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You are here: Home / Archives for The Jenny Pincher

10 Reasons Entrepreneurs Should Have a Pension Plan

July 18, 2018 By The Jenny Pincher Leave a Comment

It is true that entrepreneurs do not have a fixed retirement age in India like salaried employees. They could work as long as they wish but at the same time they do not have the security of provident fund savings or pension after they decide to take retirement.

That is why, it is absolutely important for the self-employed professionals and small business holders to work out their pension plans when they can still work. In fact, it is not possible for a person to work whole life. After certain age, you will eventually want to retire from your self-raised business. No matter how successful you are and how much you earn today, only a proper retirement planning could give you a peaceful retired life.

Are Pension Plans Only for Salaried People?

Since entrepreneurs have the freedom of working throughout his life, you might be wondering if self-employed professionals need a retirement planning at all. The answer would be, yes, they do require pension plans  just like a salaried individual. Superannuation is not meant for only service holders but also small business owners and professionals. They are, surely free to choose their retirement age but sooner or later they will choose to retire. To make your retirement days vibrant and relaxing you need to work out your retirement savings goals just like job holders. Remember, after your retirement there would be no provident fund or pension to support your livelihood. So, it is wise to start saving for your old age security beforehand.

10 Reasons Entrepreneurs Consider Having Pension Plans

Nobody wants to live his retired life in full of worries. You can take the real fun of retirement days only when you feel secured. Sense of security only comes when you have saved enough for your future. In fact, small business professionals and entrepreneurs should be more careful about their pension plans because they do not have the security umbrella of EPF. Only with systematic planning and regular savings entrepreneurs can build corpus for their retired days. Here are the 10 major reasons why entrepreneurs should consider having their retirement plans:

  1. You Will Choose to Retire, Sooner or Later – No matter how much you love your work and how hard working you are today but at certain point of time you, surely, will choose to retire. It is true that being an entrepreneur you can work as long as you desire. But that does not mean that you will never feel the desire to retire someday. This is the reason you need pension plans for securing your retirement days.
  2. To Remain Self-Sufficient – Being an entrepreneur you have always stayed independent and self-sufficient. You may have never depended or worked for anyone in life but for yourself. So, retirement savings would keep you independent even after you choose to retire. It is wise to work out a proper pension planning at the very beginning of your career based on your requirements. While estimating your future requirements and expenditures always consider the growing age, rising cost of living and ever growing inflation rate. Your retirement savings goal should be determined considering all these factors. Only systematic pension plans can meet your retirement expenses, cope with inflation and at the same time keep you prepared for unpleasant turns of life without being depended on anyone.
  3. Value of Money deflates – Another important reason to build up corpus for your superannuation is that the value of money gradually deflates over time. It is wise to save greater than you aim for because by the time you retire your savings may seem smaller than your expenditure. It is, thus, a matter of extreme concern that your pension plans should be worked out considering such future problems.
  4. Greater Life Expectancy – With advanced medical technologies and greater awareness among people, life expectancy of a person has increased considerably. Greater longevity means you need more money to sustain the needs of your life for longer period of time. You superannuation planning should be adequate enough to provide a good life for longer period of time.
  5. To Stay Prepared – Your retirement savings is not only meant for providing your livelihood but also an instrument to deal with unexpected events of life. This would give you financial support at the time of unforeseen requirements. Be it your child’s marriage or medical expenses of you or your loved ones, you can stay always prepared for any sudden lump sum expenditures.
  6. To maintain Same Living Standard – The aim of pension plans also revolves around the fact that you would want to maintain similar living standard for the entire stretch of life or maybe a better lifestyle. The perfect picture of superannuation will only be completed if you have abundant wealth to relax in your retired life. You have no worries and burdens at this phase of your life.
  7. Unexpected Medical Expenditures – With growing age you can never be sure about your health problems. You have to stay prepared for such unexpected medical expenditures. Though you have a comprehensive health cover plan but you never know about sudden requirement of expenditures you need to make towards health issues.
  8. To Deal with Inflation – You need methodical and organized pension plans to ensure that you do not outlive your savings. Despite your hard earned savings and thorough retirement planning there still remains the risk of outliving your accumulated wealth far before your estimation. The increasing inflation is one big problem to deal with in your retirement plans.
  9. To Take Care of Your Other Responsibilities – Remember when you are planning for your retirement you do not plan for your own future but also for your loved ones. You might have other responsibilities, too, during your retirement. This retirement corpus is not just for providing your requirement but also your spouse’s.
  10. Leave Some Fortune for your Children – This may sound a little unnecessary but being an Indian parent you might also want to leave some fortune for your children or grand children too. It is a natural tendency of Indian parents to do more than they could do for their children’s future. That is the reason why your pension planning should be efficient enough to meet your requirement and maintain same living standard as before, keep you ever prepared for unexpected turns and at the same time save something extra for your children without compromising your own lifestyle.

 

Filed Under: GP

How to build on a budget

March 29, 2018 By The Jenny Pincher Leave a Comment

Saving cash when you’re building on a budget can be a never ending battle. If your bottom line is tight, read below for several tips to help you keep costs under control.

Although it may mean that you spend a little longer in the design phase, taking the time to consider the best options for your lifestyle (as versus an existing or off-the-plan design) will save money over the life of your home. If you need to retrofit things such as heating or cooling, this can be more costly if you need to rewire or add in infrastructure for ducted temperature control. If you can’t afford the complete appliance or feature in your initial build, you can still get your plumber or electrician, for example, to put the pipes or wiring in place to make installation down the track more straightforward.

While opting for cheaper materials will be the best choice for some, a more savvy use of cash is reducing the floorplan while maintaining a higher quality. When you have less square meterage, this will typically mean your build will cost less meaning you can pocket the difference or put it towards things such as green technology or design that delivers cost savings to you over time. You’ll also be a friend to the environment!

Good communication with your building team is essential. This begins with your initial meetings to obtain quotes, through to the signing and negotiating of contract, right up to the final payment after the works have been concluded. Asking questions (even several times) can help you to understand the building process better, especially when a lot of the terminology will be new to the first time builder. You may wish to get an independent building inspector that is not affiliated with your builder to help keep track of your build’s progress. This is especially useful if you have a particular standard of build quality or a lot of finely detailed work that you want double checked.

Good communication will also mean that if there is a delay in being granted building permits, you should be clear as to what costs you will need to cover, even if your construction has not begun. For this reason, some people opt to overestimate the planning process to avoid a delay in your build beginning. Ideally you or your project manager will also have a few alternative options in place in case certain trades are unexpectedly unavailable, delayed or subjected to uncontrollable factors such as inclement weather. Knowing ahead of time what can be rearranged if needed will save last minute stress if materials do not arrive on site, for example.

Don’t forget whether you’re seeking a builder in Melbourne, Perth or Brisbane, be sure to get quotes from at least three builders to get an idea of the costs that you will need to cover. This should include a site visit to factor in things such as slope, tight access and logistics such as restricted parking for trades.

Filed Under: Budgeting, GP

Cost savings for new business owners: What you should know

March 29, 2018 By The Jenny Pincher Leave a Comment

When you’re starting out in a new business, making ends meet can be a challenge. While it is not uncommon for new businesses to take a while to start making profits, planning ahead will increase your chances of getting there sooner. Read below for our tips that will help you get set up the right way, first time.

Recordkeeping

When you’re making a smaller volume of sales, it can be tempting to manually do invoices or receipts until you beef up your revenue. However, using software from the beginning will allow you to easily see if you’re on track. Programs like MYOB or Quickbooks will enable you to monitor sales, stock, outgoings and employee data. This assists you with your bookkeeping requirements like annual activity statements, and also enables you to identify trends in your sales that can leveraged in the future. Come tax time, it should be a more straightforward process, which is a bonus for any business owner.

The same goes for client profiles or any other data that is relevant to your business. Depending on your industry, there are oodles of custom software that will help you manage client details that extend beyond their most recent purchases. Down the track when you’re increasing your marketing spend, customer insight can provide valuable data as to where you should concentrate your publicity efforts. It’s essential that it’s transferred to your online system, a bunch of handwritten client forms are of limited use and easily misplaced!

Networking

Another option for the new kid on the block is to leverage networks or create new ones. Not only does this enable you to become more integrated in your local or online community, but the opportunity to collaborate in cross-promotions or even skills swaps can materialise. In cases of contra deals, be sure to flesh out some specifics so you get the help you need without ‘paying’ too much in free services or goods. You might consider hosting some industry events to meet your competition/peers.

Being in the loop will also keep you on top of industry news, whether it be risks or opportunities to be aware of. Who knows, you may find a like-minded company to go halvies on a warehouse for sale, which dramatically reduces the cost of your real estate outlay.

Your initial business plan

Even the most organised of people will find the first few months or even years of business ownership a challenge. Too quiet and cash flow issues may creep up, too busy may mean you struggle to meet demand. However while this early time goes, ensure you schedule out a time to revisit your initial business plan. Here you can revise initial goals and budgets and consider whether they’re still relevant. If you need to refinance or look at different ways to structure your cash flow, it begins with your initial set up. Once you determine where you’re at, it’s time to make new goals for the future or adjustments to get you back on track.

 

Filed Under: GP, Women Entrepreneurs

Four Mistakes Everyone Makes With Their Finances

March 4, 2018 By The Jenny Pincher Leave a Comment

Considering how often you use it, you think you would be better at saving money. But like remembering the garlic toast before it burns under the broiler or creating a flawless cat eye liner that matches the other eye, sometimes the things you do most often don’t come out as well as you hope. Managing your money is just one of those chores that doesn’t come naturally to you. It’s far too easy to make a few mistakes that stop you from saving properly. Luckily, it’s just as easy to fix these mistakes. Scroll down to see the most common mistakes people make with their finances, and make sure you aren’t making them, too!

Going Without A Specific Goal

A goal (or several — there’s no limit to the number you set for yourself) is a great way of focusing your financial attention, but it’s only helpful when you make it correctly. Setting a goal isn’t simply setting a basic intention and hoping for the best. Successful goals — ones that you can actually attain — are made mindfully with precision.

Everyone at one point in their life has said they need to spend less and save more. While well-intentioned, this promise doesn’t have the makings of a successful goal because it lacks detail. Effective goals answer the basic who-what-when-where-whys. In this case, you need to identify how much less you should be spending and how much more you should be saving. More still, you need to give a purpose to the way you spend and save your money. You must be able to know why you’re changing the way you use money.

For some single women, this may be paying down debt or saving for a new home. For others, it could be a week-long trip in the Galapagos or an iPhone X — no mean feat, as it’s heralded as Apple’s most expensive phone. For you, it could be entirely different. You need to think about what excites or concerns you the most and take it from there.

But you’re not done quite yet. Once you’ve identified your target, you need to assign a timeline to your goal. Figure out when you want to pay them off by. Then calculate what sort of payments you’d need to be making to hit that target.

Spending Without A Budget

Once you have a detailed goal, you need a budget to make sure your expectations are realistic. It helps you identify cash flow problems that stand in the way of achieving your goals. It does this by outlining the way you spend your money, so you can understand where your finances sit.

Unfortunately, the act of creating a budget isn’t very fun. While there are free money management apps that can help you, a budget is at its most effective when you’ve had a hands-on approach on its creation. When you sit down in front of an Excel spread sheet or an old-fashioned piece paper, you’re forced to confront your spending habits. It’s not always easy when faced with mindless overspending, but this realization can be what forces you to change your ways.

Carve out a time when you can devote your full attention to your finances. You’ll need enough time to review old statements and other financial documents so that you can track the way you’ve spent your money over several months. This will give you a better understanding of your long-term habits. Then itemize your spending by categories to see where you’re going wrong.

Living Without A Safety Net

A budget can help you plan for retail splurges and vacations. But that’s just the icing on the cake, so to speak. Before you can budget for the fun stuff, you need to make sure you’ve set aside enough cash to cover financial emergencies that may happen in your future. An emergency fund or financial safety net should be large enough that you can cover your fixed expenses for roughly six months should you get laid off.

Six month’s worth of wages can take a while to accumulate, so it’s important that you have a backup plan should a sudden bill, repair, or medical emergency occur before you’re ready. For urgent assistance, personal online cash loans offer an alternative to conventional financial resources. When you face a bill or household repair that needs immediate payment, check in with online direct lenders, like MoneyKey. They issue quick online payday loans that you can receive in as little as one business day, making it possible to cover unexpected financial responsibilities without delay.

Waiting Until You’re Ready To Invest

Investing is the financial buzzword of the day — and for good reason. When done correctly, investing is a sound way to prepare for the future promising higher rewards than just straight saving — even when compared to a high-interest account. The thrill of taking on risks in the market in the hopes of banking a huge reward is also a lot more exciting than sitting down to make a budget. For this reason, many people jump into stocks, ETFs, and robo-advisors before they should.

There are several problems with this eager approach. When you make premature investments, you’re tying up your money in a way that can harm you down the line. Most financial advisors suggest waiting until you have a nest egg of 3–6 months of your living expenses before you put any money towards the stock market.

It’s also difficult to achieve goals on budget once you split your money this way. If you’re without both goals and budget, then you could choose the wrong type of investment. We’re not talking about jumping on the Bitcoin bandwagon when most analysts warn against it. When you leap into investments without clear goals in mind, you could invest in a long term mutual fund when really you need help with a short term goal.

The bottom line: don’t stop there

Get familiar with your finances, so you can ferret out other mistakes you’re making with your cash. It could be as simple as buying coffee every day before work or as complex as using the wrong (low interest) savings account. Just don’t be content to stop. Cutting out toxic behaviors is only the first step. Like the three examples above, you need to figure out ways to fix your mistakes, so you can manage your money properly and start saving.

Filed Under: GP

When Going Into Debt Is Okay

February 20, 2018 By The Jenny Pincher Leave a Comment

There will come the point in life when you enter into debt. Rarely will you get away in life without accumulating some form of debt. Whether it is credit cards, mortgages, student loans or borrowed money from a friend, they are all forms of debt.
But sometimes it is okay to be in debt – depending on the type. There is such a thing as good debt, compared to the commonly known bad debt. So if you find yourself, or hear the word debt, take a step back and re-evaluate what type of debt you have.
Consider some of these reasons why going into debt is okay.

Education (Student Loan)

If you went to college after graduating high school, chances are you will, or have already acquired a hefty student loan. But this is okay. A student loan shows that you went to college to further your education. How can anyone fault you for that?
Plus after finishing post-secondary school, you have a degree that allows you to access specific jobs that others without education would be able to. That means more than likely a higher paying job with a better chance to pay everything off.

Housing (Mortgage)

When you buy a house, it is doubtful you will be able to pay everything in cash. So you go to the bank and get a mortgage. This will be considered good debt because buying a house is an investment. If the housing market works in your favor, by the time you sell your home the value should have gone up. So when you sell, you actually make money off of the house.

Consolidating Loans

If you are looking into a consolidation loan, don’t shy away because of the word loan. What you are doing is taking as much of the bad debt as possible (credit cards, bank loans, etc.), and putting it under one low-interest loan.

Usually, bad debt comes with high-interest rates that make it hard to pay off quickly. So by going with a consolidation loan, you are now required to make only one monthly payment that is usually more affordable.

The downside of consolidation loans is that it frees up the credit cards that got you to where you are in the first place. You must stay dedicated to paying off the consolidation loan without racking up more credit card debt.

Quick Fixes

Although they are not necessarily considered good debt, quick online loans can be beneficial. These types of loans are fast approval with access to reasonable amounts of cash. They are suitable for when funds are tight, and an emergency pops up.
But you will still have to pay it off. Usually, these loans last for about a year. However, if you do not pay them off in time, the interest rates are quite high.

So if you find yourself in a little bit of debt, do not worry. Re-evaluate your situation and see which debt is good, and which is bad. That will also help you decide which debt to tackle first when it is time to pay everything off.

Filed Under: Debt, GP

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Hi, I'm Jenny, owner and creator of The Jenny Pincher. My goal is to educate and empower single women on how to get out of debt, build wealth & design a life you love. How can I help you? Read More

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