We are currently having the greatest recession time in our history. There are so much of things we must do right now to reduce the damaging effect on our wealth and future. But there are things we must do too to prepare for the next recession.

Prevention is better than cure and this theory is really good. You and I already knew how it feels in recession period and what are the side effects that can damage our dreams, retirement plans etc. So we must do something to prepare for the next recession so that we won’t have such a tough time again.

Recession will happen again

History tells us that recession can happen again and again. In fact, it is part of the economy cycle that we can not avoid. We cannot do anything but have to prepare ourselves and our assets for the next recession. At least we must prepare our business, retirement funds, personal finance, income and any other financial products for this great event in future.

What is Important In Recession?

Before we take any actions, first we must know our target and goal. These are the things that are very important for everyone of us to survive in recession period:

• Cash. Cash is king in recession. Nowadays most of us are living in credit. We buy things through credit cards, get loans for college, house, cars etc. However, this is very dangerous if we don’t know how to manage our credit properly. Credit is useless in recession. In fact, less and less businesses are willing to give credit out during recession. Therefore a new phenomena will appear where cash becomes king again. This is why I will strongly suggest you to always prepare some cash for emergency period like recession.

• Income sources. In my previous post , I mentioned that there are nothing really secure forever, even our jobs. This is what I learn from this recession. Great layoff happens in recession and most of the businesses are slowing down. Our income might loss in this period. This is a big problem because our life are on risk if we lose the income. This is also why there are so many people having emotion problems during this recession period. Therefore we must know and figure out a way to protect our income source or  have multiple income source that can support our life even in the hardest time in our life.

• Basic Assets protection. Besides cash, there are something that we need to survive. For example, our houses. We must prepare ourselves to keep our houses and pass through the recession period. As you can see, great foreclosure happens in this recession and this has told us that something is not right. Maybe most people tends to buy a house that they cannot afford due to high commitment or maybe they are not preparing any emergency fund to pay the installment just in case they lost they income sources in recession. So we must learn the lesson and only buy the assets that we can afford. Besides that we allocate some extra cash ready to support our valuable assets during recession.

Now we know what is important and we must focus on those 3 things above. In fact, our preparations are most likely focusing on them.

How to Prepare for the Next Recession?

There are 5 steps you take and repeat again and again to prepare for the next recession:

1. Setup your saving and emergency funds. As I said, cash is king. So we must prepare some cash as the foundation for our personal finance. First you must know how much you really need to survive. You can know this by carrying out a budget for at least 3 months. Then you will know how much you really need to survive. My suggestion will be save up 6-24 months of emergency funds is the best foundation for financial security purpose. This is because it really takes time for our economy to come out from recession. The more you have in emergency fund, the more financial security you can have.
2. Live below your means and Only Buy Things that You can Afford. One of the common mindset that I found among the people around me is that they tends to spend every penny that they have on hands. People like to do their calculation using 100% of their income. They never leave a room and space for their finance. This is why they have financial problems. In order to have a good financial future, we must learn how to live below our means and ONLY buy things that we can afford using the less credit! Along the way, the more money you can make, the more income your have, you can raise your standard and also the quality of your life. But before you build up the financial security, you are not encouraged to raise your standard of life. Yes I know it is not nice to stay below your means but this is the sacrifice you have to make for a good future. You suffer now but in future you are can enjoy your life for a long time.
3. Reduce Your Debts Burden. Debts are burdens, risks and bombs for our life. It only safe as long as you have money to pay it. But what happen if you lose your income during recession? This will be a big problem for your life. Therefore, you are advised to reduce your debt burdens so that your life is not risky. Anyway, if you can buy according to your ability and using the less credit, then you are quite safe and stable in your finance.
4. Build multiple income sources. Don’t put all your eggs into 1 basket. This is the advice that we usually hear when comes to investment. But this theory also can be applied in our income. This is because nothing is really secure during recession especially our job security. We must learn and work hard to build multiple income sources. First, this can let us generate more money at the faster speed so that we can build a stronger financial foundation. Second, we can have multiple income during recession and have more security for our income. Some of the incomes that I recommend you should learn and build besides your job are business income, passive income, residual income and investment income.
5. Increase your financial literacy. Recession is a good time to gain more wealth and make more money. However, this only can happen if you know how to manage your money and leverage the power of your money. This is all about increasing your financial literacy. From today, you can spend a little bit of time, maybe 20minutes per day to read something about finance. It can be a book, a magazine or study the news. This is the most direct and easy way to increase your financial literacy.

Reminder for You

There are many ways to prepare your finance for the next recession. However, it will be useless if you don’t take action and follow the plan. What I usually worry is people will go back to their old spending habit when the economy is alive again. If you don’t learn the lesson and take the action, you will suffer again in the next recession. So we must always remind ourselves and get ready for the future! Remember, the foundation of personal finance is very important as it can greatly affect our life and future.

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This is an article that talks about the 5 kind of things that can appreciate their value which you can buy. After reading this article, you will know what kind of things you can spend more money on.

Money is very important in our life. Yes, money is just a number, or pieces of paper that can let us exchange for other kind of things. This process is what we usually call “buying”. In personal finance or money management, it is important for us to know how we make money, how we spend money and how we invest to keep or increase the value of our money. However, that’s not all. One thing that people usually forget is what we spend money on. 

People usually spend their money on something that is for short term usage or fast in value depreciation. The most common value depreciation product that people usually spend money on is a car. In most cases, once you drive your new car out of the dealer office, you car’s value will start depreciating. Besides that, every year, each car manufacturer will release their new model. So eventually your car’s value is hard to be maintained because it is an old model car.

5 Value Appreciation Things That You Can Buy

If you want to manage your money even better, then you must know what kind of things you usually spend money on. Below I listed the top 5 things that can appreciate their values, which you can buy for investment or protection for your money.

1. Real Estate. Real estate related products such as lands, properties, factories, are those hot value appreciation things that most experts will recommend you to buy. In most cases, the value of your properties will appreciate according to the inflation rate and hence protect your money from losing. Besides that, if you can manage your property properly, it also can be a tool that generates income for you such as rental income and so on.

2. Antique. Antique is another kind of things that you can leverage as an investment. However, most authorities agree that investing in antique is risky compare to other kind of investment tools. First antiques are extremely vulnerable to fluctuations in public tastes because usually people buy your antiques primary because they like them. This is very abstract and it is hard for us to determine whether which antique will have the value for investment. But it will be fine if you just want to buy some antique for your house decoration.

3. Arts. Arts are another kind of things just like antique. It is good to hold some famous arts for value appreciation. However, for those arts that came from the ancient society, it will be hard and cost you money to maintain them and of course it can give you more value.

4. Gold and Diamond.  Gold and diamond has a certain level of value appreciation effects. Most of my aunties will buy gold and diamond as part of their money management. I found that gold has even more value. Gold price is floating every day. When the gold price is increasing, my aunties will sell of their gold for money. In this process, sometime, they can make money. Of course it will not make you rich, but this is another choice or way to manage money.

5. Wine and Alcohol Drinks. Some of my customers, especially those are rich, will buy and store some wines in their house or cupboard. Some of them are those wines that were produced 100 years ago and its value is quite high. I heard from them that, in most cases, the longer you store a wine, the higher its price will go up. However, most of my rich customers don’t just simply keep the wine for value appreciation. They love to collect wines and drink them.

Every one of us in this world must spend money to survive. In this process, it is up to us whether we buy something that has more value or just get something that will depreciate in value. This is another kind of mindset on money. Some people love to buy something that has more value and can last longer. They will pay more for this. But some people will spend the other way.

For me, I believe that quality things come with higher price. So I usually buy something that has more quality and can save me money in long term, though I will spend more money on this.

So how your spending habits?

Are you one of them, Group of irregular income? I understand that most freelancers and also small business owners will be the “members” of this group. To be honest, I’m also one of them. Being a small business owner, my income is mostly depending on my business and I can tell you that a business is different with a steady income job, the income is different each month. This is one of the challenges that you might encounter if you want to start your business.

In this article, I would like to share with you the investing guide for the group of irregular income. Although the main target of this article is on the group of irregular income, but I think this guide is also work for any one especially those with tight budget over their steady income.

Preparation before investing Your Money – Budget Your Money

Yes I agree that budget your money is quite boring and annoying. However, from the group of irregular income, we have no choice but have to make a plan to use our money. Planning is important to an investor and budget can help you build a system to control your expenses. There are a few points that you must pay attention on budgeting your money, especially you are from the group of irregular income.

For the first 3 months, set a budget and get the average figure for your income and expenses and also categorize your expenses. The main purpose is to know your habit on spending money.

Use the information you collected for the first 3 months and predict your expenses ahead and then set a budget that included an investing account. This account will be the place where you save a certain amount of money for investing.

Then building up an emergency fund at least 4-6 months. The main purpose is to secure your life just in case anything happens in future.

If needed, try to re-allocate your money in the budget again every 1-2 weeks. This is one of the important steps for budgeting over irregular income. This will ensure your money is enough for the next pay day by reviewing your budget from time to time.

Before this, I wrote a few articles that are about budgeting which might help you:

Saving Tips that make your budget works

What Make Your Budget Fail

Learn and Start Investing : Start Small with simple baby steps

I prefer to get started small in everything. This will be much easier for my mind and get motivated to take action. I usually become procrastinate and stress if I want to start something very big and complicated. Eventually nothing is done by me. So I prefer baby steps especially invest using my irregular income.

Learn “how to invest” frugally – Investing is a skill that we must learn. We cannot just jump into the market and invest our money. This sound like gambling and not investing, isn’t it? So I always try to learn and gain information before taking any actions. Since I have a budget, the money for me to take any investing courses, buying any reports or books are quite tight. So I usually read books and reports for free from local library and also local book stores. If you can take good care on their books, you are welcome to spend time reading in book stores.

Always invest with small capital – Yes, sometime I come across some of the investment that can bring more profits in a shorter time. However, those investments usually need a lot of money to invest. For me, I usually let them go and look for those small capital investments. I think stocks, forex and also mutual funds are a good start for. This is because with a small amount of money, you can start investing and gain experience.

Dare to loss “small” – So far I never heard or see any investors that do not loss any money along their life in investment. Everybody will lose money in investment. The key here is how you learn from the losses and then make more profit next time to cover it. So “Exit strategy” is playing an important role here. To minimize my losses, I always have an exit strategy. Since my income is limit and so is my investment capital, I must learn how to control the losses from investment and protect my capital.

Diversify your investment – There are always some argument between putting all your eggs in one nest or diversify them. To me both of them have their pros and cons. However, for irregular income group, I will recommend diversify. The reasons to do that are:

1.   Diversify means diversify the investment risks

2.   Diversify means diversify your investment capital and hence reduce the impact of losses into your capital.

Because our capital is limited, we must learn how to manage the risks of investment and also protect our capital from being burnt out by the market.

Conclusion

No matter what kind of job, income or business you have, you must learn how to manage your money, how to invest them and plan your future financially. Yes I agree that, sometime, there are a lot of negative voices coming out from my head telling me that “I can’t invest because of my irregular income” or “There is nothing you can do with this kind of irregular income”. This kind of negative voices and mindset don’t block me at all because I have a goal, a goal to achieve financial freedom by age of 30. I know I must do something to achieve my goal and have better future. So I still continue to learn how to prepare my irregular income, get myself ready and invest. You might also have the same condition that I have. But don’t give up! There is something you can do on your personal finance and future, even your retirement. This only depend whether you believe it or not. IF you believe, nothing can block you!

Good Luck!

Harrison Loke

If you are an employee, one of the issues that you might concern is how you can manage your monthly salary so you can achieve whatever financial goals that you planned.

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I think Paycheckcity.com because it provides a lot of paycheck calculators that let you better mange your paychecks.

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You may think you need to pay for all the services. Nope, nothing charged on you. With a free membership, you can access and use all the tools inside the page.

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For you convenience, I listed down some of the calculators for you here:

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Personal Calculators

1. The Paycheck Calculator
2. The Hourly Paycheck calculator
3. Form W-4 Assistant

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Advanced Calculators (Free Membership needed)

1. Gross-Up Calculator
2. 401(k) Planner
3. Bonus Calculator (percent method)
4. Bonus Calculator (aggregate method)
5. Employee Stock Options Calculator
6. The Public Employee Paycheck Calculator
7. Tip Tax Calculator
8. Payroll-Taxes Discussion List

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Source : Paycheckcity.com

Below are some of the personal finance tools and spreadsheet that I found from the creditboards forum. You can print the spreadsheet out and try or just use the calculators to see how far your personal fiannce status is. Just give them a try.

Budget

1. Printable Personal Budget Worksheet

2. Printable Weekly Expense Worksheet

3. Discover Card Budget Calculator

4. Providian Budget Calculator

5. Online Budget Calculator

Debt

1. Credit Card Balance Transfer Savings Calculator

2. How Long Will it Take to Pay off My Credit Card? (CardWeb)

3. What Will It Take to Pay Off My Credit Card (Bankrate)

4. The True Cost of Paying The Minimum

5. When Will You Be Debt Free?

6. Quicken Debt Payoff Planner

7. Debt Tracker Spreadsheet

8. Debt Snowball Payoff Spreadsheet

Savings

1. Savings Calculator

2. Asset Allocator

3. Millionaire Calculator

4. IRA Certificate Calculator

5. Money Market Calculator

6. Balance Sheet/Statement of Net Worth

Loans

1. The True Cost of a Loan

2. Loan Calculator and Amortization

3. Auto Loan Calculators

Mortgages / Home Equity

1. Debt-to-Income Ratio

2. Monthy Mortgage Payment

3. Mortgage Amortization Schedule

4. Home Equity Loan

5. Home Equity Loan Amortization Schedule

6. Home Equity Loan Comparison

7. Home Equity Calculators (Bank One/Chase)

8. Mortgage Calculators

Miscellaneous

1. FICO Score Estimator

2. Small Business Calculators

3. Microsoft Office Templates

4. H&R Block Tax Calculators

5. Financial Aid Calculators

6. Calculate Your Pay Check

Retirement

1. How Much Will You Need for Retirement?

2. Retirement Planner

3. Social Security Calculator

4. Ballpark Estimate Calculator

5. IRS Withholding Calculator

All Kind of Calculators

1. Every kind of financal calculator you'll need at one site

2. Tcalc Financial Calculators

Freeware

1. AceMoney

2. GnuCash

You are welcome to add whatever calculator that you are using now. Just comment it here. Thank you

Source : Creditboards Forum

Other Resources

Banking and loans industry is like a backbone for financial system of a country. Business management is always looking for good bank rate to get a finance loan for expanding or renovating their businesses. Secured loans are also available for doing small business. Apart from this, loan market offers services for home mortgage and home loans etc. Banking industry is now also venturing into insurance services like car insurance and stock insurance etc.