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New Year, New Hope: Plan Your Finance to Yield the Best Return

Finance InstitutionForget what some people said about how bleak the year 2009 is. The truth is, all we need right now is financial planning.

The premise – plan your finance well, and it will deliver you from financial woes that hit many who unprepared in 2007 and 2008.

The significance of financial planning in 2009

Financial planning has always been important.

Unfortunately, not all people believe the fact, until they were hit by financial problems. ‘Thanks’ to recession, the financial problems are magnified – due to the recession, financial planning has never been this important in the history of the mankind!

Particularly in 2009, financial planning is probably your most important task to do, either for your business finances or personal finances.

Creating a form of safety net or save haven for your money and finance will not only help you survive the recession, but also triumph over it.

Even better, you need to find a way to utilise all financial knowledge and tools you have to yield the best return for every penny or cent you have.

Here’s several plan ‘items’ you should consider thinking about.

Plan #1: Saving and deposit account – forget about it! Says hello to precious metals

As we know, banking and financial institutions are one of the hardest hit in today’s recession. In the US, the Fed squeezes record-amount of fund to keep those institutions afloat. Why? One of their fear: People rush to close their accounts.

However, in my opinion, that’s what you suppose to do – forget your saving and deposit account.

I’m not suggesting you to close your saving and deposit accounts – they are important parts in diversification. What I’m suggesting you is NOT to put too much money in them.

With the rising inflation in every part of the world, your saving and deposit accounts interest rates are becoming more and more insignificant.

You need to get back to what all the money in the world should base upon – gold and the other precious metals. Although the price of the metals are sky high, they are one of the safest investment forms today.

Plan #2: Utilise your credit cards better

Unlike most financial planners suggest, I suggest you not to cut your credit cards.

Instead, I recommend you to consolidate your credit cards – transfer your existing credit cards to lower APR ones or to credit card issuers that offer the most perks and rewards.

How to know which ones you should transfer balance to or apply for, invest some time to browse the Net for reviews and recommendations on credit cards issuer. Credit card sites offer alternatives you can consider, including which credit cards are good for what purposes.

My favourite credit cards story is that of my colleague’s – he shop for his business needs with his business credit cards. With tens of thousands dollar month after month business spending made on his credit cards, he is enabled to vacationing regularly and staying in luxury hotels, courtesy of his business credit card issuers – a win-win situation for credit card issuers and holders.

Plan #3: Cut bad debts, utilise good debts

When I say ‘utilise your credit card better’ in plan #2 above, I think credit cards as your ‘bridging’ in your financial planning. That being said, avoid using credit cards for loan purposes, as the interest rates are high.

Instead, cut any debts related to credit cards. In fact, cut any debts that are aimed to people with low credit scores, such as payday loan. Not that payday loan is not useful – it does in certain circumstances – but you should consider a lower interest loans that brings positive cash flow to your pocket.

Happy holiday and happy planning!

You need a break somehow, and be prepared for the coming 2009. Remember the butterfly effect I mentioned in my previous articles – what you do and think about your finances will affect your community – being positive is contagious, and it will eventually end the recession somehow.

I wish you have a happy holiday and happy planning!

Image by Zach Alexander.

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One Response to “New Year, New Hope: Plan Your Finance to Yield the Best Return”

  1. Heartburn Home Remedy says:

    Hey, nice tips. Perhaps I’ll buy a bottle of beer to the man from that chat who told me to visit your site :)

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