Mutual Funds are a good option for new investors because of the following advantages:

• Mutual funds are designed to make investing low-cost and straightforward. You can begin investing with as little as Rs. 5,000.
• Investors are not burdened with the decision and research involved in selecting the stocks and bonds to be purchased in the funds or the daily management and safekeeping of the chosen investments.

What are Mutual Funds

A mutual fund is a selection of stocks, bonds, money market instruments, or any similar assets bought by the investors’ money. A mutual fund can be different combinations of stocks, stocks & bonds, or any other variety of securities combined under the mutual fund as a single investment pool.

This combination is specified in the mandate of the mutual fund, and they cannot deviate from the set mandate.

Mutual fund investments are managed by Money or Fund Managers, who make the investment decisions and manage the funds to ensure that capital gains are maximized for investors.

Mutual funds are run by Asset Management Companies (AMCs), usually public limited companies. A Trust (and Trust Deed) is established by the Asset Management Company under which a mutual fund is launched. The Trustee acts as the custodian of the fund’s assets while the Fund Manager makes the investment and related operational decisions regarding the fund. Asset Management Companies can launch and manage multiple mutual funds with different or overlapping, or entirely distinct mandates.

Why Invest in Mutual Funds:

Mutual funds offer an optimized investment option to yield competitive returns to meet long-term or short-term financial goals. The investor can invest with the long-term financial goals of arranging funds for their child’s higher education or retirement savings or child’s marriage etc. An investor can also have short-term financial goals like saving for a vacation or buying a new car or a new home.

Before investing in mutual funds, all investors need to know their investment objectives. This will help determine the risk and return profile, investment timeline, and target goals. Understanding these questions will allow an investor to make more effective investment decisions.

By investing in mutual funds, the investor gets the advantage of exposure to different securities under a single investment package. They allow the investor to develop a diversified portfolio of assets while enjoying financial management by professionals.

Another key advantage of investing in mutual funds is that the investor can avail tax credit.

Types of Mutual Funds:
There are two primary forms of mutual funds. These are

1. Closed-Ended Mutual Fund:  These funds are traded on the Secondary Market after their launch through an Initial Public Offering.
2. Open-Ended Mutual Funds: These funds are issued in the form of Units to investors, which can be redeemed (sold back) based on their Net Asset Value (NAV) at any time. These funds can be purchased and redeemed through the Fund Management Company, which daily announces their offer and redemption prices. These funds can also be listed on the Stock Market.

Categories of Mutual Funds:

Mutual Funds are of different categories. These categories are based on where the fund invests, its risk profile, and the investment strategy. In Pakistan, the following mutual fund categories are approved by the SECP.

1.     Money Market Fund

These funds invest in short-term fixed-income securities like government bonds and certificates of deposits, and commercial paper. Their aim is to maintain high liquidity by investing in low-risk instruments that are generally safer.

2.     Income Fund

These funds generally invest in market securities, term finance certificates/sukuks, commercial paper, and spread transactions. They aim to generate a regular stream of income for their unitholders.

An income fund is generally seen as less risky compared to an equity fund as it is not likely to be affected by market volatility. The probability of capital appreciation is also limited.

3.     Equity Fund

These funds invest in stocks and grow faster than money market or fixed-income funds. This means they carry a higher risk as they are exposed to market volatility.  An equity fund aims to provide exposure to listed equity securities and capital appreciation over the medium to long­ term.

4.     Balanced Fund

A balanced fund offers exposure to both growth and regular income by investing in equities and fixed income securities. Regulations require that balanced funds keep 30% to 70% of their net investments in listed equity securities.

The other remaining can be invested in other certified investments. Balanced funds are exposed to both risks of fluctuations in equity markets and interest rate variations. Balanced funds can be risky like equity funds but are less risky than equity funds based on asset allocation.

5.     Asset Allocation Fund

These funds can invest in any type of securities subject to conditions to diversify their assets across different types of securities and investment styles as written in their offering document. Asset allocation funds are generally considered high-risk funds due to their potential to be fully invested in equities at any point in time.

6.     Capital Protected Fund

This type of fund makes investments in such a way that the original amount of investment is safe to ensure positive investment returns. This fund keeps a significant part of its net amount in a bank in the form of a term deposit. At the same time, the remaining is invested in accordance with the authorized investments stated in the offering document. Unlike other funds, the capital-protected fund has a fixed maturity period specified under the investment period or tenure.

7.     Index Tracker Fund

This type of fund is designed to carry out the activities of a particular index and show the probable tracking in the offering document. Investment of at least 85% of net assets is required in the securities that constitute the selected index or subset.

8.     Fund of Funds

This fund holds other mutual funds in its portfolio rather than investing directly in any security. However, each fund of funds will have its own category, for instance, equity fund of funds, income fund of funds, etc.

An investor can invest in the fund that suits his investment strategy, the investment time horizon, how much risk he can tolerate, his cash flow requirements, or any other investment objectives/ requirements.

The Mutual Funds Association of Pakistan has a very helpful website http://www.mufap.com/ with comprehensive details and comparisons of fund performance.

Key Terms:

Some key terms used in mutual funds investment that you should know are as follows:

Net Asset Value (NAV): 

Net Asset Value is the market value of a mutual fund’s assets after deducting its expenses and liabilities on a particular day. The per unit NAV is the Net Asset Value of the funds divided by the number of units/ certificates outstanding on the Valuation Date. The NAV shows the performance of a mutual fund.

NAV = (Current Market Value of all Assets – Expenses – Liabilities) / (Total Number of Units Outstanding)

Expense Ratio: 

Expense Ratio is the fund’s annual fund operating expenses, expressed as a percentage of its average net assets. An Expense Ratio of 1% p.a. means that 1% of the fund’s total assets will be used to cover expenses each year. Expense Ratios are essential to consider when choosing a category of mutual fund as they can significantly affect returns.

Redemption: 

The units of open-end mutual funds can be partially or fully redeemed at any time from the Asset Management Company that manages the funds.

Fund Manager Report

This is a monthly report produced by an asset management company in which information on the composition and performance of the mutual funds is presented.

How to Invest in Mutual Funds:
The documents needed for opening a mutual fund account are as follows:

1. CNIC Copy
2. Application/ Account Opening Form/ Purchase of Units Form
3. Zakat Affidavit (Optional)
4. KYC Form/ FATCA Form
5. Cheque/ Pay Order/ Demand Draft (payable to the respective Trustee)

Fees & Charges:

You must keep in mind that there are charges involved with investing in mutual funds. Some of these charges are as follows:

1. One-time Fee: This fee is paid for investment/ divestment in an open-end fund. Details of these fees are disclosed in the offering documents.
2. Front-end Load: This is charged on the purchase of units of the fund.
3. Back–end Load: This is charged when an investor redeems his investment in the mutual fund.
4. Contingent or Deferred Sales Load: This is charged only when there is no front-end load. This load ischarged on redemption of investment. However, funds can reduce it progressively if an investor holds an investment for a more extended period.
5. Management Fee: This is the fee charged by the AMC for the management of a fund.
6. Trustee Fee: This is the fee charged by the Trustee to provide trusteeship and other services for the fund’s assets.

Benefits Of Investing In Mutual Funds:

Asset management companies manage mutual funds. They evaluate investment opportunities by researching, selecting, and monitoring the performance of the securities purchased by the fund. These tasks are done by qualified financial professionals who make calculated investment decisions on your behalf.

Diversification

A mutual fund can help reduce investment risk if a company or sector fails by spreading its investments over other securities and investment sectors.

Affordability

Mutual funds are ideal for investors without a lot of money to invest. They have relatively low Rupee amounts for initial purchases and subsequent monthly purchases. For example, you can add funds at set amounts of, say, PKR 1,000 to 5,000 per month or other intervals. This is not difficult to set aside for savings or investment purposes.

Liquidity

Mutual fund unit holders can easily redeem their units into cash on any working day. They will receive the applicable value (NAV) of their investment within six working days. Investors do not need to look or wait for a buyer. The fund buys back (redeems) the units at the current net asset value (NAV).

Well regulated

The SECP continuously monitors all mutual funds through reports that the mutual funds are required to file with the SECP regularly.

Transparency

a mutual fund’s performance is reviewed by different publications, rating agencies, and the SECP. This makes it convenient for investors to compare the performances of different funds. Unit holders also receive regular updates, like daily NAVs, fund’s holdings, and the fund manager’s monthly strategy report.

Tax benefits

Investment in mutual fund schemes entitles the investor to avail tax credit that enhances the overall return on their savings

Things to Know Before Investing In A Mutual Fund

Before selecting an appropriate mutual fund for your savings, you must identify your investment objectives. Your financial goals are determined by your income, expenses, financial independence, age, lifestyle, family stage, etc.

Here are some questions that you should ask yourself and likely answers that will help you select an appropriate mutual fund.

• Why am I investing?

I need some side income, need to save up to buy a home, fund a wedding, save for higher education, or a combination of all these needs.

• What is my risk tolerance?

I am unwilling to take any risk, or I accept that to earn long-term gains, I may book short-term losses.

• What are my cash flow requirements?

I want to multiply my assets for the future and do not need periodic cash flow; I need a regular cash flow, or I need X amount to meet a need in X years.

• What is my time horizon?
• I need some money in under a year (short term), or one to five years (medium-term), or five years or more (long time)

If you answer these questions honestly, you will have clarity of what to expect from your investment.

This will help you determine an appropriate mutual fund investment strategy.

Sadia Zaheer

Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.

The post All you need to know about Investing In Pakistani Mutual Funds appeared first on Smartchoice.pk.

Including how they should make and save money while remaining true to their religious principles. Saving for retirement the Muslim way involves “very intentional investing that is consistent with values”

The philosophy behind Islamic saving and investing can be traced to the Quran and other early Islamic texts. The story of the prophet Yusuf conserving grain from rich harvests in Egypt, related in Sura (chapter) 12 of the Quran, is often cited as an admonition to save against hard times. Other verses advise against squandering wealth, while the Prophet Muhammad warned in a hadith (a collection of his sayings) that one “who is prudent in spending will not be dependent on others” later in life.

Importance of Planning for Retirement

There are two components to retirement income planning: Personal Planning and Financial Planning. Personal planning is important because it is the determining factor of your satisfaction with your retirement lifestyle.
Financial planning is crucial because it identifies your sources of income and expenses and establishes your retirement budget, based on your plan.

Personal Planning

All too often people entering retirement do not place enough emphasis on personal planning to ensure they maximize their opportunities. So one needs to think well before time and take the time now at an early stage in your planning process to plan and think about your life, to think about the choices you have about how you would like to spend your time during retirement.

What do you think would you pursue when you won’t have the obligations and responsibilities you have today. Do you want to volunteer at a local hospital? Take up that hobby you were always interested in, but never had the time to start? Go back to school and pick up a few special interest courses? Start your own business? Travel around the world? Buy property in a warmer climate and spend the winter months there?

These and many other lifestyle questions based on your preferences are all important factors to consider when planning your retirement since your choices will drive the financial circumstances that must be met to achieve your goals.

Financial Planning

Financial planning is the foundation of all the other planning you wish to take up when you retire, as your finances lead up to the material benefits in the future.
Will you have adequate funds to provide the kind of retirement lifestyle you envision? Remember your income will likely come from three general sources: government pensions, employment-related sources, and your investments.

Your retirement will be more enjoyable if your income is structured to fit your lifestyle choices and if you have developed a retirement plan to protect the assets you have worked hard to acquire.

Develop an Action Plan

The concept of retirement has evolved greatly over the last fifty years. If we live longer, we do perhaps retire earlier. Fewer of us have pensions and we are increasingly responsible for providing our income in retirement, a period of our lives that may well last twenty to thirty years.

As you approach the end of your working career, you may have questions about how to support yourself in retirement. How do you know what you’ll need to live on? Which pension option should you select? When should you start collecting Social Security? How will you pay for health care?

Things/factors to keep in mind well before your retirement:

• Set your retirement goals
• Assess your current financial position
• Identifying retirement income sources
• Evaluate your retirement risks
• Understand health care issues
• Invest the retirement assets that you have saved during your working years
• Manage your retirement income
• Monitor your retirement assets

Here are some details for each step:

“Inflation is like an acorn. It starts small, but given enough time can turn into a mighty oak tree”.

We’ve all heard—and want—compound and reliable growth on our money and the sources we plan to invest into. Well, inflation is like ‘compound anti-growth,’ as it erodes the value of your money. A seemingly small inflation rate of 3% will erode the value of your savings by 50% over approximately 24 years.

It doesn’t seem like much each year and may seem like a very small amount to be spending more each year, but given enough time it has a huge impact.

Set your Retirement Goals

Start by listing thirty retirement goals on a sheet of paper. The suggested number is thirty because the first ten are easy to identify, the next ten is somewhat harder to recognize, and the last ten makes you discover your inner dreams and passion that you have kept well inside you for several decades. Arrange your goals into short, medium and long-term goals. Assign a certain amount to each goal/your wish-list things where appropriate.

Assess your Current Financial Position

To help you achieve your retirement goals, you need to know for sure of where you are today. A net worth statement of liquid and solid cash will identify all of the assets from which retirement income may be derived.

You must also assess your retirement budget needs. What do you spend to support your current lifestyle? You may need at least 80 to 90% of your pre-retirement income to meet your goals in retirement. Preparing a retirement cash flow statement (budget) is a very important and critical task. That must be undertaken with care and at your earliest.

Identify Retirement Income Sources

Retirement income may come from a variety of sources and the percentage of each adding into your bank statement may change over time. These sources may include a pension, savings, and even part-time work. The after-tax benefit of each source of income needs to be considered. The timing of when to use each source also needs to be pre-determined.

Evaluate Retirement Risks

You must consider the risks that affect your retirement income. Inflation will erode the purchasing power of your income over time. The various investment markets/funds may occasionally falter. You may well live to be 100 years old. All of these risks need to be taken into account. Some of the risks may be known and some might some of them you might be completely oblivious too, so prepare yourself to handle the risks that you might have to face.

Assess Risk Tolerance vs. Investment Goals

Whether it’s you or a professional investment manager who is in charge of the investment decisions that you make and guides you through it, a proper portfolio allocation that balances the concerns of risk aversion and returns objectives is the most important step in retirement planning.

How much risk are you willing to take to meet your objectives? Should some income be set aside in risk-free Treasury bonds for required expenditures? So that it is saved even though your other funds are affected by the downhill economy or certain stocks you have invested into.

You need to make sure that you are comfortable with the risks being taken in your investment portfolio and know what is necessary and what luxury is. This is something that should be seriously talked about not only with your financial advisor but also with your family members.

It’s kind of like parenting: The child that needs your love the most often deserves it the least. Portfolios are similar. The mutual fund you are unhappy with this year maybe next year’s best performer so don’t bail out on it.

“Markets will go through long cycles of up and down and, if you are investing money you won’t need to touch for 40 years, you can afford to see your portfolio value rise and fall with those cycles,” said by John R. Frye.

CFA, chief investment officer, Calif said “When the market declines, but don’t sell. Refuse to give in to panic. If shirts went on sale, 20% off, you’d want to buy, right? Why not stocks if they went on sale 20% off?”

Understand Health Care Issues

Retirement usually brings a change in health care insurance coverage. when you retire you need to look for a proper health plan for your needs, as biology with age brings you multiple health-related issues for which you may and should need to secure health insurance on your own. You can find your desire plan at Jubilee General Insurance under the category of “Parents Care” plan that also covers your pre-existing medical health issues.

Long term care insurance proposals often present a confusing array of choices. How do you determine if it is right for you? Not everyone needs it. A careful evaluation of your situation is required. You can consult Smartchoice.pk for smart decisions which help you save money as well!

Invest your Retirement Assets

With goals identified and defined, develop a written investment policy that will govern your investment approach. Make your investments road map. An asset allocation (the mix of stock, bonds and cash) should be clearly stated.

The policy should also provide diversity and security of investments, be appropriate for your goals and time frame, and be in line with your risk tolerance. Within the various retirement sources, understanding the attractiveness of the asset is important, also always take into account the tax consequences of asset purchases and sales.

Manage your Retirement Income

Working in the world, we are accustomed to getting income from our employer or our business. With the onset of retirement, however, the paycheck ceases. Now income has to come from several different sources as you cannot ensure a fixed percentage of money from a permanent source all the time. Properly managing these retirement income sources requires planning and monitoring.

Monitor your Retirement Assets

It is important to conduct periodic reviews of your financial situation by monitoring your savings and your cash inflow; you can assure yourself that you will have sufficient assets to fully fund your retirement. At worst, you may discover that you may need to engage in part-time work during retirement. You need to maintain a sustainable withdrawal rate strategy.

You’re monitoring your funds reviewing it time to time with your investment expert or your family members will give you the confidence to live the retirement lifestyle that you planned.

Conclusion:

The Bottom Line os that the burden of retirement planning is falling on individuals now more than ever. Few employees can count on an employer-provided defined-benefit pension, especially in the private sector.

These steps provide general guidelines on the procedures required to improve your chances of achieving financial freedom in your later years.

One of the most challenging aspects of creating a comprehensive retirement plan lies in striking a balance between realistic return expectations and a desired standard of living. The best solution is to focus on creating a flexible saving and investment plan which can be updated regularly to reflect changing market conditions and retirement objectives.

Khurram Zahid

The post How to Kick-Start Your Retirement Planning! appeared first on Smartchoice.pk.

Some people start saving long before the shaadi and yet some doesn’t get a chance to do so.Following are some of the hacks where you can spend the amount in your hand wisely:

1.Planning is the Key

First and foremost important thing about wedding is that you should know how much you have in your pocket to spend on your dream wedding and what are the things that will make your wedding a dreamy one. You should also know that things you are rooting for are actually falling under your budget.

In any case where the amount gets shorter and expenses are exceeding, what will be the sources you’ll look upto to generate that amount in that time? These are some of the question that can only be answered if you’ve everything planned on a planner or a notebook. Every NOTE worthy information should be on your fingertips so you know that how will you cater certain expenses.

2.Its ok to let go “TINY” Details

It’s ok to not consider every tiny details of your wedding. Most of the times, couples focuses on small details which guest are not even going to be notice. Yes! It is important to do every bit with perfection but what’s the point if you lose all the essences of the important things that are going to be noticeable by everyone? Try to prioritize your requirements first.

First invest in your important details and then go for the smaller ones if they are falling under the budget and BINGO!

3.Guest List

In every desi wedding of Pakistan, the mother of all discussions and the father of all the arguments is that “Who should we invite in Pinkie’s wedding” When you are on a budget, try to prioritize your close ones first.

Try to put all those people in the list one that are your close ones and you meet them and you know each other rather than inviting “Kamo aunty ki phupo kay betay ki bhatiji” or “Uncle Fred from Vietnam” keep your circle “Small and Smart”.

4.Give a Hit to the “Freelancer”

While planning for your wedding, the most important point to be noted is that how the bride is going to look in real? And how the photographs are going to be turned? This can only be done by a great MUA (makeup artist) and a KA-BOOM photographer. Sometimes people spent hefty amount on both of these things and doesn’t get a desired result.

There is a lot of fishes to catch inside the pool now. You can search for it on different Facebook groups. Get into reviews and prices. Look in to the portfolios and prices, compare it and then get your hands on the final call and Voila!. These freelancers will give you the best of its service and won’t charge you an arm for it. Isn’t it just AH-mazing?

5.Events

One streak that every desi wedding wants to make is at least 3 or 4 events of a single wedding. While planning for 1) Daras followed by a small dinner 2) Dholkis 3) Mehndi night 4) raat jaga and mehndi lagai 5) Shadi 6) Valima you’ll see how the cost for one event multiplies on each thing.

This is HUGE to afford in these times where the value of money is decreasing by the rate of every single breath you take. In this modern age the limelight over Shendi and Shalima has changed the entire dimension.

Some people prefer to have combine events.This will save a lot of money and efforts and most importantly people can get rid of extent shadis celebrated for more than a week. Bonus points: You can have all the fun under one roof without missing out anyone just because they couldn’t make it to one of the event that we usually plan.

6.Venue

Venue is something which you’re suppose to book 6 months prior to the wedding dates. In Karachi, a lot of tension has been seen by the people where the halls they booked got the order from the government to get removed.

Most importantly things get change in the matter of six months. The prices of these halls never come that easy. To save up on this, you can calculate the number of guest, get a private space and DIY or Pinterest it.

Don’t have much time? Ask your friends to look after all the matters. You can also hire a freelance for this task.

7.Shopping

Shopping part is for the girls where they have to make sufficient number of clothes which they can utilize after the shadi in dawats. Always do coordination with someone in your in-laws that what kind of dresses are they going to make? Heavy or Semi-formals and then manage your closet according to that because there is no reason to invest hefty amount on heavy dresses as you cannot utilize them all the time.

Also with the emerging market of pret, one can look up for sales that usually happen on every season end of any festival. Shop from there and you can avail some great outfits in cheaper prices than usual. One of the most important shopping hacks is when it comes to find a Karigar is to search all the markets, compare and then enter into it.

Don’t invest in a lot of makeup if you don’t know the right use of it, Always invest in the good eye pallets that too with nude shades because that goes with every dress and create different looks all the time. Invest in the products that you use frequently as the makeup also gets expired.

8.Food

Now the finale comes where guest are going to define your wedding according to the taste of food. It is said that a shadi is remembered with the reference of the taste of its food. But is it necessary to invest a lot of money to make the taste better?

No way!!! The only thing that is necessary is that you need to be smart while picking up the menu. Don’t make it flooded, focus on the quality. Always check for the guest you’ve invited, from which community the majority of them belongs and then select dishes according to that.

At last!!!

These are some of the tips and tricks that can make your dream wedding a well-executed one. Nothing is more important than the essence and the enjoyment you get from a wedding and most of all the memories you make. Make the memories where you see yourself making Smartchoice rather than being broke!!!

So what are you going to do with the money saved? Do tell us in comment section.Have a great wedding ahead

Khurram Zahid

The post How to Save Money on Your Dream Wedding appeared first on Smartchoice.pk.

Inefficient home appliances result in a shocking 25% electricity wastage.  For example, 20-years-old refrigerators use 50% more power than the recent technology that is efficient in utilizing electricity.  Additionally, over-stuffing the refrigerator, neglecting its maintenance, putting hot items in it and keeping the door open for a long time overburdens it. 

A common problem across Pakistan is increase in numbers of electricity bills. Smartchoice.pk has compiled some widely acknowledged and accepted yet not followed practices that can help you in significantly cutting back on your monthly electric bills. Just by being responsible and careful, you end up not only saving a great deal on your bills, but also extend the life of your valuable appliances and reduce maintenance costs.

1. Change to Light Emitting Diodes (LEDs) or Compact Fluorescent Lamps (CFls)

By replacing normal volt bulbs with LEDS or CFIs (generally known as energy savers), cash can be spared not only because of a decrease in power utilization yet additionally in light of the fact that these bulbs have more life expectancy. CFIs last up to multiple times longer than radiant bulbs while LEDS last around multiple times more. A little LED bulb would use around 12 watts and a little CFI around 25 watts if compared with the normal 100 watts bulb. In addition, this efficient technology is saving A LOT more money up to 75% per bulb.

2. Only Buy Energy Star qualified Appliances.

Energy star qualified appliances help decrease cost, spare vitality and are likewise environmental friendly, as they don’t produce any ozone harming substances. These machines are quick paced in terms of productivity guidelines that are not found in other standard appliances these days. Vitality productive machines comprise of higher quality segments bringing about less mechanical and specialized issues and a more drawn out life expectancy. Moreover they have prevalent mechanical plans that improve their presentation for example a star qualified washing machine may utilize less water when compared with a standard ashing machine available in the market. Get some information about vitality star or other vitality proficient appliances.

3. Turn off or Unplug Electrical Appliances when not being used

Appliances would still use electricity when they are turned off as they are on stand -by. One of the well observed practice to save money on your bills is to unplug the devices after turning them off. This won’t adjust the settings in any capacity as all appliances have a memory chip that naturally resets them.

4. Change to Inverter Air Conditioners

Globally, energy efficiency is a big component of energy conservation. It allows us to have the same quality of service (lighting, cooling, heating, entertainment, productivity, mobility etcetera) or comfort level for a smaller amount of energy as technology advances with time. However, in Pakistan, when people hear the phrase “energy conservation”, they think of turning off the lights when leaving the room, or not using their air conditioners. These measures are also very important to remember.

Inverter Air Conditioners cost more than the normal air-conditions available in the market yet they are very energy productive and expend about 40%-60% less power than ordinary ones. This is primarily since an inverter AC can change the speed of the blower and does not need to stop and begin again to keep up the set temperature. It is likewise ready to achieve the ideal temperature a lot faster than a typical AC would and is additionally not powerless to temperature changes.

Costs of inverter AC’s shift as per brand for example a privately amassed 1.5 ton Orient AC would cost about PKR 84,000 while a standard Orient of a similar size would be in the scope of PKR 45,000 to PKR 48,000.An imported brand like LG would cost roughly 120,000 for a 1.5 ton inverter AC while a standard LG of a similar size would be in the scope of PKR 78,000 to PKR 82,000.

5. Utilize Hybrid Gas radiators rather than Electric warmers

Electric radiators have an extremely high power utilization rate. Superior options are half assembled Japanese imported radiators. These warmers are amazingly energy effective in light of the fact that they can keep running on low gas weight (Approximately 10% of gas that ordinary radiators use) and their power utilization is additionally very low; around 15-25 watts which is proportional to an energy saver, in this manner lessening both power and gas bills. Best of all, not exclusively are they vitality effective they are low priced too beginning from as low as PKR 4,000.

6. Abstain from utilizing high power expending gadgets during peak hours

PEPCO (Pakistan Electric Power Company) has presented various tariffs for peak hours and off peak hours.  Power taxes are a lot higher during peak hours which are between 7:00 PM to 11:00 PM. Keep away from overwhelming power expending parts, for example, irons, water engines, climate control systems during these peak hours to fundamentally decrease your power bills.

7. Turn off pointless lights, fans and forced air systems

This is an easy decision. You can spare impressively on your electric bill by turning off pointless lights, fans, forced air systems and different devices.

One can take some voluntary but mandatory steps within one’s home and work places to save on energy expenses. Many of us make use of the remote control to switch off the TV, AC, fans, stereo etc. leaving the appliances running on standby. This, in fact, means the appliance is still using up electrical energy and wastes a significant amount of power.

By switching off at the main power button, or even the socket, one could save both- energy for the nation and money for oneself .Items left on standby consume roughly 85 per cent of the energy they would, if switched on completely.

After all, if we were to misuse electricity, it would mean sending out precious energy to waste and also shelling out our hard-earned money on electricity bills.

We ought to likewise abstain from organizing capacities after the dusk and build up a propensity for ahead of schedule to bed and right on time to rise. Market-timings must be balanced from 8 am to 8 pm. Lights of boards must be turned off after 8 pm and we should make each conceivable move to spare power.

Khurram Zahid

The post How to Save Money on Your Electricity Bills in this Summer Season appeared first on Smartchoice.pk.

That we save up some money and start to feel good about our finances.

Then, a financial emergency comes along and wipes it all away,

We are back to square one.

Leaves us all frustrated!

But how can we jump off this perpetual roller coaster without getting hurt?

We need to decide what is a Financial Emergency Kit, before getting to that there is another question that needs to be answered first and that is what can actually be the financial emergencies that we may find ourselves in need the financial emergency Kit:

Unexpected Job Loss:

Even if you’re amazing at your job, you may be laid off or otherwise unable to work. You’ll need to be prepared for that kind of income shortfall as well. You will also want to start reducing your expenses and attempting to increase your income in other ways.

Unexpected Medical/Dental Expenses:

If you or someone in your family suddenly becomes ill and your health insurance doesn’t cover all of the cost, you may need to pay some of those bills immediately.
Just don’t forget to get a health insurance, so under certain emergencies, you can negotiate these costs with your insurance and at least get some relaxation when the emergency arises and pay less than full price for a certain emergency.

Unexpected Travel:

If you have a family member that suddenly falls ill or pass away, you may have some unexpected travel, which may create a dent in the budget and may create a financial emergency causing strain on your mental peace.

Unexpected Car Expenses:

If your primary vehicle needs immediate repair so you can continue to work, so that is the cost that needs immediate attention.

Natural disasters:

Natural disasters are something that is unforeseen yet there are certain things that we prepare ourselves against by getting Insurance that covers many natural disasters, but you may discover certain specific expenses are not included or that your insurance plan doesn’t reference specific disasters, so it may be one of the things that check your financial emergency checkbox.

Major home repairs:

If your roof starts to leak, all of a sudden in a rainy season you’ll need to fix it immediately. Some home issues could render your house unlivable, and others will only increase in severity the longer you allow them to go unaddressed.

This kind of emergency is inevitable and needs to be handled on an urgent basis, so yeah some plan/alternative should be there for this unknown-unknown risk, that may arise at an unexpected time creating a chaos in your financial calendar.

What’s an Emergency Fund Anyway?

An emergency fund is simply defined as an account where you set aside funds/measures/policies to be used for unexpected expenses. It’s a “just in case” account.
You want to have something that mitigates risks, so you don’t need to rely on debt when a financial emergency inevitably arises.

A long-term financial emergency arises (i.e. job loss, the death of your parents, spouse) so that you can weather the storm much longer.

What are the Essentials of your Financial Emergency Kit?
Some of the things that are important to face/overcome your financial catastrophe can be as follows

Estate/Wills documents:

Estate planning is really the highest form of financial emergency planning because it addresses the ultimate personal financial emergencies, medical exhaustion or death.
Make sure your family has an easy access to this material if something happens to you or your loved one your emergency kit includes, estate documents would include copies of current wills (for you and your spouse or partner, children etc.), your advanced directives health/financial powers of attorney (which designate specific individuals to step in to manage your money or healthcare if you cannot do so) as well as other documents that provide additional guidance for operating businesses and managing and distributing other assets you have.
Make sure these documents are always current and that contact information is included for all the qualified experts you took assistance to prepare them estate or business attorneys, tax professionals and financial planners.

Insurance policies:

Having insurance policies such as (life, car, home) is an important and wise decision one can make regarding your assets, they are your coverage against a natural disaster or any uncertain situation, but it’s important to think a little more broadly. File as much policy and contact detail as you can for any health, disability, business, life and accident coverage you have and remember that it’s particularly important to note or file documentation on this coverage at work, too. Sometimes we sign up rather blindly for work-based benefits only to realize how important they may be in a financial emergency.

Set some cash aside:

Plan for at least three months’ worth of expenses, the size of your emergency fund will vary based on your personal risk tolerance, the types of emergencies you’re most likely to encounter, and your personal circumstances (including your income).

However, it is recommended that you set aside at least three months’ worth of expenses and preferably six months or more. You need to know how much you spend in a typical month and plan to cover at least three months to be safe.
Only use the fund for real emergencies. Once you have established such a fund, don’t tap into it for anything else. This isn’t a reserve of handy extra money you can use for a vacation nor is it a surplus for splurging on Ramadan and festivals gift shopping. The fund is only for emergencies and shouldn’t be touched until you’re forced to cover an expense that your regular income can’t absorb.

Have a backup plan:

If your emergency fund isn’t enough to cover an unexpected expense/ condition you need to have backup plans do you have in place.

It may seem redundant to have an emergency fund to cover your emergency fund, but you’ll be glad that backup parachute is there if you should need it, Credit cards, it helps in keeping the insulating layer of funds if needed in emergency, make your retirement plans so you don’t have to work when you can have some peaceful time, establish college savings for your children, to meet the needs when time be and obviously, you shouldn’t use them unless you have to.

Be-Proactive:

If you can, try to prevent emergencies before they occur, Invest in solid insurance policies that protect you from the bulk of unplanned expenses you’d otherwise face. Take care of your home with upgrades and as-needed repairs, get regular medical checkups and keep your vehicle in good running condition.

What about the Other Financial Emergencies? What about all of those other expenses that depleted your savings in the past?

There are things like gifts, vacations, insurance premiums, school field trips, sports uniforms, etc., right?
Those types of expenses are not emergencies; they’re not even unexpected, they just occur at irregular intervals. If you sit down and think through these types of expenses, you can plan more appropriately for them.
For example, if you know that you’re going to spend PKR 50, 000 during the holidays, you need to start saving several months in advance. Even some of the expenses you think are unexpected (i.e. school field trips), are actually not, you know they’re going to occur, but maybe just not when. Just set some money aside for these types of expenses on a monthly basis and dip into it when needed.

Plan Ahead for these Irregular Expenses

One of the best ways to plan ahead for irregular expenses is to create an annual budget,by viewing the next 12 months of income and expenses, you can see if an irregular expense will fit into the month it normally occurs. If it doesn’t, you’ll need to start setting aside money for the expense several months in advance.

For example, if your child’s college fee is PKR 60, 000 and it’s due every six months, you might want to save PKR 20, 000 per month for the three months before the fee is due.
If you can’t budget PKR 20, 000 per month, you need to start saving PKR 10, 000 per month for six months before the fee is due.
By planning ahead, you’ll have the money set aside and you can pay the bill without having to dip into your emergency fund or worse, having to take on debt.

Here’s what you to do should do:

Grab a blank piece of paper and think about all of the irregular expenses you have throughout the year. You may need to look at your statements to help jog your memory.
• Write these expenses down and include the dates you need to pay them and how much they normally cost.
• Create an annual budget and start plugging in these irregular expenses.
• Adjust the expenses in your annual budget until you’re able to not go over budget in any given month.
• Start saving for these expenses in separate savings accounts
• Pull the money when the bill is due and start saving for the next time!

Building a financial emergency kit requires some thinking, but it can help you avoid major losses and speed up decision making in a crisis. Work with people you trust to make it accessible and useful to your family and trusted individuals, as well the expenditures which are irregular sort it out beforehand by setting aside some funds and not mixing or overlapping it your emergency funds as emergency funds are just for emergencies so, If you find yourself facing a major life crisis, you would be prepared to handle the financial fallout.

Khurram Zahid

The post 5 Essentials for your Financial Emergency Kit appeared first on Smartchoice.pk.

Bali, Indonesia

A Country in the South East of Asia, this Indonesian island provides the perfect mix of opportunities for cultural exploration and relaxation. Travelers should spend time visiting and learning about the island’s many ancient temples before heading to one of its beautiful beaches.
As far as accommodations go, Bali features dozens of villas, hotels, and resorts (at varying price points). To up the luxury factor, stay at a five-star resort like the Four Seasons or St. Regis and indulge in a relaxing and revitalizing spa treatments.

Peru

A beautiful Tropical Country in the South American Continent, The Peruvian territory was home to several ancient cultures, ranging from the Norte Chico civilization in the 32nd century BC, This Incan citadel in Peru is a once-in-a-lifetime trip. Part of the fun for many travelers is conquering the four-day hike along the Inca Trail before being rewarded with the view of this sprawling UNESCO World Heritage site. If you’re not one for hiking, you can still see this impressive historical site by hopping on a train from Cusco to the mountain base.

Hong Kong

Hong Kong is strategically located at the mouth of the Pearl River Delta in Southern China. Hong Kong is a destination that puts travelers’ senses into overdrive. The glittering skyline, the dynamic food scene, the historical sites, and the family-friendly attractions are just a few reasons visitors can’t get enough of this bustling metropolis.
Start your trip with a tour of the waterfront on the Star Ferry, and pencil in visits to Hong Kong Disneyland or Ocean Park amusement park if you’re traveling with kids. Meanwhile, foodies will delight in the culinary options: Dim sum, stir-fry, and pineapple buns should be a few things you surely sample.

Greece

The country is one of the most exotic locations of Europe, it is washed to the east by the Aegean Sea, to the west by the Ionian and to the south by the Mediterranean, Two-thirds of the territory is covered with mountains. The highest mountain peak is Mount Olympus, at an altitude of 2917m.
While visiting Greece you can enjoy a sunset in Santorini and you’ll know why this Greek destination is one of the world’s best places to visit. In addition to offering an exquisite evening atmosphere, Santorini boasts colorful black and red sand beaches, ancient ruins and several wineries. But the picture-perfect scenery is what draws most travelers, the whitewashed buildings that line the brilliantly blue caldera. What’s more, the luxury hotels here are some of the world’s best.

Dubai, United Arab Emirates

Dubai lies on the southeast coast of the Persian Gulf; it is the capital of the Emirate of Dubai, one of the seven emirates that make up the country. Dubai is home to the world’s tallest building, the Burj Khalifa, one of the world’s largest shopping centers, the Dubai Mall, and one of the only indoor ski resorts in the world, Ski Dubai.
In addition to being a city of superlatives, Dubai embraces its Middle Eastern traditions. The best way to immerse in the beauty and enticing places of Dubai is to tour the Jumeirah Mosque and stroll through the gold and spice souks.

The Gambia

It may be the smallest country in Africa, but there are plenty of postcard-worthy beaches to be found in The Gambia. Daytime temperatures hover in the high-twenties, often tipping 30°C. Plus, the winters are dry so chances of rains and need to carry an umbrella may not be there.
You can soak up the sun and sea at the coastal resorts of Bakau, Fajara, and Kotu where you’ll be spoiled for choice with cheap and cheerful hotels after you’ve had your share of beaches, head inland to explore the namesake river at the heart of the country. Its verdant basin brims with wildlife: where you can spot hippos, manatees, monkeys and hundreds of bird species.

Rome

Delicious food (pizza, pasta, gelato, you name it), rich coffee are a few reasons why travelers love Rome. However, food and drink aren’t the only things this city has to offer. You’ll find major highlights of art and history, from the Galleria Borghese to the Colosseum and the Roman Forum all these sites are majestic and beautiful, and they provide you a vivid look into the rich history of Rome.
Rome is the capital of Italy, has been one of the few cities in the world to see the birth of democracy, beautiful architecture and also the prestige to be the birthplace of many amazing artists still remembered today.
The Pizza Novana square contains 3 fountains, and the largest and most memorable is Bernini’s Fountain of the Four Rivers with each of the 4 statues representing a river from different continents.

Palawan, Philippines

If your winter daydreams likely involve palm-fringed beaches with sugar-soft sand, lapped by an ocean the color of a swimming pool, if that sounds like heaven?
Then you’ll love Palawan, a gorgeous cluster of islands where those kinds of views are ten-a-penny.
The Philippines isn’t as popular as neighboring Indonesia yet, so you’ll enjoy a far quieter retreat from the chilly British winter. The food is divine (think fresh tuna and coconut curries) and it’s affordable. Plus with barely any light pollution, the stargazing is magnificent.

Some important things to remember before embarking on your Journey, to enjoy your vacations to the fullest, create memories and have a once in a lifetime experience are:

Alert your credit card company

Ensure that your credit card works while you’re traveling, your credit card company needs to know your travel plans, if you plan in advance and don’t have a credit card apply for one as plastic money is a big help in an unknown territory, as carrying so much cash is not an easy task, so if you need to spend and you don’t have cash-in-hand having credit card at disposal helps in numerous situations.

Confirm all reservations

Double-check all your reservations: your flight, hotel, car rental, restaurants, attractions, and any other services or experiences you’ve planned. So there are no surprises at a check-in counter.
If you have access to a printer, it’s not a bad idea to print out confirmations. If you don’t, write down confirmation numbers (and customer service phone numbers) keep the printed paper in your wallet or with all your travel documents.

Make advance payments on bills that have due dates during your trip

Before your planned travel dates make sure that all dues are clear and we don’t get charged with late fees? Make sure all credit cards, housing expenses (e.g., rent, utilities), and other monthly bills will be paid on time.

Check the weather

This may seem like an obvious one, but “many vacationers forget to do it,” Check the forecast for your destination and your hometown when you’ll be returning, and pack appropriately according to weather conditions.

Eat or give away any perishable food

The last thing you want is to return home to a stinky fridge and a smelly home, take out the garbage and clean the sink to be sure there’s no food in the drain that could rot or attract bugs while you’re away.

Travel Documents

Getting all your documents at one place and getting their copies done is very important, your travel document s shall be your passport, visas, Tickets, itinerary and travel insurance (a requirement from many countries these days, yet an important cover against any unforeseen situations you may encounter while traveling), always leave a copy of itinerary with your friends and family so they are aware of your travel plans and also know where to reach you.

Khurram Zahid

The post 8 most Inviting International winter-sun destinations to visit this winters appeared first on Smartchoice.pk.

Here are some tips that you can carry in your daily life to become a smart spender and to use the given services smartly and economically.

Use discount coupons wisely:  

Coupons can be a great idea to save money but it is important to make sure that you are not using coupons to buy unnecessary items just because you can save a few rupees. For instance, if you are using a coupon to buy a bulk pack of cosmetics that you have never tried, you may get stuck with a product that sooner or later would be wasted if you didn’t like it. So try to use coupons for the items that you are sure about or you use them on regular basis. With intelligent use of coupons, you can surely save yourself a handsome amount of money. You can also take help of social media pages of the companies that are offering discount packages or can help you use your coupons to shop grocery for you. It will help you to stay up to date with the latest deals in town and will help you take maximum advantage of it.

Cell phone plan and use:

Cell phone a basic necessity of every person on this date and with a cell phone you can surely stay connected with your peers. However, with its extreme importance, it is also something that takes much of your monthly earnings. To aid the users the cell phone companies keep offering short and long-run plans for the users. You need to check if your cell phone package matches your needs or not. If you are paying for an unlimited data and not using it, it’s the time to shift your package. Also, check for your sms, data and call usage and buy a package accordingly.

Washing your car on your own:

There is no big deal in doing your own chores. Dealing with small activities at home like cleaning the garden or washing your car, will not only save you some money but also give you better health and some fun time with family if you get your kids involved with you for a car wash.

All that you need would be a bucket, soap and some old rags and you are all set for the amazing family adventure right in your garage. Although going to a car washer can be easier and quicker but it will also cost you a lot of money. Save that money for any better use.

Wearing clothes wisely:

Wear your clothes for at least 2 to 3 times before washing them or sending them to dry cleaner. We do understand that wearing Lawn suits twice, in the hot weather of Pakistan, is not a good idea but what about those jeans and jackets? What about your dress pants and suits? Washing them every now and they will tear them up quickly. The color will fade fast and it will surely lose the grace quickly.  

There is nothing bad in hanging these clothes again for a second use. It will save your dress from wear and tear, time of ironing them again and again, and the costs of washing or dry cleaning them every week or so. It will also help you keep your wardrobe look nice for the longer period of time and allow your favorite dress to make you look good for longer.

Pay bills and credit card payment on time:

This is a key to staying secure financially. Never delay your bills and credit card payments as just one small delay can end up making you pay hundreds of rupee in terms of late fee and other surcharges etc. Paying your bills on time not only make you punctual and teach you finance management but also impact greatly on your savings.

With the timely payment of bills and credit card can make you save the extra money in your safe deposit. On the other hand, late payments for the credit card will have a negative impact on your portfolio which will end up restrictions on many facilities that you could have availed if you had maintained a good portfolio.

Smart shopping with credit cards:

Having a credit card to be used in emergency and paying the credit card bill is not the only thing that you can deal with. A credit card brings you an unlimited amount of opportunities in life. Before you opt to buy a warranties item like any Mobile phone or LED TV, check your credit card. It is possible that the credit card you own offers an extension of the manufacturer’s warranty on items that you buy using the card. Although there can be few cards that can offer you such services, it’s worth doing research before making any such purchase.

Be careful about speeding on the road:

Yes! You need to slow down. It will save your life and a lot of money that you may need to give to doctors in case of any unpleasant incident, or the police may get you and charge you with a considerable amount of fine.

If you need to be somewhere at a specific time, let say a meeting or an interview, better is to set up the alarm and make sure that you are giving yourself some clear time gaps to cope with an uncertain situation. This small change in your attitude towards settling up things will not only save you some money but will also leave you with some better-settled rules for life.

No more smoking!

No, we are surely not up to give you some health advice but yes, quitting smoking will give you some financial benefits as well. We completely agree if you are not scared of cancer or you have some amazing health insurance policy to help you in any such case, but what about the impact of cigarettes on your pocket. Each pack of cigarettes costs an average of about PKR 100, which means that if you are smoking 3 packets in a week it makes 12 packets per month that cost PKR 1,200 and almost PKR 15, 000 per year. This amount is just for sustaining a bad habit that will surely lead you to bad situations as you get older. Remember in such cases, the physical cost is much more than the financial costs.

Become a handyman:

No need to become a jack of all trades but there are many small wears and tear that you can repair at your home or in the office with lesser knowledge about the issue. With the changing technologies, YouTube is also a great option to educate yourself to deal with these minor repairing tasks at your home. You can also find many books in the market about different How-To tips. Change your approach of calling experts every single time you need some help, Try to be your own boss.

Sticking to the budget:

There are hundreds of budget management applications that you can have right on your smartphone. Making yourself a budget is always the first step to save money.  However sticking to the decided budget is a tough task for many people, especially when they have an excessive money in hand. No matter how much excitement and fund you can have with that amount in hand, sticking to your budget is very important for you to stay independent and secure financially.

Here important is to write down your budget. No matter how much concerned and keen you are to stick to your budget, important is to take notes of everything that you have spent on and what was your budget demand.

Staying organized and advance planning are two major things to ensure and economical lifestyle. Planning in advance will not only let you find and avail amazing discount offers and other opportunities but will also help you keep a check and align other activities in your life, leading you to financial peace and stability.

Khurram Zahid

The post How to Live a Penny Pincher Life and Save Huge Money? appeared first on Smartchoice.pk.

Remember it is never too early to teach kids about finance management. It is a necessary part of the life.

1. Their Wants & Needs with Candies & Choco:

Which of the kids is not fond of eating popcorns, M&M or juices? The technology has tailored the minds of kids well and they are aware of what they need in their life since early ages. Use these desires to develop a sense of responsibility towards wishing. Explain the kids about the difference between the needs and the desires. Teach them that need is something necessary for life or survival while want is something that is pleasing to have but is not a must. Wants are not necessary for survival and we must learn to compromise on our desires about minors things. Developing their understanding for the two and enabling them to control their will can help you make them a better human with better control on them.

2. The Weekend Plans:

What are the costs and benefits of a weekend plan? Being a grown up individual you might have a clear idea of the matter, but do your kids know? Let them make such decisions. Let them decide if they should go to the park on the weekend or play with their toys and spend some time with the family. Explain them the costs and benefits of each alternative and present them with the examples of their decision and outcomes.

3. Comparison Shopping & Budgeting:

It’s common that your kids will accompany you to the grocery store. Do not waste this time in scolding them for being too much naughty. Let them explore and share the concept of budgeting and comparison shopping.

You can take your kids to the grocery store and ask them to pick some minor grocery items in a given amount of money. Let them decide which product they must select from the shelve and let them complete the transaction on their own. Later on, you can discuss the shopping decision of the kids and guide them if they have done it right or they can still find some better option that is economical.

At the same time important is to teach kids, the concept of comparison shopping. You can assign the kids with a specific amount of money and ask them to shop in a way to make get most items in the limited amount of money.

4. Focus on Priorities:

Money is just a tool and it can’t and should not be taken as a cause of happiness. It is important for us to know the fact and to teach it to our kids as well. It is important to teach kids that money is meant to meet the end of life and is not the aim of life. Also, they must learn that money cannot earn you love or any other intangible leisures of life, love, family and values.  At the same time money does not guarantee happiness in life.

Assist them to understand the value of sharing, caring and recycling, for themselves and for their surrounding (both people and ecosystem). It will help them develop and maintain a healthy relationship with the money. if not, unfortunately, money will be controlling them for rest of their lives.

5. Importance of Personal Information:

We are living in the technological world. The securities are extreme and so do the threats of security breaches. Although as an adult you may have a clear idea of the importance of privacy of your personal information, important is to teach this to your kids at an early age. Guide them how to protect themselves and how and in what conditions they must share their personal information with any person, known or unknown, other than parents.

kids are quick learners and learn very easily about everything, make sure that being a parent you are doing your best to teach the kids with the importance of their security and the value of everything they have in their life. They must also learn to keep a balance of things in their life and must look after their priorities. Taught well today, the skills will help kids tomorrow, to become a better person for the society.

Khurram Zahid

The post 5 Financial Skills You Must Teach Your Kids for a Prosperous Life appeared first on Smartchoice.pk.

You have to start a new search for jobs and re-evaluate your spendings. But don’t worry, this is not the end of the world. You will get through this bigger and better.

Due to the hike in prices of nearly everything, be it food or clothes or other basic everyday needs, managing your budget has become a great challenge. In such inflation, one can not even think of saving extra bucks for the future.

Read Also: 25 Ways to Save Money in Pakistan if You are a Salaried Person

Most of the families in Pakistan are middle class, thus spending what they earn as there is a very small margin, and even if you do save some money, it either gets used up in case of emergencies or even if not, it is not something that you can solely rely on for your sustenance.

So as a wise man once said, you should always be prepared for the worst in order to get the best. This article not only focusses on the ways that you can manage your finances when you are unemployed, but these points, if integrated in your daily life while being employed can make you manage your expenses very well.

Now with increasing population and a great competition in the education field, we have many fresh graduates coming out every year with better qualifications and a more talent.

Thus, companies tend to prefer these multi-talented individuals over the old ones. Hence the chances of unemployment have also increased because of this competition.

Only a few people are left with stable, high caliber jobs. Rest have either been already fired or stand at a high risk of unemployment.

Become save-a-holic!

When you are unemployed, there is no fixed income. You may work as a freelance for some time but that is also equal to no pay at all, so the only thing left now for you is saving! Saving up after unemployment is essential, as you don’t know when and where your next job will be. Till then you have to survive with the money you have only.

You won’t get more cash miraculously from somewhere, neither will the prices of everything around you go down. Rather, you yourself will have to be realistic and use your money efficiently so that your basic needs are covered for your survival. And this needs to be done from day one only as every penny counts

Saving has a lot of benefits other than the obvious ones and we will discuss those here. For you to start saving, first you need to chalk out your spending and plan them out strategically, this makes you more organized and calculated.

Moreover, it makes you realize the true worth of money. You weigh the importance of your spendings, you realize what is important and what is not.

How to save money while being unemployed

Now being unemployed, you are already on a very low budget and saving up in this scenario might seem unreasonable and stupid. But this saving up is not for your extra needs but for your basic everyday food, clothing and house.

You need to realize that these things are an essential to your daily life, if you don’t have them, you will be at the stake of other’s mercy and believe me, no one wants that! So let’s discuss a few ways that will help you save small amounts till you get employed again.

1. Cook most food at home

This seems small but makes a great difference by the end of the month. Eating outside might seem convenient and sometimes cheap to you, but in reality you are actually paying a lot more and doing harm to your body. This you will realize when you cook food at home.

The added cost of groceries is way less than food from outside or the frozen food that you get. Also, eating such food does harm to your health which you might have to pay in the form of medical bills in the future. So cook at home, and stay healthy, alongside saving a few thousands.

2. Use public transport

Try to use the public transport as much as you can. For trips to the market, or searching for a job at different places etc. we don’t realize but the petrol cost every day takes up a major chunk of our money and so does the car maintenance. We are not telling you to sell your car yet, but save up on the cost by not using it for the time being.

3. Plan your spendings

Keep fixed amounts of cash for groceries, traveling, and rent. Keep the rest aside and don’t use it until it’s very important.

Read also: How Travel Insurance Can Help You Save Money!

4. Use your bank account

Now keeping that saved money in the cupboard might tempt you to spend it on something that for the time being seems important to you. So use your bank account and deposit your cash there. It will make you difficult to take that cash out and spend, thus making your saving more effective.

5. Watch your bills

By this we are referring to electricity, water and gas bills. Watch the usage of these resources and try to cut them down. Some tips can be to not use the air conditioner, reducing the water usage by taking a shower with a fixed amount of water rather than free flowing, switch of the lights not in use etc. this will decrease the usage resulting in less payable amount in bills.

Conclusion

So these were a few points to make your struggle a little easy. Follow them and feel the difference. And remember, this unemployment is temporary, so don’t loose hope and give it your best shot.

Khurram Zahid

The post How to Manage your Expenses when you get Unemployed in Pakistan appeared first on Smartchoice.pk.

Reward Points vs. Reward Cards:
Almost all credit card providers have their reward points system on which you accumulate reward points by simply making purchases via your credit card. These points can be later used to get discounts if redeemed at various places which have partnered with the bank. However be aware that reward cards usually carry a higher percentage of interest. Hence if you have opted for a reward card for commodities such as fuel or grocery, make sure you pay your complete dues on time rather than just the bare minimum otherwise you will end up losing more money in terms of paying interest rather than saving. Also only get a reward card if you really need one because the discounts and cash backs are reserved to a specific service only.

Select The Right Card:
This is very essential. There are some incentives that you just can’t get on regular cards. For e.g. if you are a frequent flyer, then you should get a travel card which gives you air miles on spending on your air tickets and hotel bookings. The accumulated air miles can be redeemed upon your next trip. Not just that, you also get free access to VIP lounges that you might be paying for otherwise. If you travel in your personal car a lot, then a fuel card is a must have and if you have a big family then a grocery card could help you save your money by purchasing through the relevant card.

Keep An Eye On Offers:
It surely annoys getting spam emails/messages and even phone calls at times from your credit card provider. While running after such offers can land you into deep waters(read: hefty debt), however don’t ignore all of them too. Credit card providers usually have some good offers in the holiday/festive season apart from the usual offers that you get with your credit card.

Make Timely Payments:
A credit card will only help you save all those rupees only if you keep paying off your due balance on time. To make sure that you aren’t charged interests or late payment fines,make sure that you always pay more than the minimum if not all of your amount within the grace period. This will also improve your credit rating and you would be able to get a higher tier card easily or apply for another card from a different provider. In case you don’t pay your credit card bills on time, things can get pretty ugly.

Don’t Withdraw Cash:
Emergencies can happen anytime where you might be in need of cash urgently. While you can withdraw cash from an ATM using your credit card, it’s not a good idea at all because the interest starts accumulating on the withdrawal right from that very moment because there is no grace period. Also the interest rates are sky-high and you could end up paying huge amounts for the sake of convenience. A better idea is to always keep some cash handy.

We hope that following these smart tips, you will also be using your card to save on your monthly expenses and regulate your finances to your benefit!

Khurram Zahid

The post 5 Tips To Save Money Using Your Credit Card! appeared first on Smartchoice.pk.