This article will highlight the most important and interesting facts in our guide.
Topic 1: Inflation
Many people never knew that globally, salaries are expected to outpace inflation by 1.9 percentage points on average. Highest salary rises are expected in Venezuela; lowest are forecast in Germany. Greatest salary increases after inflation are likely to be in Latvia; lowest projected to be in Puerto Rico.
Globally, salaries are expected to rise by an average of 5.9% next year - 1.9% above inflation - according to a study by a global leader for HR and related financial advice and services. Pay increases tend to change significantly around the world, depending on inflation, economic growth and unemployment. Companies need to be aware of these market differences when setting compensation budgets and deciding how to allocate resources to create the greatest return on their investment.
However, inflation tend to outpace interest given by banks. We will not be earning much money input even if we just depend on putting our savings into a bank because of inflation.
Topic 2: Credit cards vs Debit cards
The following sections will illustrate the key two main differences between a debit and credit card.
When using a debit card you deduct money straight from your bank account, with a credit card, you pay later, like a loan.
There can be a certain limits with regard to how much you spend to both cards, depending on the bank or the organisation which issues the cards.
Debit cards are like checkbooks, but they are convenient because you do not have to carry cash or a checkbook. You need not show identification nor pay any interest charges. It is very important to keep records, like receipts and entries into your checkbook. Credit cards are like loans, they buy you extra time to get the money paid.
Under federal law, under the event of someone stealing your credit card, you need to pay the first $50 of unauthorized charges. If you notify the the company that issues before the thief makes any charges, you may not need to pay anything. For debit card, you need to pay the first $50 of unauthorized charges, but only if you notify the company that issues the card within two business days. You are given 60 days from the time your bank statement is mailed to report the case.
When do we use credit cards or debit cards?
For debit cards, you are able to keep tabs on your budget through your bank account. We often overspend with credit cards as through impulse buying we often loose track of our spendings and fail to keep tab with the credit card company.
It is advisable to limit your use of debit cards to small types of purchases, but for more expensive or online/phone purchases, credit cards offer much more protection and allows you to make arrangements or stall time before you are being charged.
Topic 3: Saving and Spending
These two will usually go hand in hand. You save most of what you do not spend.
The most important thing to note while initiating spending and saving is to a solid plan to map out:
1. your budget, ie. income
2. your expenditure, ie, what you plan to buy
3. your spendings, ie. what you tend to splurge on while going shopping
4. your debts. Debts, especially credit card debts should be cleared as soon as possible to prevent a debt build-up in the future.
Remember to set aside additional money if you expect rainy days to arrive. This may be in the event on a steep hike in inflation, economic slowdown or currency drop.
When spending think more about your needs than your wants. This will be illustrated in the saving section.
Every millionaire has one thing in common: they do not spend needlessly. In the 2007 Annual Survey of Affluence and Wealth in America, some of the richest people had spent their money with a "middle class mind set". Saving up is definitely one way of accumulating your wealth!
Topic 4: Get Started on Stocks
Have you no inking on how to get started on investing? Here's a general step-by-step guide.
Step 1- Picking up Stocks
Select a company and ensure they are publicly traded companies by checking the labels of their products. Get details of company names and the quality of the company from your families and friends.
Step 2- Stock Buy List
Identify the stock symbols for the company. Check the company web site to check on the company's performance and make your stock purchase.
Step 3 - Setting up and monitoring a Stock Portfolio
Name your own portfolio and set it up! Set a goal of the total amount of returns you would like to have. Get a daily update of your portfolio profits or losses though the company's web site.
Step 4 - Sell your stocks!
Check your final rate of return from your investment, the money you started with, your monthly contribution, and if it tallies with your goal.