Are you a spender or a saver?


Since Nov 2006, I have been a saver. Choosing to make it out on my own rather than to be an employer, I have learned so much in managing my funds. I have learned to budget my monthly food, gas and entertainment spendings. I have also learned to set aside 10% of my earnings as savings for the future. The future where I will be using loans to get my houses and cars, learn more about mortgages, buying insurance for my family and saving properly in the bank. Here are a list of basic things that I know about handling money together with links to Thriftyscot from UK, a plain-speaking, money-saving advice site.

  1. Loans
    • I know that most personal loans charge fixed interest rates. This means that our monthly repayments stay fixed throughout the life of our loan, which helps with budgeting.
    • I know that unlike a mortgage, an unsecured personal loan isn’t secured against our home, which means that our home isn’t at risk if we have trouble making our repayments.
    • I know that to compare the cost of loans, we have to look at the Total Amount Repayable (TAR). This shows the total amount that we’re expected to repay, including all monthly repayments, fees and charges. Therefore, the lower the TAR, the better the deal, all other things being equal.
  2. Credit Cards
    • Previously, I wrote an article telling about the pros and cons of using a credit card.
    • Though credit cards may be convenient, they may be killers when there is lack of self discipline.
  3. Savings & Current Accounts
    • Current accounts records the values of goods and services sold and purchased abroad, plus net interest and other factor payments and net unilateral transfers and gifts.
    • A savings account is an account at a bank on which interest is usually paid and from which withdrawals can be made.
    • There are so many savings and current account deals out there but you can only find the best by comparing them. Actually, by simply changing to a new savings or current account your finances could be given a much welcome boost.
  4. Mortgage
    • I know that fixed rate mortgages are the traditional loans that have a fixed interest rate over the life of the loan.
    • I know that adjustable rate mortgages typically start at a lower interest rate (and lower payments) but interest rates and payments fluctuate depending on market interest rates.
    • I know that balloon mortgages have a somewhat lower interest rate than a conventional 30-year mortgage, but the loan is usually due in five to seven years.
    • I know that jumbo loans are larger than average loans.
  5. Insurance
    • Home insurance, is an insurance policy that combines insurance on the home, its contents, and, often, the other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.
    • Car insurance is for providing protection against losses incurred as a result of car accidents.
    • I know that life insurance offers premium and death benefit flexibility, as well as the potential to increase cash value based on the performance of your choice of underlying funds.
    • As life insurance is tied to the performance of various securities markets, it may provide an important hedge against inflation. This can help keep the value of life insurance policy from eroding due to rising costs of living.
    • Common life insurance allows us to withdraw money or to borrow from the policy during our lifetime.
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