“Your salary is credited”.
This message on your phone when it’s the month-end is the key to happiness in every employee’s life. While it feels tempting to spend all the money on your wishlist, it’s important to understand the concept of investing and saving.
Investments and savings are directly related. If you invest in your savings regularly, it will give you good returns after a certain period of time.
It also helps you to manage your monthly expenses which can become an issue for most people. Speaking of which, most people actually don’t know the correct way of saving their money.
According to a recent survey, 25% of respondents confessed to having no emergency savings at all. That is not at all a good figure, considering how many jobs get lost in a matter of days when a pandemic like Covid-19 hits the world.
The correct way of saving is by dividing your income into wants and needs and saving the rest to an emergency fund. This emergency fund should be enough to sustain you for the next 3-4 months. Still confused, how to do it?
Then let’s check out these 8 effective ways to save money.
1. Prepare a budget
Preparing a budget prior to receiving your monthly salary will do half your work. When you make a budget for yourself, it will help you figure out how much each part of your lifestyle can be maintained at a minimal cost.
It can be entertainment, leisure, food, groceries, rent, electricity among others. By giving you the idea of where you are overspending, it will further help to come to a plan where you’ll be able to limit your spendings on unnecessary items.
2. Track down your savings
Apart from making a budget, tracking down your savings also becomes immensely helpful when it comes to saving. It targets your psychological reaction to make you aware of your expenses. This reaction makes you more focused on your prepared budget and hence saves your income.
There are several apps available on the internet that can help you record your expenses, track them, and notify you from time to time.
This can also be very helpful in the month when you will sit down with all your credit cards and bank statements to prepare a new budget.
3. Find ways to cut down expenses
There are always certain areas of your life where unnecessary expenditure happens. You might have already got the idea as this line ends. So, now that you have got it figured out, find a way to reduce that expenditure.
Delete any unnecessary subscriptions to newsletters, groups, Netflix, and gym (maybe). You will be surprised to see how much money you will save at the end of the month.
4. Set goals
Develop some short-term and long-term goals – both must be different. Short-term goals must allow you to spend the whole month without any roadblocks, fulfilling insurance payments, investing some amount every month, being financially stable, and more.
Whereas long-term goals must be buying an asset (car or land), gaining returns from investments, paying lower insurance premiums, having enough emergency funds.
This list can vary according to what kind of life you want to live. But make sure you do this important step. It will keep you focused on your path and push you to hit your goals consistently.
5. Use credit cards
Credit cards are the most amazing tools you can use to save up your money and also help yourself out in the future.
Since there is a possibility of financial issues during the month, if you use the credit card you will have access to your needs immediately and then you can pay the amount easily at the start of the new month.
Also, maintaining a good credit score will accompany you to reaching your long-term goals such as taking loans for a car or a house.
6. Optimize a priority list
Make some priorities in your life that are financially related. It can be insurance or educational savings for your child or your next business venture.
Your priority list will help you tick off these issues and make it easier to enjoy the luxuries without any worries.
Over to you…
The key to saving money is to be consistent and practice self-control. Just doing these two things for the next 10 years will keep you tension-free for the next 60 years. So, start now!
5 Different Types of Insurance That People Should Own
Unexpected emergencies can happen unannounced to anyone. However, it is possible to protect oneself and the loved ones from the worst impacts of the financial crisis. There is an extensive range of insurance policies available. However, no one likes to spend more than they need to.
Selecting the right insurance type and the right amount is dependent on an individual’s specific situation. Different factors like age, lifestyle, employment benefits, children, etc., play a crucial role.
In a nutshell, the financial experts suggest 5 must-have insurance for everybody. Read on to know them!
1. Auto insurance
Despite significant improvements in road and auto safety, the number of deaths in traffic accidents is alarming. So, it is the most important insurance that everybody requires to have.
Auto insurance helps you in several ways:
- Cover the expenses resulting from an accident
- Safeguards against litigation resulting from an accident
- Protects vehicle against natural disaster, vandalism, or theft
However, the cost is determined by your specific circumstances like every other insurance. To get the best policy, compare rate quotes and coverage options of several policies. Additionally, check out regularly whether or not you qualify for lower rate insurance depending on your driving record, area, or age.
2. Life insurance
This is must-have insurance for those whose family is entirely dependent on their salary as it provides for a family in case of your unexpected death. The experts suggest a policy that pays around 10 times your yearly salary. However, everybody can’t afford such costs.
To calculate the amount of life insurance, consider factoring in these:
- Funeral expenses
- Mortgage payments
- Outstanding loans
- Credit card debt
- Child care
- Future college costs
Typically there are two types of life insurance:
- Traditional whole life: It can be used as an income tool and an insurance tool as well. As long as you keep paying the monthly premiums, it covers your life until death.
- Term life: This type covers you for a set period.
3. Indemnity insurance
This is a must-buy coverage for professions like doctors. It gives the coverage from third-party claims and financial losses under professional risks, including:
- Incorrect treatment
- Negligent misdiagnosis
- Legal defense costs
- Claims for compensation
- A third party bears damage
- Breach of confidentiality
When the costs associated with litigation and patients’ expectations for compensation are too high, the professional indemnity covers your finances as an experienced doctor.
The investment made in this policy ensures the finances are protected. You get to carry out your business smoothly. In addition, you don’t have to worry about cash flow constraints. We suggest you explore tailored and flexible indemnity insurance covers from insurance specialist Tego.
4. Long-term disability insurance
As per the statistics, 1 of 4 workers entering the workplace will become disabled and won’t be able to work before even reaching the retirement age. So, it is must-have insurance for workers.
Several employers offer long and short-term disability insurance that is a part of their workers’ benefits package. It is the ideal way to get affordable disability insurance.
However, if your employer doesn’t provide a long term policy, keep in mind these things when buying it all by yourself:
- Check out a policy that guarantees income replacement or around 40-70 percent of your salary.
- Disability insurance cost depends on different factors. However, the average cost is around 1-3 percent of one’s yearly earnings.
- Read the final print before you decide to purchase the insurance policy.
5. Health insurance
The next must-buy is medical insurance. It gives you the reason to visit the doctor for annual wellness checkups or occasional illnesses. Also, there is no chance of getting stuck with a huge bill when you or your beloved ones meet an accident or develop a chronic disease.
However, if your budget is very tight, consider purchasing a minimal policy; it is better than none. Additionally, the best and the most affordable solution is to purchase your employer’s health insurance programs.
The Bottom Line
The industry experts suggest life, health, indemnity, auto, and long-term disability be the must-buy 5 insurance for everybody. The best and the most affordable way to purchase them is through your employer coverage. If the employers don’t provide one or two of them, then get quotes and compare the best rates from different providers.
Explained: Cardano, The Cryptocurrency
If you go anywhere near the cryptocurrency trend, you probably will hear about Cardano, also known as ADA. While relatively nascent, Cardano is consistently gaining market share against its main rivals, Bitcoin and Ethereum. Whether you’re an investor interested in diversifying your portfolio or a hobbyist just diving into the blockchain rabbit hole, here’s everything you need to know about Cardano.
Cardano in a Nutshell
Cardano or ADA is a decentralized PoS blockchain network that was built to be more efficient than its PoW counterpart. PoS stands for proof-of-stake, which is a mechanism that rewards miners based on the portion of coins they have for that particular network that they are trying to mine from.
PoW, on the other hand, rewards miners who solve complex computing problems. Both PoW and PoS are necessary consensus mechanisms that allow for transaction verification without the need for a third party. As a PoS network, Cardano is able to conduct transactions and build its underlying ledger in a more energy-efficient manner.
The groundwork for Cardano started in 2015 by Charles Hoskinson, who is also the co-founder of Ethereum. It took Hoskinson two years before the platform was launched in 2017. Hoskinson studied analytic number theory at the Metropolitan State University of Denver and, subsequently, the University of Colorado Boulder. In late 2013, Hoskinson was brought into the Ethereum team as one of its co-founders alongside Vitalik Buterin.
Cardano’s Unique Attributes
As mentioned earlier, Cardano is a very energy-efficient and eco-friendly cryptocurrency as compared to coins running on a proof-of-work mechanism. In comparison, Cardano only uses about six gigawatt hours worth of energy as opposed to Bitcoin’s 130 and Ethereum’s 50 terawatt hours. Another way to visualize this difference in energy consumption is this – Bitcoin consumes as much power as Argentina while Cardano only consumes as much power as 600 American households.
Scalability is another advantage that this third-generation cryptocurrency brings. Cardano is designed to be able to handle large amounts of transactions per second. For reference, Bitcoin completes about five transactions per second while Ethereum completes around 15. Visa, however, completes over 1,500 transactions each second. During tests, Cardano was able to clock in at 257 transactions per second, which while nowhere near Visa’s 1,500 is still a huge improvement to Bitcoin and Ethereum.
Cardano’s Use Cases
Cardano’s potential use cases span across different industries. For instance, it can be used to securely store a patient’s health records, student records, and financial records in its blockchain network. And while Bitcoin and Ethereum also have these in their list of use cases, Cardano’s ability to do it in a faster and more eco-friendly manner makes it a more ideal alternative. To start using them, you’ll need to figure out where can you buy Cardano. A trusted platform, like SoFi can give you access to Cardano and a whole range of other digital assets.
There is still no clear path of adoption for Cardano and most other cryptocurrencies today. What is clear, however, is the fact that cryptocurrencies like Cardano are here to stay. Knowing what Cardano is and how it works will help you position yourself better from both a consumer and investor point of view.
How to Find the Right Bank for a Car Loan
Deciding to purchase a new vehicle is a big decision. Once you’re committed, it’s necessary to determine where you will get your auto loan from. You want to survey different lenders until you find the right bank that offers the most favorable terms.
Define What You’re Looking for First
Before you even start looking for auto loan lenders, it’s time to define what you’re exactly looking for. This means choosing a price range for a potential vehicle and knowing your maximum monthly payment. You should determine how long you want to take your loan out. Having all of this information adequately defined to start with can help to ensure that you find the right bank to fund a car loan that you’re comfortable with.
Don’t Go to the Dealership First
One of the biggest mistakes that many vehicle owners make is going to the dealership before looking into their financial options. It’s easy to get caught up in the experience of looking at new vehicles and wanting one. Before you know it, you may be signing loan paperwork with the dealership.
In most situations, borrowers will discover that dealership loan terms tend to be less favorable. It’s a good idea to check with other financial sources to determine what rates and terms they’re willing to offer you. You can compare them with the terms that a dealership may provide you with and choose the most favorable option for your budget.
Know Your Financial Options
Auto loans are available from many different financial sources. You have big banks, credit unions, online lenders, and so forth. It’s worth taking the time to evaluate all of your options before choosing one. You’ll want to consider many factors when assessing each offer.
First, you’ll want to ensure that you’ll be approved for the loan amount that you desire. Second, pay close attention to the interest rate and the term length. According to Lantern by SoFi, “The longer the loan term, the lower the monthly payments will be, but that means more interest will be paid over the life of the loan.” Many borrowers get caught up in auto loans that offer extremely long-term lengths because of their enticing low monthly payments. However, they end up spending way more on their vehicle than they truly realize.
Use an Online Marketplace
If you’re looking to refinance car loan or purchase a new vehicle, you should rely on an online marketplace. There are various sites like Lantern Credit that allow you to view various options from various lenders. This can let you assess the different interest rates and terms you can expect.
The best online marketplaces will have a short application. This helps to prequalify you for the specific lenders that can meet your auto loan needs. Instead of searching through countless banks, credit unions, and so forth, you can simply search an online marketplace. You’ll receive multiple options that you’re already prequalified for.
Gone are the days of simply heading to the dealership to get a new car. Nowadays, you have many auto loan options that you can take advantage of to get the best rates possible.
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