FINANCIAL TIPS

I WANT TO MANAGE MY MONEY BETTER

If you are already using your bank's online banking services, you might want to ask your banking representative about online account management. You can combine the convenience of online banking with personal budgeting software and you may find it easy to reconcile your accounts and track your budget over time.

You could review your budget each year to make it fit in with your financial goals, both long-term and short-term.

Too many people wait to start investing because they think they need a large sum of money to begin with. On the contrary, investing is wise for anyone, at any time, with any level of financial know-how. Even if you start with US$25 or US$30 per week, you will see your investment accumulate. You should start with what you can, invest it prudently and watch it grow. This is time-honored investing wisdom.

If you are a long-term investor, called 'buy-and-hold' in the industry avoid the temptation to check your stocks, bonds and mutual funds every day. Chances are, they will be a lot of volatility and you might be fooled into acting on a short term event.

You could use an automatic savings plan to make sure that you save a percentage of your pay check every payroll period. If you invest $100 a month in a mutual fund, you could have as much as $20,000 in ten years, depending on the rate of return.

You do not have to be an expert to be a successful investor. What you do need is a bit of discipline to ensure that you are contributing money regularly and keeping an eye on its progress.

One of the most practical investment approaches is dollar cost averaging. This is ideally suited to individuals with steady incomes who are able to invest a fixed amount regularly over years. Dollar cost averaging involved buying equal amounts of an investment at regular and continuing intervals, whether annually, semi-annually, quarterly or monthly. The simple arithmetic principle involved is that the same amount of money will buy more shares when the price is low than when the price is high. Conversely, investors may want to consider systematically cashing in some of their investments (e.g., in retirement).

You should use your budget to identify a major expense that you can forego or minimize. For example, travel and home furnishing purchases can be delayed in the name of economizing without making a major difference in your standard of living.

The way in which your investments are taxed can make a significant difference to their attractiveness. Capital gains and losses (changes in the value of an investment), dividends and interest all have different tax treatment in different countries.

In addition to just using your credit card less, there are many ways to cut your credit card costs, e.g., switching to a card that charges lower interest rates or lower fees. Credit cards are not a good way to borrow - the interest rates are likely much higher than those on most consumer loans.

I WANT TO PROTECT MY FAMILY AND MY BELONGINGS

Life Insurance is a key estate-planning tool. In addition to providing for the welfare of your survivors it can be used to finance the payment of estate taxes, pay funeral expenses and pay off debts.

Travel medical insurance is a must for anyone traveling regularly outside the country on business or pleasure. Either for a defined period, or for full annual coverage, travel medical insurance covers you for emergency medical care and transportation if you become ill while away.

Estate planning is the process of arranging for everything you own, minus your debts, to be dealt with in accordance with your wishes upon your death. The first step is making up a Will that documents your instructions. There is a common misconception that estate planning is just for the wealthy, the elderly or people with large families. This is not true. Every adult should have a well-defined estate plan, no matter what their age, family status or financial worth.

Be sure to revisit your estate plan every two to three years and when there is a major change in your life such as marriage, divorce, new child, grandchild, children reaching age of maturity, change in assets or change in tax laws.

I WANT TO BUY A CAR, BOAT, OR OTHER MAJOR PURCHASE

An essential part of financial well-being is being prepared for the major events in life that have significant costs. Some of these are inevitable, like retirement, family education and housing. Your top priority should be to have plans in place to ensure you are ready for these events.

I WANT TO PAY FOR MY CHILD'S EDUCATION

What happens if your child does not go to college or university? While this might be a disappointment, you might find that you have a young entrepreneur in the family that wants to start a business or take a stake in an existing one. Think of their education fund as an opportunity fund that can support your children's plans for their future - however they define it.

Even if you're saving and investing for your child's education, encourage them to earn and save money on their own in preparation for their university or college years. Summer jobs and part-time work can help them build a college-fund account that will give them extra spending money when the time comes. This also helps them develop a good attitude towards spending and saving.

I WANT TO LEAVE AN INHERITANCE

You should not store your Will only in your safety deposit box. These boxes may be sealed on death and can cause significant delay in dealing with your estate. A copy may be kept in a home safe with your other important documents with the Executor or Spouse.