Finance is a field that deals with proper schemes of investment. It is related to certain dynamics such as liabilities and assets. Public Finance deals with an integral part of the economic situation of the country. The government plays an important role in this sector of finance management. It incorporates a host of risks and uncertainties. The only solution to this problem is proper planning. Public finance is a part of general finance where analyzing the market and the present status of the government is quintessential while making the investment. The public finance domain looks into three major aspects of finance management such as Stabilization of the Economy With the growing population the growth of urbanization and industrialization are directly linked up. In this case the market economy also goes through innumerable highs and lows. As all these aspects are interlinked it is extremely significant that a stable market economy is maintained. Any kind of inefficiency can cause distortion of the entire system. This macro economy sector comprising of the larger sectors such as the global, regional, and national economies has to cater to various facets of economy such as the structure and the performance. The fluctuations that take place during the decision making can affect the national economy in huge proportion. The indicators of the macro economy are price indices, the rate of unemployment and GDP. Allocating the finance in the best possible way One of the most vital points for allocating finance in an efficient manner is that each product, goods or service should be provided in the best quality to the consumers. It should be done in a manner that the consumer is able to avail some marginal benefit which shall be less than the cost of production. The best technique of productive efficiency is by providing goods at the lowest total cost. Maintaining proper distribution Market failure is one of the toughest times. The crisis can shatter the whole system of management. It takes place especially when the goods and services are not provided efficiently. The market then faces a setback which has to be dealt with urgently and with utmost care. If one link in this whole network falters then the entire system seems to be facing a crisis which is very difficult to be tackled in such a short span of time. Income distribution directly affects the GDP. The distribution of income among the nation’s population is one of the crucial aspects of public finance. This has always been a vital matter of concern. Factors such as income inequality can have a huge impact on the whole scheme of finance distribution. Here poverty or low pay scales can be the reasons for the difficulties in taking proper decisions. There are different theories which can provide a guideline during this kind of crisis but applying those can be a tough one. The Lorenz Curve can come to rescue as it helps in presenting a curvature of the recent researches done on the market regarding income inequalities.… Read More →
Credit cards are the common modes of payment these days. People use these cards because they do not have to carry money with them. They can also be used conveniently in order to buy items that a person cannot afford with the current savings. People have to pay high interests though on credit card purchases so credit card providing companies are always looking for different ways to promote credit card buying. The companies, therefore run promotional campaigns where purchasers are either rewarded points or they are given cash credits which they can use to perform purchases from particular merchants which are generally partner organisations of the banks. Here, we look at the common perks that are offered by credit card companies to promote their customers.

System of Reward Points

Almost all credit card companies run a system of reward points. These points are gained whenever the customer uses their credit card. The reward points can then be reimbursed for free gifts such as restaurant meals and air tickets.  Some companies also offer cash back on achieving a particular total of reward points. This will simply mean that a person will have to pay less when returning on credit card purchases.

Extended Warranties

Most people do not know that they do not have to buy additional warranties when buying objects from their credit cards. Credit card purchases often include an additional warranty for the next year as well for most products that are specially bought online. There are many items that come under this scheme. The additional warranty is covered by your credit card issuer. Many issuers though cap the overall warranty period to a maximum of five years.

Credit Information

Credit information can usually be bought from different companies that are experts in finding credit scores. Many top of the line credit cards, though allow their customers to access this information for free. This saves around 10 to 15 Pounds but still is a significant amount if you check it regularly.

Travel and Rental Car Insurance

Most credit card companies issue their cards with supplemental travel insurance. Most cards also have rental car insurance in their package as well. This covers the loss of money in case an accident happens and you do not have to buy separate insurance when travelling to places. You need to ensure though that you buy your air tickets and rent your car through the credit card in order to register the trip to the credit card company for this perk. This is an important as it safeguards your interests.

Price Protection

Another nice perk that you may have on your credit card is the price protection. Many retailers guarantee a cash-back if the price for an item drops within a month. You automatically receive this offer if you buy an item with your credit card. You will get the best price regardless of where you placed the order for the product as long as its price dropped. These are just a few of the perks that are available on credit cards. Premium cards offer more perks, but they usually have an annual fee as well. You need to find a balance between the available perks and the annual card maintenance costs.… Read More →
You are extremely well-disciplined with your budget and have never had any financial troubles in the past. But oh dear, your partner is a shopaholic. It is not uncommon to see people having money troubles because their spouse has completely contradictory spending habits. Incompatibility may lead to a toxic house environment. Therefore, it is extremely important that you come up with ways to manage your budget and reduce this conflict.  Continue reading for ways in which you can manage your budget efficiently when your partner is a spendthrift.

1.     Create a Pragmatic Budget

It is always a good idea to plan a budget together, especially if two people living under the same roof have different views on financial spending. Based on your spending habits and that of your partner’s, draft out a realistic budget. Figure out your collective income and then your expenses — chances are that your intelligent partner will be able to figure out his/her frivolous spending habits without you insinuating it. Who knows, maybe your partner makes a resolution of turning over a new leaf.

2.     Pay with Cash — Don’t Get Into the Habit of Using a Credit Card

Using credit cards for everyday purchases is definitely not recommended despite the fact that you will get reward points and great cash back services upon purchases. But why must you limit the usage? Since you have a spendthrift partner living with you, getting into the habit of credit card might get you into financial problems quicker than you can contemplate. Using cash will enable you to adhere to your budget and never cross the set boundaries.

3.     Financial Loyalty

Do not hide financial details from each other. It is not uncommon to see that many spouses keep their expenses a secret. Just be absolutely honest about your finances and your expenses. Keeping track of your budget is much easier when you are not building a barrier of evasiveness. This may lead to other resentments and you will have to live in an aura of distrustfulness.

4.     Restrict Your Expenses

Yes, you will have to determine a spending threshold with a mutual agreement. Living with a partner who has the habit of spending money impulsively is not really difficult when there is a weekly budget limit or so. Allocate a miscellaneous budget in your planning — this will give your spouse a feeling of liberty without even exceeding the set limits.

5.     Shop Together

When your partner wouldn’t budge from impulsive shopping sprees, you should suggest going shopping with them. This way they will not feel guilty about their habit and the two of you can make wise decisions about the stuff you would like to buy. You can even create a list which shall help you from making unnecessary expenses. Remember not to be someone who kills all the fun while shopping; otherwise your partner will be reluctant having you around the next time.

6.     Consider Having Separate Accounts

If you are having money arguments, remember that it is absolutely fine to have separate accounts even if you are in a strong relationship. But make sure that your account is not a mystery to your partner. There is a fairly good probability that upon looking at your efficient planning and budgeting inculcates better personal finance4 management habits in your spouse.… Read More →

Take Them to a Yard Sale

The purpose of taking your children to a yard sale is manifold. One reason is that you get to spend time together. Another reason is that they get to see how such sales have tables laden with kids’ stuff. Then there is also the fact that it will help your kids discover that they are able to buy more there than they can do at the mall. An alternative is a local thrift shop that may be visited on Saturdays, if your family likes to sleep in late on the weekends.

Switch Over from Piggy Banks

While saving is a good thing to teach your kids, having them put their money in a piggy bank isn’t so great. Instead, have them use a clear glass jar to collect their money. This way, they can see how much they have saved and how much farther they need to go. They can see the money growing while it stays safe in the jar. Don’t stop them when they want to count the money and share their excitement.

Allocate the Money in Different Jars

Now that you have switched to glass jars from piggy banks, there is another thing you can do. To help them understand the ways in which they can use money, make it three jars. Let them decorate the jars in any way they want. After they are done, label the jars. The idea is that the money in one of them is to be spent, the second is for saving, and the last one is to be given away. Then discuss what each jar represents to the children and decide how much money goes into each jar.

Walking into a Store Does Not Necessarily Mean Shopping

Since what your kids learn at an early age will set the tone for how they use money later on, these lessons are important. The trick is to start as early as you can. Today’s kids are pretty smart and catch on quickly. If you tell them you do not have the money to spend on something, they will know that you can use the credit cards for that. Thus, making them understand that you won’t be buying them what they want every time you go into a store can be a very good thing.

Help Them Understand the Meaning of Delayed Gratification

Dr. Walter Mischel’s “marshmallow test” was the result of an experiment involving children. It entailed children being made to choose to get a marshmallow immediately or double the amount but it would be given to them 15 minutes later. To children, fifteen minutes is a considerable amount of time. The researchers followed the children who took part in the experiment for years. They reported that the children who waited for the marshmallows scored better on their SATs. They also showed lower values of BMI and turned out better educated. Use the test to help your children understand how delayed gratification can be a good thing when it comes to finances.… Read More →
There are several taxes that a person has to pay to Her Majesty’s Revenue and Customs. While many taxes are in the public’s knowledge some are not. One of the relatively least known taxes is inheritance tax. If you don’t know about a tax you may end up not paying it, which could put you at a risk of fines and penalties. This article is a guide for people who know relatively little about inheritance tax.

What is Inheritance Tax?

Inheritance tax as the name suggests is tax which is applied on estate and property of a person who has died. There are three categories that a dead person’s estate is divided into and all three of the following have inheritance tax:
  • Possessions
  • Money
  • Property (land, etc.)
There are three exceptions where inheritance tax does not apply on a deceased person’s estate. These include:
  • The estate has been left to the person’s civil partner or spouse
  • The estate is valued under a threshold of £325,000
  • The estate has been left to an amateur community sports club or to a charity organization

Who Should Pay the Tax?

Tax that is payable on inheritance is normally paid for by estate that was left. If the person has not left enough cash behind to make the payment, the payment is made using the cash which is raised from the sale of the deceased assets. In some cases, albeit sparingly, there are instances where because the deceased had no cash on the estate, they may use a life insurance policy that they may have arranged specifically to cover the costs of inheritance. The government does not automatically deduct the tax. If the person who has died has left a will, the executor of the will, whoever that may be will arrange to pay the taxes. If there was no will, the court appointed administrator of the will has to do the same job.

Is there a Time Period for the Tax to be paid?

Yes, there is a time period under which the inheritance tax needs to be paid. If the tax is not paid within the set time period, the HMRC will start to charge an interest rate on the tax. The designated period for payment of the tax is six months. However the six months deadline is not set in stone. The HMRC recognizes that there are certain situations which are beyond a person’s control. In such times, the HMRC can give the executor more time to pay the tax bill as long as the executor has asked for an extension and has a genuine need. Unfortunately, even in a situation where they have been permitted to take their time, they will be charged an interest rate for late payment. A better way to deal with this situation is to pay some of the inheritance tax even before the property has been properly valuated. In that case the HMRC will take time before charging interest rate. In some cases the executor can also make the payments from their own account and claim that money from the estate which is completely legal.… Read More →