Saturday, March 12, 2011

Bringing Your Budgeting Out of the Stone Age

No matter how much money you make, it is easy to spend too much. As expenses (debts) overwhelm revenue (credits), many people run into budget problems, such as overdrafts, penalties and even foreclosure. Paper and pencil don't automatically calculate depreciation rates, adjustable rate mortgages or equity derivatives. In the modern era, it is wise to use modern technology, tools and software options for bringing your budgeting out of the stone age.

Many people have run into financial difficulties due to overdrafting their accounts. With checking, savings and money market accounts that have frequent direct deposit or automatic withdrawal transactions occurring constantly, modern budgeting can be complicated. A simple Non-Sufficient Funds Fee of $35 can wipe out a planned restaurant meal or movie night.

People have a variety of different financial positions - from the high school or college graduates just starting out to the wealthy financial investor with numerous accounts and investments in his portfolio. Each person must find the best online software to fit his individual needs.

There are free and pay software online that can help with the three most important elements of budgeting:

  • Accounting Credits and Debits

  • Bill Pay

  • Calculation

  • Funds Transfer

  • Investment Portfolio

Here are some popular online budgeting tools:


PearBudget is a Web-based financial management program offering a free 30-day trial. It is based on the Microsoft Excel spreadsheet using the envelope system where people place their money in a separate file, folder or envelope for each expense. This prevents people from spending money reserved for necessities on unnecessary items.

Users follow a simple 3-step process of Plan, Enter and Review for their budgets. The spreadsheet quickly calculates totals. The advantages of PearBudget include the ease-of-use, familiar templates and great customer service.


"We are refreshing money management" is the slogan of the popular website. Mint is a free online money management tool where customers can view their checking, savings and credit card accounts in one convenient location. It has enabled anywhere budgeting with its award-winning iPhone and Android apps.

Consumers can quickly organise their financial information for display in colourful charts. The structure is straightforward and intuitive. It is easy to set spending monthly goals and Mint can alert you if you are above or below your goal. Mint is easy to customise. Mint boasts 4 million users and has won numerous awards.


Mvelopes is online software based on the envelope budgeting system for financial management, which provides a guide or map for future expenses. Mvelopes offers a free 30-day trial. It encourages customers to "proactively take control of their budget."

It is simple to enter data into Mvelopes. Mvelopes enables users to budget, track spending, calculate net worth and pay bills. It is an award-winning program.

YNAB (You Need A Budget)

"Stop living paycheck to paycheck" is the motto of YNAB. YNAB offers a free 7-day trial download. YNAB helps users establish financial discipline with the four steps of Plan, Adjust, Surplus and Save to create a balanced budget.

Customers simply fill in their financial information into colorful spreadsheets. This software doesn't link directly into your bank accounts. The categories are already established to assist you with your budgeting. A more advanced version, YNAB Pro, is available with more graphs and charts.


Yodlee has services for both financial institutions and consumers for managing their money. The Yodlee MoneyCenter is free, aggregation software that enables users to get a solid picture of their financial condition. It has been described as a one-stop shop for viewing, tracking, bill paying and funds transferring purposes.

This is a good system for getting a complete picture of your financial condition. It has a Financial Calendar for planning ahead and timely alerts for reminding you of bills. Users can run generate personalised reports. Yodlee is effective at pulling data from different sources, maintaining your financial history and even allows you to include frequent flyer miles.

Matt writes at Money Choices, which is an independently operated Australian compare website for buyers to find cheap car loans and other financial products

Tuesday, March 8, 2011

The Latest Market Commentary as on 8th March 2011

Good morning, I hope you are well.

I am pleased to provide you with our latest market commentary.

It hasn’t been the strongest month for sterling. Compared to the January GBPEUR exchange rate of 1.19-1.20 this month it’s been closer to 1.17-1.18. There are numerous reasons for this:

For one UK GDP figures for the fourth quarter of 2010 were not positive. The first estimate in January showed that GDP declined -0.5% in the final 3 months of 2010, but this estimate was later revised in February to -0.6%.

Furthermore it emerged that inflation rose to 4.0% in February compared to 3.6% the month before. This indicates that prices for goods and services continued to climb. This risks damaging the credibility of the Bank of England, because the Government’s target for inflation is 2.0%.

However there was some encouraging news for sterling in the future. The results of the Monetary Policy Committee vote on interest rates changed for the first time in months. Most recent minutes show 3 (out of 9) MPC members voting to increase interest rates. This indicates the Bank of England is not far away from increasing rates, which in turn should benefit sterling.

Of course for a more in-depth assessment of your particular currency feel free to speak to your currency dealer at Pure FX.

Despite the ongoing concerns about the euro’s long-term viability (see Portugal, Ireland and Greece!) the single currency has strengthened.

In particular the German manufacturing PMI (measuring output in the German manufacturing sector) hit record highs during February. This is important because Germany is the planet’s second biggest exporter next to China, meaning that strong manufacturing bodes well for Germany as a whole. In addition Germany’s trade surplus rose €2.1bn to €14bn.

Furthermore the euro has benefited as an alternate haven to the US dollar as tensions in Libya continue. In the past the US dollar has benefited as a safe haven during times of political strife, but during February this changed. Perhaps because of the ballooning US deficit, which might be causing the markets to look elsewhere?

However euro bulls need to remain cautious. The EFSF rescue fund for ailing nations has still not been finalised in spite of a conference in Brussels to settle the matter two weeks ago. In addition the Portuguese economy is teetering as bond yields approach dangerous levels above 7%.

US Dollar
It’s been a mixed month for the US dollar in terms of economic data. US consumer confidence increased during February. In addition non-farm payroll figures increased 192k last month – the largest rise since May 2010.

However Fed Chairman Ben Bernanke told the Senate that economic conditions are still too mixed to pare back the $600bn quantitative easing package.

As we have seen in the in the past when there is positive US data, the dollar tends to weaken as risk aversion abates. February was no different with both sterling and euro reaching 2011 highs versus the dollar.

Australian Dollar
It was a tough month for the dollar owing to a series of natural disasters in Australia. First off calamitous floods meant the markets sought investments elsewhere, then a hurricane in Queensland compounded the issue. However the Australian economy is in robust shape, therefore we anticipate the AU dollar to remain strong.

New Zealand Dollar
The New Zealand dollar collapsed in February on reports of a major earthquake in Christchurch, the nation’s second largest city. In addition to the humanitarian crisis some economists are suggesting New Zealand might dip into recession as a result.

Canadian Dollar
It’s been a quiet month for the Canadian dollar. GDP for Canada for the last quarter of 2010 met expectations, and this helped the CA dollar against the US dollar. In addition the CA dollar has risen as confidence in the US dollar has declined. With ever rising oil prices we expect the Canadian dollar to remain strong for some time to come.

Monday, March 7, 2011

How to Budget and be Free from Debt

The key to getting out of debt is to plan the family finances. Easier said than done, perhaps, but a vital step in avoiding bankruptcy, which is the ultimate price to be paid for letting debt issues get out of control.

Devising a practical repayment plan that can stave off bankruptcy takes time and effort. It may be that some impartial and practical debt advice can help outline all the steps necessary to make a debt management plan that would be acceptable to lenders. If the aim is to find an acceptable repayment plan then knowing what to aim for can save time, effort and money.

Impartial and practical debt advice can help with setting out a sensible and all inclusive budget. It is easy to forget to include items of spend that occur irregularly by simply studying one or two months. These may include motoring costs such as insurance, servicing costs or replacement tyres or items such as the annual TV licence fee.

Getting a complete picture of the expenditure is vital for successful budgeting, as is developing a sense of discipline in saving and spending. This may be the hardest part of any repayment plan as it requires a change in habits and lifestyle that may have become ingrained over many years.

Where large amounts of debt are involved then the options become clear cut and with a real reason to change. Smaller debt levels lack that sense of urgency or need to change but as any impartial debt advice will demonstrate the situation can escalate quickly if left unaddressed and bankruptcy could loom ever closer.

Bankruptcy should be far from any debtor's thoughts but remain as a final, but avoidable, solution to debt problems. Professional advice will help get to a position where a debt management plan can be developed that will help steer you back to financial wellbeing. However debt advice is only that – advice. The hard part is listening to that advice and making the changes to spending habits to actually make it achievable.

No lender will simply walk away from any unpaid loans. Finding a repayment plan that is acceptable to all lenders can be a tricky and involved process. Independent advice and advisors can point debtors in the right direction or act as intermediaries to get the best possible terms given the situation in hand. For those with debts over £15,000, there is the possibility of a legally structured debt management plan called an Individual Voluntary Arrangement (IVA). This is the final step before bankruptcy but has a number of advantages in that it is a private arrangement and avoids the loss of all personal assets.

It also involves receiving advice from a licenced insolvency practitioner who will also work with the debtor to establish what they can afford to pay given their income and expenditure. The debt management plan agreed will ensure that people retain enough to live on, although this may be tighter than before!