February 22, 2012

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Determining the Value of Various Currencies in FX

If you’re new to the world of foreign exchange trading, it may seem like forex traders are speaking another language. JPY? USD? GBP? What

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do all those letters mean, anyway? And what’s with all the numbers?

The forex language may seem pretty intimidating, but it’s actually not that hard to master once you get the hang of it. Let’s take a look at the terminology used to determine various currency values.

What the Letters Mean

The three letters simply refer to one country’s currency. USD means “United States dollar,” and it’s almost always used as the base currency for trading pairs. Base currency simply means it’s the “base” by which other currencies are measured. The second set of letters is your “quote currency.” So if you’re looking at a currency pairing for USD/JPY, you’re looking how many units of Japanese yen you’ll receive for one United States dollar. USD is your base currency, JPY is your quote currency: the currency measured in terms of one base currency unit.

Cross-Rate Currencies

The dollar is almost always used as the base currency. However, what happens when you want to compare yen to euros? Such pairings are called “crosses” because they don’t use the American dollar at all.

Still Confused?

Some forex traders (UFX Markets, for example) will let you try your hand at forex trading in a “practice mode.” This lets you practice trading without spending any money — it’s an ideal way to learn how the market works.

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Personal Finance: Tips for Managing Debt

Credit cards 

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Whether you’ve taken out huge student loans, gotten carried away with credit card usage or experienced a health issue that has set you back financially, determining how to manage debt will be important for your financial future. Here are a few tips for gaining control over your personal finances.

1. Examine your spending habits. Debt accumulation may be due to inability to resist a shopping impulse or unwillingness to say no when invited to social gatherings in restaurants and bars. Determine if aspects of your spending can be reduced.

2. Reduce debt by decreasing excessive spending. A daily visit to a coffee shop can be replaced by making coffee at home. Buying food and household supplies in bulk can help save money. Cooking at home is cheaper than dining in expensive restaurants. Make a list of ways to cut back.

3. Pay more than the minimum payment. When you make only a minimum credit card payment, you are primarily paying interest. Increase monthly payments to pay off the principal as much as possible.

4. Negotiate with credit card companies. Speak to debtors about lowering your interest rate. The less money you pay in interest, the more will be allocated to paying off your principal. Debtors will sometimes make allowances for this, particularly if you have been making payments on time and have been a longtime client.

5. Consolidate or refinance loans. Look into consolidation options at lower interest rates. Student loans often offer this option. Be careful, however, not to transfer student loan balances to low interest credit card offers unless the interest rate is locked in.

 

 

 

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Filed Under: Finance, Personal Tagged With: , ,

Getting Organized to File Self-Employment Taxes

Cash rounding receipts from ICA, Karlskrona, S... 

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Technological advancements have made it easier for people to start home-based businesses. Along with this benefit comes the important responsibility of paying self-employment taxes. Whether you plan to hire a tax professional to do your taxes or will do them yourself using tax preparation software, here are a few tips for getting organized.

1. List all expenses related to your business. For example, real estate agent taxes will require tracking car mileage, business meals, communication fees and more. If you have set up a home office, business-related expenses would include office equipment purchases, business phone lines, Internet fees and your business cell phone. Make an exhaustive list of all relevant expenses.

2. Mark up receipts as you receive them. For example, when you have a tax-deductible business meal with a client and pick up the tab, write the name of the client and the purpose of the meeting on the receipt as soon as you arrive home. Similarly, clarify business-related expenses during a trip to the stationery store where you make personal and business-related purchases. Circle the business-related items immediately so that you don’t have to guess six months later which items were purchased for business reasons.

3. Get organized. Buy a filing cabinet in which you file all receipts in carefully marked envelopes for each category of expense. For example, you might have a separate folder for transportation, communication, Internet, business supplies and so on. Alternatively, you can scan all documents and receipts, and keep them in electronic files on your computer.

 

 

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Filed Under: Banking, Finance Tagged With: , ,

When a Relative Wants to Borrow Money

 

Money and personal relationships don’t always mix well. Conflicts over money matters have been the cause of the dissolution of many relationships in marriages, professional environments, and between states and countries. So when a relative asks to borrow money, what should you do?

Give Money You Don’t Need

As some financial experts often argue, when you lend money to a relative or a friend, the chances that you will be repaid in full may not be good. Therefore, only give money that you don’t absolutely need. If you later end up in a bind yourself, you can’t necessarily count on a relative to pay you back the amount that you need at the time that you need it.

Assess the Situation

If you’re approached by a relative who needs a large sum of money immediately, you’ll want to ask a few questions. First, are you confident that the relative is not going to be in this situation repeatedly? Is he or she deep in debt and has not taken steps to remedy the situation? Giving money to such a person will only enable the dysfunctional financial pattern. This type of situation requires some tough love and possibly saying no.

Put Things in Writing

There are situations in life that are unavoidable, and your relative may be financially responsible but going through a tough time. Your help during such a time may be just what he or she needs to recover financially.

In this type of situation, put the details in writing so that there is no conflict down the line. Ask for a promissory note that details how much has been borrowed and when the relative plans to repay the money.

 

 

 

 

 

 

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Filed Under: Budgets, Finance Tagged With: , ,