The financial expert recommends that women’s lawyers keep money in foreign currency
According to the financial expert, the best option for the extra money is to exchange them to pounds sterling or Swiss francs or to keep them in state-owned banks. But acquiring an apartment for commercial purposes does not justify itself anymore.
From big to small
Increasingly, the Ukrainian citizens are worried about how to plan their own budget to buy everything they need and still lay money by for a rainy day. Lawyers do not remain indifferent to this problem too. So it is not surprising that the Women’s Club of the Ukrainian Bar Association invited an expert on finance to discuss the finer points of accumulation and investment.
The financier Anna Parfyonova started from the characteristics of the state budget of Ukraine. Like any other estimate, it is a revenue and expenditure plan for a specified period of time. The items of expenditure inherent only in this category distinguish the state budget. Thus, the main source of income for the past year (about 40%) was the income from value added tax. The second largest revenue item is the excise tax (almost 20%). The personal income tax, income tax and other income accounted for 8-9%.
The largest item of budget expenditures, at least in 2018, will be transfers to local budgets, which have become possible in a result of an active decentralization course. The second largest item of expenditures is social payments. The next one – expenditures for security. Last year it reached almost 17% of the share of all expenditures and will increase this year.
The company’s budget is, of course, much more modest, but has no less complex structure. It is believed that only the financial department is responsible for its formation and control. But this belief is false. In fact, the company`s budget is a common cause for all its participants. Depending on the structure of the business, the structure of its budget varies. However, there are also common characteristics. Yes, the process of budgeting should have its beginning.
First and foremost, the strategic goals are determined. They are established by the management and owners of the company, and the marketing department translate it into specific figures.
Depending on the kind of the company’s activity and the conditions of the market, the goals are transformed into a concrete plan, which may include introduction of innovations, increase of production, discounts on certain products, advertising, transportation costs, employee search, diverse training, etc. The establishment a company`s budget is a team effort, where each department makes its input.
Being your own financier
Unlike the business budget, everyone is responsible for his own estimates. The structure of the personal budget also consists of two parts – income and expenditure. Typically, personal income sources are limited. For example, these are wages, bonuses, interest on deposits, dividend income, rent from real estate, gifts, etc.
At the same time, there are much more the expenditure positions. Earned money goes for food, medicine, transportation, utilities, loan payments, various hobbies, help for other family members, rest and many more.
Like the state budget, the personal budget can expect one of two scenarios:
- Expenditure exceeds incomes, which leads to a deficit;
- Incomes exceed expenditures, that is, there is a surplus.
If there is not enough income, the finance expert advised to think over one of the rules proclaimed by the well-known man of wealth John Rockefeller: “Do not worry about big expenses, worry about low incomes” and look for additional sources of earnings.
The specialist is convinced, that careful planning will help to save and multiply a wealthy. In general terms, it involves the drawing of two graphs of expected revenues and expenditures. After that, you need to figure out both positions and check if the desires and opportunities match. If John Rockefeller is not the authority for the planner, you may have to give up something.
Separately, insists the specialist, it is worth highlighting the need to accumulate money for some big purchase. Even if the planner is not going to do it right now, later it will make it easier to collect the required amount.
In order to simplify planning and calculations, a specialist advised to use the capabilities of Microsoft Excel. A standard file will fit for someone who has initial knowledge of the program. But for advanced users, the latest program models contain a template called “personal budget.” You can use it constantly by editing records.
Meanwhile, Anna Parfyonova advises to plan a budget once a month.
Field of Miracles
The one who has a significant surplus and does not want to hide the money under the mattress, the expert recommended the following.
You can put a surplus on a bank deposit. It is worthwhile to choose state-owned or well-known foreign financial institutions. The point is that, in the case of force majeure, the payments to the state bank do not take place through the Deposit Guarantee Fund, but directly from the state budget. In addition, they are not limited to 200 thousand, but are fully paid off. If something happens to a foreign bank, which in Ukraine is mainly a subsidiary or affiliate of an institution headquartered abroad, it is trying to solve the problem and repay the debt in full. The downside is that it’s difficult to earn money from such a deposit. A small percentage will be emitted with the inflation, so it will only be possible to save money from the last-named.
A good option for an investment is buying a currency. At the same time, the expert advises not to dwell on well-known dollars and euros, but pay attention to British pounds sterling and Swiss francs. Their currency rates are more stable and growing, albeit gradually, but steadily.
The expert advised to think carefully about buying an apartment for the purpose of renting it. If such an investment previously justified itself, then the market has changed and it will be harder to pay back the property. If you do not want to give up on such an idea, it’s better to choose a compact apartment in a cozy area. Then the tenant will not have to overpay for extra meters.
Investments in securities are more risky. It is better to do it if a person has the relevant knowledge or has a trusted person to who he could fully rely on. The advantage of such an investment is the steady income from on shares. A disadvantage is the loss of money in the event of a depreciation of securities.
You can experiment with cryptocurrency. And it is necessary to be careful as well.
Therefore, according to the financial analyst, accumulation of funds requires pedantry, caution, but also some courage. If you are able to combine these qualities, the financial management will bring you a real satisfaction.