A Brief History and Introduction to Finance

Introduction to Finance

Have you ever asked yourself when did finance first appear in history or how it was born? Probably we will never know, but the only thing that we know for sure is that it is a very ancient concept that goes back to the ancient civilizations.

The concepts of borrowing and lending and the calculations of interest were concepts that our antecessors created and mastered through the centuries. We exactly do not know when the first contracts appeared, but the oldest ones date from the age in which written language appear.

In Mesopotamia there are some ruins called the ruins of Uruk. Here in the early 1920’s a German archeologist found, after digging and digging into Inanna Temple, many small tokens which had the shape of the commodities of daily life, like animals, food, jars, clothes etc. This discovery at the beginning did not mean much or the experts couldn’t find a meaning for them, but after many years of study, they got to the conclusion that it was a system of accounting that the priests of the temple managed. These tokens were kept inside a sort of clay envelope called bullae and in order to know what was inside, they made inscriptions on them to identify the contents. These findings told the experts that the tokens kept inside the bullaes were in fact contracts that kept the records of the goods given and the type of payment for them. But as the parties of these contracts can not be identified and the experts can not determine the terms and time in which they were arranged, it is difficult to call them financial instruments. Some time later, around the year 3000 BC the Uruk civilization invented and started using pictographic tablets with an abstract numeric system similar to the one we use nowadays.

When this civilization started growing, the need to have contracts for lending and borrowing things or time became a need. When people live in a small village where everybody knows everybody, the lending is not a problem as you know your neighbors. But when it starts growing some neighbors will be strangers and if you lend something to a stranger, then you need a type of agreement. And interests in the good lent were born as a way of encouraging people to lend what other people needed. It made the action more attractive, as the lenders were going to benefit from the service requested by a stranger.

We have to understand that the first idea of interest was born in a type of society where money was not the currency used. These people were shepherds and their most valuable possessions were their cattle. So the idea of interest came as a very natural one. For example if a person was going to lend another person some cattle for a year, during that year the cattle will have offspring, so the natural thing to ask in return was the cattle lent plus some of the offspring at the end of the year. This whole process is the incipient form of the finance system we know today.

So Finance is a whole system that was not invented by modern civilization. It appeared as a need for human kind and it is the result of the evolution of society. Great civilizations such as the Greeks or the Babylonians have shaped our modern society and how the finance system works. They are the ones who developed the concept and left their heritage for us to understand the roots of our own modern civilization.


Free Personal Grants

Free Personal Grants

Money may be required for many reasons like paying off debt or simply to fulfill one of your needs that are waiting to get fulfilled due to lack of finances. Free personal grants are available for people who are in real need of money and are facing hard days. These grants are found for individuals and specific group of people also. Anyone can apply and get personal grants that are resident of America and are above 18 years of age. If you want to pursue higher education or start a new business, you can find the grant that is fit and capable of providing you with the necessary fund so that you are able to accomplish your needs.

These government grants are excellent alternative to personal loans. Although these loans are easily available, they have to be paid back and to receive the money you have to pledge collateral or go through credit check. However the government grants money is completely different and you do not have to go through any such tedious and humiliating process. In addition you need not repay the money also. You simply have to use it for the purpose mentioned in the application form. Depending on your need you have to find the right category of grants and then find the relevant grant that will provide you with the essential funding.

Free personal grants are free financial aids provided to the citizens of America who are in need of additional funding. Try to find relevant information regarding the grant you want to apply and then thoroughly get through the requirements that you have to fulfill in order to qualify for the grant. The qualifying factors are very important and your application will be considered only when you are qualified.

So, the first thing after finding the grant is to see whether you qualify for the grant or not. If you do not qualify, look for other related grants and then apply for them. Apart from this if you are a single mother or belong to minority or low-income group of people, you can take advantage of the free personal grants for specific groups.

Teach Children About Money, Savings and Credit

Teach Children About Money

It’s vital that children learn about money at an early age. Teaching children about money gives them a better chance at a financially secure future. It is true that money isn’t everything. However, in today’s world it is important to have a good understanding of money in order to survive.

Begin to teach children about finances at preschool age. A good way to begin is to buy a pretend store set with play money. Put prices on the items for sale. Hand out a set amount of money. State that this is their pay for the week. Have them “shop” for food.

Play shopping teaches children that cash is not unlimited. It’s also a good way to learn to count money. They learn how to give change and budget the use of their money. Set up a play bank as well. Before they shop, they must put cash in their play savings account for other expenses.

Once children become school age, they’re ready to begin earning their own money by doing chores around the house. Open a savings account at this time. Teach children to put a portion of their chore pay in their savings account each week. A good amount to start with is 20%. Make it very clear that this money is absolutely untouchable.

Explain that there are things they’ll need in the future that savings can be used for. Any money which is not put into savings can be used to buy things they need or want now. Teach children to be careful with their money. Give them a few practice years for making mistakes and learning from them.

Do not rescue children from their mistakes. It’s tempting to look at tear filled eyes and give in. It’s essential to their education to allow a child to take a fall once in a while. This isn’t a fun part of parenting It is a necessary one. It’s better for kids to fail at money lessons now than later, when they’re facing adult issues like foreclosure and bankruptcy.

In addition to their regular savings account, teach children to save for goals like a new bike or other items that are not in your family budget. Put this money aside in a jar with the goal labeled on it. Encourage children to do odd jobs to earn money for the jar fund. They’ll soon learn that hard work pays.

Teach children to budget their money by keeping track of how it’s spent. If everything is written down it’ll be easier for them to track their mistakes and triumphs. As they grow older this habit can be turned into a valuable asset. There are many adults today who could benefit from a little record keeping.

Take children shopping. While you’re in the store, talk about how to find the best deals and the use of coupons. Teach kids to be thrifty in these areas, so that money will go further and last longer. Explain that if you buy the less expensive cereal, there’s a better chance of leaving the store with extra money to save toward a movie or other entertainment.

Product comparison extends to television commercials. Teach your children about false or misleading ads. Explain that advertisers are trying to sell their product and will use any method needed to convince you to buy it. Their claims may be inflated or just plain false.

Teach your children that it’s better to save money for large items than to take out a loan or use credit cards. Explain that this is because of the interest charged by the bank or credit card company. As a general rule if you can’t afford to save for it, you definitely can’t afford to charge it.

Credit cards are a valuable tool when used properly. They should be used for emergencies only or when this is the only way the seller will accept payment. Teach children not to charge anything that cannot be paid off by the end of the month. The majority of credit card companies give 30 days to pay without interest being charged.

Talk to children about keeping credit clean by paying bills on or before the due date. Today, your reputation revolves around your credit rating. Those with bad credit may be turned down for loans and even jobs or apartments. Maintaining good credit is an essential financial survival skill for kids to learn.


How to Take Over the Family Finances When a Spouse Gives Up

Family Finances

Most married couples, for the sake of convenience, have one spouse handling the majority of the bill payment duties. From balancing the check book to deciding upon investments, that one person is generally responsible for updating the other spouse on the financial health of the household regularly. But what happens when you find out that your spouse wasn’t as responsible as you thought? What about when they wait too long to ask you for help?

With a recession always looming and the economy taking a downward spiral, more and more marriages are crumbling under the pressure to maintain a certain appearance. That same pressure exists between spouses living under the same roof, with one hoping to keep the other unaware of the troubles they are facing. If your spouse comes to you with devastating financial news, they’re looking for help. If asked to take command, or if you simply feel that an intervention is necessary, consider the following steps outlining how to take over the family finances when a spouse gives up. If you’ve never handled the family budget before, these steps will have you on your way to successfully taking the reigns in no time.

Step #1: Dig out the dirt. There’s likely a great deal of information that you’ll have to brace yourself for. Don’t take for granted that anything is up to date. From the mortgage to the utility bill to your kid’s braces, make sure you have all recent receipts and bills in your hand. It may be difficult for your spouse to be completely honest.

Step #2: Count the cash….disposable or not. By now you’ve probably come to the realization that someone is on the verge of repossessing the car, the jewelry, and the family dog. Welcome to the current way of life for the average American family. It’s time for some serious liquidation of the assets, if there are any to be liquidated, for the sake of keeping the basics. From household goods to emergency savings, count up everything that can be used to pay off debt and stabilize the family’s finances, and list each item as either being liquid or not.

Step #3: Calculate the total amount of all past due bills and debts. This is where a little prioritizing comes in to play. Write down each bill that is past due, and then organize these emergencies in order of importance. For example, the house payment is more important than the credit card bill.

Step #4: Write down what you must pay for, and what may have to be let go. It’s not something we want to think about, and most financial gurus would cringe at this advice, but those of us living in the real world right now understand that, if you are currently living paycheck to paycheck, sometimes surviving is a matter of taking your losses. During a time when we’re being advised to downsize our homes, not a soul is looking to buy one. When we’re being told to use coupons and cut back on our grocery bill, the pantry is already as bare as it can get. Think of the necessities here. A home, a car to get to work in, utilities, and food are your basics. Any debts and anticipated costs associated with these necessities must come before all else.

Step #5: Negotiate everything for more time. If a job loss or a substantial hit to your monthly income has been taken, time is crucial. Call every creditor you have and work out the best plan possible for short term relief. Most companies offer such plans in the event of an emergency. Also, check the fine print of your credit card statements to see if you’ve been paying a small fee each month for a protection plan. Many card companies today charge minimal fees that enroll customers in such plans from the beginning of the contract agreement (these plans will sometimes cover the minimum monthly fees for several months during a bout of unemployment).

Step #6: Prepare to say farewell. That is, to your assets, cash, and maybe even that perfect credit score. If you’re one of the many Americans whose spouses have just informed them that all savings have been lost and a job has been downsized, you’re in for a reality check. Brace yourself and be willing to be cutthroat in order to maintain those aforementioned necessities.

Step #7: Once you have liquidated what you can (and what you feel you should), it’s time to allocate and organize. Allocate what you have to emergency past due bills that are not negotiable and are absolutely necessary, and then organize a system and a plan for paying the rest. If you are just holding tight until another job comes into the picture, center your plan around holding off what bills you can while keeping enough set aside to pay the rest for several months.

Step #8: Remember that this is temporary, and begin planning your family finances out for the next several years. If you are taking over the family finances after your spouse has given up on surviving the economic downturn, you’ll have to work toward setting brand new goals. That means planning now for possibly downsizing your lifestyle before moving back up.

Finally, when taking over the family finances for a spouse who previously held all control, try not to concentrate on finger pointing. Families are facing enough without turning against each other, and you may find yourself having to ask for help one day as well. With current economic affairs as they are, no one is completely safe. Organize, strategize, liquidate reasonably, and start again. If your family survives as a unit, the most important task will be taken care of.

Budgeting Secrets for Newbies- First Things First

Budgeting Secrets

Most people want nothing more than to be able to effectively manage their finances. After all, Joe Public works hard for the money and hates to see his money going towards things that don’t further his financial objectives or build his future. This is the reason Joe needs to budget but he also needs to teach his family about the necessity of budgeting as well.

If the Publics execute budgeting strategies effectively, this should help them to see where their money is going. They will begin to get more bang out of each buck that comes into their home and their savings and future family goals and dreams will start to take form.

5 Essential Steps to budgeting secrests for newbies:

  1. The first smart thing to do in budgeting is to set a goal. You have to determine what you want to achieve? Is your desire to be able to pay your monthly bills on time? Do you want to buy that hot new plasma or do you need a new car? Goals help to shape your budget and budgets help to best serve your interests.
  2. Jot down daily spending in a pocket notebook. Write down what you spend your money on. This will help you know without a shadow of a doubt where your money is going. This notebook should include every little expenditure that we likely never track like, snack purchases, trips to the local ice cream shop, the Friday night video rental and so forth. Don’t forget to track these forgotten miscellaneous purchases religiously. This is the only way you will be able to stop, cut and drop little purchases that add up to big money drains at the end of each month.
  3. Identify your regular expenditures. Take into consideration what you need to do in order to cut waste out of your budget all together. Your daily caffeine fix and your daily paper may be costing you an estimated $3500 per year. Over a ten year period that is $35,000. Now you may love coffee but if you are going to invest in it that much, it should be paying you some sort of interest shouldn’t it?
  4. Jot down the amount you earn and compare it what you are spending. Create a system that works for you and will help you keep track of your monthly budgeting progress. You can make use of computer cash management programs, or download a money management spreadsheet for these purposes by visiting www.financialbasics101.com/forms.html.
  5. Forget about the Jones’. The Jones have it all because they can really afford to buy it. As their neighbor we sometimes find ourselves trying to do what they do because of image of success and happiness they seem to project. This behavior causes us to reach or qualify for monthly payments that help us to feel good about our new plasma tv or car but when the payments start to weigh in on our budget, we find it hard to cope sometimes.

In order to be effective in budgeting secrets for newbies, we have to remember the long term objectives and forget about the short term payoff. Spending a chunk of our money on things that depreciate in value and don’t progress our current financial standing is just financially immature.

Establishing a Home Budget

Establishing a Home Budget

A household budget is the financial blueprint for your home’s savings and expenses. An efficient budget should take care of the bills in a timely manner and add to savings, with hopefully leaving some monthly money as disposable income. First off, we must identify what and how much we are spending monthly on bills. Once we have this number, it is time to decide whether we would like to keep it the same, reduce it, or add to it. Most of us would like to cut our bills so we look for any ways we can reduce our monthly spending. You may want to use a software program such as Microsoft Money or Office to help create your budget. This definitely makes things easier. Once current spending patterns have been identified, we can move on.

Set up plans for future financial plans and goals. How much more would you like to save? Do you have any major purchases in the near future? How does employment and salary situations look? These are all questions that have to be taken into consideration. Make sure to begin tracking all your expenses so you have snapshots at given points in time to see exactly where the money goes. Do not spend beyond your limits! This is certain death to your budget. When tracking your budget make sure to recognize the four major categories of your financial picture. They are Income, Mandatory Expenses, Recreational Expenses, and Savings. Contributing more to the final category is the main objective. The future is uncertain. The more you can save, the better off you will be.

Once all allowances are settled upon, it is important that everyone in the family knows their spending limits. This is important even for the children in the family. This gives kids an early financial education that they can carry through life. Give your child chores and let them work for their money. This will help them appreciate the value of a dollar.

There are free budget worksheets that you can get off the net also. Kiplinger has a good one.This is a very inexpensive way to set up your home budget. Whatever your budget plans, if you find yourself in debt a good amount of the time then a planned budget is definitely for you. It can make the difference between a secure future or a debt laden one.

If things are really tight financially, you may want to consider a part time job or a side business on the internet. The extra income can make things a lot more comfortable. Extra income can always help ease the restraints on the budget. Good luck and Good savings.

Artist Grant

Artist Grant

Many organizations in addition to government agencies offer artist grant for those artists who are aspiring and professional and need additional finances for the accomplishment of their projects. These grants are sufficient to help these artists cover their professional and personal expenses. These programs can give up to $50,000 to the artists if found eligible at any level of their career and for any form of art. The main thing is to search for the right grant and then apply for it successfully.

If you are an artist and looking forward to getting finances for your upcoming projects, you can seek help from the government and look for details on its website. Find out the particular grant and collect information regarding eligibility requirements and the right application procedures for that exacting grant category. Find the funding that is available for you and then submit the duly filled application form to the right agency. Just as it is important to apply for the right grant following the right procedure, it is important that you submit your application to the assigned agency.

You can apply for artist grant no matter what category of artist you are. Each grant has different eligibility requirement and you will have to qualify in order to get the grant money. Once you have been awarded the money, you can use it for the fulfillment of the need you mentioned in the application form. You might need to submit some of your samples of work or provide references for that. The category is vast and there are grant for almost every kind of artist. So the main thing is to find the right grant to apply.

After the submission of your grant application, it will be reviewed by the assigned agency. There is no limitation for applying and so you can apply for more than one grant also. If your application gets approved, you will be notified and the check will be sent to your address and this you never have to pay back. Finding and applying for artist grant will take only some time and if you are awarded the money, it will help you get your dream come true.

Student Loans and Grants

Student Loans and Grants

It is really a big responsibility for the parents to provided finances for their kids and fulfill their education needs properly. Today even the school cost has gone high and many of them find it difficult to cope with it and so student loans and grants are in great demand today. There are different types of financial assistance programs available for students and it is always better to opt for the loans and grants available through the government. On one hand these grants are free money and they do not have to be repaid and on the other the loans that are available through the government are either at low interest rate or no rate of interest.

The increasing fees and expenses associated with school and college education has forced many students to either leave their studies in the middle or take high interest student loans that are available easily in the market. These loans are easily available but when the student gets his job the repayment goes along for 10 – 15 years depending on the loan amount and the type. The whole amount that the student pays is much more than the actual loan amount because of the high rate of interest accumulated on it.

But with student loans and grants the whole scenario is different. You do not have to repay the grant money and for the loans, if you find it difficult repaying even after you get a job or you have a family and the expenses have increased, the government will buy back the loan. In this way you might be able to get rid of this repayment option also.

However, do not forget that there is no free meal and the government’s intention behind providing you the financial assistance must be some or the other. Well, frankly speaking the main aim of the government behind all this is simply that it provides you with the facility so that you get good jobs and they get their revenue generated through income tax money. As a student, if you apply and get one of the student loans and grants, you are in a win-win position.

Getting Tough with Finances

Getting Tough with Finances

When the economy gets tough, it is time for consumers to get tough. That also means that you, or whoever handles the finances in your family, also need to get tough.

If, like many consumers, you are finding it hard to make ends meet, then simply put, you have only a few options. You can continue to spend more than you make. You can decrease spending (ideally so that spending is less than income). You can increase income (so that it exceeds your spending). Or you can both increase income and decrease spending. This article gives an overview of these concepts. Look for other articles in the “Family Economist” series that will cover these, and other consumer-oriented financial topics.

Continue to spend more than you make

If you continue to spend more than you make, you will eventually exhaust any savings you might have. Continuing to spend more than you make after savings are exhausted then creates an ever-increasing mountain of debt. While there may be circumstances that cause this situation to arise for short periods (such as being between jobs for a few weeks, or even a month or two), it is important to not allow this situation to continue any longer than necessary, as well as to minimize the disparity between income and expenses. While it can be tempting to ignore the problem, do not ignore it. I personally know of one woman who ignored the problem until she finally obtained a lawyer and filed bankruptcy, which was denied. The woman’s home was foreclosed on for less than the existing debts, her credit was ruined, and she ended up in a small one-bedroom apartment in a run-down neighborhood.

Decrease spending so that income exceeds spending

There are usually a number of ways to decrease spending, although some may seem painful. Start by creating a tracking budget, as it is almost impossible to find ways to cut spending if you do not have a record of where you are spending money in the first place. Keep in mind that everything adds up. When you track your spending, everything counts, and keep details. For instance, if you normally give yourself $45 a week for lunches and coffees while at work, do not just write down “lunch and coffee expense, $45”. Instead, write down each time you buy coffee or lunch. If you are carrying balances on your credit cards and have not been late, call and ask for a lower interest rate, so that more of the payment goes to paying down the balance.

Increase income so that it exceeds spending

Whether you work full-time, part-time, or not at all, there may be ways to pick up some money as income. Writing for an open content network such as Associated Content is one way. Consider taking a part-time job; even if you only work one evening a week, that is still more income coming in. Some businesses will still give employee discounts for their merchandise, so it may pay to look at working part time for something you like. I know of one person who loved golf, so he worked part-time at a golf course to get free tee times. Another liked books, and found work at a bookstore with a significant employee discount. Hold one or more garage sales; you can pick up some money and de-clutter, all at once. If you have spare time during the day and like pets, consider offering a pet-sitting or dog-walking service in your area.

Increase income and decrease spending

Ideally, when your income is not sufficient to meet your spending, you can work on the problem from both ends – increase your income and decrease your spending. Doing so often helps to make the changes feel somewhat less painful, because you are occupying some of your previous “free time” with an income-producing activity.

Get everyone in the household on board

If you are the only person in your household, then the entire burden is on you to learn how to trim expenses and increase income. However, if you have others in your household, it is critical to get everyone on board for the plan to work. Otherwise, you might find your plan sabotaged by an unhappy family member. I know of one case where a teen was very angry that the mother had cut everyone’s discretionary spending allotment. The teen managed to get the mother’s credit card information, and went on a spending spree, ordering clothing for friends and herself through the telephone. To hide her activities, she had all the purchases delivered to friends homes. The mother did not find out about this spending spree until the credit card bill arrived; the teen had ordered nearly four thousand dollars in merchandise, far exceeding the extra money the mother had received from working part-time in a bookstore. Even after returning as much as could be returned, the mother was forced to choose between having 13-year-old arrested for credit card fraud, or accepting responsibility for thousands of dollars in charges.

In summary, if you are finding it tough to make ends meet, you need to find ways to increase income and/or decrease spending. It is critical to track your expenses in detail, and to have everyone understand what you are doing, and why. If the concepts of tracking expenses, making and keeping a budget, and looking for areas to trim expenses are difficult concepts for you, then look for the articles in this series to help you through these steps.

Tips for Paying Your In-Home Business Bills on Time

Home Business Bills on Time

One important aspect of your home business is to keep close watch of your finances. Keeping close tracks of your home business bills is a very important part of successfully running your business. Your business credit is very important to get the items you need and keep your business afloat. EEspecially when you hit those difficult times. If you are unable to get loans when you need them you will find it a lot more difficult to keep your head about water when it comes to your business.

One way that you can go about tracking your bills, is to take the item and organize them properly. Have some type of mail bin will work nicely to ensure everything is paid on time. You can find these types of mail bins at your local office supply store. Label each slot of the bin for different types of bills. Since this is a home business it is important to keep your household bills and your business bills separate. This will really help when it comes to tax time. I have also found that create a spreadsheet on your computer which will allow you to track your bills as you come in certainly comes in handy. As soon as you receive your bill you can check it off on the computer program. Be sure to have a section where you can enter the date, the bill was received.

Once you have paid the bills you can easily check it off as paid. In my experience I have also found that setting up your bank account to automatically pay some of your monthly bills makes things easier. For example your electric bill, and other household bills can automatically be paid straight from your bank account each month. This way all you have to do is confirm that the payment has been sent out, and check it off. When it comes to the business if you have office supplies delivered to your home, you can set these up as a recurring payment. At the end of each month it is a good idea to balance your check book to make sure that you know where each, and every dollar went. It is also a good idea to keep your business accounts and your personal accounts separate. I have found that this really helps to manage the business better. If you want your business to stay afloat and really grow, keeping proper track of your money is one of the most important steps.