Lead a Debt free life

We all dream to achieve our multiple goals in life of buying things such as cars, home and other luxuries by a combination of our own funds and borrowings. Sometimes we go overboard by stretching our budget too far than what we can afford.  

Given below are a few checkpoints that could keep your lives stress-free and eventually make you debt-free even when you are comfortably positioned to achieve your goals.

• Understanding how much debt /leverage you should take while planning to buy your home/car/holidays
• Planning your finances that lead you to become debt free?
• Learning to manage your home/credit card or personal loan account

Here's how you could go about achieving a debt-free life; this is however not an overnight thing. It has to be executed in phases and it will take time, focus to ensure that you reap the desired results.

Assess your problems

This becomes absolutely pertinent to start off on your goal to achieve a debt-free life, it is also important from the perspective of doing some damage control. When things go awry, there is an immediate need to plug the leaks even before digging deeper to analyse the situation.

As part of the problem assessment stage, you will be required to jot down:

• Who do you owe the money to?
• How much do you owe?
• What is the interest rate across each of these loans?

While you do this exercise, you may also make a mental note of which ones to plug first -- the one with the least outstanding amount and with the highest rate of interest should be on your priority list. For example: Credit card overdue, personal loans should be the first ones to knock-off your list.

Change your lifestyle

If you overspend as a habit, it may be time to change your lifestyle. Keeping tab on your expenses can go a long way in enhancing your savings, which can in turn be routed towards loan closures.

Swiping your card may be the easiest thing to do at the petrol bunk, grocery store etc., but as a policy try to use cash for smaller purchases, this will help you keep a tab on how you use your credit card.

It may also help your create a budget and stick to you it in the long haul.

In the wake of getting some luxuries, you could have gone overboard with your EMIs, you may need to conduct a financial feasibility to ensure that you do not have to compromise on your basic needs. On a thumb rule basis, your overall EMI commitment should not be more than 30 per cent of your net earnings.

Need versus want

When you need something, you should have it -- when you want something, you can have it but you can do without it as well. Need arises from necessity, wants arise from desires.

This is a primary question that you should answer while you do your shopping and when you avail your loan as well.

You may aspire for a high-end gadget, although you may not be able to afford the same. This would lead to a scenario, where you borrow and burden yourself with a loan liability, despite the fact that the individual could definitely survive without the product under consideration.

This is a typical situation especially amongst the newbies who land up in jobs with attractive pay packets. There are however, others as well who feel a sense of pride by owning the latest gadgets etc., and they too get caught in a debt trap.

Itemise your highest interest debts

These are typically your credit card overdues, personal loan, car loan -- ones you should gun to pay-off at the earliest, you can choose to make withdrawals from your savings/investments (liquid funds, term deposits, mutual funds etc.,) and lower the monthly outflow.

This can in turn be routed towards some short-term investment plans which can be pulled out to do a pre-closure on another debt with a high interest rate. This will allow you see your progress faster, and will make you feel good after each smaller debt is paid off.

Review your finances thoroughly, crunch the numbers, and see which method would be the most effective for your situation.

Don't borrow to close your outstanding loans

It may seem tempting to borrow at a lower rate to close the loan with a higher rate, but you are only getting into a vicious debt trap, avoid this to the maximum extent. Borrowing interest free amounts from relatives, friends may be a more viable option.

Final word

Paul Clitheroem once wisely quoted, "There are plenty of ways to get ahead. The first is so basic I'm almost embarrassed to say it: spend less than you earn". So true in more than one ways, if only we could satisfy ourselves within our earnings, then this world would be debt-free and ofcourse, many would have to shut down their businesses.

But, on a serious note, any debt should be assumed only after prudently considering financial feasibility.

Key takeaways...

Assess the problem, conduct some immediate damage control

Change your lifestyle, curb your spending habits

Use your credit card prudently

Ascertain whether you need it or want it spend only if you need it

Prioritise your debt and close them out starting with the highest interest rate / lowest outstanding amount

Courtesy: Rediff

Thanks : Anil Rego (In the second part of the 'I Dream' series Anil Rego)

In the first part of this series he explained how you could become a millionaire by 30!

Sardarji Jokes with due respect

PL. GO THROUGH THE FOLLOWING URL. HAVE A NICE DAY


http://www.thedesignershub.com/funhouse/sardarji_joke_1.asp

Attn: Govt. employees who get HRA

Financial advisors are often quizzed about how an employee House Rent Allowance (HRA) works.

Typically, an employee gets a certain amount of HRA. But often he either owns a flat or is about to buy one.

So, he is concerned whether on account of the ownership, he may lose the HRA deduction that he is entitled to.

The concern could also be the other way round: Since he is receiving HRA, he may not be eligible for home loan deductions.

Let's check if these fears are justified.

HRA is basically an allowance, part of your taxable salary.

It is not mandatory for the employer to give you HRA.

But, if your employer gives you HRA, you will get it irrespective of whether you own a house or pay rent. Like your salary, you will receive it monthly.

However, the law also provides that if the employee satisfies certain conditions, a deduction will be provided from the HRA received and only the balance amount would be subject to tax.

This deduction depends on the city you live in and the amount of rent you pay.

Let us first see how already owning a house is related to getting HRA.

The two are not connected. HRA and home loan provisions are two different issues under the Income Tax Act (ITA) and one does not influence the other.

So, you may own a flat or any number of flats, either in the same city you work in or anywhere else in India or abroad.

It won't influence the HRA deduction you are entitled to.

Conversely, whatever the HRA, your home loan deductions on the equated monthly instalments (EMIs) for the house you've bought or intend to buy would not be affected.

Let's move on to understanding your eligibility for HRA deduction and how to calculate it.

The first condition is that you have to be paying rent. That is what the allowance is meant for.

It is not necessary that you pay rent to only a landlord. You could live in your parents' house and pay rent to them.

If so, you're eligible for HRA deduction.

Only, in this case, the rent received will be taxable for your parents; if their total income is below the taxable limit, the entire transaction would be tax-free.

The basic exemption limit for a senior citizen is Rs 240,000 a year.

Split between both your parents, the total amount of rent could be as much as Rs 480,000 (Rs 240,000 multiplied by 2) without tax incidence.

So, you get your HRA deduction, they don't pay any tax and everyone wins.

The same structure cannot be adopted in the case of your spouse as the relationship between husband and wife cannot be commercial.

Husband and wife are supposed to live together under the same roof; they cannot charge rent from each other.

Where you live also influences HRA deductions.

In a metro city, you would be eligible for a deduction of up to half your salary (basic plus dearness allowance, if applicable). Else, the limit is up to 40 per cent.

So, HRA deductions could mean any of the following:

* Actual HRA received

* 50 per cent of salary for employees living in metros and 40 per cent otherwise

* Excess of the rent paid over 10 per cent of salary.

For example, Ashish earns a basic salary of Rs 60,000 per month.

He pays monthly rent of Rs 25,000 for an apartment in Mumbai.

The actual HRA he gets is Rs 20,000. His HRA deduction will be the least of the following three figures:

* Actual HRA received, that is, Rs 20,000

* Half of the salary, that is, Rs 30,000

* Excess rent paid over 10 per cent of the salary, that is, Rs 25,000 minus Rs 6,000 which is Rs 19,000

Therefore, the HRA deduction for Ashish would be Rs 19,000 and so, the taxable component of HRA would be Rs 20,000 (HRA received) less Rs 19,000 (HRA deduction) which comes to Rs 1,000.

Finally, do maintain the rent receipts or a copy of the lease agreement. These serve as a proof of having paid the rent.

Courtesy: Rediff

Charlie Chaplin's 3 Heart touching Statements

 
Nothing is permanent in this world, 
not even our troubles.. ! 
  

The most wasted day in life, the day 
in which, we have not laughed. 
  

I like walking in the rain, 
b'coz nobody can see my tears.  

Bunches of roses specially for you

Things you must know

WHEN A THIEF FORCES YOU TO TAKE MONEY FROM THE ATM, DO NOT ARGUE OR RESIST, YOU MIGHT NOT KNOW WHAT HE OR SHE MIGHT DO TO YOU.?? WHAT YOU SHOULD DO IS TO PUNCH YOUR PIN IN THE REVERSE, I..E IF YOUR PIN IS 1254, YOU PUNCH 4521.


THE MOMENT YOU PUNCH IN THE REVERSE, THE MONEY WILL COME OUT BUT WILL BE STUCK INTO THE MACHINE HALF WAY OUT AND IT WILL ALERT THE POLICE WITHOUT THE NOTICE OF THE THIEF.

EVERY ATM HAS IT; IT IS SPECIALLY MADE TO SIGNIFY DANGER AND HELP. NOT EVERYONE IS AWARE OF THIS.


(Beware do not try this if you are not threatened by a thief)

God, Man, Wife & a Bridge

A man was riding his Harley beside a Sydney beach when suddenly the sky clouded above his head and in a booming voice, The Lord said. 

'Because you have TRIED to be faithful to me in all ways, I will grant you one wish.'

The biker pulled over and said, 'Build a bridge to New Zealand so I can ride over anytime I want.'

The Lord said; 'Your request is materialistic, think of the enormous challenges for that kind of undertaking, the supports required reaching the bottom of the Pacific and the concrete and steel it would take! It will nearly exhaust several natural resources. I can do it, but it is hard for me to justify your desire for worldly things. Take a little more time and think of something that could possibly help mankind.'
The biker thought hard about it for a long time. Finally, he said,
'Lord, I wish that I and all men could understand our wives. I want to know how she feels inside, what she's thinking when she gives me the silent treatment, why she cries, what she means when she says nothing's wrong, and how I can make a woman truly happy'.

The Lord replied;
'You want two lanes or four on that bridge?

Please find below an useful article (Click on the image to enlarge)
Thanks: Times of India Pune Edition Dt. 15-10-2010

Your kind attention is invited to go through this article.

EATING FRUIT...

We all think eating fruits means just buying fruits, cutting it and just popping it into our mouths. It's not as easy as you think. It's important to know how and when to eat.

What is the correct way of eating fruits?

IT MEANS NOT EATING FRUITS AFTER YOUR MEALS! * FRUITS SHOULD BE EATEN ON AN EMPTY STOMACH.

If you eat fruit like that, it will play a major role to detoxify your system, supplying you with a great deal of energy for weight loss and other life activities.

FRUIT IS THE MOST IMPORTANT FOOD. Let's say you eat two slices of bread and then a slice of fruit. The slice of fruit is ready to go straight through the stomach into the intestines, but it is prevented from doing so.

In the meantime the whole meal rots and ferments and turns to acid. The minute the fruit comes into contact with the food in the stomach and digestive juices, the entire mass of food begins to spoil....

So please eat your fruits on an empty stomach or before your meals! You have heard people complaining  every time I eat watermelon I burp, when I eat durian my stomach bloats up, when I eat a banana I feel like running to the toilet, etc  actually all this will not arise if you eat the fruit on an empty stomach. The fruit mixes with the putrefying other food and produces gas and hence you will bloat!

Graying hair, balding, nervous outburst, and dark circles under the eyes all these will NOT happen if you take fruits on an empty stomach.

There is no such thing as some fruits, like orange and lemon are acidic, because all fruits become alkaline in our body, according to Dr. Herbert Shelton who did research on this matter. If you have mastered the correct way of eating fruits, you have the Secret of beauty, longevity, health, energy, happiness and normal weight.

When you need to drink fruit juice - drink only fresh fruit juice, NOT from the cans. Don't even drink juice that has been heated up. Don't eat cooked fruits because you don't get the nutrients at all. You only get to taste. Cooking destroys all the vitamins.

But eating a whole fruit is better than drinking the juice. If you should drink the juice, drink it mouthful by mouthful slowly, because you must let it mix with your saliva before swallowing it. You can go on a 3-day fruit fast to cleanse your body. Just eat fruits and drink fruit juice throughout the 3 days and you will be surprised when your friends tell you how radiant you look!

KIWI: Tiny but mighty. This is a good source of potassium, magnesium, vitamin E & fiber. Its vitamin C content is twice that of an orange.

APPLE: An apple a day keeps the doctor away? Although an apple has a low vitamin C content, it has antioxidants & flavonoids which enhances the activity of vitamin C thereby helping to lower the risks of colon cancer, heart attack & stroke.

STRAWBERRY: Protective Fruit. Strawberries have the highest total antioxidant power among major fruits & protect the body from cancer-causing, blood vessel-clogging free radicals.

ORANGE : Sweetest medicine. Taking 2-4 oranges a day may help keep colds away, lower cholesterol, prevent & dissolve kidney stones as well as lessens the risk of colon cancer.

WATERMELON: Coolest thirst quencher. Composed of 92% water, it is also packed with a giant dose of glutathione, which helps boost our immune system. They are also a key source of lycopene �€” the cancer fighting oxidant. Other nutrients found in watermelon are vitamin C & Potassium.

GUAVA & PAPAYA: Top awards for vitamin C. They are the clear winners for their high vitamin C content. Guava is also rich in fiber, which helps prevent constipation. Papaya is rich in carotene; this is good for your eyes.

Drinking Cold water after a meal = Cancer! Can u believe this?? For those who like to drink cold water, this article is applicable to you. It is nice to have a cup of cold drink after a meal. However, the cold water will solidify the oily stuff that you have just consumed. It will slow down the digestion. Once this 'sludge' reacts with the acid, it will break down and be absorbed by the intestine faster than the solid food. It will line the intestine. Very soon, this will turn into fats and lead to cancer. It is best to drink hot soup or warm water after a meal.

A serious note about heart attacks HEART ATTACK PROCEDURE': (THIS IS NOT A JOKE!) Women should know that not every heart attack symptom is going to be the left arm hurting. Be aware of intense pain in the jaw line. You may never have the first chest pain during the course of a heart attack. Nausea and intense sweating are also common symptoms. Sixty percent of people who have a heart attack while they are asleep do not wake up. Pain in the jaw can wake you from a sound sleep. Let's be careful and be aware. The more we know the better chance we could survive.

To whomsoever it may concern

An useful article from  Times of India, Pune Edition Dt. 12-10-2010 (Click on the image to enlarge)