9 essential steps to manage your money the right way

KATHMANDU: There are some great tried-and-tested strategies you can learn how to manage your money the right way.

Let’s take a look.

Having a sound money management plan can be the light at the end of the tunnel for people trying to get their financial life in order.

If you are like me and have several bank accounts, credit cards, and the like, often times getting a grip and fully understanding your personal finance state might seem daunting and an uphill struggle.

But if you don’t take the proper steps to get organized and actually learn ways for better managing your finances, you’ll feel like you are swimming against the current.

Managing your money—like anything—takes time to understand and to improve on. And to master, it also takes commitment and a solid understanding of your financial situation. These are the first steps in effective money management.

Everyone and anyone who ever took control of their finances went through this; and getting your financial life in order, sooner rather than later, is of utmost importance.

Here are 10 fundamental steps to help you manage your money the right way:

1.      Create a budget

First things first: create a budget if you haven’t already. Is it necessary? Are windshield wipers necessary in the rain? Trust me, you need one.

Creating and sticking to a budget might seem a little tough to achieve at first but it pays off in the end (no pun intended). Budgeting helps us see with clarity and full transparency our financial situation and this is of most importance for better managing your money.

It’s the first step to help us pay off debt and start saving for future expenses such as a mortgage, a car, and your retirement. It’s what will bring balance to your financial life and give you peace of mind.

To begin, you will need to understand your expenses and your income to better manage your money. This is addressed in the following 2 steps:

2.      Understand your expenses

Ask anyone off the top of their head to tell you how much they spend a month on everything and they might not be able to do so. This isn’t rare.

Many people actually don’t know the total amount of expenses they generate on any given month. This is a problem but there is an easy solution for it. Here it is: for one month, keep track of all your expenses. Easy-peasy. Take all your receipts (groceries, restaurant bills, utilities, etc.) and look at your bank statements and add up all of your expenses. Remember to keep track of expenses paid by cash as well as credit cards.

The idea is to have all your expenses (both variable and fixed) accounted for to get a total amount. This will allow you to see the whole picture and know how to manage your expenses going forward. You will also want to compare your historical performance over time.

3.      Understand your income

Ask anyone off the top of their head to tell you how much they make a month and although they probably won’t tell you, internally they know. This is the difference between income and expenses, most people know their full monthly income but have less knowledge of their full monthly expenses.

Nonetheless, the point is to figure out your total expenses and subtract that from your total income for the month in question. Here is how the results should pan out:

If you end up with a negative number this means you spent more than you made. Actions to take? Reduce your spending and expenses until the total reaches zero.

If you end up with a positive number this is good (high five!) and means you spent less you made. Actions to take? You could increase your debt payments or increase your savings.

Once you understand your expenses and income and have a firm understanding of the money coming in and out of your life, it’s time to take some additional steps to best manage your money.

4.      Consolidate your debt

Debt, the dreaded word. No one likes debt. No one. And most people that need help managing money actually need help getting out of debt. Sound familiar? If you are like the majority of Americans (~80%), then you most likely have debt.

The first thing to do is to get it under control and work on getting rid of it. If you have credit card debts, student loans, and other debts; look to consolidate them and try to get the lowest interest rate possible.

Again, its all about taking the proper steps to control your money. There are options out there that allow you to combine several unsecured debts such as credit cards, personal loans, and payday loans, into one bill rather than pay them individually.

If you only have a single credit card debt and are on a tight budget, try paying at least the minimum amount as soon as you get the credit card bill. Then, if your finances permit it, and you come across some more money, try to make the same payment a few weeks later.

Try keeping this payment cycle going until your debt is fully paid off.

5.      Slash or remove unnecessary expenses

Big fan of Starbucks? If you are buying a Venti Caffe Latte every day (as delicious as they are) that’s around $4 out of your wallet. Multiply that out and you could be spending about $1,400 a year just on that. Maybe, just maybe, consider making your own blend at home to pinch those pennies?

Paying for a gym membership but doing yoga in your backyard? Cancel it. Think long and hard of other memberships, subscriptions, accounts that you are paying for but could live without.

Remember, the idea is to learn how to manage your finances better by taking everything and every penny into account.

So, do some spring cleaning and slash expenses wherever you see an opportunity and especially if it’s something that doesn’t affect your life to a great extent.

6.      Create an emergency fund

Something happens and it’s good to be prepared. Emergency funds are an important part of a healthy personal finance plan.

In almost all cases, you shouldn’t touch or take money out of the fund, rather, let it sit there earning interest. If you lose your job or an unfortunate or unexpected expense arises—such as your car breaking down or a tree falling on your roof—this is when you should tap into it.

7.      Save 10 to 15 percent for retirement

I know it’s far off, but if you want to be sipping margaritas in Miami under a sun umbrella, the sooner you start saving for retirement, the better off you will be in your golden years.

First thing should be to establish a savings target—one that tells you approximately how much you should set aside over time to meet your retirement goals that will allow you to live the sort of lifestyle you envision.

Let’s say you are 21 years old and don’t have anything saved up but just got offered a job paying $40,000 a year. If you save 10% of your income annually then by the retirement age of 67, you will have $2.5 million saved up! Cha-ching!

8.      Review and understand your credit report

Why are credit reports so important? Because they are.

A credit report is a number roughly between 150 and 900 that serves as a score/grade which factors in your present and past loans, credit cards, mortgages, and any other reported debts.

It serves to determine how creditworthy you are and this score has a direct impact on your future borrowing ability. It’s important that you review and understand your credit report to assure it has all your updated information and to identify any possible errors (it’s estimated that 2-3% of reports contain some errors that could affect your overall score).

If you want to aim for a great credit score, keep your credit card balances low and work on paying off your debt instead of moving it from account to account.

9.      Follow money management resources

Knowledge is power. Every financial guru we know today started off like you and me. They just continuously learned and educated themselves and turned their passion into their profession.

Financial pros can give you some much-needed advice on how to manage your cash the right way, as well as some inspiring stories to get you focused on being the best version of yourself in terms of crushing it financially.

The key when researching which expert to follow is to carefully pay attention to what they say, absorb it, and only take the pieces of advice or guidance that can really help your case.

Some of their financial jargon might be out of your league, so look more for those kernels of wisdom that might apply to you and yours.

Overall, stay well-informed, practice sound financial management, and perhaps one day you will be the next personal finance guru and have thousands, if not millions, of people sharing your content and seeking your expertise on the best way to manage your money. Anything is possible.

Being able to effectively manage your money will make life flow much more smoothly, not to mention help lower your stress levels. Being well-organized will also save you time and save you potential headaches in the future. And no one wants those.

So, get out there and take the first steps mapping out your personal financial strategy with the ever-present goal in mind of being able to manage your finances better than before. Many others have done it and so can you. moneystrands

Maha Shivaratri

Maha Shivaratri is one of the major festivals of Nepal and which literally means “Night of the Shiva”. It is celebrated on the 14th day of the dark fortnight of the Magh month, as per the Hindu lunar calendar but is specially celebrated at falgun 27th or 11th march.

On this day, people (specially children) used to stop the road by rope and take money from the people to have fun and at night all of the people gather together all set a fire because according to the story all their devotees wanted to become like the god so at the night they eat a lot of bhang, Dhaturo with Haluwa and celebrate this festival happily. 

The day of Shivaratri is different for different people. Some take it as a day to fulfil a religious purpose, whereas some as the day to smoke and have fun around a bonfire. .It is believed that on this day, the stars in the Northern Hemisphere are at most optimum positions to help raise a person’s spiritual energy. It is  also believed that the Shiva principle is most active on this day of the year.

Maha Shivaratri is celebrated marking the convergence of Shiva and Shakti. Maha Shivaratri also celebrates the night when Lord Shiva performed the "Tandav", the cosmic dance. Hundreds of thousands of devotees visit Pashupati temple in Kathmandu, one of the holiest shrines of the Hindus.  Pashupatinath is considered the Guardian and Protector of the Kathmandu valley and Nepal. 

As Maha Shivaratri is mainly related with the night, the devotees stay up all night and pray to Lord shiv. The four Prahars of Puja is carried out all night long, the devotees usually stay in tents along the Gaushala road.

Tips for Exam

Exams put extra pressure on even the calmest of students. But, with a little preparation and a well-planned revision timetable, you can achieve the grades you deserve.

TWO MONTHS BEFORE YOUR EXAMS:

Now is the time to think seriously about your revision timetable. You should:

·        check the most up-to-date syllabus for every subject

·        find out about the exam (for example, are questions multiple choice or essay-based?)

·        prepare a revision timetable. 

SOME REVISION TIPS:

Try to schedule revision for your most productive times during the day. For example, if you feel fresh and alert in the morning, make sure you do most of your studying early. You should also try to:

·         priorities exams that make up a large percentage of a subject’s grade

·         take regular breaks to refresh your mind

·         use a variety of study tools to revise – including books, audio guides and online video summaries

·         highlight important points in your study notes

·         ask family and friends to quiz you on each subject

·         sit past papers so you get a feel for the questions and timings

·         make time for relaxation with family and friends.

A MONTH BEFORE YOUR EXAMS:

If you’re a school student, your exams co-ordinator should provide you with a Statement of Entry.

Your Statement of Entry will tell you exactly when your exams are being held so you can make appropriate travel arrangements. You must remember to bring this form with you on exam day.

For more information on what to bring and to view your exam timetables, see advice we have written especially for your exam day.

In the meantime, continue with your own revision timetable – but remember to schedule breaks so you don’t get too tired.

EXAM QUICK TIPS – ON THE DAY

So, you have revised and prepared for the big day. Don’t worry if you feel a little nervous – that’s only natural. Follow a few more simple tips to stay relaxed and get the best possible exam results.

·         Try to: stay calm and take deep, even breaths

·         read the exam paper completely before you start

·         plan your time

·         move on to the next question if you get stuck

·         read the questions carefully and make sure you answer each one properly

·         sip fresh water throughout the exam

·         check each answer, particularly if you finish early.

For essay questions, remember to structure your answers with a beginning, middle and end. The beginning introduces the essay, the middle explores the topic in more detail and should make up around 75 per cent of the overall word count, and the end concludes or summarizes your essay.

How to Effectively Conduct a SWOT and PESTLE Analysis

PESTLE and SWOT analysis give internal and external insight about a topic. This is beneficial for people of all walks of life. Without it, you may never discover your true strengths and weaknesses. Or realize how much the macro-environmental factors of PESTLE analysis truly influence everything around us.

PESTLE and SWOT are highly effective analysis tools to help you during the process of developing a strategic plan for your business. They can be used in isolation, however become significantly more effective when used in combination.

• PESTLE analysis considers the broad environmental context that affects the business and the changes that occur in this context.
• SWOT analysis then interprets these findings for the business to determine the strengths and weaknesses, and opportunities and threats.

If combined, PESTLE analysis is usually completed first to provide a context for the SWOT analysis.

PESTLE Analysis

PESTLE analysis is, in effect, an audit or external scan of an organisation’s environmental influences that helps guide the planning and strategic decision making. It is often referred to as providing a ‘big picture’ of the environment in which a business operates.

The assumption is that, if a business is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes. Often, the analysis will determine likely issues/events that will impact the business – these are generally considered to be outside the control of the business.

The diagram below shows how all these different factors can influence the business or organisation and how it operates.

Let’s consider the individual factors and how they may impact your business plan:

Political

This factor represents the way and extent to which the government influences the economy, and certain businesses. This could be at the federal, state or local level. Current considerations in the market that may impact planning include factors, e.g. a potential change of government, unstable government due to the balance of power, tax law, changing superannuation policies, labour laws, and trade restrictions.

Economic

This factor refers to the areas unique to the economy and directly influence it. Factors that may influence your business plan include inflation rates, interest rates, economic growth, exchange rates, and property prices.

Economic also refers to local economic factors within your geographic area, e.g. Newcastle, the second most populated area in NSW, is famous for its coal exports. In comparison, Port Lincoln in South Australia is known as the Seafood Capital of Australia. Economic factors differ for each town or city and must be analysed for their impact on your business.

Social

This factor refers to demographic factors, including population growth rates, cultural aspects, age distribution of population, and changing social behaviours; e.g. people using social media applications to discuss products and services. Many of these factors may impact the way you do business with your clients and the methods of interaction you may have.

Technological

This refers to the rate of technological changes and Research and Development (R & D) activities, automation, and incentives. These factors influence outsourcing decisions, quality, and efficiency considerations. Some examples include mobile internet, smart phones, Skype appointments, location based searching, emergence of Artificial Intelligence etc. Over the last 10 years, changes in technology have massively impacted every industry and the degree and speed that this will occur in the future is only going to increase.

Legal

This factor refers to all the laws directly connected to a business or company and its area of activity. E.G. WHS, Consumer Law, Privacy and Discrimination Law.

Environmental

This refers to all the factors directly related to, influenced, or determined by the surrounding environment. This could include weather and natural disasters, geographical position, climate changes, and sustainability. Think about the apparent increased frequency of natural disasters (floods, drought etc.) and their impact on the business and future planning of many affected businesses.

The traditional use of PESTLE in change management is as follows:

Step 1 – List external PESTLE factors for the business

You may need to brainstorm and have an expert knowledge of the business and/or the world outside the business for this.

Step 2 – Identify the implications of each PESTLE factor on the business

Decide the implications of the external factors – rank or rate them. Normally, this involves assessing their impact over time (short, medium and long-term), impact by type (positive or negative affects), and impact by dynamics; i.e. the significance/importance of the implication increasing, decreasing, or remaining unchanged.

Step 3 – Rate the impact and likelihood

Rate the potential impact on the business, high – low, and the likelihood of it happening, low – high.

Step 4 – Further action

You can then undertake further analysis in the form of a SWOT Analysis or scenario building. Developing ‘what if’ scenarios enables you to visualise different alternative futures for the business, focusing on the high frequency, high impact combinations of influences.

SWOT analysis

As discussed earlier, SWOT analysis helps to interpret the findings of the PESTLE analysis to determine the business’s strengths and weaknesses, and opportunities and threats. It is important, as a part of the internal focus, to conduct the SWOT analysis prior to completing your business plan. It is a critical part of the risk management process.

It helps to understand SWOT analysis by classifying the strengths and weaknesses as an internal assessment of a business, so looking within a business at controllable factors. The opportunities and threats are therefore classified as an external assessment of the business, so looking at outside forces and influences that are beyond the businesses control.

What are some of the questions you could ask yourself, which would also assist with the business planning process?

Strengths

•  What advantages does your business have?
•  What do you do better than anyone else?
•  What unique or lowest-cost resources can you draw upon, that others can’t?
•  What do the people in your market perceive as your strengths?
•  What factors indicate that you “win business”?
•  What is your Unique Selling Proposition (USP)?

Weaknesses

•  What could you improve?
•  What should you avoid?
•  What are the people in your market likely to perceive as your weaknesses?
•  What factors cause you to lose business?

Opportunities

• What good opportunities can you spot?
• What interesting trends are you aware of?

                Useful opportunities can come from such things as:

•  Changes in technology and markets on both, broad and narrow scales.
•  Changes in government policies related to your field.
•  Changes in social patterns, population profiles, lifestyle changes, and so on.
•  Local events.

Threats

•  What obstacles do you face?
•  What are your competitors doing?
• Are quality standard, compliance requirements, or the specifications for your job, products, or service changing?
• Is changing technology threatening your position?
• Do you have bad debts or cash-flow problems?
•  Could any of your weaknesses seriously threaten your business?
• Think about some of these considerations when conducting a SWOT analysis.
• The completed SWOT analysis image provides an example of the issues that a business owner may face. 

PESTLE can be rightly called a thorough view on the external environment in which an organization is operating in. On the contrary though, SWOT analysis is the analysis on the internal environment of the company based on its products etc. SWOT tends to be more product/service specific as an individual or an entity conducts this analysis based on that product/service.

Diplomacy

Diplomacy is broadly described as the art of conducting negotiations, agreements and relations between two or more parties in a sensitive way. These parties could be anything from husband and wife to two countries.

Open Source Software (OSS): Expert's Choice

The term open source refers to something people can modify and share because its design is publicly accessible.

The term originated in the context of software development to designate a specific approach to creating computer programs. Today, however, "open source" designates a broader set of values—what we call "the open source way." Open source projects, products, or initiatives embrace and celebrate principles of open exchange, collaborative participation, rapid prototyping, transparency, meritocracy, and community-oriented development.

Open source software is software with source code that anyone can inspect, modify, and enhance. "Source code" is the part of software that most computer users don't ever see; it's the code computer programmers can manipulate to change how a piece of software—a "program" or "application"—works. Programmers who have access to a computer program's source code can improve that program by adding features to it or fixing parts that don't always work correctly.

Some software has source code that only the person, team, or organization who created it—and maintains exclusive control over it—can modify. People call this kind of software "proprietary" or "closed source" software.

Only the original authors of proprietary software can legally copy, inspect, and alter that software. And in order to use proprietary software, computer users must agree (usually by signing a license displayed the first time they run this software) that they will not do anything with the software that the software's authors have not expressly permitted. Microsoft Office and Adobe Photoshop are examples of proprietary software.

Open source software is different. Its authors make its source code available to others who would like to view that code, copy it, learn from it, alter it, or share it. LibreOffice and the GNU Image Manipulation Program are examples of open source software.

As they do with proprietary software, users must accept the terms of a license when they use open source software—but the legal terms of open source licenses differ dramatically from those of proprietary licenses.

Open source licenses affect the way people can use, study, modify, and distribute software. In general, open source licenses grant computer users permission to use open source software for any purpose they wish. Some open source licenses—what some people call "copyleft" licenses—stipulate that anyone who releases a modified open source program must also release the source code for that program alongside it. Moreover, some open source licenses stipulate that anyone who alters and shares a program with others must also share that program's source code without charging a licensing fee for it.

By design, open source software licenses promote collaboration and sharing because they permit other people to make modifications to source code and incorporate those changes into their own projects. They encourage computer programmers to access, view, and modify open source software whenever they like, as long as they let others do the same when they share their work.

Open source technology and open source thinking both benefit programmers and non-programmers. Because early inventors built much of the Internet itself on open source technologies—like the Linux operating system and the Apache Web server application—anyone using the Internet today benefits from open source software.

Every time computer users view web pages, check email, chat with friends, stream music online, or play multiplayer video games, their computers, mobile phones, or gaming consoles connect to a global network of computers using open source software to route and transmit their data to the "local" devices they have in front of them. The computers that do all this important work are typically located in faraway places that users don't actually see or can't physically access—which is why some people call these computers "remote computers."

More and more, people rely on remote computers when performing tasks they might otherwise perform on their local devices. For example, they may use online word processing, email management, and image editing software that they don't install and run on their personal computers. Instead, they simply access these programs on remote computers by using a Web browser or mobile phone application. When they do this, they're engaged in "remote computing."

Some people call remote computing "cloud computing," because it involves activities (like storing files, sharing photos, or watching videos) that incorporate not only local devices but also a global network of remote computers that form an "atmosphere" around them.

Cloud computing is an increasingly important aspect of everyday life with Internet-connected devices. Some cloud computing applications, like Google Apps, are proprietary. Others, like ownCloud and Nextcloud, are open source.

Cloud computing applications run "on top" of additional software that helps them operate smoothly and efficiently, so people will often say that software running "underneath" cloud computing applications acts as a "platform" for those applications. Cloud computing platforms can be open source or closed source. OpenStack is an example of an open source cloud computing platform.

People prefer open source software to proprietary software for a number of reasons, including:

Control. Many people prefer open source software because they have more control over that kind of software. They can examine the code to make sure it's not doing anything they don't want it to do, and they can change parts of it they don't like. Users who aren't programmers also benefit from open source software, because they can use this software for any purpose they wish—not merely the way someone else thinks they should.

Training. Other people like open source software because it helps them become better programmers. Because open source code is publicly accessible, students can easily study it as they learn to make better software. Students can also share their work with others, inviting comment and critique, as they develop their skills. When people discover mistakes in programs' source code, they can share those mistakes with others to help them avoid making those same mistakes themselves.

Security. Some people prefer open source software because they consider it more secure and stable than proprietary software. Because anyone can view and modify open source software, someone might spot and correct errors or omissions that a program's original authors might have missed. And because so many programmers can work on a piece of open source software without asking for permission from original authors, they can fix, update, and upgrade open source software more quickly than they can proprietary software.

Stability. Many users prefer open source software to proprietary software for important, long-term projects. Because programmers publicly distribute the source code for open source software, users relying on that software for critical tasks can be sure their tools won't disappear or fall into disrepair if their original creators stop working on them. Additionally, open source software tends to both incorporate and operate according to open standards.

Community. Open source software often inspires a community of users and developers to form around it. That's not unique to open source; many popular applications are the subject of meetups and user groups. But in the case of open source, the community isn't just a fanbase that buys in (emotionally or financially) to an elite user group; it's the people who produce, test, use, promote, and ultimately affect the software they love.

This is a common misconception about what "open source" implies, and the concept's implications are not only economic.

Open source software programmers can charge money for the open source software they create or to which they contribute. But in some cases, because an open source license might require them to release their source code when they sell software to others, some programmers find that charging users money for software services and support (rather than for the software itself) is more lucrative. This way, their software remains free of charge, and they make money helping others install, use, and troubleshoot it.

While some open source software may be free of charge, skill in programming and troubleshooting open source software can be quite valuable. Many employers specifically seek to hire programmers with experience working on open source software.

What is open source "beyond software"?

At Opensource.com, we like to say that we're interested in the ways open source values and principles apply to the world beyond software. We like to think of open source as not only a way to develop and license computer software, but also an attitude.

Approaching all aspects of life "the open source way" means expressing a willingness to share, collaborating with others in ways that are transparent (so that others can watch and join too), embracing failure as a means of improving, and expecting—even encouraging—everyone else to do the same.

It also means committing to playing an active role in improving the world, which is possible only when everyone has access to the way that world is designed.

The world is full of "source code"—blueprints, recipes, rules—that guide and shape the way we think and act in it. We believe this underlying code (whatever its form) should be open, accessible, and shared—so many people can have a hand in altering it for the better.