Managing finances wisely: A guide for young people

Finance tips for youngThe monetary system works well, which is why people all over the world have used money for thousands of years. Money has an agreed upon value, a standard by which worth is judged. Our standard is of course the dollar, and no one better than a young person knows the value of a dollar. Why? Because for you, dollars are hard to come by, easy to spend, and difficult to replenish.

Here is how a young person can stack these dollars by acting smartly

Start saving

Saving money is just plain easier if we’re saving for something. The thing we’re saving for is our goal. Our goal can be short-term or long-term, depending on the nature of the purchase. Generally speaking, short-term goals are easier to achieve because our aim is shorter. Long-term goals take years to achieve, but we all have to start somewhere.

Getting Credit

If the companies you want to borrow money from find out you’re negligent about paying your bills, if you’re always late, or always short, you’re going to have to pay more to borrow the money you want. That makes sense, doesn’t it? If you’re considered a risky bet, you have to pay more to borrow money. If on the other hand, you’re always on time, people will trust you more and you won’t have to pay as much for that car loan as the person who’s always late.

Automatic Savings/ Direct Deposit

Banks and other institutions know exactly how hard it is to save money. So they’ve come up with a tool to make it much easier. I’ve used automatic savings for years, and there’s no doubt that it’s helped me achieve some major financial goals. The only thing you need is a job and a bank account.

Here’s how it works:

  • Decide how much you want to save
  • Decide where you want this saved money to end up
  • Save money without worrying about it!

Every month, I have money deducted from my paycheck and deposited into a variety of accounts. The money goes its way without my ever seeing it, in other words, it never makes it into my paycheck, so I don’t have to face the pain of writing a check, or even worse, depositing cash. You sign up in one of two ways. You can contact your human resources office, who should be able to send the money where you want it to go. And if you go from the direction of where you want your money to end up — say you want to open an online savings account and also fund your Roth Individual Retirement Account, then set up the accounts and have those institutions contact your bank account.

Value Investing

Your aim should be to buy good solid companies whose prices are within your budget. You are to then hold those companies until investing in them no longer makes sense. When does investing in a company make no sense? When their fundamentals — how they run their company — are not good, or when a company’s stock price is so expensive that it’s simply too late to count on any further upward momentum.

Look for impressive dividends

Some companies’ dividends are impressive indeed, and if their fundamentals are sound, I suggest that you own a piece of those companies. If it’s a great stock, like Apple was once upon a time, when it cost less than $20 per share, then you hold onto it and don’t ever let it go. Things that make us rich are a blessing, and I say that without one bit of hesitation. Having money in abundance is something to be grateful for, and if we’re able to earn money even while we’re sleeping, we’ve got the right idea.

So, what’s your investing motto? Buy good companies cheaply. If the company offers you the option of re-investing your dividends, act like you’ve got some sense and re-invest them. Buy and hold. Buy and hold.
Here’s what you look at carefully when you’re considering whether to buy shares of a company:

  • What is their market capitalization; i.e., how much is the company worth?
  • How much debt do they carry?
  • Who runs the company? How long has this person been on board?
  • What is their price to earnings ratio?
  • What do they produce, and is their future outlook rosy or bleak?
  • How many employees do they have? Are the employees treated well?
  • How long has the company been in business?
  • What is the outlook for the future?

How do we as individuals and nations keep up with rising prices when our incomes aren’t keeping pace? We can’t. Not as long as we don’t make a decent amount of money with our investments. Life is scary, unless you just sit around in an easy chair all day. We have to get out there. We have to take risks.

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Managing Your Medical Bills

Medical expensesAny person, who has ever undergone a major surgery or was forced to spend several nights in a hospital bed, will likely remember the mountain of paperwork they had to fill out, in order to ensure their insurance coverage would be effective at the time of the procedure. At the same time, health insurance policies can be very complicated, and it is not uncommon for many individuals to be confused by their insurance provider’s explanation of benefits. Oftentimes, it is not until several weeks – or even months – later, when all medical bills are forwarded to the patient, that paperwork errors are finally discovered. Unfortunately, it usually also becomes more challenging to correct these errors after the bills have already been processed by your insurance provider. However, you may still be able to fix any discrepancies, as long as you keep a good record of all the procedures, tests and other medical services that were provided. In addition, there are several great tools that can make the process of managing all of your medical bills a lot easier and far less time-consuming.

  • Managing your Medical Bills: Errors, Clerical Mistakes and other Discrepancies

According to the Medical Billing Advocates of America, as many as 80% of all medical bills contain errors and mistakes that ultimately lead to higher bills, as well as higher insurance premiums. The mistakes can range from double-billing for individual procedures, charging for exams with contrast when none was used, and even decimal point mistakes that convert a minor $100.00 dollar charge to a major $1000.0 expense. Furthermore, these mistakes will very rarely occur to the advantage of the patient, and hospital accounting staff members seems to be far more diligent when it comes to catching errors that go against their employer’s best interest. Consequently, checking the bills for clerical errors is the first, and the most important step of managing your medical bills.

  • Claims, Billing Statements, and Explanation of Benefits: What is the Difference?

Currently, when any medical service is provided to a patient that has health insurance, the billing is usually forwarded directly to the insurance provider that settles the claim, and the patient may – or may not – receive a billing summary from the insurer. However, the summary will only serve as the explanation of covered benefits, and will not be the bill itself. For example, if your insurance decides not to cover certain procedures, they may notify you about it, but you will not be liable for any remaining balance until you receive another bill directly from the medical provider. However, it is still important to check the bill received by your insurance company for any errors, and you should request a statement listing all of the services provided on the specific date in question. You should then compare this list against the report you receive from your insurer, checking for any discrepancies in terms of care received or dollar amounts charged. It is also important to keep these statements together with your personal medical record, in case you need to dispute any claims several months after the medical services have been rendered.

  • Taking Advantage of Online Services Provided by your Health Insurance Company

Many health insurance providers in the United States including all the major providers, now offer online services to their clients that allow them to check the status of their claims from their home computers. In most cases, you will first need to make an online account using the insurance information from your card. Once that is all done, you will be able to access the list of currently pending claims, as well as those that have already been settled with the medical provider. However, you must realize that it can often take several weeks for the provider to notify your insurance about any services you have received, and the claim information will not be immediately available.

  • Other Management Tools Available Online

In addition to the services provided directly by your medical insurance company, there are several apps that can help you manage your medical bills. One of the more popular ones is Simplee – a free online service that can act as a database of medical records, claims and other insurance information. The service is also able to automatically spot errors such as duplicate entries, or eligibility issues, as well as predict your insurance coverage for specific treatments. Although the service was introduced only two years ago, it has rapidly grown in popularity, and – especially considering its automatic error detection – its number of users is only expected to further increase in the future.

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DIY Plan: Ingenious ways to manage your credit card debt to attain financial freedom

Credit card debt burdenIn this tough economic situation, the livelihood of common man has become miserable. After the recent financial collapse, a large number of people suffered job loss or wage deduction. The condition of the economy is not strong enough to bring over a complete revival of the job market. So, many people are still unemployment. In this scenario, most of them failed to pay of their credit card bills on time and incurred overwhelming debt. If you’re in a similar situation, then you can come out of the debt rut by managing your credit card debt. You’re not required any help from the professionals to come out of this financial maze as you can do it on your own by following some of the simple steps.

Here are some of the important points that you need to consider when you plan to pay off your credit card debts on your own:

Step 1.

Budgeting- A key mantra: It’s needless to say that if you’re planning to manage your credit card debt, you need to start with a budget plan. Well, budgeting is considered to be a key tool to get out of the debt rut. When you’re on a budget plan, it can be easier for you to track your expenses. You can understand where you’re draining your hard earned money. You can avoid splurging when you’re on a budget plan. As a result, you can manage to save considerable amount of money when you’re on a budget plan. Make sure you modify the plan in accordance with the financial situation.

Step 2.

List of the owed amount: Once you formulate a pragmatic budget plan, your next job is to review your financial state. You’re required to prepare a list of the owed amount in descending order of the interest rate. Preparing a list of the owed amount can make it easier for you to pay off the debt.

Step 3.

Approach the creditors for negotiation: You can negotiate with the creditors to lower the interest rate on the principal balance to make the owed amount affordable to pay off. If the creditors don’t agree to negotiate, then you can threaten them to file bankruptcy. In most of the cases, this trick works and you can manage to lower the interest rate on the outstanding amount. Once your interest rate is reduced, you can actually manage to lower your monthly payment.

Step. 4

Avalanche method of payment on the debts: Make sure you prepare a list of the owed amount in descending order of the interest rate. Start paying the high interest debt on top of the chart. Make more payment on the high interest debts, in the meantime make payment on the remaining balance. Once you pay off the high interest debt, start working on next on the list. Try to continue the process diligently unless you pay off the debts in full.

Step 5.

Avoid the use of the plastic: When you’re working on paying off your debts, try to avoid the use of cards. In most of the cases, you find the consumers are tempted to spend when they find teaser offers on the card. Therefore, keep aside your card and spend cash. When you use cash instead of cards then it can be easier for you to stay within your means.

Step 6.

Increase your income: Look for a part time job to make more money during your spare time. You can work as a freelancer or start your own home based business to make some extra cash. You can use the extra money to pay off your debt and regain financial freedom during tough economic situation.

Therefore, you’re required to keep the above mentioned points in mind when you plan to manage your credit card debt on your own. Once you pay off your debts yu can regain control over your financial situation.

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