Posts Tagged ‘Financial Literacy’

Earth Day – Simple things to save Money and Earth as well

We only think about conserving energy and saving the planet when the gas price goes up and when we feel the pinch in our budget. But every year Earth Day reminds us that we need to do something whether gas price is up or down. It also gives us opporunity even during this time of unprecedented environmental challenge, for every citizen to make an impact.  This year Earth day is on April 22 and I want to share few simple things which I do every day and has an impact. You can also try it out and be satisfied for doing something.

1. First thing, avoid paper bills unless its really necessary. If we all reduce paper usage, it will eventually reduce the number of trees cut for this purpose. Many utility companies, financial institutions like banks, mortgage servicers, insurers are campaigning to reduce the paper waste by requesting customer to signup for ebills over the internet or email. Obviously they have better motive  which is to reduce their cost but still it makes sense to help reduce the paper waste by moving to ebill solutions. But do it subjectively.

If you think your bill will change every month and needs to verify before paying, you shouldn’t sign up for auto withdrawal but if they have an option to get ebill and then pay online then go for it. If they only have option for ebill and automate the payment, then continue with paper bill in those situations. On the other hand, if the bill stays same all throughout the year, you don’t need the paper bill. For example, mortgage is always going to be same every month and you can avoid paper bills instead get ebill reminder to pay them or setup auto deduction.

2. Next comes Electricity. We use lot of electricity at home everyday which is either generated by Coal or Wind. Wind is good but we don’t have lot of windmills to support our electricity demand. Currently it’s most electricity comes from coal which has lots of waste and emissions. For your part, reduce electric consumption by using fluroscent bulbs as much as possible instead incandescent  bulbs.

You might find incandescent bulbs cheaper than compact flourescent bulbs but things are getting better these days. Even if you pay more and buy flourecent bulbs  they will last longer than their counter part. So think again and do the right thing. We changed 90% of lightings to flourescent bulbs. Also Turn off the lights when you leave a room whether at home or office. Start making it as a practice. Don’t forget to Turn up the Thermostat during summer and Turn down during Winter. Turning up to 78 degrees uses less electricity and Turning down to 65 degrees during winter will use less natural gas to heat up. Both saves you money and good for the environment.

3. Plastic is another big chemical waste which is ruining our earth’s composition.  Try to reduce plastic waste. It also emits lot of unhealthy gas during decompositon or recycling process. You can help by reducing the plastic use by reusing them as much as possible. For example, save Ziplock bags or any plastic bags after first use and try to use them few times before you throw it out. Avoid bottle water if you can use filteration system like Reverse osmosis. That reduce plastic waste and also gives you good, healthy water for cheap. Check out a Costco offer for Reverse osmosis I posted last week.  


4. Water is another precious resource from mother nature. Try to reduce water consumption by not  leaving the water running while brushing your teeth or shaving.  Nearly tens of gallons of water just goes down the drain during our daily activities. By saving water, you save money and also natual resource which is getting wasted. So try to avoid wastage by only using limited quatity when needed during shaving, doing laundry, watering the lawn, washing the car, washing dishes.

5. Finally, Petroluem/Gas/Oil. Carpooling is the best way to reduce carbon footprint by reducing fuel consumption and also saves money on fuel cost and vehicle mileage. Also there are reports about effective driving can reduce gas usage. May be it’s true but it is hard to change your habit immediately whether it’s good or bad. No harm in trying, so I recommend you try one change at a time and see the effect and go from there. Like try to avoid rising your engine too quickly when you start from lights. Do it slowly which won’t consume more fuel. Try small things like above and you might see the difference in your gas tank.

These are just simple things which I follow and feel good in both saving money and helping save the planet. There are many websites like this one which shares lot more tips to help to do your part and make an impact in reducing bad impact to our Mother Earth.



Happy Earth Day!!

Money Smartness – Do’s and Don’ts for any year

This year just started off and half of January is almost over now. Days are moving fast so you better focus on things you want to get accomplished.

Do a quick check on your goals or Resolutions for this year. Did you ever get started with any of them? If you did, how far along are you? Do you think you are moving along as planned or just dragging yourself, waiting to quit? If you never got started, you still got till 31st to do something about it so you can atleast brag that you started something new this year. If you are chucking along, good job and keep it going!!


Moving on to Money smartness, it is not only about making and saving money right. It is also about doing things which could help to manage and preserve the wealth you earned. It is about getting ready for emergency situations and planning for proper wealth distribution when you are gone. In this post, I like to share and remind few Don’t and Do’s which most of us take it for granted in our everyday busy life. We don’t consider them serious enough until it hits us hard.


Don’ts

Don’t lose your 401 (K) contributions


I called my friend who lives in East coast to wish him Happy newyear. During our conversation he was mentioning about his 401k from his previous employer. It has been almost 2 years, he still not moved his funds over to new account. He don’t know where to start because his previous company had gone through few mergers after he quit and don’t know how much the account worth now and where exactly the funds are held.

I strongly urged him to get on it, start working first thing otherwise he might lose his hard earned money. Many of us fail to roll over my 401 (K) when change jobs. We forget about it, while we struggle to find a new job. With some many job losses last year, I am sure money of you aren’t thinking about 401K accounts yet. If you get a chance, do take time and start working on rolling over to Roth IRA account or mutual fund.

Don’t be a Identify Theft/Scam/fraud Victim


Identity theft, Ponzi schemes and scams are the talks all over the internet last year. Many millions of people get affected by identify theft every year especially via phishing over Internet. Whether you use online banking to check your account or make your credit cart payment, be careful in protecting your identity by protecting your computer from getting hijacked by the hackers. There is more to avoiding a identify theft than just virus protecting your computer and will talk more about it in my later posts.

Avoid Impulse buying


Beware of persuasive or forceful sales pitches. If it seems too good to be true, it might very well be, so avoid taking action at the spur of the moment. Try to be wise by not paying more for what it’s worth and always do comparison shopping. There is a reason why Milk cans are stored way back in any grocery store! Try to always compare different offers whether you are on the street shopping for car or expensive items.

DO’s


Pay yourself First


That’s the mantra of many Money Guru these days. First take out some money from your pay check for yourself and put it away in a saving account before it disappears. Start small and stretch it out slowly. With automatic saving with online banking, you can do it easily in minutes. By saving periodically, you are also taking advantage of time to work for you. Magic of compounding is the be8th wonder invented by Einstein..  I like to say, Saving is an habit not an hobby, so start a habit this year. Once you get started with saving, you can expand to invest the savings for future purpose like kids education or retirement.


Plan to be Debt free


Are you debt free? I would be surprised if you were. Everybody has debt in  some sort or other whether it is home mortgage or just credit card debt. But you can plan to be debt free and try to get out deep debts avoid paying high interest rates charges.  Don’t let your revolving debt to shift as long time debt. That will reckon your financial wealth. If you are in deep credit card debt, try to contact national credit counseling agency and work out a plan to get out of debt and shift to revolving debt situation.


Prepare a WILL


Last but not the least item in the list, Estate planning. Do not think estate planning is only for wealthy individuals. Estate planning is all about preparing for unexpected. It is just about preparing Will/Testament or Trust for the benefit of your dependents.These paper works are very important especially if you are married and have kids. You can make a will in just few minutes using Willmaker by Quicken and execute according to your state law. It is a cost efficient solution compared to Trust but not cost saving solution if you have big estate. Consult your CFP for more details.

I hope these Do’s and Don’ts help you to start thinking about few things which are important always not just in a new year. I am planning to touch upon these topic in more elaborate manner in my future posts. Please check back periodically.

NOTHING IS TOO BIG TO FAIL – FINAL PART

In my last week blog post, Nothing is too big to fail – Part 1, I shared information about Citibank and CIT, biggest commercial lender. How these big companies are struggling in this tough economy?  As I concluded, this week final part will have an another interesting story about Harvard facing hardship on its own. I did my conclusion with lesson learned from these stories. So Read on…

What’s up with Harvard?


It is not just financial companies which are failing in this recession. Harvard University is facing what some say is the worst financial crisis of its 373-year history. While many of the nation’s top universities are experiencing problems as a result of the financial meltdown — even Harvard University, which has the largest endowment of all universities by far. University’s $37 billion endowment a year ago has shrunk to an estimated $26 billion today.


What got Harvard into so much trouble?


Harvard did what many Americans did: It overspent. In this decade, it’s added 6.2 million square feet. That’s roughly equal to the space occupied by the Pentagon. These land acquisitions have cost Harvard more than $4 billion. It has had huge expenses built up while the number of students stayed constant. 

“It’s rather like someone who has taken on a mortgage, bought a house that far exceeds what it can afford, and they’re now facing really what is the worst, most dangerous financial crisis in their 373-year history,” according to  Nina Munk, contributing editor at Vanity Fair, told NPR’s Linda Wertheimer. To read the article, goto npr.org


Should big Companies allowed to fail?


Thats a very hard question even to Bernake. Being a big shark in a ocean is not an easy task. Playing a big role in the economy doesn’t protect against economy downfall.  I see it as a double edge sword. A company has to take chances and risk by investing their money in order to  make more money. If it avoids taking risk or chances, consumers won’t see new products and services at the same time company cannot grow and make money.

On other hand, if economy is falling because of companies fault and bad practicies, it does needs to be regulated and corrected. At the same time, If these companies are penalized by allowing to fail for taking risk to grow is not the right way. But I agree a company should act and forecast before stepping into risky modes of operation.


So if these companies are always left to fail, there is a bigger chance of snowball or avalanche effect which is actually averted by Fed last year.  Taking last years episode, if every big banks which faced problems are let to fail without bail out, just imagine the impact it would have created. It would have devastating effect twice worse than great depression. It is not prudent to always struggling company to fail. Everybody needs a lending hand sometimes and more so during bad times.

Obviously, it is really hard to say which companies should be allowed fail and not others. It all depends on the time and position. I hope that also answers the question, Why financial institution gets billions to when big GM and Chyrsler are allowed to fail. Check out these articles related to this story from SeekingAlpha and npr.org.


Lesson Learned


I am fully convinced that no company is too big to fail and government won’t always come for help. So if you are investing in securities and bonds, please be cautions and invest in right company analysing their porfolio and performance. Don’t by stocks just because the company is too big and it will never will fail. As we all know now, NO COMPANY IS TOO BIG TO FAIL.

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