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5 Step Guide to Saving and Spending Your Paycheck

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Saving and Spending Your Paycheck

The most obvious financial goal is to spend less than you earn so that you have money to save while also having a carryover amount at the end of the month. By making the right financial choices, you can build a savings account, create an emergency fund, and even get out of debt.

But, properly saving and spending your paycheck isn’t an easy feat. From marketing temptation to impulse buys, there are all sorts of factors that play against making the best money decisions.

Are you ready to take charge of your finances? If so, follow this 5 step guide to saving and spending your paycheck wisely.

  1. Have a Plan for Every Dollar

One of the biggest mistakes that people make when it comes to saving and spending their paycheck is not having a plan for every dollar in their bank account. To prevent needless spending and impulse purchases, figure out where you want your money to go each month. This makes it much easier to make a budget and stick to it.

When you don’t have a purpose behind each of your dollars, it’s much easier to spend them on something frivolous. If you find you have money left over that you don’t know what to do with, the wisest plan is usually to save it!

  1. Know Your Schedule

If you have a lot of different lenders and expenses, it’s very easy to lose track of what’s due when. Budgeting should not only include how much money you make and where it goes, it must also include a schedule for making payments on time. A late or missed payment can not only have a huge impact on your credit rating, it can also lead to fees that throw off your budget.

Avoid having to remember all of your payment due dates but scheduling automatic payments. As long as you have a bank account, you can schedule a bill to be paid automatically each month on a set date. This is extremely convenient and helps to ensure that you never miss a payment.

Knowing your schedule also helps in knowing how much money you’ll have and when. Planning to pay all of your large bills with your first paycheck makes it much easier to budget for smaller expenses later in the month.

  1. Pay Off Your Debt

Debt is one of those parts of life that we wish we could run away from forever. But, putting your debt on the back burner only does more harm than good. Paying off your debt should be your top priority. The less debt you have, the better your credit score will be and the easier it is to meet future financial goals.

To wisest way to pay off debt is to pay off the highest interest rate debt first. If you only make the minimum payment on a loan or credit card that has a high interest rate, a good chunk of your money is going towards interest. This means that less is going towards the actual balance, making it much harder to pay off the debt entirely.

Budget so that you can double or triple up on payments. With this method you’ll notice just how much your principal balance starts to drop. Soon enough you can move onto the next debt!

  1. Use Credit Cards Properly

Most people use credit cards as an extension to their paycheck. However, this often causes large balances that are subject to interest. Having a credit card is a great way to earn points and rewards, but if used improperly, these pieces of plastic can do serious harm to your credit.

When using a credit card, there are certain rules you’ll always want to follow. They include:

If credit cards are used properly, they’re a great way to earn airline mileage, discounted hotel stays, and other perks. Using a credit card is also safer than a debit card as lenders back your line of credit. In the event that your card is stolen or misused, you can ensure that you’re covered.

  1. Set Financial Goals

Budgeting is a good first step, but take your financial security and success to the next level by setting goals. Maybe you want to save $200 each month towards a family vacation. Maybe your goal is to pay off your debt and establish an emergency fund. By setting goals, you can always work towards something. As you reach your goals, reward yourself and make new ones! You can never run out of goals that revolve around money.

Conclusion

Knowing how to properly save and spend your paycheck is key to achieving financial security. Follow these 5 steps so that you can avoid the stress that comes with overspending. Here’s to financial freedom!

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VAT Fines and Penalties in UAE

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VAT Fines and Penalties in UAE

A full list of penalties has been approved by the authorities in UAE regarding VAT. Now, nobody will be able to avoid VAT registration in UAE no matter what he does. If he is eligible to pay, he will have to pay it without finding any other way of escape.

Pay VAT or pay penalties

If someone is having enough amount of taxable goods and supplies, he becomes eligible to PAY vat. If such a person doesn’t register for VAT, after getting caught, he will get punished or he might have to pay fines as well. this is why it is better for the person to pay VAT tax Dubai rather than finding escape ways. Always keep ready vat accounting and auditing / VAT bookkeeping. Go to this link https://farahatco.com/blog/methods-vat-accounting/ and find more info.

A proper list of the penalties has been approved which will be implied on the ones that will get caught violating the tax laws.

No penalty will be less than 500AED and it will not more than the triple value of the transaction of the business that is under consideration at the moment.

List of penalties

If someone fails to keep the records that are needed for the procedures of the tax, he will have to pay the fine of AED10,000 at is first time violation whereas he will be fined AED50,000 if he repeats the violation again.

If a person is not able to submit the data in the Arabic language to the authorities who asked for it, he will be fined AED20,000

If the person is not able to submit the application of registration within a specific time period, he will be fined AED20,000

It is as important to submit a deregistration form than it is to submit a registration form in a specific time period. If someone doesn’t comply with the commands of the authorities, he will be fined AED10,000

Amendments in the tax record are also to be informed to the authorities. If nobody does that, he will have to pay AED5,000 at his first attempt to violate the tax law. If he does the same again, he will be fined AED15,000

A legal representative will be fined AED20,000 if the authorities are not notified about the appointment of a legal representative.

If the tax representative doesn’t file a tax return in a particular time limit, he will be fined AED1,000 for is the first-time violation but if he repeats it again, he will be charged AED2,000 within 2 years.

People need to understand how important it is for them to pay tax and comply with the tax laws no matter what. If they do not do so, they will have to face penalties which they wouldn’t like at all. so, they should make sure that they comply with all the rules and regulations of tax laws. Contact Farahat & co. for free advice.

All mentioned above is not just it. there is a lot more people might face I they do not pay the tax to obey the rules of the tax laws. so, if you want to be safe, obey the rules. It is your duty being a resident in UAE.

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Strategic Financial Tips for Successful Enterprises

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Strategic Financial Tips

Every company needs solid financial management to stay in business. This entails planning, controlling and effective management of the financial aspect of the market. This is because it takes more than a good business impression to stay in business. There tactical financial management tips that include;

Financial Planning

This requires an accurate record of all resources available in the company. Every enterprise needs to have a capital budget for purposes of proper financial planning. This enables the company to allocate resources in order of priority. Several aspects need to be considered when planning finances they include

Actual financial supervision requires an enterprise to invest in a reliable system that meets the specifications of the business it operates. This enables the observation of vital data in the company. The system should be easy to understand and for other staff to perform. It is critical to keep checking if the required data is being collected over time for purposes of studying your financial trends and making decisions.

Another important aspect of financial planning is the management of financial risks. Through a well-documented risk management framework. This can be complied with by the help of a governance and risk compliance team. It contains a list of all risks related to the business.Their financial implications and how to mitigate these risks for instance through insurance.

Use of Financial Information to Manage the Enterprise

These are financial statements that every company needs to have.These should be accurate and precise to the enterprise. They include;

  • Cash flow statements
  • Balance sheets
  • Profit and loss figures and statements
  • Changes in equity statements
  • Wages and salaries statements

A qualified employee will come in handy in the interpretation of these statements. Alternatively, the company may contract a qualified GRC team individual to read and interpret the reports and give financial advice. For example, the company might have made so much profit, and there is the need for expansion.

Team Work

All the employees working for the enterprise should have some financial performance of their firm.This enables them to get motivated and build confidence especially if the company is making a profit. All employees should be allocated financial targets so that they have a direction of working towards success. For instance, the head of human resources could be assigned an economic goal to reduce the wages by 2%. Performance evaluation within a stipulated period is necessary to keep the team members on course. They also help to evaluate how the company is performing financially.

Financial Control

This is action based on reliable and well researched financial data and interpretation. The enterprise can use tools that are not capital intensive to provide financial information. Cloud-Based software is such one tool.It offers real-time data relevant to the business, for instance, daily sales and expenses. Besides, it provides actual time data anywhere; this can guide the company in decision making. There are other aspects of financial control namely;

Tracking of Invoices

The company should have well-stipulated terms and conditions for payment of invoices.They should be communicated to all their clients for awareness especially when there are any legal aspects related to the fees. The cloud-based software can be used to track payments of invoices according to the set deadlines.

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Living Together Agreements

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It is crucial that you put in place a cohabitation agreement or a living together agreement when you live together with your partner. The purpose of entering into such an agreement is that your assets are safeguarded even if you both were to split ways in the future.

The assets that can be safeguarded by a living together agreement are those which have been bought before you started living together with your partner. It can include other important aspects such as how the living expenses will be divided between the two of you and how the debt accumulated during your relationship will be shared between the two of you. Setting out such a financial agreement makes it clear as to who owns what when you cease living together.

When to use a Living Together Agreement

A living together agreement can be used if:

Ø  You are currently living with someone or intend to live with someone in the near future

Ø  You wish to set things straight regarding ownership of assets and also how bills will be paid

Ø  If any of the partners decide to approach the court upon the split up, you wish to have a formal agreement which can be deemed legal by the courts

Contents of an Agreement

The following aspects should be made clear in the cohabitation agreement:

Ø  The income earned by each person in the relationship belongs to the one who has earned it

Ø  The property or assets which were owned by a partner continue to be owned by that particular partner, irrespective of the status of their relationship.

Ø  The assets which were bought together will be owned jointly by the couple.

Ø  Both partners will share a joint liability to pay off the debts that were acquired jointly.

Ø  The splitting of living expenses

Is Independent Legal Advice Necessary?

Before entering into an agreement of this sort it is advisable for each of the partners to seek legal advice. This can help to prove at a later date that both the parties entered into the agreement completely aware of what type of agreement they were entering into.

It is also advisable to make complete financial disclosures as there can be claims later of having acted under some influence. Having a formally drafted agreement rules out the possibility of a dispute and proves that each partner had voluntarily signed the agreement and that no pressure had been placed on them to agree to the terms involved.

Terminating the Agreement

If any of the following events have occurred, the agreement can be terminated:

Ø  One of the partners die

Ø  The partners involved in the agreement decide to get married or enter into a civil partnership with each other or any other person

Ø  Both partners mutually decide to terminate the agreement. A deed will be signed to make this happen

Ø  One of the partners is handed over a written notice which terminates the agreement

Ø  Partners decide to adopt a child

Ø  If court rules out the agreement to be legally invalid

Distribution of Assets after Termination of Agreement

When an agreement is terminated, the assets which have been acquired after entering into this agreement will be treated as being owned jointly. Therefore the assets will be sold and the income earned will be divided equally between the partners. The debt which was acquired jointly will have to be paid in equal shares. For any personal debt, the partner who is liable to pay it will be responsible for its repayment.

Which other documents are required for Legal Protection?

If one of the partners who were living together were to pass away the cohabiting partner may find a claim to the deceased partner’s assets. To prevent your assets from being inherited by the wrong person you may have to write your own Will. Almost two thirds of British citizens presently do not have a valid Will which puts their assets at risk.

English Law doesn’t recognise cohabiting partners and the rules of intestacy may not ensure wealth distribution according to your wishes. There are many ways you can write a Will such as using a simple Will template which several websites provide or by hiring the services of a solicitor.

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