FinTech is a term used to describe new technologies that aim to improve and automate the delivery and use of financial services. FinTech companies typically develop innovative and efficient ways to provide financial services to customers through the use of technology. This can include everything from developing new mobile banking apps to using artificial intelligence to help customers make better investment decisions.

FinTech simply refers to financial technology. And more specifically, new financial technologies that aim to improve and automate the delivery and use of financial services.

How has FinTech evolved, what is the recent history of FinTech?

FinTech is still a relatively new industry, and it is constantly evolving. As new technologies emerge and as the needs of businesses and consumers change, we can expect to see even more innovative FinTech products and services in the years to come. Even though the term FinTech was popularized in the 1990s, technology has always been a part of the financial services world. A research paper called “The Evolution of FinTech: A New Post-Crisis Paradigm?” and published in 2016 by a trio of academics from 2 different universities (Ross Buckley from UNSW Sydney, and Douglas W. Arner and Janos Nathan Barberis – both from The University of Hong Kong) divided the FinTech evolution into 3 eras:

1. FinTech 1.0 (1886-1967): when it evolved from analog to digital.
2. FinTech 2.0 (1967-2008): with the development of traditional digital financial services.
3. FinTech 3.0 (2008 – present): with the democratizing of digital financial services.

But if we look at the evolution of FinTech from a more generalized perspective, here are the most important milestones across time:

The development of the automatic teller machine (ATM) in the 1970s was among the first that signaled the start of FinTech. During the 1980s, affordable personal computers made digital innovation accessible to the masses. It was in the 1990s that people began communicating more via the Internet, thus resulting in the creation of new firms such as PayPal, which used technology for financial transactions. As a result of mobile internet access and mobile app usage in the 2000s, mobile FinTech apps experienced a surge in popularity.

Types of FinTech companies, with examples:

There are many different types of FinTech companies that cater to consumers needing affordable financial services. Here is an overview of the most common types, with examples for each:

1. Digital banks: Starling Bank, Monzo, BBVA
2. Mobile payment systems (PayTech): Apple Pay, Android Pay, and Samsung Pay
3. Investing & Trading platforms (TradeTech): Acorns, Robinhood, Stash
4. Peer to Peer Lending platforms (LendTech): LendingClub, Prosper, and Upstart
5. Crypto / Digital Wallets / Blockchain: Coinbase, Blockchain.info, Xapo
6. Crowdfunding platforms: Kickstarter, Indiegogo, and GoFundMe
7. Budgeting Apps (WealthTech): Mint, YNAB, and Pocketguard
8. Robo Advisors: Wealthfront, Betterment, and Acorns
9. Insurance (InsurTech): Lemonade, Policygenius, and Oscar Health
10. Regulatory Technology (RegTech): Compliance.ai, Alteryx, DataRobot, and Domo

Why is FinTech important?

There are many reasons why FinTech is important, here are a few:

• One reason is that it can help to make financial services more accessible to people who might not otherwise have access to them. This is especially important in developing countries, where FinTech can help to provide essential financial services to people who would otherwise be excluded from the formal financial system.
• Another reason why FinTech is important is because it can help to promote financial literacy. This is important because many people do not understand how the financial system works and, as a result, they make poor financial decisions. By promoting financial literacy, FinTech can help people to make better financial decisions and improve their overall financial well-being.
• If we look at it from another perspective, FinTech is important because it can help improve the efficiency of the financial system. This is essential because the financial system is plagued by inefficiencies leading to high costs and slow processes. FinTech can help to address these issues by streamlining financial services and making them more efficient.
• FinTech can help to reduce financial crime. This is important because financial crime is a major problem that costs the global economy billions of dollars every year. FinTech can help to combat financial crime by providing tools and solutions that make it more difficult for criminals to operate.

Overall, FinTech is important because it has the potential to greatly improve the financial system and make it more accessible, efficient, and secure.

Who needs FinTech?

Many people believe that financial technology, or FinTech, is useful only for large corporations and wealthy individuals. However, this isn’t the case. In fact, FinTech can be used by anyone who wants to improve their financial situation.

There are several reasons why someone might want to use FinTech. For example, FinTech might be useful to anybody that wants to:

– Save money on fees: FinTech can help you avoid costly fees, such as bank fees or exchange rates.

– Get a better interest rate: With FinTech, you can often get a better interest rate than what’s offered by traditional banks.

– Invest money: FinTech can be used to invest money in a variety of ways, including through peer-to-peer lending platforms or automated investment services.

– Better Manage their finances: FinTech can help you keep track of your spending, budget better, and make smarter financial decisions.

Small businesses often need access to capital, and FinTech can provide them with alternative financing options such as crowdfunding and peer-to-peer lending. Startups may need help with financial planning and management, and there are many FinTech tools available to assist with this.

Ultimately, FinTech is about using technology to make financial services more user-friendly, efficient, and affordable. And that’s something that everyone can benefit from.

How do FinTech companies make money?

There are a few different ways that FinTech companies make money. One way is by charging fees for their services. This can include things like transaction fees, account fees, and other types of service charges. Another way FinTech companies make money is by lending money to customers and earning interest on those loans. Finally, some FinTech companies make money by selling products and services to financial institutions.

Another way FinTech companies can make money is by selling customer data. Many FinTech companies have access to a lot of data about their customers’ financial behavior. This data can be valuable to other businesses, so FinTech companies may sell it to third parties. A few examples of the most popular ones include Experian, Equifax, and TransUnion. These companies collect and sell customer data to businesses for a variety of purposes, including marketing and credit scoring. Even though you might not be directly affected by this, you should be careful and diligent when reading all their terms of agreement and privacy policies.

FinTech companies can also make money through advertising. They may sell space on their website or app to advertisers, or they may use customer data to target ads to specific users.

FinTech companies vs traditional financial services firms

There are a number of ways in which FinTech companies differ from traditional financial services firms. For one, FinTech companies are generally much more nimble and innovative, able to move quickly to take advantage of new opportunities or meet changing customer needs. They are also often more focused on providing a great customer experience, something that can be lacking at traditional financial institutions.

Another key difference is that FinTech companies are often built around cutting-edge technology, whereas traditional financial firms tend to be reliant on older, more established systems. This gives FinTech firms a significant advantage when it comes to developing new products and services or implementing new technologies.

FinTech companies are often less regulated than traditional financial firms, giving them more flexibility to experiment and innovate. This can be a double-edged sword, however, as it also means that they may be subject to less oversight and protection for consumers.

What is the difference between FinTech companies and banks?

FinTech companies are often much more willing to take risks than banks. They are more likely to try out new ideas and experiment with new technologies. This willingness to take risks can lead to some failures, but it also means that FinTech companies are more likely to succeed in the long run.

What are the current FinTech trends?

There are a few major FinTech trends that are currently driving the industry. First and foremost among these is the move towards digital banking and mobile banking. This trend is being driven by the increasing popularity of smartphones and tablets, as well as the growing number of people who are comfortable conducting financial transactions online.

Another major FinTech trend is the rise of alternative lenders. These lenders are often able to provide financing to small businesses and consumers who might not qualify for traditional bank loans. The growth of alternative lending has been fueled by the increasing difficulty of obtaining bank loans, as well as the higher interest rates and fees charged by traditional banks.

One major FinTech trend is the increasing use of data and analytics. This data is being used to help assess risk, make lending decisions, and target marketing efforts. The use of data and analytics is expected to continue to grow in the coming years, as more companies seek to obtain a competitive edge by using this information.

The rise of cryptocurrency and blockchain technology is another major trend that heavily influences the FinTech space. Cryptocurrencies like Bitcoin and Ethereum have become increasingly popular in recent years, and blockchain technology is being used to create new financial services and applications.

What are some examples of FinTech stocks?

Some examples of FinTech stocks would include companies like Square, Robinhood, and SoFi. These companies are all involved in different aspects of the financial technology industry and have seen tremendous growth in recent years. Square, for example, provides mobile payment solutions that have made it easier for small businesses to accept credit and debit card payments. Robinhood is a commission-free online broker that has popularized investing among a younger generation of investors. And SoFi is a leading online lender that offers competitive rates and terms for student loan refinancing, personal loans, and mortgages.

What are the challenges of FinTech?

There are a few key challenges that face FinTech companies today. Firstly, there is the challenge of regulation. The financial sector is one of the most heavily regulated industries in the world, and new entrants into the space often have to navigate a complex web of rules and regulations. This can be a significant barrier to entry, and it can be difficult for FinTech startups to get off the ground.

Another challenge facing FinTech companies is the need for significant investment. The financial sector is a capital-intensive industry, and FinTech firms often need to raise large amounts of money to get started. This can be difficult to do, especially for early-stage companies.

And there is the challenge of competition. The financial sector is a large and established industry, and there are already many well-established players. This can make it difficult for new FinTech firms to gain a foothold in the market.

Another big challenge for FinTech is security. Because financial information is often stored electronically, it can be more vulnerable to hacking and other forms of cybercrime. This is a major concern for both consumers and businesses, and it is something that needs to be addressed in order to ensure the continued growth of the industry.

Another challenge facing FinTech and worth mentioning is education. Because the industry is so new, many people are not familiar with it or how it works. This lack of understanding can lead to mistrust and confusion, which can prevent people from using or investing in FinTech.

As you can see, the challenges of FinTech are numerous and varied. But perhaps the most significant challenge is the need to keep up the pace with the rapidly changing landscape of financial technology.

Is FinTech going to stay? And why should you care?

FinTech, being a relatively new and evolving industry, presents a dynamic landscape for ideas in entrepreneurship. Despite its uncertain future, there is widespread excitement about the potential for FinTech to bring about a revolutionary change in the financial services industry. New technologies are emerging that have the potential to disrupt the way that financial services are delivered, from payments and lending to investment management and insurance. But there are several factors that could impact the future of FinTech. For example, if traditional financial institutions start to adopt more of the technologies that are popular in the FinTech world, that could cut into the market share of FinTech companies. Or, if there’s another economic downturn, that could lead to people being less willing to take risks with their money, and that could hurt FinTech companies as well.

It’s really impossible to say for sure what the future holds for FinTech. But it’s definitely an industry to watch, and you should care about it because it has the potential to change the financial landscape in a big way.

The post What Is Fintech and Why Should You Care? first appeared on My Blog.

What is an inconsistent or irregular income?

An inconsistent or irregular income is an income that changes drastically from month to month. This type of income can be challenging to live with, regardless of the reason for the fluctuations. This income can create problems when budgeting for and planning for your future financial needs.

Who has inconsistent or irregular income?

Here are a few examples of situations in which a person might have an inconsistent or irregular income:

• Seasonal jobs or businesses that have more clients in a specific period of the year, like, for example, photographers. They will earn more in the wedding season, which extends from late spring and continues through early fall, with weddings peaking in June and September. Farmers or construction workers may also have inconsistent income.
• Self-employed people or freelancers often have irregular income, as they are not paid a regular salary like employees are. In some cases, self-employed people may be able to control their income by taking on more or fewer projects, but in others, they may be at the mercy of the market.
• Commission-based income falls in the irregular income category. Your earnings will fluctuate based on how much business you’re able to bring in. If you have a slow month, your income will be lower, and if you have a busy month, your income will be higher.
• Trading stocks can become a full-time career opportunity. And recently more and more people are trading from home. The stock market is inherently volatile, so the value of stocks can go up and down relatively quickly. This means that someone who is trading stocks may see their income fluctuate depending on the performance of the market.
• People who work in the gig economy. The term “gig” is a slang word for a job that lasts a specified period of time. Traditionally, the term was used by musicians to define a performance engagement.  The gig economy can include a wide range of workers, from musicians and contract workers to gig economy businesses like Uber and Airbnb. In many cases, gig economy workers are able to command high rates for their services due to the specialized nature of their work, but the downside is that their income can be irregular.

Why is it more difficult to budget on an inconsistent or irregular income?

There are a few reasons why budgeting on an irregular income can be more difficult. First, it can be hard to predict how much money you’ll make in a given month, making it difficult to know how much to set aside for bills and other expenses. Second, even if you are able to save up enough money to cover your expenses, you may still end up short if your income fluctuates and you have a month where you make less than usual.

How to budget on an inconsistent/irregular Income?

Budgeting on an inconsistent income can be difficult, but there are a few things you can do to make it easier. Here are 4 steps you can take to be able to budget well on an inconsistent income.

Step 1 – Build up an emergency fund

Having an emergency fund is key in protecting yourself against volatility in your income. Every time you receive a paycheck, some of it is inevitably eaten up by expenses, so you must build up an emergency fund in order to safeguard yourself against such fluctuations. Building up an emergency fund is crucial, and there is no excuse not to do so. Your income may be inconsistent, but that doesn’t necessarily mean it will always be low. When your income is high, you must save money for the times when it’s low. Working against your natural urges and stopping unnecessary expenses when you receive a paycheck is critical.

Step 2 – Get a better understanding of your spending patterns

Spending patterns are the ways in which people spend their money. This can include things like how often they purchase items, what kinds of items they purchase, and how much money they spend on average in any spending category. There are a few key reasons why it can be helpful to understand your spending patterns. First, it can help you identify areas where you may be able to cut back on expenses. Second, understanding your spending patterns can also help you make more informed financial decisions. For example, if you know that you tend to spend a lot on eating out, you may be more careful about how often you do so. To understand the spending patterns, you have to compare your actual spending with what you think is normal. And just to be sure, you can compare it as well with what other people consider normal.

Here are some examples of common activities on which people spend more money than what they anticipated:

• Many people find that they spend more on groceries than they anticipated. This is often because people do not realize how much food they actually need to purchase in order to maintain a healthy diet.
• People often underestimate the cost of transportation. This can be because they do not factor in the cost of gas or because they do not use public transportation as often as they thought they would.
• Many people find that they spend more on entertainment than they originally budgeted for.
• Many people overspend on their credit cards, which can lead to debt.
• Other common expenses that people tend to overspend on include travel, dining out, and shopping. People often spend more on clothes than they thought they would. This is because people often see something they like and buy it on the spot, without thinking about how much it will cost.
• Childcare can be one of the biggest expenses for families. According to a report from the U.S. Department of Agriculture, the average family spends over $10,000 per year on childcare.
• Another big contender for overspending is health care. People are often surprised by the high cost of medical care, whether it is for an emergency room visit or a simple doctor’s appointment.

All of these costs can add up quickly, and people often find themselves spending more than they had anticipated. I tried to add a comprehensive list so that you can check your budget and see if you spend more than you anticipated in any of the categories mentioned above. When you find that your spending is much higher than what it should be, you can start working towards bringing it down to a level where it’s manageable. The purpose of this process is to make sure you spend as little as possible on a day-to-day basis and free some money you can direct to the emergency fund.

Step 3 – Supplement your income with other sources if possible

Starting a side hustle is a great way to generate extra income without having to commit to a full-time job. There are a number of ways to get started, such as freelancing, becoming a consultant, or even starting a blog. If you have a skill or passion that you can monetize, starting a side hustle can be a great way to earn some extra money. The trick here is to choose something whenever you want, even if the payout is lower. For example, you can build your own website and try to earn money from advertisements placed on it. You can learn search engine optimization (SEO) and apply it to your website. You can choose a niche or topic that you are passionate about and start a YouTube channel. If you are passionate about communication and interactions with other people, you can grow some social media accounts on topics you like. All of these are side hustles that require a lot of work and dedication, but the good thing about them is the flexible schedule you can adopt. All of the examples above have flexible working hours and can provide a degree of flexibility that may be beneficial for those who have jobs with irregular schedules or incomes.

You should know that there are some typical jobs where employers allow flexible work hours. Flexible work hours are a type of work arrangement in which employees are allowed to determine their own start and end times within certain limits set by their employer. Some of these jobs may be based in an office, while others may be based in a more flexible environment, such as working from home. Here are some examples of jobs that offer flexible work hours:

• Accountant
• Bookkeeper
• Commercial banker
• Controller
• Financial analyst
• Investment banker
• Loan Officer
• Management consultant
• Operations research analyst
• Personal financial advisor
• Securities analyst
• Tax examiner
• Tax preparer

To learn more about specific jobs that offer flexible work hours, it is best to consult with a career counselor or search online for job postings that list flexible work hours as a requirement or preference.

Conclusion:

Budgeting on an inconsistent or irregular income is like trying to budget on a tightrope without knowing how long the rope is or when it will snap. But if you are able to resist the urge to spend on things that you really don’t need, you should be able to make it work. This is actually the point of budgeting, and it works for irregular income as well. Whether your income is up or down, it is important to keep track of how much money you are making and how much money you need for the basic necessities of life. Start the budgeting process right away and it will help you determine if you are able to spend without going into debt or taking on unnecessary risks.

The post How to Budget on an Inconsistent / Irregular Income first appeared on My Blog.

So, you have no plans, nothing to do, and no one to hang out with. What are you going to do? Are you going to spend the rest of the day reading books, watching TV, or something else entirely? Perhaps you’re thinking about calling some friends or parents but they aren’t home or they are busy. This is when it gets a little tricky. What do you do on your day off? The answer may seem obvious, but it isn’t that simple. There are many things you can do on your day off, depending on your interests and the time available. Since not everyone will have the same circumstances, I did some research and grouped these potential activities in the following way:

What to do on your day off if you:

• Want to relax or chill
• Want to try something new
• Want to be productive and useful
• For long-term growth and skill acquisition
• Want to focus on health and welness
• Want to do something good for others
• If you don’t want to spend any money

1. What to do on your day off if you want to relax or chill?

Your work is your work. You put in long hours, so it’s understandable that you’d want to take a break and relax on your days off. But what do you do on your days off? If you have no hobbies or interests, this can be an exceedingly difficult question to answer. Unless, of course, you’re willing to commit yourself to finding new hobbies and interests…Which doesn’t seem like something many people are up for.

Luckily for you, we’ve got some great ideas about how to spend your day off. So switch off your laptop screen, put down that smartphone, and read on for some great advice on how to spend your day off when the time comes around again!

When you are feeling stressed or anxious, the last thing you probably want to do is go out and do something more stressful or anxiety-inducing. Activities that induce stress or anxiety are obviously not great for those prone to these feelings. But what activities are best for relaxing? There are so many different ways to relax, from meditation and yoga to reading a book or drinking a hot cup of tea. However, there are definitely some activities that are more relaxing than others. And time is also a factor; some activities require more time than others, so I grouped them in a table with a rough time estimate so you can choose whatever you like. The ones written in red don’t involve spending any money:

2. What to do on your day off if you want to try something new?

Experimenting with new things can be a fun and exciting way to learn more about yourself and the world around you. It can also help you to become more open-minded and adventurous, which can be beneficial in many areas of life. Of course, it is important to approach new experiences with caution and be sure to do your research beforehand so that you don’t end up in a dangerous or uncomfortable situation. Here are a few more unusual examples of what to do on your day off, the ideas written in red don’t involve spending any money:

3. What to do on your day off if you want to be productive or useful:

Some people feel their best when they’re being productive and making the most of their time, while others prefer to relax and recharge on their days off. These types of people are generally called “hustlers.”  Generally speaking, a hustler is someone who is always working hard and trying to achieve their goals, regardless of the obstacles in their way. They’re determined, driven, and never give up, they are never satisfied with where they are and are always striving to do better, and most of the time, they will dedicate their day off to productive and useful activities. If being productive is something that will make you feel good, then, by all means, go for it! Here are some examples of activities that you can do on your day off, while you can also benefit from their outcome in one way or another.

For instance, take some time to get hands-on with your finances; an honest and tested approach is to read a Rocket Money review. See how it can assist in managing subscriptions and tracking spending. Additionally, if you’re looking to make your money work for you, consider reading an Acorns review for investing. It’s a user-friendly way to start growing your wealth without having to dive deep into the complex world of stocks and bonds. Both are productive steps towards financial well-being that you can explore comfortably from home.

My family has a saying, kind of an inside joke: why waste a perfectly good holiday having fun when you could be doing chores?

4.What to do on your day off for long-term growth and skill acquisition:

Investing in your future self doesn’t require a hefty bank account—just a bit of your time and the desire to learn and grow. Whether it’s advancing your career or enriching your personal life, here are some ways to use your day off to plant seeds that will one day bear the fruit of success and fulfillment:

5. What to do on your day off for Health and Wellness:

Taking a day off is the ideal chance not only to rest but to actively engage in nurturing your body and mind. This is about creating an experience that leaves you feeling rejuvenated and recharged. Based on tested and tried ideas, these activities are more than just suggestions; they are pathways to enhanced well-being. Here are some examples to inspire you:

6. What to do on your day off if you want to do something good for others:

While many people will find charitable work stressful, there are some that this process will help disconnect from their day-to-day activities and make them feel better about themselves. Some people may find that they enjoy and even feel relaxed while doing volunteer work for a cause they care about. And there are many benefits to participating in charitable work, including the potential for improved mental and physical health. If you think this might work for you, why not give it a try? Here are some examples of what to do on your day off if you want to help others. The ideas marked in red don’t involve spending any money.

7. What to do on your day off If you don’t want to spend any money:

Some people may choose to spend very little on relaxation, while others may choose to splurge on activities or experiences that help them unwind. According to a study done in 2020 by the Bureau of Labor Statistics, the average American spends around $3,000 per year on entertainment. You could easily tap into this money and snatch some savings just by engaging in entertainment activities that don’t cost anything. I marked with red all the ideas that don’t involve spending any money from the categories above,  so you can do a quick scan and identify them at a glance. And if you want a few more examples of what to do on your day off that doesn’t involve spending any money, check the table below:

Final thoughts:

A day off is a precious gift, and it should be treated as such. Enjoy some leisure activities, spend time with family and friends, or just take some time for yourself. Whatever you do, make sure you savor your day off and use it to rejuvenate yourself.

A day off is a small gem that does not come along very often. It is something we should cherish and enjoy.

The post What To Do On Your Day Off: Ideas Based on Mood, Time and Money first appeared on My Blog.

It may seem overwhelming if you’ve never created a budget before. But once you understand the benefits of budgeting and learn some easy tips for creating one, it will become second nature. Many resources and tools are available to help you make and stick to an actionable budget. This article outlines the best budgeting tips for beginners and provides personal examples of how to put them into practical use for everyone.

1. Don’t be too hard on yourself
2. Choose your goals first
3. Emergency funds are underrated
4. Do budget planning in your spare time
5. Budget planning is 99% about how you spend money
6. Use the best budget planning strategy that fits your needs
7. Try to keep bills and receipts close when budgeting
8. Use budget planning to plan ahead for large purchases
9. Mark a no-spend day in your budget plan
10. Use cash to limit budget leaks
11. Use the power of habits when sticking to a budget plan
12. In your budget plan, set aside money for discounts & bargains
13. Trim your budget – reduce cell phone bills and cut cables
14. Separate fixed expenses from variable expenses when you budget
15. Use public transport if possible, try to walk more instead of driving
16. Cut unuseful habits that cost money from your budget plan
17. Do budget plan reviews frequently – review spending patterns
18. Budgeting tips for inconsistent income
19. Try an online budgeting tool – maybe it’s more convenient for you
20. Expect the unexpected – work hard on your savings

1. Don’t be too hard on yourself

It’s like learning to drive a car. It takes time and patience to learn how to budget. It’s difficult because it requires you to think about money in a different way. For example, people who do budgeting must often make decisions based on long-term goals rather than immediate gratification. This can be challenging for some people, who may be more accustomed to thinking about money in terms of immediate needs. Budgeting is also a complex topic with many different facets. For example, in budgeting, you will eventually understand concepts such as “needs”, “wants,” zero-based budgeting”, “envelope cash systems”, and so on. These are not easy to grasp, but they are not very complicated either. Think about it this way: it’s like opening a jar of pickles. You have to use some effort to open the jar, but removing the lid makes it very easy to remove the cucumbers.

It’s important to be mindful of how you talk to yourself when you venture into the realm of budgeting. The good news is that you can work with it even if it’s not perfect. For example, maybe the first time you forgot to budget your pet’s food. When you realize the mistake, adjust the budget plan. Do it even if you have to do some cuts. Maybe less eating out. Perhaps fewer online subscriptions.

Embrace the imperfections and use them to your advantage. Let them add character and charm to your day, and don’t be afraid to adjust. Maybe you can find some cheaper pet food with this opportunity. If you’re constantly putting yourself down or berating yourself for small budgeting mistakes, it can take a toll on your mental and emotional health. Remember that you’re human and that everyone makes mistakes. Among all the budgeting tips, the first one is the most important: cut yourself slack and try to focus on the positive. There’s no need to be too hard on yourself. Do it like you’re in it for the long term.

2. Choose your goals first

This advice is solid overall and shines especially as one of the best budgeting tips for beginners. Having clear goals gives you something to focus on and work towards. Budget planning goals will be more concrete than other life goals and can be tracked easily. And even partial results will help to keep you motivated and on track. Compare the motivation power of a vague goal like “getting married to a cute guy” to building a $1,000 emergency fund. After you put aside some cash, even as low as $300, you can already look back with satisfaction, and because of this, it will be easier to maintain enthusiasm and stay focused. Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART).

3. Emergency funds are underrated

In budgeting, an emergency fund is a fund set aside to cover unexpected expenses, such as a job loss, medical emergency, or home repair. Achieving financial stability by having sufficient savings to handle unexpected expenses, such as medical bills or car repairs, is one of the smartest budgeting tips you can put into practice.

Emergency funds are underrated because people do not think they will ever need them. If people do have extra money, they may not see the need to have an emergency fund as they may feel that they can rely on credit cards or other forms of borrowing in the event of an emergency. They don’t understand or know the high cost of borrowing money fast. The cost can be financial or social if you borrow from friends. Yes. this kind of action puts a strain on your relationships. And can cost you up to two or three times the money you could have saved in the first place. Usually, people understand the importance of having an emergency fund only after they have their first emergency, and usually after they are already in debt and regret it. That is why learning it from other people’s experiences is important. And it is even more important if you start a budget plan because budgeting offers a good framework for building emergency funds. Just set aside $50 every month in an emergency fund. Or even less! Just think about it: how much money would you have in an emergency fund if you put aside $50 every month and if you started ten years ago?

According to the report on the Economic Well-Being of U.S. Households in 2020 – May 2021 by the Federal Reserve, 39% of Americans would have a hard time covering an unexpected cash expense of just $400. This means that a relatively small and unexpected expense, such as a car repair or replacing a broken appliance, can be a hardship for many families. Basic budget planning could help these people build an emergency fund without feeling any serious burden by regularly saving a very small sum of money. You need to set aside just $35 every month, and in a year, you’ll have a $400 emergency fund as a backup. If you need more motivation to start budgeting, read this article about budget planning statistics.

4. Do budget planning in your spare time – think about needs vs. wants

This is one of the hardest budget tips to put into practice, but one that can have a major impact on your results. When you do budgeting, it is crucial to prioritize your spending and allocate your funds in the smartest way possible. An effective budget needs to take into account what you need and what you want. For example, when you need to buy a car, it’s not just about the price tag—you must decide whether it is a need or a want. I have broken down the needs and wants in a recent article about the different budget planning strategies. They are actually part of the 50 / 30 / 20 budgeting strategy; check it out if you want more concrete examples.

Unfortunately, many people live above their means and cannot afford the lifestyle they want because of their monthly expenses. If this sounds like you, look at your financial situation and see where you can cut back (especially in the wants department) to save money for the things you need.

Working on a budget does not mean you cannot enjoy yourself at all; it simply means having a plan for how much money you can spend on different things every month so you don’t go over budget. Lack of enjoyment in your plan is not necessarily good because you will eventually burn out and stop doing it. Just be careful about what you want and what matters to you. And if these things are included in your budgeting plan, you just have to worry about following it.

Another trick you can do in your daily routine is to do this thinking process whenever you have spare time. This can be done in the evening, before bed, whenever you have to wait for a meeting, appointment, or even food. You don’t have to have dedicated time for it or even have to do it when you do the actual budget plan. Just think about it in your spare time, clarify what is you need and want, and apply that knowledge when you do the actual budgeting.

5. Budget planning is 99% about how you spend money

Most of the effort when you do budgeting is placed on spending patterns, habits, and decisions. People typically start their month off by allocating a certain amount of money for different expenses like rent, groceries, transportation, etc., and then they break down expenses even further into subcategories like food, clothes, entertainment, etc. But, after the budgeting is done, the reality kicks in, and the real issue becomes this: did you spend more than you allocated? Staying constantly within the allocated ranges comes with experience after much trial and error, so don’t discourage yourself if you don’t manage to do it all the time. If you realize before you start your budget plan that spending habits are the most important part of the budgeting process, you won’t have such a big shock when your budget plan meets reality. With experience, you will become more aware of spending patterns. This is one of the best tips for budgeting because it brings a compounding advantage for people who do budget planning over those who don’t.

6. Use the best budget planning strategy that fits your needs

You can do budget planning in many ways, and they are called budget planning strategies. I outlined 5 of them in a previous article:

1. The Classic Budget Planning Strategy
2. The Zero-Based Budget Planning Strategy
3. The 50 / 30 / 20 Budgeting Strategy
4. The Cash Envelope Strategy
5. The Pay Yourself First Budgeting Strategy

Each comes with its advantages and disadvantages. For example, the cash envelope budget strategy tracks how much money you have left in each budget category. This is helpful for people because they can easily differentiate between cash for rent, gas, food, or groceries, and they can spend only as much as they decide at the beginning of the month. This is one of the budgeting tips that have a psychological aspect to them, giving people peace of mind that they aren’t spending the rent money on some fabulous shoes. The only disadvantage is that you have to carry around multiple cash envelopes.

Another example is the pay-yourself-first budgeting strategy: put aside money into savings first whenever your paycheck comes in, then budget the rest. This is a good tip for people who have trouble sticking to plans.

Each budgeting strategy has advantages and disadvantages. Make sure you review all of them and choose the one that best fits your style. Then, you will have a way easier time budgeting for the rest of the year.

7. Try to keep bills and receipts close when budgeting

There are a lot of people who choose to keep all of their bills and receipts to have a complete record of their expenses. But did you know that there are budget planners specifically designed to store bills and receipts? For example, the Mead Organizer Expense Tracker has separate pockets for bills and receipts, which is uncommon among top budget planners. If you are one of the people who keep all of their bills and receipts, then the Mead Organizer Expense Tracker will complement your abilities well. Trying it is a good tip for organized people. With this budget planner, you will get two monthly pockets to separate the bills from the receipts. This feature makes the budget planner much more attractive because your papers will be stored in the same place in which you review your spending, so they will come in handy.

Among these personal budgeting tips, my favorite is to scan or photograph your bills and receipts so that you have a digital record. You can create digital folders for different types of expenses, making it simpler to find the information you need when you need it. Scanning your bills and receipts and keeping them in the cloud can give you extra peace of mind in case of loss or damage. If you have a digital copy of your documents, you won’t have to worry about replacing them if they are lost or destroyed. Scanning your documents can help you declutter your home or office, as you won’t need to keep physical copies of everything. It will also allow you to use budget planners without pockets or room for bills and receipts, which are usually smaller, lightweight, and easy to carry around, like the Clever Fox Budget Planner.

8. Use budget planning to plan ahead for large purchases

It’s always a good idea to plan ahead for large purchases. By setting aside money each month specifically for your large purchase, you can do it without getting into debt and paying unnecessary interest rates. A combination of savings and borrowing may do the trick when planning a large purchase. Some stores offer to finance big-ticket items, which can help make the payments more manageable, but you will end up paying more out of your pocket just because you did not have enough money when you made the purchase. Planning your budget and saving for what you need is the best long-term solution, one of the best tips for budgeting, in which you pay the least for what you want.

9. Mark a no-spend day in your budget plan

A no-spend day is, simply put, a day where you don’t spend any money. This is one of the budgeting tips that can be tricky to do if you’re used to spending money every day, but it’s a great way to save money and get your finances under control. There are a few ways to go about having a no-spend day. First, you can plan ahead and ensure you have everything you need for the day so you don’t have to go out and buy anything. This might mean doing some grocery shopping the day before or packing your lunch instead of buying it. Second, you can make a rule for yourself that you won’t spend any money today, no matter what. This can be tough, but it’s a good way to test your willpower. Finally, you can try to find free activities to do instead of spending money. This might mean playing some old computer games that don’t cost any money, going for a walk in the park instead of going to the movies, doing some meditation yoga, listening to music, or borrowing a book from the library instead of buying one. It’s a good tip to do extensive research about these kinds of activities and select the ones you enjoy the most. No matter what activities you choose, a no-spend day can be a great way to save money and get your finances under control. Do this as many times as possible.

10. Use cash to limit budget leaks

A budget leak is a situation in which money is spent unplanned. This means that money is spent outside the budgeted amount without much consideration at the time of purchase. This can happen for various reasons, but usually, it is because people are not sticking to the budget or because unexpected expenses come up. It is associated with easy and fast purchases when credit card details are saved in the payment system or with payment processors like Paypal, where you can easily set pre-approved payments. Most of the time, budget leaks are simply due to careless spending, such as when someone buys something without knowing whether or not it is within the budget. If you find yourself in a similar situation or if you are someone who tends to overspend, switching from digital currency to paper-based currency can solve most of the problems. With cash, you have more control over your spending because you are limited to the amount of cash you have on hand. And you’ll never have to worry about paying interest on cash. Also, the physical process of getting them, counting them, and the process of letting them “fly away” from your actual hands, may give you some room for having second thoughts about the purchase. This is one of the simple budget tips that can stop you from spending money.

On the other hand, credit cards offer several advantages over cash, including building credit, earning rewards, and enjoying protection against fraud and theft. You also have the ability to build your credit history and improve your credit score by using credit cards responsibly. However, they can also lead to debt if you’re not careful, and you may be charged interest and fees if you carry a balance. But if you are disciplined with your spending and pay off your credit card balance in full each month, you may find that the credit card rewards and convenience of using a credit card make it the better choice for you.

11. Use the power of habits when sticking to a budget plan

Habits help us automate our behavior to do things without thinking about them too much. This frees up our mental energy for other tasks. There are many benefits to developing good habits. Habits can help us to become more efficient and productive, make better decisions, and to stick to our goals. And they work especially well for budgeting.

Here are some examples of habits that could be very useful when doing budget planning. They are good budgeting tips even for experienced budget planners:

• Write down expenses as soon as possible. Ideally, it could be done as soon as the money is spent, in a small budget planner you carry with you all the time. But let’s be realistic; most of us won’t be able to do it like this. The second best thing would be to find some spare time just before bed or after waking up. This way, you have everything fresh in your head. You can mentally break down the past day and write down everything about spending money. Do this every day until it becomes a habit.
• Review and adjust. Your budget should be a fluid document you review and adjust as needed. As your circumstances change, so too should your budget. Review your budget plan regularly to ensure it’s still meeting your needs. This also can be done among the first things you do in the morning or evenings, maybe once a week (on one of the weekend days). If you repeat it enough times, it will become a habit.
• Making a list before shopping is another habit that can help you stay on a budget. This is an excellent tip to help you stick to your budget by buying only necessary items. List-making can become a habit like any other if you do it repeatedly.
• Live below your means. Just because you can afford that new car or designer handbag doesn’t mean you should buy it. If you want to stay within your budget, it’s important to live below your means and only spend money on what you need. While it may not be the most exciting way to live, living below your means is a great way to build long-term financial stability.

12. In your budget plan, set aside money for discounts & bargains

If you’re looking to save money in the short term, then discounts may not be the best option for you. However, if you aim to build up your savings over time, taking advantage of discounts could help you reach your goal sooner. Many stores offer discounts on certain items or during sales, so it is wise to set some extra cash aside to take advantage of these deals. Seasonal discounts are typically offered on seasonal items, such as winter clothes during the winter season. They are a way for retailers to clear out stock and make room for new inventory. So, the best time to buy some winter clothes is not at the beginning of the winter (when most people buy them) but at the beginning of spring, when the retailers want to make room for new inventory. You can have huge savings if you factor this knowledge into your budget plan. This is one of the budgeting tips that is harder to implement because the trick here is having the money way before the actual need. The only disadvantage is that you might not be on top of trends because you buy your clothes for the winter in the spring. However, this should not be a problem for most of us.

13. Trim your budget – reduce cell phone bills and cut cables

There are several ways that you can trim your budget to save money. One way is to cut back on unnecessary expenses such as eating out or buying new clothes. Another way is to find ways to reduce your monthly bills, such as by negotiating with your service providers or looking for more affordable options. Cell phone bills are the prime candidate in this case. There is absolutely no reason why you should pay a lot of money to your cell phone service provider (excluding some specific cases). Cable TV is not as popular as before, especially among young people. According to a 2017 report from eMarketer, the number of people in the US who watch cable TV has been declining since 2010. In 2010, about 100 million people in the US watched cable TV. By 2017, that number had declined to about 86 million. Are you among those who don’t watch cable TV but still pay for it? If so, this is the right moment to take action.

14. Separate fixed expenses from variable expenses when you budget

Fixed expenses are costs that stay the same each month, such as rent or a car payment. Variable expenses are costs that can fluctuate from month to month, such as groceries or gas. When budgeting, the trick is to consider both types of expenses to make accurate financial plans. Seeing where you can cut back or save money can be difficult if all your expenses are lumped together. However, breaking your expenses into categories can make it much easier to see where to make changes. For example, if you see that you’re spending a lot of money on dining out, you may scale back in this area to save more overall. If you know how much you typically spend in each category, you’ll be better equipped to handle unexpected expenses when they come up.

15. Use public transport if possible, try to walk more instead of driving

Public transportation can often be cheaper than owning and operating a vehicle. And in some cases, public transport can be even more convenient, especially if you live in a city with a good public transport system. It can save you money on parking and gas and is often faster than driving in heavy traffic. Taking the bus or train can also be a more relaxing way to travel since you can sit back and read or listen to music while someone else does the driving. Public transportation is also good for the environment. Buses and trains emit far less pollution than cars, so using them helps reduce air pollution and climate change. And, since public transportation can carry more people than private cars, it reduces the number of vehicles on the road, which saves energy and reduces traffic congestion.

For your budget planning, it can do wonders, especially in the savings department. The amount of money you can save by using public transportation will vary depending on several factors, including the cost of gasoline, the actual cost of public transportation, the distance you typically travel, and your driving habits. However, you can generally save a significant amount of money by using public transportation instead of driving. A good tip here is to take advantage of any discounts or deals that your public transportation system offers. For example, many systems offer discounts for seniors, students, frequent commuters, and low-income riders. If you qualify for any of these discounts, be sure to take advantage of them.

If public transit options are not readily available or reliable, they may not be the best option for you. It may not be easily accessible from your home or workplace. It can also be quite inconvenient, especially if you live in a rural area.

Walk more. Walking is a great way to save money while getting some exercise; it has many benefits and is one of the easiest budget tips to put into practice. It can help you lose weight, improve your cardiovascular health, and increase your fitness. Walking is also a low-impact form of exercise, which means it is easy on your joints and muscles. This includes walking to work, to the store, or running errands. Walking can be a great alternative to driving and save you money on gas and parking fees if you live close enough to where you need to go.

16. Cut unuseful habits that cost money from your budget plan

Many habits can cost money, depending on how often they are indulged in and how expensive they are. For example, smoking cigarettes can be quite costly, as can drinking alcohol or going out to eat frequently. Other habits that can cost money include shopping, gambling, and travel. Essentially, any habit that involves spending money regularly can cost a lot over time. After you track your expenses for a few months in a budget plan, you can clearly see the burden this habit puts on your finances. Breaking old behavior patterns and establishing new, healthier ones can be difficult. However, it is possible to do so with dedication and effort. This is one of the hardest budgeting tips for beginners. Many resources are available to help people give up bad habits, and with the right support, it is possible to make lasting changes, but the trick is finding the one that works for you. First, identify them and then start doing research on how to break or replace them.

17. Do budget plan reviews frequently – review spending patterns

Reviewing your budget plan regularly is a good idea to ensure you’re still on track. This is one of the best tips on budgeting that can help you avoid overspending and getting into debt. You may also want to adjust your budget if your income or expenses have changed.

Some things you might want to consider when reviewing your budget plan include:

• Are you spending too much money in certain areas?
• Are you consistently spending what you plan for?
• Are you saving enough money each month?
• Are you on track to reach your financial goals?
• Do you need to adjust your budget to account for any changes in your income or expenses?

On the other hand, if your finances are in good shape and you’re not trying to make any major changes, you may not need to review your budget as often. Ultimately, deciding how often to review your budget based on your circumstances is up to you.

18. Budgeting tips for inconsistent income

An inconsistent income is defined as an income that varies significantly from month to month. This type of income can make it difficult to budget and plan for your financial future. There are a few different reasons why someone might have an inconsistent income. Perhaps they are self-employed, or their business fluctuates seasonally. Or maybe they work on commission, and their earnings depend on how many sales they make. Whatever the reason, living with an inconsistent income can be challenging.

The first tip for budgeting is to build up an emergency fund to have a cushion to fall back on when your income is low. There is no excuse for not building it. The fact that your income is inconsistent means that sometimes it’s high, and sometimes it’s low. It does not mean it’s always low. When it’s high, you need to set money aside for the times when it will be low. Basically, you have to work against your natural impulses and try to cut back on your expenses as much as possible when the times are good.

The second tip for budgeting is to try to find ways to supplement your income with other sources of income. This could include picking up odd jobs, starting a side hustle, or finding creative ways to make extra money. Find something that allows you to work at any time, even if the payout is lower. This will help you to stretch your budget further and make ends meet when your income is low. Identifying business idea examples that allow for flexible work hours, even with lower payouts, can help you maximize your budget and ensure financial stability during times of low income.

And the third tip for budgeting is to try to understand your spending patterns better. This will help you budget more effectively and ensure you are not overspending when you have a good month. If the average income you earn is decent, then the actual problem is not the income but the spending. Try to analyze it as best as possible and control it.

19. Try an online budgeting tool – maybe it’s more convenient for you

Several online budgeting tools are available to help you keep track of your finances and make better spending decisions. Some popular options include Mint, You Need a Budget (YNAB), and EveryDollar.

Mint is a free online budgeting tool that connects to your bank account and automatically tracks your income and expenses. It also provides helpful features like bill reminders and a credit score tracker.

YNAB is a paid budgeting tool that helps you “gain control of your money, get out of debt, and save more money.” It offers goal tracking, bank synchronization, and transaction categorization features.

EveryDollar is another paid budgeting tool that offers a simple, straightforward way to track your income and expenses. It also includes features such as debt payoff assistance and custom budgeting templates.

This is one of the easiest budgeting tips to try in practice. The trick with these kinds of apps is to find one that you actually use regularly. Try some and see if anything sticks!

20. Expect the unexpected – work hard on your savings

The final one from our list of good budgeting tips is to expect the unexpected. This means being prepared for anything that might happen. It’s important to be ready for anything that comes your way because you never know what might happen. The best thing you can do for the unexpected in budget planning is to work towards savings. It can feel very liberating to have an emergency fund in place. It can provide a great sense of security, knowing you have a cushion to fall back on in case of unexpected expenses or unforeseen circumstances. For many people, having an emergency fund can be the difference between financial stability and financial chaos.

The post 20 No-Fail Budgeting Tips for Smart and Practical Living first appeared on My Blog.

Before you begin the interview process, it’s important to understand why exactly you want to pursue a career in finance. That way, when potential employers ask this question as part of the application process, you’ll be ready with thoughtful answers instead of just a blank stare and some mumbling about wanting nice office furniture.

There are a lot of answers to this interview question, ranging from barely decent to utterly bullshit. Before I started writing this article, I did a bit of research, and I was amazed at how pathetic and devoid of any imagination and creativity the search results for this particular topic are. Here are a few examples of what’s out there: financial security and stability, high salaries, a challenging work environment, there is always something new to learn, and so on. They are so cringy; I hope you’re not falling for that kind of bullshit!

In this article, not only will I give you three amazing examples of reasons why you want to pursue a career in finance, but I will teach you how to create them yourself, assuming you want something even more unique. So, let’s get into it.

Why finance?

Answer No 1: 

I want to pursue a career in finance because I believe that someone is sitting in the shade today because they planted a tree long ago. I stole this quote from Warren Buffet, who is the world’s greatest investor and one of the world’s richest men. Warren Buffet is one of the persons that inspired me the most, and this is the foundation of his long-term investment ethos. Like him, I want to start early, get as much experience as possible, and learn the ins and outs of the finance industry. And eventually, become an investor myself.

You may want to adjust the last sentence with something you actually want. To give this answer, you should read more about Warren Buffet, learn about his life, read a few more quotes, and maybe listen to his biography as well.

Answer No 2: 

I want to pursue a career in finance because I’m fascinated by Michael Burry, he is a great researcher and analyst, and I believe I can become one as well. But first, I want to understand everything about finance, with first-hand experience and not from books and guides. Here is one of his core beliefs: “I don’t believe anything unless I understand it inside out” and I’m here to do just that!

You may want to read more on Michael Burry, he had training as a doctor and has learned everything about finance and investing on his own. You can learn about his predictions and the way he thinks about money. There are plenty of resources available online, you just need some time to do it. You can also watch the movie “The Big Short”, where Christian Bale plays him in the convoluted events that led to the 2008 financial crisis.

Answer No 3: 

I want to pursue a career in finance because I’m a big fan of Dave Ramsey; I listened to his radio talk show a lot. I like how he shares practical answers to tough money questions from day-to-day people. I believe that someday I can help a lot of people as well, I know that requires a lot of experience, and that is why I want to learn everything I can about finance.

You should read more about Dave Ramsey before you give this answer so that you can deal well with follow-up interview questions. He started offering financial advice to couples at his local church. In 1988, he founded a financial counseling service. You might also want to read his book, “Financial Peace”, and learn more about the 7 steps to budget in the popular “Dave Ramsey Method.” It wouldn’t be bad to know some things about the debt snowball method as well before you answer this way.

Why Do You Want to Pursue a Career in Finance?

How to create your personal take and why you should do it:

First, why should you create a personalized answer? Why not answer like anybody else? Think about it from an employer’s perspective. They have to select one of probably dozens of candidates who went through the same training and have no direct experience dealing with real problems, and all of them will probably answer in a similar way to all their interview questions. They can certainly clean out the weeds, those that don’t even grasp the basics of finance, but how can they differentiate from a few candidates that do a decent job at answering most of the questions? Certainly, with an interview question like this: why choose finance? This can reveal people who have more motivation, who think for themselves, and who really want to do a good job by preparing well for it. This answer is certainly one of the biggest things that can make a difference in the hiring process. Another reason why you should craft a personal answer and not copy the ones I provided above is that one of your competitors might come up with the same answer. They might be lazy and just pick one that they like of the 3 above. If you give the same answer as your competitor, the employer will realize both of you read this answer somewhere and did not come up with it. But before you start working on a customized answer, you should know that it’s not easy to craft one, but there are some benefits; here are the pros and cons of writing one yourself:

Pros and cons in simple words:

Pros:

• You can create it based on your beliefs
• It will be unique
• It will be better than anything else that you find on the web
• It can work wonders for your hiring process, and also motivation

Cons:

• It takes time to build, probably at least a few hours
• You need to be able to answer more follow-up interview questions, so more hours are required to do research

A short step-by-step guide on how to create a personalized answer to the interview question “Why finance?”

• Step 1 – Do research about people in finance. Choose one that you like.
• Step 2 – Read about his / her beliefs, and understand their motivation.
• Step 3 – Make their beliefs your own, or use them as inspiration.
• Step 4 – Check the beliefs and values of the company you want to work for, and try to factor them into your answer.

And here are a few more tips and tricks to help you at each step along the way:

Step 1 – Choosing a role model

This should not be hard to do. It requires research on popular people in finance. Just open Google, and type “popular people in finance” and you will get a list with plenty. The hardest part is choosing one. The more popular the better, don’t choose somebody very obscure, even if it’s among the most successful people in the world, because your employer might not know about him. But they will probably know about the most popular ones like the examples I shared above: Warren Buffet, Michael Burry, and Dave Ramsey. They are all good even if you come up with something different from what I came up with. A few more examples would be Ray Dalio, Benjamin Graham, or even some popular YouTubers like Graham Stephan,  Ben Felix, or educators like Aswath Damodaran. Using them is a bit more risky, even though they are popular, they are not so widely recognized by people. Anyway, choosing them has an advantage as well, because it will certainly make your answer more unique.

Step 2 – Answering “Why did they choose finance?”

This step is a bit harder to make, you basically have to do some investigation and understand why your chosen role model pursued a career in finance. What does he believe about investments, money, about life? The key point here is to start with the question “Why?”, “Why finance?”. Something that will help you at this step is the book “Start with Why: How Great Leaders Inspire Everyone to Take Action” by Simon Sinek. There is also a short video by the author, in which he explains the whole process step by step. He also gives a few hands-on examples of his theory put into practice.

Step 3 – Can their beliefs become your beliefs?

This step is a bit harder than the previous one. Here you have to actually use some creativity and adjust what you find in the previous step to what you currently believe. In other words, you have to create something that sticks, something interesting, something good while mixing your role model’s beliefs with yours. To help you with this step, you can use the advice Chip and Dan Heath gave in their popular book called “Made to Stick: Why Some Ideas Survive, and Others Die.” The short summary is this: to make an idea stick, it has to have 6 qualities all wrapped up in a clever acronym SUCCES so that you can remember them easily. Each letter means the following: simple, unexpected, concrete, credible, emotional stories. So, whatever you create should have these qualities. Let’s take the first example I mentioned above, the one with Warren Buffet, and go through the checklist:

• Is that example simple? Yes, it’s only a paragraph; it wouldn’t even be hard to memorate it word by word.
• Is that example unexpected? Yes, your future employer will expect a boring answer like a challenging work environment, dynamic industry, opportunities for growth, “I like problem-solving”, or other stuff like this.
• Is that example concrete? Yes, very much. We are talking about Warren Buffet, who is a well-known person, and we are giving away one of his quotes. This is not astrology, speculation, wishful thinking, or something that does not connect easily to stuff that everybody knows. In contrast: “I enjoy rising to new challenges and resolving problems that might arise” – is vague, don’t do that!
• Is that example credible? Yes, this example is something that might really motivate somebody. A good example or role model is one of the most powerful motivators. In contrast to “fast-paced environment”, or “I enjoy rising to new & hard challenges”. If you really like solving hard challenges, why don’t you try to find a cure for cancer, solve hunger, and save the environment? Why finance? Challenges in finance here are not “special” when compared with challenges in other fields. Those generic & typical answers are certainly not credible.
• Is that example emotional? Yes, because it touches on a point that many people know is true but don’t really apply in practice. The more scientific term for it is delayed gratification. It can touch a sensitive cord when you see a young person thinking for the long term when you as the employer know that you probably took a lot of decisions that favored faster and smaller benefits and sacrificed long-term results in the process.
• Is that example a story? Yes. It’s a small story: you found out about Warren Buffed, you got inspired by him, you want to become like him, and you are starting now.

Step 4 – Mix in something from your future employer’s beliefs

This is even harder, but it will bring extra value. What you need to do is some research about the company where you want to apply for the job. Learn their core values, their goals, their targets, in other words, what they want to become. Try to incorporate these values in your little story; for example, do they want to grow bigger? Make your story about growth. Do they want to invest smartly? Make your story about investment decisions. But don’t be too specific because you risk falling into cringy land if you keep harping on too much. Keep it general; use the direction they want to go in as your direction.

Conclusion:

Answering the interview question “Why finance” is pretty hard; if you don’t want to bother too much, use one of the 3 examples I gave above. A lot of people search for answers to this interview question: why do you want to pursue a career in finance? And there is a tiny / very tiny / very small chance that somebody who competes with you will choose the same answer, but there is one nonetheless. And if you want to be unique and you don’t want to take any chances, create one good answer using the step-by-step guide I wrote above. Good in this case means that you should be the one satisfied with the answer. And then have a prosperous career, my friend!

The post Why Finance? Why Do You Want to Pursue a Career in Finance? first appeared on My Blog.

When it comes to budgeting, there are many different aspects to consider. Figuring out where your money is going and how much you have left in your account can be tricky, especially given the available online banking options and complex financial software. It is important to ask the right questions to create a functional budget plan that helps you reach your personal finance goals. While they might seem like small details, these things can make all the difference in helping you achieve your money management goals and stay on track in the long term.

Asking a good question is like doing good detective work. It’s like using a magnifying glass to bring out the smallest details. Act like a detective and solve this mystery: what are the flaws in your budget plan? What are you saying you do, but you actually don’t? Look at all of the evidence and put together a logical explanation for what happened in the previous month. Don’t trust yourself, don’t believe everything you say! Be critical and see what you can discover. Use that info to improve your plan for the future!

Before I give you concrete examples of how to ask yourself questions when you do budget planning, I want to give you some advice about asking questions in general. These are some general tips you can remember when asking a question to ensure it is clear, concise, and on point. Some things to consider include:

• Asking questions that can be answered with a simple yes or no are often not as helpful as questions that reveal more facts about yourself. For example, instead of asking yourself: “Exactly how much did I spend on clothes?”, you can ask yourself: “Why did I spend so much / or so little?”
• Be specific in your question. For example, if you are confused about a concept, don’t just ask, “What is this?” but rather, “What does this mean for my actual needs?”
• Think more critically about the information that you write down. Don’t ask only questions that support what you already believe. Ask the ones that go against your natural thinking process. For example, “Do I really need this?”, “Can I do better in this category?”, “Is this the best thing I can do?”

What are the most important budgeting questions you can ask yourself?

1. What is my income?
2. What are my expenses?
3. What are occasional or one-time expenses?
4. How much money do I need for day-to-day expenses?
5. What are my short-term financial goals?
6. What are my long-term financial goals?
7. What are my emergency fund goals?
8. How much debt do I have?
9. How much can I realistically save each month?
10. Can I increase my income?
11. How much should I set aside for investments?
12. How much should I save for retirement?
13. How often should I review my budget?

Budgeting can seem daunting, but it’s important to consider answers to all of these budgeting questions to ensure that your finances are in order. Now I will break down each question with reasons to ask it and try to identify important information that the question will reveal:

1. What is my income?

When budgeting, it’s crucial to know exactly your income, specifically your take-home pay (net income or disposable income), because it sets the foundation for all your financial allocations. For instance, if your monthly net income is $3,000, this is the amount you have available for necessities, discretionary spending, and savings. It’s essential to base your budget on your net income, as this is the actual amount you receive after taxes and other deductions. Relying on gross income figures can lead to inaccuracies in your budget, potentially causing financial strain. The real challenge is dealing with multiple income sources. There are a few different ways that you can approach budgeting when you have multiple income sources. One option is to add all your income and then create a budget based on that total amount. Another option is to create a budget for each individual income source and then combine those budgets into one overall budget.

• If you choose to budget by combining all of your income sources, you will first need to add up all of your income and then determine what percentage of that income comes from each source. Once you know the percentages, you can create your budget categories and allocate a certain percentage of your total income to each category. For example, if you have three income sources and you want to allocate 20% of your overall income to housing, you would then budget $600 for housing if your total monthly income is $3,000.
• If you choose to budget for each income source, you must create a budget for each source and combine the budgets into one overall budget. This can be helpful if you have income sources with different purposes or want to keep your spending separate for each source. For example, you may have one income source that is your main source of income, and you use it to cover your living expenses. You may have another income source that is used for savings or investments. By creating a budget for each income source, you can more easily track your spending and ensure you are not overspending in any area.

2. What are my expenses?

This is basically the core of budgeting. You need to answer this question to identify your actual spending (and make sure you don’t go over budget), compare with examples from other people, and ensure you don’t indulge too much in expensive eating habits. Assuming you are living in the United States, here are some general guidance numbers I got from the Bureau of Labor Statistics: The average person spends about $7,500 per year on food. Housing costs will vary depending on where you live and whether you own or rent your home, but the average person spends about $20,000 per year on housing. Transportation costs will also vary depending on factors like whether you own or lease a car, how much you drive, and public transportation options in your area, but the average person spends about $9,500. Check out the table for yourself and compare how much you spend in each category. Also, consider your specific location because things may vary greatly based on city and country. Search online for more accurate data regarding your specific location. You should know that there are also YouTube videos in which people share their real numbers with the world, and they also specify the general area where they live. Search on YouTube for “budget with me” videos, and also add your location in the query, like this: “budget with me New York,” and you will find some good examples, like this video: “BUDGET WITH ME | Monthly Budget while Living Alone in New York as a 20 something” or like this one for Canada: August 2022 Budget With Me what I spend in a month living in Canada.

More specific questions you should ask yourself:

• Am I Tracking Well?: Regularly review your expenses to ensure you stay on budget. Compare current spending with past months to identify any changes or trends.
• Fixed vs. Variable Income?: Differentiate between regular, predictable expenses (like rent) and those that fluctuate (like utility bills). This helps in planning and adjusting your budget accordingly.
• Analyze expenses for the Last 3-6 Months: Get a clearer picture of your financial habits and necessary adjustments.
• Do you need to set up spending limits?: Based on your expense analysis, set realistic limits for different categories, ensuring you live within your means while meeting your financial goals. This practice helps in avoiding overspending and maintaining financial stability.

Analyzing Spending: Did I Overspend?

To determine this, compare your actual spending against your budgeted amounts. If you consistently exceed your budget in certain categories, it’s a clear sign of overspending. To stop this trend, first identify the areas of excess. Common culprits include dining out, entertainment, or impulse purchases. Implement strategies to curb this behavior, such as setting stricter spending limits, using cash instead of cards, or employing the envelope budgeting system. Additionally, consider ways to cut down on spending, like opting for home-cooked meals over eating out, canceling unused subscriptions, or seeking cheaper alternatives for regular expenses. Adopting these measures can help you regain control over your finances and align your spending with your budget goals.

3. What are occasional or one-time expenses?

The occasional expenses are items that you do not purchase on a regular basis but still need to account for in the budget plan nonetheless. While budget planning, people typically set aside a small amount of money each month to cover these types of expenses, which helps ensure they are prepared when they occur. Answering and identifying these budgeting questions will allow you to plan in advance so they don’t surprise you. After all, they are expenses you will certainly do. The real question is this: will you be prepared for them or not?

Here are a few examples of one-time or occasional expenses:

• Gifts: I budget $50 per month for gifts. This covers birthdays, holidays, and other special occasions.
• Clothing: I budget $100 per month for clothing. This covers new clothes, shoes, and any other items I may need.
• Home Maintenance: Occasionally, you may need to make repairs or replace appliances in your home. Repairs to the house fall in this category as well. A few examples could include painting, fixing a leaky roof, repairing the shower, or making other household repairs.
• Miscellaneous: I budget $50 per month for miscellaneous expenses. This covers things like laundry, dry cleaning, and other random costs.
• Health Care: While you may not have to see the doctor every month, you will probably need to visit the doctor or dentist occasionally. You may also need to buy prescription drugs or other health-related items. This has to be included somewhere in your budget plan

All these are things you will eventually have to spend money on. They might not be included in your initial plan; if they are not, you will feel shocked each time you have to deal with them and can’t postpone them anymore. Knowing that you have money set aside can help you relax and feel less stressed.

4. How much money do I need for day-to-day expenses?

There is no one-size-fits-all answer to this question, as everyone’s day-to-day expenses will vary based on their individual lifestyle and needs. However, a good general rule of thumb is to budget $50 to $150 per day for food, transportation, and other basic necessities. Of course, this amount can fluctuate depending on your specific circumstances. If you live in a more expensive city or have a higher standard of living, your costs will naturally be higher. Similarly, if you are a thrifty shopper or can live on a tight budget, you may be able to get by on less money. Ultimately, the best way to determine how much money you need for daily expenses is to track your spending for a few months or so to get an idea of your average costs. A good idea to get better estimates of what other people in your area pay for day-to-day expenses is to check YouTube. Do a search for “cost of living in“ and add your location. You can easily find videos like these: Cost of living in New York City * How Much Do I Pay?!, or Cost of Living in London | Minimum Salary to Live Comfortably in London.

5. What are my short-term financial goals?

You typically want to achieve short-term financial goals within the next year or two. They might include saving for a down payment on a house, paying off high-interest debt, or building up your emergency fund.

Answering this question is important because it will help you create a better budget plan for your actual needs. This might involve setting up a budget and sticking to it, cutting back on unnecessary expenses, and automating your savings so that you’re regularly putting money away.

In their short-term financial goals, people usually include the emergency fund to have a cushion to fall back on in case of unexpected expenses. It may include buying tools like a laptop, a more advanced phone, or something you really miss that can improve your life by a large margin.

With a clear plan and a bit of discipline, you can achieve just about any short-term financial goal you set your mind to.

6. What are my long-term financial goals?

This is another important question you should ask yourself when budgeting. Long-term financial goals can help you set aside money for major life events, such as buying a home, weddings, or retirement savings. Additionally, having long-term financial goals can give you a sense of financial security and peace of mind.

Here are a few reasons why you should have long-term financial goals:

• To help you stay motivated
• To have a plan that you can follow
• To be more organized
• To be more confident
• To make more informed decisions

People with long-term financial goals often have more incentive to keep pushing their goals up. This motivates them to achieve them and allows them to stay focused on their goal. Here are a few examples of long-term financial goals:

• save up at least 20% of the purchase price of the house so that you can get a good interest rate on your mortgage
• save up enough money to buy a house within the next five years
• make sure that you have enough saved so that you can enjoy your retirement without worry
• have enough money to travel and enjoy life

Once you know your goals, you can start figuring out how much you need to save. If you want to retire in 20 years, you’ll need to save more than if you want to retire in 30 years. And, of course, the sooner you start saving, the better.

Achieving sufficient savings to retire is usually people’s greatest long-term financial goal. And socking away 10% to 15% of every paycheck for this purpose is the common rule of thumb. However, this rule of thumb doesn’t work for everyone. If you’re saving less than 10% of your income and you don’t have a significant other or children to support, you might want to consider increasing your retirement savings. On the other hand, if you’re just starting out, the recommended percentage might be closer to 20%. Even if you’re in your late 20s or early 30s and feel far from retirement, saving now can make a big difference in your future. Even small amounts saved over time can add to a healthy retirement fund.

If you’re unsure where to start, you can talk to a financial planner to help you develop a savings plan that meets your unique needs. You may also want to consider opening a high-yield savings account to earn more interest on your savings. Whatever you do, don’t forget to keep your long-term financial goals in mind to stay motivated to save.

No matter what your long-term financial goals may be, it’s essential to start saving early and make regular contributions to your savings account. It is important to remember that reaching your long-term financial goals is a marathon, not a sprint. Stay disciplined and patient, and you will eventually reach your goals.

7. What are my emergency fund goals?

An emergency fund is a financial cushion that can be used in times of need. It can be smaller than $1,000 and can be used to cover unexpected costs such as medical expenses and repairs. It is a place where you can put money to help you if something bad happens or if you find yourself in a difficult situation. The amount of money you need to have in your emergency fund will vary depending on many specific factors. Your emergency fund should not be too small, as this could overwhelm you and limit your options regarding crisis funding. When you set your emergency fund goals, the rule of thumb is to set aside at least three to eight months’ worth of expenses, depending on your lifestyle, monthly expenses, income, and number of dependents. You should expect the answer to this question to change in time, which is natural because your values and circumstances also change.

8. How much debt do I have?

This question might sound obvious, but answering it might seem harder than it looks. Especially for people with a lot of debt and debt from many different sources.

There are a few different ways to calculate your debt. One way is to add up all of the debts that you have simply. This includes any outstanding balances on credit cards, loans, and other debts. Another way to calculate your debt is to use your credit report. Your credit report will list all your debts, current balances, and interest rates. You can use this information to calculate your total debt, as well as your monthly payments and interest charges.

You can do the following things to shed some light on your debt situation. First, you need to know the balance of each of your debts, which you can find on your most recent statements. Next, you need to know the interest rate for each debt, which you can find in the terms and conditions for each account or by contacting your lender directly. Finally, you need to know the minimum payment required for each debt, which you can find on your statements or by contacting your lender.

The average American has a total debt of about $30,000. This average debt is divided into four categories: personal debt, balance on credit card, short-term debt, and long-term debt (which often includes student loans). Knowing your debt will help you make a better budget plan with concrete steps on how to repay it. Remember, repaying debt is as important as breathing. If you stop for long enough, you’ll suffocate.

The next smart question to ask is: “How much should I pay down each month?” Consider your minimum required payments and your financial capacity for additional payments to answer this. For instance, if you have a student loan of $20,000 at a 5% interest rate with a minimum monthly payment of $200, you might decide to pay an extra $100 monthly if your budget allows. This extra payment can significantly reduce your interest over time and expedite the loan payoff, freeing up resources for other financial goals sooner.

9. How much can I realistically save each month?

To answer this question, you must be diligent and calculate your income and expenses for a few months, average them out, and then calculate the difference. This is influenced a lot by your income and spending habits. Usually, people can save around $200 to $300 per month, but this number will vary greatly. Generally speaking, this number should be anywhere between 3 to 6 percent of your monthly income. If you can do higher numbers, you are doing a great job. It’s not easy. Experts agree that saving 20% of your net pay is a good habit to get into. This is not easy to maintain, however. If you hope to retire early, you may have to save 50% of your income every month. If you want to retire in your seventies, you probably don’t want a demanding savings target.

10. Can I increase my income?

In general, supplementing your income can be a good idea if you are struggling to make ends meet or if you want to boost your savings. Here are a few general tips to keep in mind if you’re considering increasing your income:

• Make sure you have a clear purpose for doing so. Whether you’re looking to boost your savings or simply want extra spending money, setting a specific goal will help you stay on track.
• Do your research. There are various ways to supplement your income, so finding the option that best suits your needs is important. For example, you might consider taking on a part-time job, starting a side hustle, or investing in a passive income stream.
• Consider the tax implications. You may be subject to taxes depending on how you supplement your income. For instance, if you earn money from a part-time job, you will likely have to pay income taxes on that income.
• Be mindful of your time commitment. Supplementing your income can be a great way to boost your finances, but it’s important to ensure you don’t bite off more than you can chew. If you’re already working full-time, for example, taking on a second job may not be realistic.
• Starting a side hustle can be a strategic way to supplement your income. It allows you to pursue a passion or utilize a skill to earn extra money, potentially turning a hobby into a profitable venture. When considering a side hustle, assess the market demand for your offering, start-up costs, and how much time you can realistically dedicate.

11. How much should I set aside for investments?

This question assesses your financial goals, risk tolerance, and current financial situation. A common guideline is to aim for a certain percentage of your income, such as 10-15%, to be directed into various investment accounts. This can include retirement accounts, stock portfolios, or other investment vehicles. The exact percentage will vary based on individual circumstances, such as age, income level, financial goals, and existing financial obligations.

In exploring options for investment accounts, it’s useful to look into what modern tools have to offer. In my Acorns investing app review, I’ve tested how it works, confirming it’s a safe and secure option for micro-investing. Similarly, my RocketMoney app review delves into its budgeting and financial tracking capabilities. While Acorns focuses on investment, RocketMoney is more about managing expenses and subscriptions, offering a comprehensive view of your financial health. Both apps serve distinct purposes and can be valuable tools in your financial arsenal.

12. How much should I save for retirement?

A general guideline is to save around 10-15% of your income for retirement, but this can vary based on factors like age, when you plan to retire, and your desired retirement lifestyle. For example, if you’re in your 30s and earn $50,000 annually, aiming to save $5,000 to $7,500 per year for retirement can be a good start. If you’re starting later, say in your 40s or 50s, you might need to save a higher percentage to meet your retirement goals. It’s also important to consider the role of employer-matched retirement plans, which can significantly boost your retirement savings. Adjusting your savings rate based on age, income, and retirement aspirations can ensure a more comfortable and secure retirement.

13. How often should I review my budget?

This practice is crucial as it allows you to adjust your spending and saving habits in response to changes in your financial situation. For an effective budget review routine, consider a monthly check if your income and expenses are relatively stable. For example, if your monthly income is $4,000 and your expenses typically range around $3,500, a monthly review can help ensure you’re on track. A bi-weekly or weekly review might be necessary if your income varies due to freelance work. For instance, if your income fluctuates between $2,000 and $3,000 monthly, more frequent reviews allow you to adjust your budget according to your current financial situation, ensuring optimal management of your resources.

Final words

Now that you have some directions on asking questions about your budget, let’s put it into practice! Take out your budget plan and treat it like a detective treats a suspect. Don’t leave anything unexplored!

The post What Are The Most Important Budgeting Questions To Ask Yourself? first appeared on My Blog.

There is an endless supply of articles online about managing your money, but not much about managing your time. It seems as though we all live our lives in constant scarcity when it comes to time. We’re constantly being told that we need to “optimize,” “prioritize,” and “strategize” if we want to save money. An organized budget helps you know where your money is going and what you have left over to save or spend on things like vacations or new clothes. A budget helps you plan for the future and see whether you will have enough money for retirement or other long-term goals. But a budget doesn’t just mean counting your cents and nickels — it means thinking about what really matters to you.

Why is managing your time at least as important as managing your money?

Even though managing your time and money seems to be two different things, they go hand-in-hand. And, like in the case of money, the key to managing your time is being organized and planning ahead. But the idea that money is the most important thing in the world is a common misconception. In reality, time is much more valuable than money. But don’t take my word for it. Five important people of our days had this to say about time and money:

• Steve Jobs: “My favorite things don’t cost money. It’s really clear that the most precious resource we all have is time”
• Jim Rohn: “Time is more valuable than money. You can get more money, but you cannot get more time”
• Thomas Edison: “Time is really the only capital that any human being has, and the only thing he can’t afford to lose.”
• Shane Parrish: “We all know our money isn’t infinite, yet we end up treating our time, energy, and attention as if they are.”
• Jack Canfield (author of Chicken Soup for the Soul): “Money, I can only gain or lose. But time, I can only lose. So, I must spend it carefully.”

Based on the examples above, we should already have an intuition that time is more important than money, but to understand things better, let’s dive a bit deeper and look at some important characteristics that time has and money doesn’t have:

• Time is a limited resource. You can’t get as much as you want.
• Time is gone forever. You can’t get it back.

With money, you can get so much that, from a point, it doesn’t really matter. It’s not the same with time. And if you lose money, you can get it back. But you can’t get back any second of the time that passed away.

What does budget actually mean?

Using the simplest possible words: budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. If you create a spending plan for your time, we could say you are budgeting time.

What does a time budget actually mean?

The term time budget refers to a method of tracking how we spend our time. A time budget is similar to a financial budget, which tracks how our money is spent. In other words, a time budget is a detailed plan of how much time you will spend on your day-to-day activities over a given period of time.

Here is how to budget your time step by step:

1. Identify priorities:

   The first step in budgeting your time involves compiling a thorough list of all your tasks, encompassing everything from professional responsibilities to personal errands, hobbies, and even daily routines like exercise. At this stage, focus on inclusivity without filtering or prioritizing, simply gathering every task that requires your attention into a complete overview using tools like digital notepads, apps, or traditional pen and paper.

2. Organize tasks:

   After setting your priorities, the next step in budgeting your time is to organize your tasks. Utilize the Eisenhower Matrix technique here, categorizing tasks by urgency and importance, dividing them into four quadrants: urgent and important, important but not urgent, urgent but not important, and neither urgent nor important. This helps ensure that the most critical activities are attended to first. This step helps create a more structured approach to time management by identifying which tasks should be tackled first and which can be scheduled for later. Another effective concept to consider is the Pickle Jar Theory. This theory suggests that you should first tackle the ‘big rocks’ or most important tasks before moving on to the smaller, less critical ones. Imagine your day as a pickle jar: the big rocks are your main priorities, the pebbles are smaller tasks, and the sand represents minor activities. By filling your jar with big rocks first, you ensure that your most significant tasks are completed and then fill in the remaining space with smaller tasks and activities, optimizing your time management and productivity.

3. Allocate time:

   Utilize time management techniques to structure your day efficiently. Determine when each task needs to be completed. Setting clear, achievable goals for both short-term and long-term plans can guide how you allocate your time. Organizing your tasks and applying these techniques will create a more effective and manageable schedule, aligning your daily activities with your overall priorities. After organizing your tasks and applying time management techniques, you must also account for breaks, rest, and unexpected events in your schedule. This involves building in buffer times and rest periods to maintain productivity and avoid burnout. Allocate time for short breaks throughout the day and ensure there is flexibility to handle unforeseen circumstances. Balancing structured task management with the need for rest and adaptability is key to maintaining a sustainable and effective schedule, which supports your overall well-being while helping you achieve your priorities.

4. Execute the planned schedule:

   When executing your planned schedule, it’s wise to start your day by focusing on the most crucial tasks, ensuring a strong and productive beginning. Adaptability is key, so remain flexible to adjust your plan as unexpected tasks arise. Instead of multitasking, concentrate on one task at a time for better efficiency. Employ the Pomodoro Technique or similar time-blocking methods to organize tasks into dedicated intervals, allowing for focused work periods followed by short breaks.

5. Review and adjust:

   Monitor and adjust your schedule based on its effectiveness and your well-being. This involves regularly reviewing your time management plan, assessing if you’re meeting your goals, and ensuring your workload is sustainable. If necessary, make adjustments to your schedule to improve efficiency or to better align with your priorities. This could mean re-prioritizing tasks, modifying goals, or changing your approach to breaks and rest periods. The key is to remain flexible and responsive to your progress and personal needs, ensuring that your time management strategy evolves with you.

To budget your time, you need to prioritize and focus. You can’t be all things to all people. Realistically, you can only do so much.

To budget your time well, look at what others do!

Most people have a routine that they follow each day, whether going to work, taking the kids to school, or getting a workout in. A typical day at the office for a Software Engineer might start out with some coffee and a healthy breakfast before heading to the office. After a short morning meeting, you’ll spend the rest of your day writing code until around 6:30 p.m., when you can typically take an evening break or go home for dinner. If you’re working from home, your evening will probably consist of cooking dinner, cleaning up, and relaxing. In the evening, it’s common practice to have another meeting with the team to discuss the progress made on projects in the week and how to move forward. You might also attend an informal happy hour or dinner with one or two of your coworkers or tend to one of your hobbies (gaming). If you are a software engineer, this setup could work as a framework for setting up a good plan for most of the work days. You just have to adjust it a bit with your particular needs and wants.

More examples to budget your time: what do firefighters do?

I chose firefighters as an example because this is one activity requiring people to be very diligent with their tasks. Even if they are not efficient at the beginning, they will eventually become so because of the strict training schedule they must go through. They have to be prepared for everything after all, don’t they?

So, here is an example of a typical day in the life of a firefighter.

At 7:30 a.m., firefighters arrive at the firehouse and prepare for the 8:00 a.m. shift start. At 8:00 a.m., all personnel check out fire apparatus and equipment to ensure they are fully functional. Each firehouse is led by a company officer, who, in addition to leading and participating in training and calls, spends a lot of time in his or her office logging personnel and equipment on a computer, checking training and inspection schedules, and performing other administrative tasks. Every EMS Technician and Paramedic will verify that all medications are accounted for. 9:00 a.m. is physical fitness time. Daily, firefighters must maintain adequate physical condition and exercise to keep up with the demands of their job. They must complete two physical fitness assessments yearly to maintain their physical fitness, which is crucial to their work. 11 a.m. is for miscellaneous tasks. General errands must be finished (fuel and equipment for the engines, pick up supplies, and so on.). If time allows, training or inspections may be held in the morning. But emergency calls can come at any moment of the day. If an emergency occurs, they drop everything and respond. Each firefighter contributes $6.00 for a 48-hour shift. At 12:00, it’s lunchtime. From 1:00 p.m. to 5:00 p.m., firefighters have the largest block of time reserved for training, business inspections, public education, and special programs. Training may include firefighting techniques, medical knowledge and skills, hazardous materials, or specialized rescue training. Firefighters must be prepared for everything. Besides training, firefighters travel to schools and businesses to provide public fire education. Maintenance of the apparatus and equipment is also done in the afternoon on a regularly scheduled basis. At 6:00 p.m., it is dinner time.

Budgeting time -> How does a Cambridge University English Literature student do it?

In this video, you will see a typical day in the life of a Cambridge University English Literature student. Her name is Georgie Ellen, and she is in her 2nd year at Magdalene College. She had lectures and supervision, studied in the library, and attended social events. You can use her as inspiration and an example of budgeting your time if you are in a similar situation.

Budget your time by planning your days in advance!

There are many reasons why you should plan your days in advance. Planning ahead can help you make the most of your time, avoid conflicts and overlap in your schedule, and generally help you to be more organized and productive. When you know what you need to do and when you need to do it, you can better focus your attention and energy on completing your tasks. In addition, planning ahead can help you anticipate problems or issues that might arise and prepare you for them. If you know what you must do in advance, you can plan for any potential obstacles and have a backup plan if something goes wrong. By planning your days in advance, you can ensure that you make the most of your time and are better prepared for whatever comes your way.

There are many ways to plan your days in advance, including using a calendar, journal, or planner. You can write down the tasks you want to accomplish for the day and break them into smaller sections to help you manage your time better. You can also use sticky notes to remind yourself of certain tasks you need to get done. Or, if you’re more technologically inclined, you can use apps like Google Calendar or Microsoft Planner to keep track of your daily tasks. The important thing is to find the best way to keep track of your daily tasks and not let things slip through the cracks. If you have children, a partner, or other family members who rely on you, you must ensure you’re not letting other things slip through the cracks.

Effective time management is crucial for success, as demonstrated by various entrepreneur examples such as e-commerce business owners, consultants, service-based business owners, start-ups, and online business owners who must balance multiple tasks and responsibilities while staying organized and meeting deadlines.

Why can budgeting your time reduce stress levels?

Budgeting your time well can help you achieve more, which is great if you want to save time or get more done at work. However, time management is not just about being more productive – it’s also about being happier. Having a clear idea of your priorities and limiting distractions is also essential to a successful plan. When you’re constantly bombarded with distractions, it’s easy to lose sight of your goals and what you’re trying to achieve. Additionally, limiting distractions can help reduce stress levels. It can be difficult to relax and de-stress if you constantly pull yourself in different directions. When you can focus your attention on one task at a time, you’re more likely to get things done efficiently and effectively.

How do habits help you save time?

Habits or routines are one of the most effective ways to save time that you can use. When you have a habit, you will automatically do something every day. For example, if you always brush your teeth in the morning, that is a habit you have created. Habits allow you to save time because they take care of the routine parts of your life. When you have a routine for brushing your teeth, it will become easier to do. They also help to keep you motivated because you will start to feel good about yourself when you see that you are sticking to a routine. Habits can be helpful in many areas of your life, such as work, school, and home. You can even create habits around things like exercise or taking a break from social media. By creating habits, you can feel more in control of your life and less stressed.

Don’t forget about the work-life balance

When budgeting your time, it’s essential to maintain a healthy work-life balance by setting clear boundaries between work and personal life, prioritizing self-care activities like relaxation and hobbies, and being efficient during work hours to ensure you can fully disconnect later. Flexibility is key, allowing you to adjust your schedule for unexpected events while still preserving the balance between your professional and personal life. For those seeking more guidance, check out the Forbes article.

Relaxation: A Vital Element in Time Budgeting

In mastering the art of time management, relaxation plays an essential role. Relaxation, scientifically proven to rejuvenate the mind and prevent burnout, is key to a balanced time budgeting strategy. Regular relaxation practices, whether through short meditation sessions or designated unwind periods are beneficial and essential for boosting creativity and maintaining mental health. Integrating these practices strategically into your routine is vital, enhancing immediate productivity and ensuring long-term well-being and effectiveness in all areas of life. For further insights into effectively incorporating relaxation into your busy schedule, the Harvard Business Review’s article, “Relax, You Have 168 Hours This Week,” offers practical strategies to maximize your time, including vital relaxation techniques.

Stay healthy, don’t compromise

Good health directly influences productivity and efficiency. When you are physically and mentally healthy, you can manage your time more effectively as you have the energy and focus required. This includes regular exercise, a balanced diet, adequate sleep, and stress management. Prioritizing health improves your ability to stick to a time budget and enhances overall life quality. Neglecting health can lead to decreased productivity and more time spent dealing with health-related issues, disrupting your carefully planned schedule.

Use shortcuts, particularly keyboard shortcuts

Mastering these shortcuts can significantly enhance productivity and efficiency. Keyboard shortcuts, a series of one or several keys that execute a command within a software program, can save valuable time that might otherwise be spent navigating menus with a mouse. Emphasizing the importance of these time-saving techniques, this section could offer examples of commonly used shortcuts in popular software programs and encourage readers to invest a little time learning these to save a lot more time in the long run. For those interested in delving deeper into this topic, I recommend checking out an insightful article that covers a wide range of keyboard shortcuts.

Leverage Time Tracking Software for Effective Time Budgeting

In today’s digital landscape, time-tracking software is a pivotal asset for effective time management, particularly in personal project and task management. These innovative tools enable you to monitor and document the time dedicated to specific tasks, using timesheets to offer a structured and precise overview. This approach provides insights into your productivity patterns and highlights areas of time over expenditure. Utilizing time-tracking software and the methodical use of timesheets is exceptionally beneficial in managing personal projects, ensuring you keep pace with various project elements and adhere to set deadlines.

Strategies to Balance Social Media Usage for Better Time Budgeting

In today’s interconnected world, social media can be both a valuable tool and a significant distraction, especially in the workplace. Developing strategies for managing social media usage is essential to maintain focus and optimize productivity. One effective approach is to allocate specific time for social media, ensuring it doesn’t interfere with work tasks. Consider using apps that limit social media access during peak productivity hours. Practicing digital mindfulness – being conscious of how and why you use social media – can also be beneficial. Setting these boundaries allows you to stay focused on your work, save valuable time, and create more opportunities for productive activities. This balance is key to effective time management in the digital age.

Maximizing Efficiency: Integrating Time and Financial Budgeting Tools for Success

Understanding the benefits of budgeting in terms of time and finances is crucial for effective management. Time budgeting, similar to financial budgeting, involves wisely allocating your resources to prioritize tasks, set achievable goals, and enhance efficiency. This method reduces stress, boosts productivity, and addresses critical tasks. Let’s consider a legit review of financial tools like Rocket Money and Acorns to provide an impartial and helpful perspective. Much like time budgeting strategies, these tools aid in organizing resources effectively, as detailed in our thorough financial review, highlighting their role in successful planning and disciplined management.

Conclusion

Budgeting time is just figuring out what is important and what isn’t. It’s like when you are shopping for groceries. You’ll have to make a list of what you need, and then you’ll need to stick to it!

The post How to Budget Your Time – A Simple Guide to Get Things Done! first appeared on My Blog.

People are paid online for doing a lot of things.

For example, some people are paid for writing reviews. Did you know that monetary incentives for writing reviews can enhance product sales? They certainly do, according to this study! There is a high demand, and there are many opportunities to review products online, you just have to put the work in it. Some people are paid online for reviewing songs and sharing their opinions with people who compose. Listening to music can become a part-time job for anyone interested. If you are a musician, you might be asking yourself how to be paid by Spotify. How is the music streaming platform paying artists? We will have a section covering everything you need to know. If you want to find out more about the current state of streaming services in the music industry, check out this research paper.

There are other ways in which people are paid online. For example, there are some companies that pay people for doing surveys, or even searching on the web. Actually, you would be surprised how many companies are paying for surveys. But, what’s even more incredible is that people are paid for playing games, and how much they earn is based on a combination of time, luck, skill, and experience.

If you don’t want to spend all your time online, you should know that you can be paid to travel. There are many successful travel bloggers who serve as an example of successful entrepreneurship businesses, earning a substantial income while traveling the world and pursuing their passions. Here is an interesting whitepaper about travel blogging by Michelangelo Magasic.

If we come back to the online medium, there are those who are paid for reading books, reading news, or writing articles. There’s actually a whole industry for online article writing. So, if you are good with the pen and paper, this should be one of the first things you explore. You should also know that you could use your voice to earn some money online, you could be volunteering, and the last thing we will explore is if it’s possible to make money online while watching Netflix.

There are many companies that pay users for online stuff. You might be interested in how to be paid by Google. If so, you should know that Google pays webmasters for renting advertising space on their websites. All you have to do is build a few decently popular websites and you might be receiving regular checks from Google.

You might be wondering how to be paid by Youtube. This works in a similar manner, content creators are renting advertising space on their videos (just before their video starts, or inside, from time to time). And this method might be better than most at generating income. Check out this research paper that found out that Google AdSense and YouTube are better when compared to other income generating activities. If you are not sure what to do, starting on Youtube should be among the first things you consider if you want to get paid online. Here is a table showing the most popular niches on Youtube:

Similarly, many people ask themselves how to be paid by Facebook or how to be paid by TikTok. On this website we will explore all these possibilities in-depth for each individual case. Some people ask themselves how to be paid by Instagram. In this particular case, Instagram does not pay its users, but there are ways in which you can earn money if you have a decently popular Instagram account. You might work out some sponsorship deals, or you might actually sell your own merchandise.

Gamers may be wondering how to be paid by Twitch. There are plenty of opportunities to earn money online as a gamer. It can be done by anyone with consistency and skill. Here is an interesting whitepaper covering live video streaming. We will have a whole section of this website dedicated to help gamers who just want to start their online journey and become more famous.

On the business side, many people are wondering how to be paid by Upwork, or how to earn money as a freelancer. One study made by the Stanford Graduate School of Business revealed that working from home improves work performance by 13%. And in 2020 more than 57 million Americans did some kind of freelance work (according to Freelancersunion). So, it looks like many people are doing it, and it is more productive. If you want a breakdown of the self-employed sector, check out this survey made by the Labour Force.

There are other ways in which you can earn some income online. For example, if you are able to build a community and provide consistent high-quality services or consultancy, you should know that some people are paid through membership websites. You can create a membership website and be paid by members regularly.

There’s one more thing people ask themselves when researching how to be paid online: how to be paid in bitcoin. Is it possible to do some work online and get paid in bitcoin? Of course it is, there are many websites and online platforms that pay directly in bitcoin, without any intermediary or middleman. If you want to get more into bitcoin payments, here is an interesting whitepaper about blockchain technology. We will cover this in an in-depth guide soon, and in the meanwhile we recommend reading Bitcoin from Beginner to Expert: The Ultimate Guide to Cryptocurrency and Blockchain Technology.

After you start earning some money online, you certainly will want to spend it. If you are wondering how to pay online for anything, the next section will cover the main methods to pay online, and in time we will cover every possible payment method and payment system. This section is meant for beginners who are just starting their journey online.

How to be paid online, the short and easy way:

1. Set up a Paypal Me. This is one of the easiest ways to be paid online.Just share your own PayPal.Me link (paypal.me/YourName) with others, and they can send you money for any reason. They don’t have to know your email address or mobile phone number, or even have the PayPal app. They can just tap on your link to go to your PayPal.Me, type in the amount, and send the money. You need a PayPal account for this. Log in and generate your link. You should know that PayPal is one of the most popular ways to get paid online, but it’s not the cheapest. They actually have some hefty fees. If you don’t know about PayPal, we have an in-depth guide covering almost everything about PayPal here. Check it out, especially the PayPal fees section. They also have pretty bad exchange rates if you receive money in multiple currencies and want to convert them.
2. The next method is one of the cheapest, but probably not the most convenient for your clients. You can set up a TransferWise account. This is one of the cheapest ways to accept international payments and avoid fees. They are known as a transparent company when it comes to fees and exchange rates. And they work with a lot of currencies. You can create a “borderless account” and you will get 4 different bank accounts: for the US, Australia/New Zealand, the UK and the EU. And then you can accept money in any of the currencies of those countries. Ask your clients for a bank deposit and give them the appropriate bank account.
3. The last method is not the cheapest, but it’s one of the most convenient. You can use an online form builder like JotForm or 123Formbuilder. It will cost you a monthly subscription of around 10-20 bucks. But for more convenience you will have a link that you can send to anybody who wants to pay you. You don’t have to own a website, or have any kind of online presence. You can also add a customizable form and you can collect more info from the people that pay you. You will also have a list with all the people who paid and you can set up to receive notifications on your email each time you get a payment. You should be able to set up automated recurring payments this way.

And a few words of advice before you start exploring the online payment systems:

1. You should never reveal your password to anybody, not even to the administrator of the payment system you are using. He has a master password, he does not need yours. Only somebody that pretends to be the administrator will ask for your password. If somebody asks for your password, simply don’t reveal it, contact the support and ask for more info.
2. Avoid paying online directly with your credit card (if possible). If you are interested in how to pay money online to somebody you don’t know in person, use a trusted third party payment processor like PayPal or Moneybookers. These payment platforms will never reveal any of your sensitive information. The money is transferred from your card into their account, and then paid from there.
3. For payments over the Internet use only one credit card with limited funds on it. Don’t keep thousands of dollars on the credit card used for online payments. If something bad happens, you won’t lose a lot of money.
4. Educate yourself on how to pay online before you actually start paying the bills, services, or even before you start shopping. You can begin educating yourself on the National Cyber Security Center official page. And a second good resource should be the Stop Fraud Task Force page. Also visiting industry events like the National Cyber Summit will bring some unique learning experiences from experts like Katie Arrington, who is the Chief of Information Security Acquisition at the Department of Defense, or Robert Powell, who is the Senior Advisor for Cybersecurity at NASA.
5. You should know that things like cyber insurance can help to protect businesses and individuals from internet based risks.

Information on our website can be summarized as the answer to two more general questions: “How to pay online?” and How to be paid online. If you are interested, then we invite you to explore the different internet payment options and to choose the best one that suits your needs.

About the author:

This article has been written by Remus Zoica, with the goal in mind to help any beginners understand how to pay and how to be paid online. Remus Zoica has a Bachelor’s Degree in Economics from the University of Oradea and has been using online payment systems for more than 15 years. He has worked with financial related companies and products, and over time he has noticed that there is no real “beginner’s guide” for people interested in earning money online, or paying securely for goods.. Most of the online information is presented with the assumption that users already know sophisticated terms and jargon. So this guide was born from seeing the lack of information and resources available to beginners. Even though this article is long and comprehensive, there are surely a lot more questions beginners might have. That is why this article is a “work in progress” and it will be constantly updated with important questions and relevant answers. If you have anything that you think is useful, feel free to send suggestions using the contact form.

The post How can you earn money online in 2023? first appeared on My Blog.

A lot of people used Moneybookers in the past. And now they are in a weird position where they can’t find clear information and straightforward answers about it. So, let’s start by defining what MoneyBookers is:

Moneybookers is the old brand of what we currently know as Skrill. Moneybookers was incorporated in the United Kingdom in 2001 and in 2011 it was rebranded as Skrill, which is considered the European alternative to PayPal.

Moneybookers was founded in 2001 by Daniel Klein and Benjamin Kullmann, as an internet focused payment service. It was the first business to get an electronic money license. The company was established during the race to develop the first digital wallet; a race that was eventually win by PayPal. Even though it did not won the race, the payment gateway saw amazing growth. In February 2010 Sunday Times ranked Moneybookers as the fastest growing private equity backed firm in the United Kingdom. By 2011 Moneybookers reached a 25 million customer base which included 120.000 merchant accounts. This amazing growth was fueled by integration with a number of well-known online brands such as Facebook, Skype and also by focusing their marketing and adoption in the online gambling industry.

Why did Moneybookers change to Skrill?

If you used, heard or knew about Moneybookers in the past, but nothing rings a bell about Skrill, then you are certainly wondering yourself why did they make this change. Why did they change from Moneybookers to Skrill?

Because it sounds better. In the same way people ‘Google’ something or ‘Skype’ their friends, they can ‘Skrill’ their friends and family money. And they will use Skrill to pay whenever they shop online.

This is what Martin Ott, Co-CEO of Skrill Holdings at that time said. He appears to suggest that the new name could become a verb which might be easier to use in day to day conversations.

Even though the new replacement word for Moneytbookers might not sound familiar or well known, if we look deeper, we will find some interesting facts about it. The word skrill (short fro skrilla) is already a commonly used slang word for money or “dough”, according to the infamous Urban Dictionary.

Moneybookers login:

Can you still login in the old Moneybookers? Is the old interface still functional?

The old Moneybookers login page is not accessible anymore. The transition process started in September 2011, rolled out in incremental stages and ended by 2013.

The transition from Moneybookers to Skrill

The Moneybookers brand name, domain name, logo and the website design were all changed. The transition was seamless for merchants and shoppers without any extra steps or requirements from their part. In the last stages of the transition the company placed both the Skrill logo alongside the old Moneybookers logo in both its consumer and merchant products. The company recommended that online sellers should update the logo on their checkout pages, but this was the seller’s responsibility, so you might find some traces of the old logo on very old checkout pages that were not updated.

What should you do if you have to pay with Moneybookers the checkout?

Use Skrill instead. It should work!

Moneybookers and gambling

The online gambling industry has shown a significant increase in the past 20 years, and with it’s growth it also boosted the online payment systems. Moneybookers was known for being the most used money transfer service in the online casino industry, and it was considered fast and reliable. And it had another major reason for being very attractive: users could deposit money, but also withdraw. This is one of the reasons the payment system became popular so fast. According to this article Rhodes-Kropf, Matthew & Knoop, Carin. (2011). Investcorp and the Moneybookers Bid, 100% of Moneybookers revenues came from transactions related to the online gambling sites. By 2007 revenues from transactions related to online gambling dropped to 70% out of the total.

Moneybookers changed owners

The ownership of Moneybookers / Skrill changed a few times over the years. The first time it changed hands was in 2007 the company was purchased by Investcorp Technology Partners. Then again, in 2015 Skrill was acquired by what would become to be known as the Paysafe Group for €1.2 billion. The group briefly listed on the London Stock Exchange before eventually being sold to a consortium of private equity investors in 2017. Skrill is currently led by Lorenzo Pellegrino, who is supported by Paysafe Group CEO, Joel Leonoff. The Paysafe Group has a wealth of experience in this field, including Danny Chazonoff as Chief Operating Officer, Elliott Wiseman as Chief Compliance Officer, and John Arnold as Chief Technology Officer.

Skrill head office is currently in:

Skrill Limited
25 Canada Square, Canary Wharf
London E14 5LQ
United Kingdom

About the Author

This article has been written by Remus Zoica, with the goal in mind to help any beginners understand the most important things about Moneybookers. Remus Zoica has a Bachelor’s degree in Economics from University of Oradea and has been using online payment systems for more than 15 years. He worked with financial related companies and products, and over time he noticed that there is a lot of confusion about Moneybookers. And even up to today people are not sure if it’s still a thing or not. This guide was born from seeing the lack of information and resources available to those wanting to know more about Moneybookers.

The post Everything You Need To Know About Moneybookers – Past, Present and Future first appeared on My Blog.

What is Paypal?

You see PayPal everywhere, but if you’ve never dealt with it personally or read about it, PayPal is probably just a vague concept to you. So let’s define it, what is PayPal more exactly?

PayPal is a mediator that helps you buy stuff online without revealing your credit card information when you pay. You don’t have to give your sensitive information to every merchant you buy from. You give it only to PayPal, and they don’t reveal it to anyone else.

Imagine having to trust a merchant with all your credit card information every time you make a purchase. What is stopping them to re-use your credit card info whenever they feel like it?

The good news is that now you don’t have to trust all the merchants when you buy. You just have to trust PayPal. You give your credit card info only to PayPal. They keep it private and they use their bank accounts and payment agreements to pay the merchants on your behalf.

You give your payment info to PayPal, and the merchant gives their bank account to PayPal. PayPal then handles the transactions and the merchant never gets your sensitive information.

Here is an article summary, use it to jump straight to the section that interests you the most:

1) Is PayPal trustworthy?
2) Is PayPal safe against hackers?
3) How does PayPal work?
4) What is a PayPal account?
5) How to verify a PayPal account?
6) Can I send money with PayPal to friends and family?
7) What are the PayPal fees?
8) PayPal currency conversion
9) How long does it take to send money with PayPal / Is receiving money instant?
10) How to withdraw money from my PayPal Account?
11) PayPal or Wire Transfers for large sums of money?
12) PayPal subscription payments, recurring payments and automatic payments
13) How do I find my PayPal subscriptions?
14) How do I cancel a recurring PayPal payment?
15) How do I set up subscriptions on PayPal?
16) What is important to know about PayPal disputes?
17) PayPal Reviews
18) About the author

1) Is Paypal trustworthy?

When it comes to financial services, it’s hard to know whom you can trust with your credit card information, and no doubt you have some concerns when it comes to PayPal as well. So, is PayPal trustworthy?

PayPal is an officially licensed “money transmitter” and the largest and most used third-party payment provider available. With over 277 million active account holders, a huge number of employees and a regular spot on the Fortune 500 list, PayPal is a reputable and trustworthy company.

PayPal is an American company (NASDAQ: PYPL) established in 1998. In 2020, it ranked the 182nd on the fortune 500 of the largest United States corporations by revenue.

They are certainly not a shady company that nobody has heard about.

They have a physical address — with their Corporate Headquarters located at 2211 North First Street, San Jose, California, 95131 — and they can be contacted by phone at 00 1 402-935-2050.

They pay taxes like every other corporation and, with about 23,200 employees at the moment, they have been running their business for more than 20 years. For more financial information about the company visit this page.

Besides all this financial data, it’s important to know that, right now, PayPal is the largest and most used third-party payment provider available. They have more than 325 million active account holders as of January 2021, so you can rest assured you are not the first one trying a dubious service.

In the United States, PayPal is not classified as a bank – it is licensed as a money transmitter on a state-by-state basis.

Knowing that it is registered as a money transmitter should give us some peace of mind. At least we know we give access to our money to an officially licensed “money transmitter“. But state laws vary, as do their definitions of banks, narrow banks, money service businesses, and money transmitters. Because of this, in some areas the company is subject to some extra or different rules and regulations governing the financial industry.

Of course there are people who are not satisfied by their services, it’s not all sunshine and rainbows. But it’s usually on a more superficial level, concerning the quality of their service, the way they settle disputes, chargebacks and so on, and doesn’t go as deep as trust.

Regarding trustworthiness, from a “Can I trust PayPal with my credit card info?” standpoint, the simple answer is YES. There has been no major issue regarding trust from this point of view.

2) Is Paypal safe against hackers?

Even if we can trust PayPal with not giving or selling our info away, another way in which we can lose our sensitive information is by people intending to steal it from them. They may have the best intentions if their back is not covered in the safest and most secure way. So, is PayPal trustworthy enough to keep my info safe from hackers?

Even though no website can be guaranteed to be 100% “safe and secured” from hackers and PayPal is a tempting target due to its widespread popularity, their platform is secured and communication with it is encrypted so your data is kept safe from prying eyes.

PayPal have had their fair share of challenges, but overall, there seem to be no major slip-ups when it comes to security. Here you can read more about PayPal’s security.

One initiative worth mentioning related to PayPal security is the one with HackerOne.

In 2018, they teamed up with HackerOne — a platform that connects ethical hackers with organizations — and through this platform they pay (reward) ethical hackers that find vulnerabilities in their software, services or products.

So, in addition to their dedicated team of specialists, PayPal works with any smart people across the world that are capable of closely examining their code and reporting any vulnerabilities (without making them public to the world).

Just through this initiative alone, PayPal has resolved 750 reports and the average reward paid was between $1,000 and $2,000.

So you should know that the chance of them losing your financial information is very low. However, you should also know that the chance of you losing your financial data is very high.

Just to have an idea, according to this study conducted in 2017, about 1 in 15 people will become victims of identity fraud. What makes you better prepared than 14 of your closest friends?

Always be careful and educate yourself when dealing with financial information, especially when you handle financial information online. You can begin educating yourself on the National Cyber Security Center by browsing the most relevant topics there. Also, this article here is particularly important if you are serious about your security. Another good resource is this. You should also check stopfraud.gov.

Also, this paper about the electronic payment system risks written by by LJ Trautman for the UC Davis Business Law Journal could make an interesting read .

You should also know that “cyber insurance” is a thing now. If you feel overwhelmed by all this security talk, then maybe this could work for you.

3) How does Paypal work?

So now that we’ve established what PayPal is and that we can trust it with our money and sensitive information, how does PayPal work more precisely?

PayPal acts as a middleman for payments between two parties (between you and somebody you want to pay). First, you have to sign up for free on the PayPal website, use your email address and create a password. Then ad your debit or credit card information.

You don’t need a balance in your PayPal account because they will automatically use the preferred funding source when you try to pay for something.

Now you are ready to shop from any website that has the PayPal logo on their payments screen (meaning they accept payments with PayPal). You just have to insert your email and PayPal password at the checkout screen. PayPal will get the money from your credit card and then pay the merchant without sharing your financial details with them.

4) What is a Paypal account?

If you’ve made it this far, you probably understand by now what PayPal is and how it works, but you might still be wondering “what is a PayPal account and how can I make the best out of it?”

A PayPal account is the electronic version of your physical wallet. You can fill your wallet with cash or you can attach your bank or credit card info to it.

And because it’s digital, you have access to a few extra features like the transaction history when you set up PayPal.

PayPal has 2 types of accounts: Personal Accounts and Business Accounts. In the past, things weren’t as clear and when you wanted to create a PayPal account, it was rather confusing as there were more types of accounts, but it’s much simpler now. So what PayPal account type should I sign up for?

• The Personal account can be used to buy stuff online or send money to a friend or family.
• Business PayPal accounts are recommended for online merchants who operate under a company name.

Create a PayPal account that better fits your needs.

5) How to verify a Paypal account?

You’ve been using PayPal for a while and it all of a sudden asks you to get verified. So you may be wondering: should I verify a PayPal account? What do I have to gain if I verify my PayPal account?

You should verify your account if you find yourself in one of these two cases:

• You want to transfer more money than the limits imposed
• You want to keep a balance in your PayPal account – money that exists in digital form, not on your credit card or bank account that is associated with PayPal

All PayPal accounts are initially ‘Unverified’ and have limits on sending, receiving, and withdrawing money.

When you create a new account, PayPal asks only for essential information from you, but as you start transacting money, they are under a legal obligation to know more about you.

Having an unverified account puts limitations on some of PayPal’s most essential functions, including how much you can withdraw ($500 per month for unverified users), send or transfer to your account. Once you have reached any of the limits with your PayPal account, you must become Verified to continue using their service.

When you verify your PayPal account, you’re proving that you own the financial details added to your account. After you are Verified, they will lift limits so you can for example withdraw more money.

Verification of identity increases customer trust because it creates a higher level of confidence that a person is who they say they are. Verification increases the security of the PayPal network.

And now let’s get straight to the PayPal verification process in more detail. How do you actually verify a PayPal account? Which are the steps you have to go through to verify a PayPal account?

You should know that there are two types of verifications, and you may only need to perform one of them or both depending on your actual needs and specific situation:

Verifying for increasing your spending and withdrawal limits

The Verification process for this varies by country or region. For example, in the U.S., a Verified member has added and confirmed a bank account with PayPal. In Germany, a Verified member has completed a bank transfer or the Expanded Use Process. In most countries and regions where PayPal is available, a Verified member has added a credit card and completed the Expanded Use process.

If your account hasn’t been verified, you can choose to add and confirm your credit/debit card or bank account.

– Confirming your bank account: they will send two small deposits to your bank account. You’ll need to check your bank statement and enter the two amounts of the deposits in your PayPal account.

– Confirming your credit/debit card: they will charge your card a small sum of money and send you a 4-digit PayPal code. You’ll need to check your card statement for the code and enter it in your PayPal account. The charge will be refunded to your card after you’ve completed confirming this card. The refund may take up to 30 days to appear on your card statement.

Verifying for keeping a balance in your PayPal wallet

This verification is also called PayPal’s Customer Identification Program (CIP).

There is a US law that requires all financial companies to prove the identity of their customers in order to carry a balance. This process might not be required if you pay the merchant straight from your funding sources, meaning from your credit card or bank account, without having a balance in the PayPal account.

If, however, you want to keep money in your PayPal account, or use other features that require a balance, you have to go through PayPal’s Customer Identification Program (CIP).

To be compliant with the regulation, all users must be verified for the following information: full name, primary address and Social Security Number. Users must verify their identity by submitting proof documents:

• For proof of legal name: Driver’s license or passport
• For proof of address: Driver’s license, passport, or utility bill
• For proof of SSN: SSN card, ITIN card, or federal tax form

After you submit these documents, they will be manually reviewed by somebody from PayPal. If they pass verifications, you will be able to use all the balance-related features.

6) Can I send money with Paypal to friends and family?

You might have a friend or relative living far away and you want to send them money. Can you use PayPal to send them money?

Whenever you send or request money through your personal PayPal account, you can choose whether it’s a “Friends and Family” payment or a “Goods and Services” payment. For some countries, the “Friends and Family” payment option might not be available.

You can use PayPal to send money to friends and family, but is it free or is there a friends and family fee?

If you are located in the US and you send the money from your PayPal balance or bank account to friends and family, sending money is free. Neither you nor the recipient will pay any fees. However, there is a fee if you want to send your money from a debit or credit card, and if you are sending money internationally you may be charged a transaction fee equal to 5% of the sent amount (up to 4.99 USD).

So it really depends on your funding source and location.

But exactly how much you will pay in fees in these cases is impossible to put in a fixed number, because it might vary based on your location, on the receiver’s location, types of currency, and so on. You should check out this table and try to figure it out based on your particular details.

Because this kind of transaction is free (if done the right way), some businesses might request that you make a purchase and pay using the Friends and Family feature so that there will be no fee required. You should not do this because this is explicitly against PayPal’s User Agreement -> “You must not use the ‘send money to a friend or family member’ feature in your PayPal account when you are paying for goods or services.” It’s also important to know that you can get scammed very easily when you try to do something like this. PayPal does not reimburse payments sent using PayPal’s friends and family functionality.

So if you send money using the friends and family feature to a business, you will probably not get it back through any kind of dispute.

After you send money to your friend or family, the money is credited to their account. They will receive an email notifying them that a payment has been received. As long as their account is not subject to any sort of hold, they will be able to withdraw the money to their bank account or credit card. Check below how the withdrawal process will work.

7) What are the Paypal fees?

PayPal’s fee structure is so convoluted it really makes you think that they made it like this on purpose. Here, take a look for yourself.

Now let’s take a deep dive and try to extract whatever we can out of that mess.

But I insist strongly that you don’t rely on summaries made by others (including myself) and you check and confirm everything with your own eyes — this is even more important because their fees might change, while articles and content you find online might not. Most of the online content you’ll find will not be up-to-date. So, here’s how it is at the moment, in more detail than the table above:

– It’s free to use PayPal to pay for a purchase or any other type of commercial transaction (unless it involves a currency conversion). This means that you don’t pay a fee when you buy something. The price you see in any online shop at checkout will be the final price you pay, with no transaction fee added to it.

– It’s also free when you make “personal transactions” when the sender and receiver are both in the same country. PayPal calls it a “personal transaction” when you make or receive payments initiated from the “Friends and Family” tab. This implies that the payment is not made for the purchase of goods or services.

– You pay fees when you receive any “commercial type of transaction”. This means from anything you might be selling in any business examples, such as e-commerce, consulting, service-based businesses, start-ups, or online businesses, from any donations, or when you “request money”. . Basically anything that might be a “commercial transaction”. To find out exactly how much, check the merchant fees here. The standard merchant fee for a US seller selling to a US customer is $0.30 + 2.9% of the transaction amount. If you are based in a different country, the amounts will be slightly different: 4.4% of the transaction amount + fixed fee, depending on which country you’re receiving from. There are also fees for changing currency: 2.5% of the transaction amount.

– You pay fees in some cases when you withdraw money. Withdrawing to a bank account is free. But withdrawing to your credit or debit card is not. If you withdraw to your credit card it will cost you $2.50 per withdrawal, and you can withdraw up to a max of $2,500 per transaction. This sum will vary for each country, but it should be somewhere in this range in the local currency.

In conclusion: PayPal fees are usually paid by the merchants who sell, and not by the people who buy.

This might make you feel all warm and fuzzy inside, and give you the extra peace of mind of not having to worry about transaction fees. But merchants have to factor in all of these fees in their final price. Otherwise they won’t be able to stay in business. And eventually, guess who’s the one paying, even if you don’t have to worry about it…

Another commonly neglected way in which PayPal makes money off of you is from currency exchanges. Check out the following chapter about currency conversion through PayPal.

8) Paypal currency conversion:

For currency conversion, PayPal charges 3.75% on top of the base exchange rate within the wholesale currency markets.

So, if you want to pay for goods or services in a currency other than the currency they are listed in, PayPal will have to do a currency conversion. They will charge the standard conversion rate + 3.75% on top of that rate. This changed in September 2019 and it will probably change again in the future. If you have to know the exact number, you can check the “How to convert currency” section in the PayPal User Agreement.

Where can you find the PayPal currency exchange rate?

1 – Go to your Wallet page.
2 – Click Currency Calculator.

9) How long does it take to send money with Paypal / Is receiving money instant?

PayPal transfers are famous for being quick, with most of them being instantaneous, but let’s see exactly how long it takes to send and receive money with PayPal for each type of transaction:

It all depends on your selected funding source, so let’s look at it in more detail:

– How long does it take to send money from a PayPal account balance to another PayPal account (or merchant)? -> these transfers are usually instantaneous

– How long does it take to send money from a PayPal account using a credit or debit card as a funding source – to another PayPal account (or merchant)? -> these transfers are usually instantaneous

– How long does it take to send money from a PayPal account using a bank account as a funding source – to another PayPal account (or merchant)? -> When transferring money this way, usually you have to wait three to five business days before the money appears in your PayPal account. However, in 2019, PayPal started adding the instant transfer feature, first for US residents, then for the rest of the world (by the time you are reading this article there is a high chance that your area is also covered).

An Instant Transfer is a way to send money or make a payment from your bank account instantly using PayPal. The seller is credited immediately while the request for the money from your bank is processing. You need to have a confirmed U.S. bank account and a backup funding source, such as a credit card or debit card registered on your PayPal account, to complete an Instant Transfer.

If your bank declines your transfer the first time, they will try to retrieve the money a second time. If the second attempt also fails, the Instant Transfer is charged to the backup credit or debit card used for the payment. In some countries, sending payments from a bank account may not be available. It usually takes 90 seconds until the Instant Transfer appears in your bank account, but PayPal states that it can take up to 30 minutes – depending on your bank. This type of transfer has additional costs, you have to pay a fee of 1% of the transferred amount, with a maximum of $10.

There is another thing you have to take into account when it comes to how long it takes to send and to get money into your PayPal account. If a new created PayPal account receives a large amount of money in a short time, PayPal might hold any payment for investigation for 21 days. So, in some special circumstances, there is the possibility that everything might take more time.

10) How to withdraw money from my Paypal Account?

How do you get the money when someone pays you through PayPal? It’s actually quite simple to withdraw money from your PayPal account.

After the money is credited to your PayPal account, you will receive an email that the payment has been received. As long as it isn’t subject to any sort of hold, you’ll be able to send it to your bank account using the “Withdraw” > “Transfer to bank account” link on the main PayPal page. Just follow the indicated steps.

You can withdraw money from your PayPal account to your bank account at no cost. But, as we mentioned in the Fees section above, if you withdraw money to your credit or debit card, this will cost you $2.50 per withdrawal, and you can withdraw up to a max of $2,500 per transaction. This sum will vary for each country, but it should be somewhere in this range in the local currency.

11) Paypal or Wire Transfers for large sums of money?

Is PayPal a good idea when you want to send large sums of money or are you better off with a wire transfer?

In case you want to send large sums of money, bank-to-bank is a much better alternative than using PayPal. PayPal will analyze each transaction to make sure it conforms to their security and risk parameter, as well as government money regulations.

So sending large sums of money through PayPal might be more complicated and you’d probably get more help by going to your local bank to enquire about international money transfers and what procedure they follow.

12) Paypal subscription payments, recurring payments and automatic payments:

If you don’t want to worry about paying for your subscriptions or for your recurring services (like hosting, streaming services, Patreon), you should know that PayPal has a system in place to handle them without interrupting your day.

When a subscription is paid, you will automatically receive an email notifying you that the payment has been made, requiring no extra input from you.

These automatic payments are usually set up on the website from which you want to make a purchase. You might have two options, first to just pay, second to pay and also create a subscription for future payments.

13) How do I find my Paypal subscriptions?

1) Log into your PayPal Account

2) Click on the settings cogwheel icon in the top right corner

3) Click on “Payments” – the third sub-tab that appears below the main menu

4) Click on the “View” link near the “Manage your Automatic Payments”

Most of the online tutorials and guides covering PayPal subscription are not up-to-date. PayPal have changed their interface many times, so don’t feel bad if you were mislead into finding imaginary menus and clicking on non-existing links. Even PayPal’s own help section is guilty of this. It hasn’t been updated in a long time and it’s still wrong.

14) How do I cancel a recurring Paypal payment?

1) Log into your PayPal Account

2) Click on the settings cogwheel icon in the top right corner

3) Click on “Payments” – the third sub-tab that appears below the main menu

4) Click on the “View” link near the “Manage your Automatic Payments”

5) Click on the specific subscription you want to cancel, and then hit the “Cancel” button.

Most people who shop online try to talk to the merchant to get their PayPal subscriptions canceled. This is a waste of time, because the subscription is made in your PayPal account, and the merchant does not have access there to cancel it. So you have to cancel the recurring payment from your own account.

You should also know that if you cancel a PayPal subscription, you will cancel the future automatic renewal (recurring payment), but it will not affect the current membership already paid, even if there are a few months left.

Merchants give discounts if you pay in advance. The bigger the timeframe for which you pay in advance, the bigger the discount. You already made the deal and enjoyed the benefits. You can’t go back and re-do it. I mean you can, but it’s probably a waste of time.

You should also know that a subscription can be cancelled up until the day before the next scheduled payment in order for you not to be charged.

How do I upgrade or downgrade a PayPal subscription?

Most subscription services have different plans that cover different needs. If you find yourself in a situation in which you want to upgrade or downgrade a subscription, you should know that the best solution is to cancel the current subscription, and then to create a new one.

This is usually a hassle for both merchants and clients, but there is no easy way around it. There are some “modify subscription” buttons that can be set up by merchants, but that is not an easy task to do, and part of the documentation points to inexistent pages on PayPal’s website.

15) How do I set up subscriptions on Paypal?

1) Log into your PayPal Business account

2) Click on Tools

3) Click on Recurring Payments

4) Follow the step-by-step instructions

If you are a merchant, setting up a subscription service for your clients is a bit more complex. PayPal’s recurring payments allow you to bill your customers at regular intervals. The most important thing you have to know is that there is no additional fee added just because a transaction is recurring. PayPal currently supports two types of recurring payments: fixed recurring payments and per user/seat recurring payments. Start here.

16) What is important to know about Paypal disputes?

When it comes to filing and resolving complaints, PayPal will try to treat both sellers and buyers fairly, while guiding both through the PayPal dispute resolution process.

Disputes / Claims:
– Item Not Received (INR)
– Significantly Not As Described (SNAD)
– Unauthorized Transaction

If a buyer initiates a dispute, the seller will receive an email about it and will see it in the Resolution Center. The money the seller received for the transaction may be unavailable during the case investigation. Once a dispute is opened, you have 20 days to work with the buyer to resolve it (PayPal won’t be involved at this point).

If a claim is filed, the seller is asked to respond within 10 days. If the seller doesn’t respond, the claim will automatically close in the buyer’s favor, and a full refund will be issued. If the seller does respond, PayPal will work to evaluate the information provided and determine the outcome of the claim.

This process usually takes about 30 days, but more complex cases could take longer than 30 days.

Having a claim filed against you doesn’t necessarily mean you’ll be penalized. There are no automatic fees levied against you, and your seller feedback won’t automatically be affected.

However, if a claim rate is too high or other indicators are trending negatively, your account could be reviewed, and reserves or limitations could be put in place.

Chargebacks or Bank Reversal

A chargeback is when a buyer asks their credit or debit card issuer to reverse a transaction after it’s been completed. They are available only to buyers who make a payment with their credit or debit card. Because they are initiated with and decided by the debit/credit card issuer (not PayPal), the process is bound by the card issuer’s regulations and time frame. When PayPal is notified of the chargeback, they will send you an email to let you know about it. A case will also be generated in the Resolution Center at this time. Once a chargeback has been filed, you’ll have 10 days to respond to it. The chargeback process could take 75 or more days to be resolved. During this review process, a temporary hold may automatically be placed on the transaction funds and will be released back to you if the chargeback is settled in your favor. Though in this case the debit/credit card issuer determines the outcome, PayPal is there to help you through the process. For instance, PayPal will compile internal information and combine that with information you provide to dispute a chargeback, per credit/debit card guidelines. Simply having a chargeback filed against you will not automatically affect your seller feedback.

A bank reversal, sometimes called an ACH return, is when PayPal receives a request to return funds for a transaction that was funded by a bank account. This request might come from the buyer or the bank itself. Usually this request is filed because of suspected unauthorized use of a bank account. The next steps will depend on how you choose to respond. You’ll be instructed about any additional information you need to provide that can help PayPal resolve your case, such as entering a transaction ID to prove that a refund has been issued or adding context for accepting the liability. In some instances, you may not be liable for the reversal.

If you are interested in finding more about how to handle claims, chargebacks and bank reversals with PayPal, you should know that there is this book named “PayPal Hacks – 100 Industrial-Strength Tips & Tools” written by Shannon Sofield, Dave Nielsen & Dave Burchell that covers some in-depth strategies on how to handle these types of claims. Dave Nielsen has a Bachelor of Science degree in Business from California Polytechnic State University in San Luis Obispo, and it would be interesting to check out the suggested approaches and strategies for solving problems related to PayPal.

17) Paypal Reviews

PayPal is one of the companies with the worst reviews in terms of customer service satisfaction. It may be very good in terms of trustworthiness and security (as mentioned in detail in the paragraphs above), but in terms of customer service and satisfaction and customer care, it is a real mess. Just to give you an example, they have a 1 out of 5 star rating on Trustpilot out of about 10,000 reviews.

What are the most frequent complaints and the most common problems?

– buying from Chinese suppliers that send you junk, and PayPal closes the dispute in favor of the Chinese supplier just because they supplied a tracking number (they just investigate at a superficial level)

– getting your money locked in your account’s balance for very long periods of time (months) because their customer support team acts superficially, takes a long time to answer, and does not really put an effort into solving the issues. The best example for this is Minnie Small’s story that you can listen to and watch in this video.

– customer support during COVID-19 is equal to zero

– people who are victims of online fraud. Somehow, somebody got a hold of their login details and bought something from their account. If the item was delivered, there isn’t much that can be done. PayPal denies the claim, stating that the item was delivered and sides with the seller. And investigations seem to stop there. At least from PayPal’s part.

In defense of PayPal, there are also a lot (meaning a truckload) of people complaining about PayPal – when the real issue is that they bought the stuff from an untrustworthy supplier. There’s not much PayPal can do in this case. When something bad happens, a lot of people go into frenzy mode and blame everything in their sight, including PayPal. And if we look under the hood: when you throw money at an untrustworthy supplier, there is a big chance you won’t see it again. To avoid this, be sure to always check the reputation of the company or the supplier you want to acquire something from. Always check their negative reviews and make sure that whatever bothers you is not a repeating topic in the complaints section.

About the author:

This article has been written by Remus Zoica, with the goal in mind to help any beginners understand what PayPal is, how to use the system and avoid any problems on the way. Remus Zoica has a Bachelor’s Degree in Economics from the University of Oradea and has been using PayPal for more than 15 years. He has worked with financial related companies and products, and over time he has noticed that there is no real “beginner’s guide to PayPal” on the Internet. Most of the online information is presented with the assumption that users already know sophisticated terms and jargon. So this guide was born from seeing the lack of information and resources available to beginners who don’t know anything about PayPal.

Even though this article is long and comprehensive, there are surely a lot more questions beginners might have about PayPal. That is why this article is a “work in progress” and it will be constantly updated with important questions and relevant answers. You can participate as well, feel free to use the comments section below to ask any question about PayPal.

The post The Most Comprehensive Paypal Guide first appeared on My Blog.