New Info Blog

And don’t forget the time. Interest and time are two of the most key elements in savvy budgeting that is hardly mentioned when the topic of budgeting is mentioned.

A small amount of money can grow into heaps under the right conditions. Here is a metaphor: picture a lone flatworm, which turns into a miniature army of flatworms, if a competent cutter makes that incision in the right spot which would allow the flatworm to split into two successfully, and those flatworms decided to have a party, conditions were right, and nothing disturbed them. Similarly to flatworms, money needs time and interest- and no disturbance- in order to grow. Money needs to be cut and placed into a vehicle, like a flatworm’s Petri dish, that allows the money to grow with time and interest. If the investor has urges to touch the money, a certificate of deposit (or a swift kick as a reminder) could be a good way to go since it discourages the investor from withdrawing money by charging fees for doing that before a set date.

Anyway, money best grows on compound interest instead of simple interest. In simple interest, that small amount of money is the only thing that earns interest. In compound interest, that small amount of money PLUS the interest on that small amount of money, earns interest. Under compound interest, the more frequent an amount of money is allowed to earn interest, the quicker that small amount of money grows into heaps of money. Therefore, if ever given a choice over investing your money at simple interest or compound interest, opt for the choice with compound interest. Another way of putting this information to practical use is, if you have a credit card, look for the one that does not charge compound interest on the balance. If that is not possible, pick a card that charges a lower interest rate over the same amount of time.

One major credit card can fool someone into thinking that the interest rate that it charges for late payments is lower than the next credit card by restating the terms of interest and time. For example, having an interest charge of 2.5% for every fortnight that the balance wasn’t completely paid off is the same as having an interest charge of 5% for every month.

Time is money, and that saying is very true in this case. A great financial tenet is: A dollar today is worth more than a dollar tomorrow. Why is that? It is true because of compound interest. If you earn a dollar today, tomorrow you have that dollar PLUS interest, assuming that you didn’t spend that dollar and invested it somewhere. If you earn a dollar tomorrow, you do not earn any interest until the day after tomorrow. And remember, the sooner and the more frequent you earn interest, the sooner and the larger your small amount of money grows.

Now let’s say that you have a choice between a billion dollars today or a billion dollars tomorrow. Obviously you’d pick having a billion dollars today. And with a billion dollars earning compound interest today, you’d have more than a billion dollars tomorrow.

Then let’s consider what happens to that miniature army of flatworms if for some reason, a couple hundred of them were needed at different points of time during the school year for a bunch of high school students to run biological experiments on them. How would taking away some flatworms at different points in time affect the number of flatworms that make up that miniature army?

Well, if the same amount of flatworms were taken away mainly during the beginning of the school year, at the end of the school year there would be less flatworms than if the same amount of flatworms were taken away mainly towards the end of the school year.

Likewise, if the same amount of money is taken out of a compound interest account towards the beginning of the financial year, at the end of the financial year there would be less money than if the same amount of money were taken away mainly towards the end of the financial year.

It’s all because of time and interest. Have you stopped to think how credit cards and other fine lending institutions make their money? They take advantage of time and interest, and the fact that some people just don’t appreciate how much of an impact interest and time has on an unpaid balance until it becomes a huge problem. A debt agreement or bankruptcy cuts off the time and interest factor that multiplies the debt that is owed by the debtor. Think of how much money is saved by having a debt agreement or declaring bankruptcy… In flatworm terms, that would be a big pool of flatworms….

In all honesty, there are many different scenarios that could be played out with different amounts of money, time, and interest. Knowing what happens with the variations of these key elements and applying them to your budgeting can help you make payments in time and reach goals. The next time you decide what to do with spending and budgeting, think of how a dollar today is worth more than a dollar tomorrow, and remember that as true as timing is everything, it’s all about the interest, baby!

Pamela Caronongan is a guest writer for Debt Fix who help people with debt consolidation. She has a MSA degree with a specialization in finance from Northeastern Illinois University and a BA degree in English Literature from the University of Illinois Champaign-Urbana

Tags: advantage, Amount Of Money, amount of time, amp, army, Ast, bank, Bankruptcy, bet, billion dollars, Budget, cards, cia, compound interest, consolidation, Coul, credit, Credit Card, Credit Cards, debt, Diffe, Dish, Dollar, drawing, element, Elements, finance, financial, Fre, goals, guest writer, heir, honesty, how much money, inc, informat, institutions, interest rate, investing, investor, lending, lending institution, lending institutions, logic, lows, Mai, met, money, Much Money, oic, People, pool, Proble, Rate, reason, reminder, rent, Rsi, scenarios, school year, scour, sit, Smal, Specialization, stead, Stu, Success, Target, Terms, variations, writ, Yea

A home daycare can be a rewarding profession for moms who want to stay at home with their own children. Yet, there may not be any other job that is more stressful. Be aware of the 7 biggest stresses and turn them into blessings instead.

STRESSOR #1 – Operating Costs are High
Solution: Apply to have your daycare contracted through the region
Contact someone in Children Services in your region or county regarding becoming a child care provider. A child service worker will come to meet you and discuss the region’s policies. If you like what they have to say you sign a few documents and are well on your way to an increase in pay. The region may pay substantially more than parents will.

STRESSOR #2 – Not Enough Children in Your Care to Off-Set Costs
Solution: Build A Waiting List
A waiting list will be your most valuable asset. Turn over rate is high for home daycares so do not take it personally or become discouraged. Be prepared. Keep your daycare in the public eye by having a website, running a continuous small ad in the local paper and have a sign outside your home. Tell everyone you know what you are doing and ask them to tell a friend.

STRESSOR #3 – Too Much Work, Not Enough “Down Time”
Solution: Schedule regular breaks for yourself
There must be quite a few things that a hot bath won’t cure, but I don’t know many of them. ~Sylvia Plath,

Finding ways to de-stress is very important. In order to find balance and moderation there must be things in your life that you enjoy doing that are calming and restorative. Do not try to do it all. Read a book or knit while the children are watching TV. Do something you enjoy. Arrange to have grandparents or friends watch your own children for an evening once a week so you can relax. Do what is relaxing for you and rejuvenate your spirit.

STRESSOR #4 – Cook, Serve, Clean…Cook, Serve, Clean…Over and Over Again
Solution: Create a monthly menu plan to follow and keep it simple.
Again, do not try to do it all. Keep your snacks and meals simple and child-friendly. Use a calendar or spreadsheet to list snacks and lunches for a month. Usually one week will fit on one page. Use this chart when you go shopping and it will allow you to buy in bulk and to catch things when they are on sale. It will also prevent the added frustration of having to think each day about what you want to feed the children only to find out you have run out of a necessary ingredient.

STRESSOR #5 – The Place is a Mess!
Solution – Hire an affordable cleaning service
As soon as your budget allows hire someone to clean your daycare area every one or two weeks. This will be in addition to the daily cleaning you will be doing of course. But it will give you a break and help reduce the spread of germs. You are already doing so much work, let someone else do the deep cleaning.

STRESSOR # 6 – An Accident Happens on Your Property
Solution: Create an Emergency Plan and Kit
Emergencies can happen at any time and any place. Be prepared by having a plan in place. Ask yourself: How would I bring a child to the hospital? Who would stay with the other children while I left? Find helpful information online or attend a course that offers an emergency plan for businesses. Be prepared for anything.

STRESSOR # 7 – Parents Do Not Do What They Say They Will Do.
Solution: Begin a pattern of open communication with parents from day one
Parents may be one of the most unpredictable elements of your business. Start on a good note by having them sign all the necessary documents and talk in detail about the arrangements you will have for their children. Then stay in constant contact with them as issues arise. Try having little notes to send home with their child. Use a newsletter to keep all parents updated and to send out reminders.

Now all you need to do it put this into action. What is your biggest stressor right now? What is one thing you can do today to eliminate your biggest stressor today? What are 5 steps you can take this week to eliminate your stressors and bring more blessings into your life?

Rachel Perry Pellegrini is a certified elementary school teacher. She has been running a home daycare for the past year and writes about her experiences with the intention of helping other mothers overcome obstacles in their own home business. She has a background in Journalism-Print. Her daycare website is http://www.daystardaycare.com and her blog can be found at http://www.thesimpleself-improvementproject.blogspot.com

Tags: Ally, Ast, backgroun, blog, blogs, Budget, business, cleaning service, contact, Daycare, element, Elements, emergencies, experiences, fit, Fri, friends, frustration, Germs, heir, home, home business, inc, informat, Job, letter, Logs, lows, lpi, met, obstacles, Parents, patter, Personal, pita, profession, Prope, Public Eye, Rate, Regard, relax, reminder, rent, running, scour, shopping, sit, Smal, spreadsheet, stay at home, stead, Stress, Stresses, Target, tips, Valu, waiting list, work, writ, Yea

With all the negative connotations attached to the word “stress”, it is certainly hard to see it in a positive light. However, not all stress is bad. Some amount of stress is necessary to lead a normal life and for some people, it is a reminder that makes them do their best.

An important lesson to be learned here is that stress can be controlled and made to work FOR you, instead of AGAINST you. There are a number of people for whom stress is as much a part of life as air, water and food but they are not moved by it. These people manage their stress in such a way that it helps boost their performance. Apparently, they kind of lack all the symptoms of stress. And these are exactly the people must look for.

These people can be called Natural Stress Managers. They have stress management techniques down to an art. The good part is that you can learn and copy from them. Observe and notice around you – which person keeps his or her cool when in a jam-packed bus? Which person has a go-easy, no-panic attitude even in stressful situations? Which person around you seems to be the happiest in the world with no tensions whatsoever? Those people are the natural stress managers whom you can learn a lot from.

We humans learn best by example and observation. After you’ve identified these people, observe them. See what they do and also, see what they do DIFFERENTLY. How is your behavior and their behavior different in the same situation both are facing? What is it that makes them keep cool and calm while others around them are losing temper on small things?

When you do that, you’ll observe some key characteristics common to all of them. They do not panic, they are generally optimistic, they NEVER think or react negatively, they never “create a scene” in a public situation and they never let their anger take over their senses. This is important. These are the exact characteristics you need to copy to reduce stress easily. Copy them and make them a habit. There is no better way than this to learn stress management.

If you have to, ASK them. Let them know you are looking for stress relievers and tell them how calm they look to you. Everyone likes heart-felt flattery. Then ask them if they’re willing to help you reduce stress. And when they tell you how to, be a good listener and take mental notes of every word they speak and every technique they tell you about. Then go home and practice them daily. You will your stress go away within days and you’ll be managing stress like a pro!

Learn more about the signs of stress and how you can manage stress easily at http://www.howtofightstress.com

Tags: Ally, amp, Attitude, bet, bett, Control, Diffe, Food, habit, heart, heir, home, human, lot, management technique, observation, People, reminder, rent, signs, sit, Smal, stead, Stress, Target, work

Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

Tags: aim, Ally, Ast, bank, banks, billions, billions of dollars, blog, cia, combine, Comments, Congress, credit, credit crisis, debt, Desire, disaster, Dollar, ears, finance, financial, Financial Instrument, financing, Foreclosure, foreclosures, Fre, inc, individual traders, institutions, insurance, insurance companies, interest rate, Interest Rates, investment, investment bank, investment banks, jp morgan, lending, lending money, llc, losses, lost, love, lows, madness, Mai, mail, Marg, margin, market, massi, mechanic, money, mortgage, possession, promis, promise, Rate, reminder, rest of the world, risk, s trading, securities, slow down, stead, Target, trader, trading, trading forex, trillion, united states, Valu, work, Yea