Penny Sense

Since Christmas is just around the corner, here’s a fun Christmas Carol with a financial twist dedicated to everyone out there. Sing this to the tune of Santa Claus is coming to town.

Enjoy!

You’d better watch out
You’d better not cry
You’d better keep cash
I’m telling you why:
Recession is coming to town.

It’s hitting you once,
It’s hitting you twice
It doesn’t care if you’ve been careful and wise
Recession is coming to town

It’s worthless if you’ve got shares
It’s worthless if you’ve got bonds
It’s safe when you’ve got cash in hand
So keep cash for goodness sake, HEY

You’d better watch out
You’d better not cry
You’d better keep cash
I’m telling you why:
Recession is coming to town!

Finance products are confusing
Finance products are so vague
The banks make you bear the cost of risk
So keep out for goodness sake, OH

You’d better watch out
You’d better not cry
You’d better keep cash
I’m telling you why:
Recession is coming to town.

It’s December already which means this is the last month that you have to do whatever tax savings you can do for the next tax assessment happening in the first quarter of next year. There are several ways for you to save on paying income tax by taking advantage of some tax exempted expenditures, and I’m sure you’ve read them year in and year out.

Some of these tax exempted expenses include buying books up to RM1,000 for the year, making donations, buying a computer (note that the tax exemption on this is only applicable once in 3 years), buying sports equipment, paying for your family medical expenses and equipment (parents, spouse and children included, however this is specifically for serious medical conditions only), purchasing insurance policies, buying education policies for your children, even taking up an MBA for yourself, and a few others.

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This post is not going to reveal some mind-boggling answer to the answer above. In fact, no one but you yourself can answer that question. I found a good story that reminds us about why we’re working so hard to earn the money we dream of having. I hope you enjoy the story and take home a little something from it.

A boat docked in a tiny Mexican village. An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them.

“Not very long,” answered the Mexican. 

“But then, why didn’t you stay out longer and catch more?” asked the American. The Mexican explained that his small catch was sufficient to meet his needs and those of his family.

The American asked, “But what do you do with the rest of your time?”

“I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, play the guitar, and sing a few songs… I have a full life.”

The American interrupted, “I have an MBA from Harvard, and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat.”

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Citigroup has become the latest financial institution who has come under to receive a huge bailout from the US government. It has just been confirmed that the US government has agreed to a bailout of the bank at a sum of about $300 billion. According to analysts, the terms of the bailout have been rather easy on Citigroup and it is still unsure if this bailout is a means to end Citigroup’s financial problems. It may just tide the group over, as it may still struggle downhill.

What does this mean for thelocal scene here? Is the local Citibank franchise affected? It remains to be seen. The world is operating in a rapidly changing environment. It changes so fast that it makes no sense anymore.

Anyway, to read more about the Citigroup bailout, you can refer to this piece of news carried by CNN Money.

One way I’ve learned to save on high interest rates charged by credit card companies is to perform a balance transfer of all my amount owing to a card that charges significantly lower interests. This is not difficult to find because there are many Balance Transfer Cards available in the market today and you can easily compare their rates and duration of payback period that will suit your financial needs.

Bear in mind that the longer you choose to pay off your debts, the higher the interest you will incur. When choosing a balance transfer program, you need to be smart and do some calculations on all the options you see. It may not be apparent to you which is the best and cheapest option until you do a calculation on the total interest payable.

The best kinds of balance transfer programs are the ones that charge you zero percent interest. Just look out for these great deals, but also check on the terms and conditions. The zero percent interest may only be applicable for several months of the entire duration. Also, a word of caution, if you do not pay your credit card bill on time, you will be charged the market interest rate on your balances and not the lower interest rate you enjoy from your balance transfer program.

So save some money the wise way. You never know how long this global financial crisis and recession will last. We all need to ride out the rough waves for now.