Finance Terms: Here’s An Interesting Glossary for the Beginners

Finance investment companies in Delhi, India says that even after taking a way lot of content on finances, you may not totally be sure of all the important financial terms. A very few industries are as riddled with jargon as the finance industry. This is why it appears really difficult to know the application and benefits of all of them.

However, you need not enter into the extremely intense dictionary of the finance industry. Just the basics are well enough to give you the essential understanding of the terms & benefits associated with the finance industry. Here are a few common terms that you may tuck under your tool belt for all the convenience.

401(k):

401(k) is a plan offered by companies and is meant to help you save for the retirement. The money you set aside is tax deferred, and it’s frequently matched in part which means that the company will dedicate its money to your account as well.

APR:

The term APR stands for Annual Percentage Rate, and it refers to how much interest you’re paying on the money you borrow. It’s especially a term that’s very important when you are signing up for a credit card.  The higher your APR, the more money you’ll ultimately pay if you don’t if you don’t pay off your balance in full each month.

Assets:

Assets are items of value. For example things like major savings funds, a car or a plot of land are good examples of assets and are used to calculate your net worth.

Bankruptcy:

This is a really scary term and much familiar term. Bankruptcy means owing more money than you can actually afford to pay. It happens when you borrow too much through mortgages, credit card debt, student loans, car payments and more.

Bonds:

You must have heard the terms “stocks and bonds” at several occasions. When you buy a bond, you’re lending that company money. How that money is paid back is determined by the terms & conditions under which you bought the bond.

 

Stocks:

When you buy a stock, you are buying a small part of the company. The price of each share is determined in part by how much people are willing to pay for them. How much they are selling them for and how well the company is anticipated to perform.

Debt Consolidation:

Debt consolidation is a term that describes a strategy when you've accumulated debt from multiple, high-interest sources (such as credit cards). Finance investment companies in Delhi, India says that debt consolidation allow you to make one payment each month, reducing the amount of money you spend repaying your debts overall.

Savings Account: How to grow it With Minimal Efforts

According to finance investment companies in Delhi, India, everybody agrees with the benefits of saving or growing their money. But, when it comes to how, the things are not always that clear. To crack this problem, here are some tips and tricks you can use to help your savings account grow with minimal effort.

Skip Expensive Coffee & Brew at Home:

You might have not counted on it, but your monthly expenses in the name of Cappuccino might be really high if you are a religious patron every morning or every evening at a luxury coffee house. Thus, for the sake of saving some money you can cultivate the habit of sipping your “Cup of Joe” from a different outlet at your local supermarket and at a very simple price.

You Can Skip Bottled Water:

It might seem very reasonable enough to purchase a bottle of water on the go for just some rupees. But it turns out that bottled water comes at a very high markup. If you even purchase 10 – 12 bottles of water a month, you are definitely giving up on reasonably huge amount of money every month. By cutting on these expenses, you will definitely contribute to your savings account.

Pay Off Your Balance With Cash-Back Rewards:

If you have a rewards credit card, you would definitely accumulate some points that haven’t been redeemed. Consider exchanging your points for cold or hard cash back to contribute towards your outstanding balance.

Save on Electric Bills:

Although LED lights come at a higher cost, they are known to be highly profitable commodities in the long run. Major selling point of LED lights is their life span. They can last for more than 17 years assuming 8 hours of use every day. Thus replace the existing bulbs with energy saving LED bulbs and other energy saving electrical appliances to contribute satisfactorily to the growth of your money.

Become a Secret Shopper:

If you are a shopaholic, by becoming a secret shopper you can shop to your heart’s content as well as get hired and paid for writing reviews about your experiences from the company that hired you. So, finance investment companies in Delhi, India recommend you to sign up for the opportunity to be a secret shopper and contribute to your savings account by earning some extra money!

Credit Card: The Most Important Don’ts You Need to Care About

According to finance investment companies in Delhi, India the credit card is a very important money tool. And yet, many do not care to know the benefits of this financial instrument, especially the young adults. Nearly 70% of the crowd prefers a debit card over credit card. However, a blind refusal to the usage of credit cards can hurt your long term wealth.

When used correctly, credit cards can dramatically help you support the growth and sustenance of your wealth. Firstly, on time bill payments will provide you with a good score making you to pay less when it comes to borrowing money for a house or a vehicle. In addition to this rewards like cash back rebates, frequent flyer miles and other offers add tremendous value to your spending. Also, in case of an illegal hacking, stolen credit cards are much easier to remedy than debit cards.

To make the most out of your credit cards, and avoid dismissing them out of fear, here are some important credit card Do’s & Don’ts.

Never Use a Credit Card to Withdraw Money:

The cost for withdrawing cash with a credit card is very high, so this should be a total “no-no” for you. The interest rate on a cash withdrawal is generally above 25% and this is on top of a fee that is usually around 3% of the amount you withdraw. In addition to this, you will also start accruing interest from the day the withdrawal is made and you can’t avoid it even if you clear your balance in full each month.

Avoid Using a Credit Card Cheque:

Credit card cheques may seem straightforward and convenient and a means of paying for something when you don’t have cash and you can’t use your card. However, they are treated like cash withdrawals so the same higher interest rate and the absence of an interest-free period apply. Moreover, purchases made under a credit card are covered under some government law which means that the card issuer is jointly liable so if the retailer goes bust, you can claim refund from your credit card issuer. But the purchases made using a credit card cheque are not covered by this clause.

Stop Using Your Card For Dual Purposes:

Most card providers use a payment hierarchy where the cheapest debt is paid off first. Therefore you should only use your card for one purpose unless the same rate is charged for both balance transfers and purchases. What many users do is keep using credit cards with a much shorter 0% offer on purchases than balance transfers and then be very comfortable with the spending. For example, if a particular credit card offers 16 months at 0% on balance transfers, also offers three months 0% on purchases. So, you’ll start accruing interest on your purchases as soon as the three months offer ends and won’t be able to pay that back until the balance you transferred is paid off in full. Hence, if you want to keep spending while continuing to pay an existing debt you’ll need a card with an equal 0% period on purchases and transfers.

Always Stay Within Your Credit Limits:

Every credit card comes with a credit limit which is why it’s important to monitor what you owe on your card because if you exceed the credit limit, not only will your account be blocked but you will also be charged a penalty. However, if you feel that your credit limit is low you can usually apply to have it changed once you have held a card for six months.

Never Fail to Make a Payment:

Failure to make even the least monthly payment will only hit you with a late/missed payment charge. According to finance investment companies in Delhi, India in some cases even the use of your credit card may be suspended. And, any late payment that shows up on your credit profile will harm your chances of gaining any type of credit in future.  So make sure that you never fail to pay at least the minimum bill every month.