A checking account is a current account in a bank, which is easy to open and allows easy access to money. This account is also known as a transactional account, which is used to make financial transactions and pay bills. A bank allows the money in the checking account to be withdrawn using a check, debit card or through an automatic online transfer. A checking account is very easy to open and many banks offer a number of bonuses and rewards to the customers who open an account with them. This account can also be attached to other accounts in the bank or other financial products like loans from the same bank. This attaching of two different products also gives a number of rewards or facilities to the customers. Most people confuse the checking account with the savings account. We clearly put down the differences between the two in the next section. Differences between a checking account and a savings account The main difference between the two accounts is their purpose. A checking account is maintained so that every month a certain amount is put in it for expenses. The money in this account does not stay long and goes to vendors and other service providers in the form of monthly bills and EMIs.

The first bank account opened for your child is a source of joy for both the child and the parent. The child feels a sense of growing up and being responsible, while the parent feels a sense of accomplishment for securing the future of the child. It is not a good idea, though, to just go and have the account opened one day. A lot of research needs to be done. Here are a few steps that will help you and your child know about the opening of a new account and maintaining financial balances. The first step is to explain the concept of saving, budgeting and understanding the return on investment to the child in simple terms so that they understand it better. Your child would be receiving money as gifts, which can be used to teach these concepts. The power to budget for his needs and wants would also make him feel more responsible. When the child has understood the concept of a budget he will need to understand the concept of goals and savings. A goal is when he needs to buy something like a bicycle or a game box and savings would be for the long term.

Building savings is a tough task and it takes a lot of patience to collect those funds for the betterment of the future. Savings can be made in different ways. Some people cut costs to put some money away to save, while some people try and earn extra every month to build some savings. This process is extremely personal and varies based on the type of earning, the amount of earning, and the saving psychology of an individual. The banks help you in building a balance through Certificate of Deposit, CDs. Read on to know more about CDs. What is a CD? A Certificate of Deposit is a certificate issued in exchange of a deposit made in a CD account. This deposit is kept in the bank for a fixed time period and earns a fixed interest rate from the bank. The CD is given a maturity date after which the money can be withdrawn. The withdrawal money is the initial money deposited plus the interest earned on it. When a Certificate of Deposit is created, the money deposited in the account is locked away for a certain period of time and can be withdrawn only after paying a fine.

A general belief is that retirees cannot borrow money but that is not true. Getting a loan after retirement is a difficult task but it is not impossible. There are many ways in which retirees can borrow money for their need. Before we get to the ways to borrow money after retirement, here’s one warning. According to financial experts, retirees should always avoid borrowing from their retirement plan and should instead go for other methods. Below are the ways in which an individual can borrow money after retirement. Mortgage Loan A mortgage loan is the most common type of secured loan which uses the home/property that is being purchased as the collateral. This loan gives the retirees an opportunity to instantly buy money using their own property rather than asking somebody else to help them. Home Equity Loan Home equity loan is a secured loan in which money is borrowed against the equity in the home. The equity must be enough to retain 20% of it after withdrawing the loan amount. This loan is an again a good way of borrowing money without getting others involved in the process and complicating it. Cash out refinance loan Cash out finance loan is the process of taking out a new loan more than what needs to be paid but less than the home’s value.

When the 457(b) retirement plan was initially introduced, it did not have too many advantages. It did not have the flexibility of paying more, as it does now, nor did it have the trust of a qualified plan. However, with the passage of time and certain revisions, this scheme has become quite a favorite amongst potential retirees who see it as a great way to add in as much as they can according to their own convenience. However, there are many problems with this plan, as listed below. Before deciding to invest in this plan, read on: Not every employer is eligible for a 457(b) retirement plan One of the biggest drawbacks of the 457(b) retirement plan is that it is not made for everyone. Employees of tax-exempt organizations cannot opt for the 457(b) retirement plans. It is also highly preferred by people who are compensated very well. This makes it less accessible to many employees. Non-qualified retirement plan This depends on the perspective of the participant. You can view it more as a con than a pro. Although it is a non-qualified plan, which makes it much easier for the participants in terms of documentation, it does have fewer advantages compared to other conventional retirement funds.

Youngsters do not realize how quickly they become adults from being children. A certain sense of freedom can disappear from their lives as they are bound to be more responsible for themselves rather than being taken care of by their parents at home. They are likely to believe that they have got no support and lack of knowledge when it comes to financial health. Most young adults face the pressure of earning money and managing their own money. Yet being young can prove to be very beneficial when it comes to your finances. Here is how – Beginning from scratch is an advantage The advantage of starting out as a youngster is that you will have the freedom to determine your own philosophy when it comes to finance. There lies a great opportunity in setting standards for your financial future and how to go about investments. Learning about them while earning is a huge financial benefit. Besides, a youngster can afford to make mistakes during this time and bounce back from them easily too. Minor financial mistakes during your youth will make you wiser about your financial decisions in the future. Time is the greatest asset Investment and youth go hand in hand.

Taxes are inevitable and there are certain items which are taxed that would take you by surprise. Here are the 11 unbelievable items that are taxable in the country. Scholarships You might have spent months toiling for that coveted scholarship. Yes, even that goes through a tax deduction process. Any expenses covered by it other than tuition fees and books, such as lodging, travel grants, and teacher assistantship, are subject to tax deductions. Gambling wins Thrilled by the win at the casino last night? We’re sure you didn’t know that a portion of that lottery is taxable. Next time when you take the money back home, check if you’re actually taking back the amount you thought you won. Bitcoin All cryptocurrencies are considered assets by the Government and taxes are levied just like they are on the purchase of any other creditable belonging you own, such as a house or gold. The Nobel Prize Yes, you read that right. A prize as prestigious as the Nobel or the Pulitzer is subject to a hefty tax unless transferred directly to a tax-exempt charity. President Barack Obama was himself put in this situation and so will you be, if you win the Nobel prize.

While nobody likes doing their taxes, it’s something you have to do to keep the government running like a well-oiled machine. Taxes may be direct or indirect. Direct taxes are paid out by businesses and individuals on the basis of their income or earnings and cannot be legally avoided. Indirect taxes on the other hand are a little different, they are levied on goods and services which in turn bumps up their costs. One may avoid paying indirect taxes by simply controlling what one purchases. Adam Smith was famous for putting forth the “Canons of Taxation” in his celebrated book Wealth of Nations. Obviously today, these canons have been accepted and even more have been added. Let’s look at some of them closely. Canon of equality The canon of equality states that everyone should pay their fair share of taxes. Therefore, those who are more fortunate and earn more will need to pay a higher tax than someone who earns less. Canon of certainty The canon of certainty states that taxes should be certain and definite to the respective tax payers. Nothing should be left to chance and there should be no ambiguity. As such, taxes and tax slabs are decided well in advance and this gives clarity and ample time to the taxpayer.

Tax havens are countries where taxes are levied at lower rates compared to the home country. Most rich people transfer their money to tax havens to conceal their actual incomes while saving heavily on taxes. There are close to 80 countries that have incredibly low to almost no taxes. American billionaires go to these countries in order to open offshore bank accounts and shell corporations. By opening bank accounts and acquiring properties in these tax havens, people with extremely high incomes can save thousands in taxes without giving up their American citizenship. The IRS has strict rules for US citizens holding accounts in foreign countries but these rules have not stopped the extremely well-off from offshoring their funds because if done correctly, offshore banking is completely legal. The following is a list of eight tax havens that are much preferred by Americans Belize: Belize is a tropical island country in the Caribbean Sea. Belize offers two types of citizenships; permanent residence and Qualified Retired Person (QRP). QRP citizens have to just spend four weeks of a year in Belize and have a minimum retirement income. For QRPs, foreign income is tax exempted, and there is no tax on inheritances and capital gains.

As a young family ranging from their early 20s to early 40s, there are plenty of expenses that must be taken care of. Once you start a family, the expenses only increase, and you have a lot to plan ahead as well. While investments seem like the need of the hour, there are plenty of other steps which can help you save on additional taxes and use your income to your benefit. Here are the best ways of tax savings for young families: 1. Get your employer to give you a raise, but smartly You need to find out if you had too much of a tax refund given to you this year. If the payout was big, then there is a chance that a lot of money is being cut from your paycheck regularly. Get in touch with the concerned department at your employer’s office and see whether you are eligible for more allowances, which will help you save on the tax and get more money on a monthly basis. 2. Figure out how you can get through a health tax break If a medical allowance is offered to you, ensure you make the most of it. Ask your employer to let you put the highest possible sum in this fund.