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Archive for the ‘Finance’ Category

No romance without finance is a sentence that is so popular. It has been heard all over across the world and, in many ways, it is really sad. No romance without finance simply shows how material today’s society has become. Love is being measured in terms of money and material things. Love and money have a very close association. Romance is something that is sold by some people. However, it will depend on your definition of romance. If you describe it as a good time leading to sexual pleasure then, prostitutes will be people who sell romance for finance. However, the sentence is mainly used to describe normal relationships where girls or young men get into relationships just for money. This is pretty common with young ladies today. If a man is not able financially, there will be no love to speak about. Has society become misguided or are the girls just realistic? This is a question to be answered individually. On the flip side, let us examine some of the legitimate factors which may lead young girls to prioritize finances.

No romance without finance emanates from the need to insist on responsibility. Many young men today have put the issue of responsibility on the back seat. For a girl to feel secure, the man must appear to take up the role of being a man and provide for her. When a man does this, they will be in a position to be labeled as promising in regard to life in a family setting. A relationship is serious business and, it shows how a man can be when you are together in marriage. Every girl wants a man who can provide and, this is one of the reasons why girls will say there is no romance without finance. Money has always been a motivation to many things and, girls will use this to get into financial bliss. In all honesty, we would all love to have an easy life and, when the ease is brought by a partner, well and good. Love and money do not mix very well and, it is vital for you to be objective in this regard. Many girls are gold diggers and, this is a fact that is not surprising at all. When girls or women are looking to enrich themselves through relationships, the value of love goes down. The depth and sanctity of romance is abused.

The saying no romance without finance has greatly tainted love. Most men with money are finding it very difficult to really trust girls. Love has really become elusive and, it is really hard to recognize the real thing. It is therefore very necessary to look at yourself as an individual. You need to keep a focus on what matters most to you. You need to be judged according to what your hearts holds dear. If you fall in love with a person who is not well up, will you dump them for money? These and more questions need to be answered by you. The best thing is to look for the real thing not just the finances. However, if your goal is just to be stable financially, you will go for what you are looking for.

Saving money can begin by taking little steps to control unnecessary spending. One of the problems that arises when attempting to control unnecessary spending is that we are not always aware of how much money we actually spend. There are a few things that can be done in order to get a handle on unnecessary spending in order to save money.

1. Set up a monthly budget

We have all been told this at one point in time or another – budget your money. In general, we all know the basic things that need to be in our budget – rent or mortgage, utilities, credit card payments, car payments, insurance payments, gas money, food expenses, clothing allowance, savings allowance and an entertainment or miscellaneous allowance are just some of the major budgeting areas.

When setting up a monthly budget, however, many of us simply are not as detailed as possible and at the end of the month we spend more money than our budget actually allows, usually in the form of credit card expense, which costs us more money in the long run with interest rates.

While some areas of our budget are already predetermined, other areas can be micro-managed. These areas include our food expenses and our entertainment and miscellaneous expenses. Many times we don’t realize just how much we spend on food or other expenses because we don’t take the time to save those receipts and calculate just how much we spend. This is a mistake because without doing so, we cannot see just how much we might be spending unnecessarily.

2. Get Rid of Unnecessary Spending

To get rid of unnecessary spending and start saving more money, take a month and collect the receipts for everything you spend money on, even if it’s as small as a candy bar. Create a spreadsheet that lists each item you spent money on, how much you spent and why you spent that money. Then go through and decide whether that expense was necessary or unnecessary.

Deciding what is necessary and unnecessary can be a difficult task. The way I go about making this decision is based on whether I can change some of my habitual spending in order to save money. For instance, looking back at how much money I spent on food, I realized that I had spent a total of $105 on breakfast last month. Why? Because rather than eat breakfast at home, I decided that it was easier to stop in at some drive-thru and pick up breakfast.

Had I made the same breakfast at home everyday, I would have saved approximately $65. This was just my savings on breakfast alone, when I did the same thing for lunch and dinner, I realized that by changing my habits I could have saved about $300 on my food expenses alone. When I applied the same calculations on my coffee drinking habits, which is not as great an expenditure for me as it is for others, I realized that I could save an additional $50 a month.

This technique may seem like a nickel and dime way to save money, but it adds up. Saving $350 a month just by little changes will end up saving $4200 over the course of the year.

While getting rid of unnecessary expenses takes a little time, effort and commitment to changing habits that contribute to increasing the amount of money you spend every month, the outcome is a saving a significant amount of money over time.

Econometrics refers to developing quantitative methods to analyze economic principles. Theoretical econometrics uses statistical properties while applied econometrics usually applies econometric methods to the various theories. Finance domain is increasingly using the technique like risk management, portfolio management etc.

Econometrics is used in finance to evaluate quantitative problems and uses various techniques like financial models, volatility estimation, capital asset pricing, risk adjusted returns etc. Financial econometrics is viewed as a merger of economics, finance, statistics and applied mathematics. For the various issues in financial world, economics renders theoretical foundation while statistics and applied mathematics using quantitative techniques are used to solve quantitatively. The vast amount of data generated in financial markets on asset returns, volatility usually requires study over a period of time using techniques like time series. Econometrics is widely used for derivative products like options, futures etc.

Regression analysis is one of the primary methods. It usually involves modeling and analyzing various variables to establish a relationship between dependant variable and many independent variables. This technique is useful to understand the changes in the dependant variable to any changes in independent variable. Methods of Moments, Bayesian methods, Generalized Method of Moment etc are other important methods used in econometrics.

The general steps involved in developing an econometric model are:

• Understanding the problem – It involves formulation of a theoretical model to relate two or more variables.

• Collecting data – It involves accumulating relevant data from public domain like Reuters or any published information and also from surveys.

• Selection of method – This step involves choosing an appropriate estimation method like single or multiple equation technique.

• Statistical evaluation – It involves framing assumptions for estimating parameters of the model and analyzing the aptness of the estimates in relation to the data.

• Evaluating the model – The model is then assessed from theoretical perspective.

• Implementation of the model – the model is then used for the identified issue and also for making forecasts. The step also results in courses of action needed.

Econometrics is being widely used in fields including finance and knowledge of its various techniques helps investors manage their portfolios well.

Finance is perhaps the only thing that makes company’s look for other innovative ideas and take suitable cost cutting measures! Jokes apart, it is the Finance Operations Manager’s job which is the most important after the director’s position. No wonder CFOs earn more than CEOs!

What will be your role as a Finance Operations Manager in the company?

• Integrate Finances: One of the most important jobs after you’re handed over the baton to the position is to make sure that the company’s spending is optimum and not more than its budget. For this you need to get hold of every area that the company earns revenue from and then integrate the accounts.

One of the many frustrating parts of the same job is that even if you show that the company is spending an optimum amount on operations, you will be asked to lower the costs!

• Forecast: Do not for once think that it was only the job of the weather guys to forecast and predict weather – it is the job of a Finance Operations Manager too! You need to be confident with your basic skill set and show that you can really contribute to the company’s growth. You will be asked to make quarterly, semi-annually and annual financial forecasts. One of the main drawbacks of this job is that it is harder to keep your boss happy!

• Inventory: For a successful operations environment, the company makes sure that it has the best cost-cutting measures and the best inventory too! Without its inventory, the company is like armor without the bullets! Maintaining inventory levels is another part of the job that you have to undertake as a finance operations manager.

• Relationship: Now what does public relation mean for a person who has been playing with thick books of accounts and similar stuff? He is expected to stay behind the desks and pour over books and epics of finance. Not anymore – the current global business scenario has made it compulsory that even the least seen person on the job is to maintain a healthy relation with other businesses and corporate giants.

• Responsibility: As the post and the position of the finance operations manager are high, so are the responsibilities. If you’re a person who shies away from responsibility, this job is not for you. For every profit or loss, you’re as accountable as your sub-ordinates and juniors. The worst part is that – your seniors may completely push the responsibility on your shoulders when it comes to being accountable for a loss! And they may take the credit when there is a profit.

It is you who has to decide what to do and how to perform it optimally – when you have been assigned with the job of a finance operations manager.

Have you ever scanned the acres of financial advertising and wondered what APR, AER and EAR really mean? You’ll invariably find one or another of these terms in every advertisement for a lending or savings product. Well you’re certainly not alone.

The Financial Services Authority lays down the exact formulas for calculating APR, AER and EAR’s. Every UK financial institution then has to stick by the formulas and the FSA lays down rules as to when and how the figures have to be disclosed. There are no exclusions! Errors invariably result in big fines for the offending company and compensation for any borrower or saver affected. But it’s still no good if the public simply don’t understand what the terms mean.

So here’s our bit to lift the mists of misunderstanding!

APR is most commonly seen. It stands for “annual percentage rate” and is used to express the true cost of the money borrowed on credit cards, loans and mortgages. The APR calculation takes account of the basic interest rate, when it is charged (i.e. annually, monthly, weekly or daily), all initial fees and any other costs you are obliged to pay. As lenders all calculate APR the same way, it enables you to make direct cost comparisons between competing lending products.

So if one bank is offering you a mortgage at 4.75% plus an arrangement fee of

When I ask people what their financial goals are, saving money is always in the top 3. But they also tell me that they don’t know how, or they don’t have any good ideas. Well, good news – I’ve done the work for you and I hope to challenge your thinking.

Now, wouldn’t you rather use some money for something else – paying off debt, saving for a holiday, investing, etc?

o 1. Decide what you want to save and transfer it out of your main account as soon as you get paid

Somehow, you will make the rest work with your budget. I’ve been saving this way for the last 10 years and I’ve only ever had to take some of the money out about 6 times. If you don’t have anything budgeted for savings, then start with a small amount. You’ll get hooked on saving soon enough and that amount will start to increase.

o 2. Write down your expenses, day by day.

Yes, it is a bit annoying to do this, especially at first. But if you want to know where your money goes, it’s the quickest way to find out. And you’ll notice that after a week or two of accounting for your money, you start automatically correcting your course. Suddenly you realize that your 3pm daily habit of Coke and a Bar One from the vending machine works out to a substantial amount every month. I’m not saying that you shouldn’t ever get anything fun. Buy two snack packs of chocolates at the grocery store to last you the month, and just like that, you’ve saved stacks of money.

o 3. Never go shopping on an empty stomach.

You’ll end up with a trolley full of junk food that you normally wouldn’t have bought had you not been starving. When I heed just this one tip, I cut my monthly food bill by about 30%!

o 4. Make a list of errands before you leave the house

When you do this, you can plan your route and also make sure to do everything you need to do. Otherwise it’s a case of “we forgot to pay the phone” once you’re back home. You then waste time and petrol having to go back the same way.

o 5. Always, always, always use a shopping list

You can download one from my website. Use a fridge magnet and attach it to the front of your fridge. Then train your family to mark off the item as soon as it’s nearing empty. What’s the point of adding toilet rolls to the list when you’ve just used the last one?! It’s easy to be assaulted by all the sale signs once you’re inside the store. A shopping list helps you to focus. I’m not saying that you’re not allowed to be flexible. It’s just that with a shopping list, you make sure that you definitely get everything you need.

o 6. Check the lower shelves in stores

Stores pack all the most expensive items at eye level, so next time you buy some salad dressing or whatever, don’t just grab the first thing you see. Compare the prices of all the brand names, being sure to look at all the items. It will take a bit of time the first time you do this, but once you’re used to it, you’ll know.

o 7. Only buy enough fresh produce for your needs

You can get so easily hooked with the “3 bags of tomatoes for R20″ and “2 cucumbers for R10″ signs. But if you stop to think about your needs, you’ll realise that you don’t need 3 bags for just 2 people. I used to think that they only sold them packaged like that until I took one bag of tomatoes to the till one day and … lo and behold, nothing special happened. They only charged me for one bag!

o 8. Try online grocery shopping, especially if you’re an undisciplined shopper

We have good friends who have been shopping online for about 3 years. She swears that they save at least 20% every month, and that’s after paying the delivery charge. That’s because it totally eliminates all the impulse buys – food on a hungry stomach, and cute stuff.

o 9. Never go shopping when you’re cross or upset.

This is a variation of number 3 except for the fact that you’re likely to feed your emotional hunger. All the ladies know what I’m talking about. You’re cross because of something that happened at work, go to the mall and end up buying a lipstick, handbag or clothes that you don’t need. We all do it – some of us just buy bigger items than others.

o 10. Always pay your accounts on time to avoid interest charges.

Remember that with credit cards, your purchases are interest-free for 45 days BUT if you’re a day late, you’re not only charged interest for the day; interest is charged from the purchase date.

o 11. Plan your meals

When you plan your meals by the week (as I do) or by the month, you will save money. Firstly, you can use up all the food in the freezer before buying more, and secondly, you’ll know exactly what you need to get from the shops. I have a look through my freezer to check that there’s enough food for the week. I then make my list and go shopping. Then on Sunday afternoon, I decide which meals we’ll eat on which days and attach my meal planner to the side of the fridge. It then takes me maximum 30 minutes to get supper on the table every night. See? Saving you time and money! Download your meal planner from my website.

o 12. Eat more pulses

Pulses are things like lentils, kidney beans, chickpeas, etc. They are a great source of protein and you can use them to replace the meat in one or two meals a week. For example, use lentils as a mince substitute for your bolognaise sauce, or top your baked potatoes with a chickpea, tomato, spinach and cheese sauce. Delicious! Not only will you save some of your meat money but you’ll be healthier too.

o 13. Limit the number of cleaning products you use

I use a multipurpose cleaner, toilet disinfectant, dish washing liquid and a multipurpose gel. I could combine the last two but I must confess – I’m hooked on my brand of dish washing liquid. I use the multipurpose gel for washing the car, cleaning windows and mirrors, as a shower spray, to clean carpets, etc. All you do is squeeze a generous amount into an empty spray bottle, fill with water and shake to mix.

o 14. Look out for a free car wash

I’ve noticed that many service stations offer a free “wash and go” if you spend a certain amount on petrol. Look around you and start using these services.

o 15. Switch from fizzy cool drinks to water

You will save hundreds every month and… you’ll also be healthier and will lose some weight.

And now for a bonus… hire a financial coach

Yes, initially there is an investment. But over time, the rewards will be HUGE. Your coach will help you to accelerate your progress and help you to pay off your debt and save some money.

Happy saving! My wish for you is financial happiness!