial cushion. Eat out less, shop less and vacation less.

3. You’re constantly borrowing money

Do your family members or friends dodge your text messages and phone calls? Probably it’s because they know that you’ll ask for money. If your current income can’t support your lifestyle and you are always borrowing money, you are living beyond your means.

4. Housing ratio is higher than 28%

When you live within your means, your housing ratio is less than 28% of your income. To compute your housing ratio, divide your monthly housing expense by monthly income. You are living beyond your means if the ratio is higher than 28%.

5. Bad credit

Don’t think that the late payments are the only cause of poor credit. Too much consumer debt also affects your credit score. Even if you pay the bills on time monthly, your credit score never increases. So think of paying off your debt. Don’t rely on your credit cards since it can cause high credit card debt.
Read also – 8 Most Common Financial Mistakes You Might Be Making

6. You’ve exceeded your credit card limit

Have you ever maxed out a credit card? It’s a bad feeling, right? And when you have exceeded your credit card limit, it’s even a worse feeling, because now you are paying your bill, interest and over-limit fees. That’s a ton of money to put towards only one bill. Plus, it can lower your credit score.

7. You use your credit card to pay bills

Using your credit card to pay off your basic bills such as utilities or other credit cards’ bills is a red flag. And transferring balances from one card to another is also a warning sign of living beyond your means because you are not paying anything down.

8. You only pay the minimum payment

If you only pay the minimum payment every month, its’ one of the biggest sign you are living beyond your means. Paying the minimum won’t help you pay off your debt and you will be paying more in interest, and this can only add to the problem.

9. Denied new credit

If you do not have the cash, but you want a new laptop or flat screen television, you might apply for store credit. You think that you have enough income and you can afford the monthly payments. However, income is not the only factor that can determine whether you’re approved. The stores also take into consideration your existing debt. Denied new credit indicates living beyond your means.

10. Your credit balances are high

It’s okay to have more than two credit cards. However, if all of the balances on your credit cards are high, you are definitely living beyond your means. Moreover, if you have high balances it will prevent you from getting a new credit and it’s more difficult to pay off, thus you will end up paying tons in interest.
Read also – 8 Best Ways to Pay Off Your Debt Faster

11. You try to keep up with your friends

Does your best friend shop and vacation often? Do you try to keep up with her lifestyle? If so, you are probably living beyond your means. There is nothing wrong with a little fun, of course, if you can afford this fun.

12. You buy everything you want, even if you can’t afford it

Many people are guilty of this, including me. Although I write a good budget, sometimes when I get my paycheck, I spend all money on the thing I really want. Then, I end up living paycheck to paycheck, thinking where to get money to buy the essential things, including food. That’s hard to do. If you really want to buy something, try to budget for it. Don’t just buy it. You should always remind yourself that if you can’t pay for it with cash, you shouldn’t purchase it.

13. You spend more than 25% of your income on eating out each month

Do you know how much money you spend on eating out each month? If you spend more than 25% of your paycheck on eating out monthly, you are definitely living beyond your means. You might have a super busy schedule, but it doesn’t mean that you can’t cook at home. There are lots of healthy snacks and meals which are quick and easy to make at home. Meal planning can save you a lot of money.

14. You are saving less than 10% of your income for retirement

If you have not been saving at least 10% of your paycheck for retirement each month since age 25, that’s a red flag. Saving for retirement is among the most important things everyone has to do. Even if you are in your 20s, you need to start saving. The earlier you start saving for retirement the less you’ll need to put aside monthly to achieve your retirement savings goals.

15. You don’t have a budget

Finally, if you don’t have a written budget, you have a high chance of overspending your money and living beyond your means. A written budget shows if you’re spending more or less than you can afford. Start a budget now and you will see how much money you are actually spending and how much money you can save each month. This will help you live within your means without debts. If you have credit cards, make sure you keep track of the money spent with them too.

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