Check out the 5 financial tips for the first week of August 2011

Tip no 1 - Gifting 3 piggy banks to your child to teach the concept of spending-saving-donating

Piggy banking can help you teach money management skills to your kids at a young age. You can gift 3 piggy banks to your daughter. The 3 three piggy banks will be for 3 different purposes. In first piggy bank, you should ask your daughter to deposit money strictly for spending purpose. This means she can use all the money stored in this piggy bank for purchasing her favorite items. In the second piggybank, she can deposit money for saving purpose. This means that she won't be able to spend this money from the piggybank. Finally, in the last piggybank she can store the money which she intends to donate somebody.

Tip no 2 - Practice thriftiness before preaching

You should first manage your finances properly before telling others to do so. You can't possibly tell others to live a frugal life when you have the habit of spending money recklessly. They will not take your advice seriously.

For instance, you teach your children to avoid impulse shopping. But if they see that you go to the department store and purchase what ever you like there, then your children will listen to your advice. The kids will also ask you purchase the items they like in the shop. So, the bottom line is practice thriftiness before preaching it to your friends, family or relatives.

Tip no 3 - A penny saved is a penny earned.

This is one of the most popular financial proverbs of Benjamin Franklin. This basically means that you must try to save a penny instead of spending it. For instance, if you have saved around $100 in a month, then it implies that you have earned the money. The core of the matter is, you have gained $100 in that particular month.

From next time, you should try to not waste money on drinks and partying. Rather you should try to take active steps to save money. This saved/earned money can be used to fund a wonderful vacation at an exotic place.

Tip no 4 - Contribute to a retirement plan

Contribution to a retirement plan is important when you want to secure your golden years of your life. The available funds in your retirement accounts will help you lead a comfortable life after retirement. You can shift to a good house, go for a vacation, and meet your daily expenses without being at the mercy of your children. You can lead an independent life post retirement.

Check out the retirement plans offered in the country. Choose the one that will suit your financial needs. If required, you can consult a financial planner regarding this issue. Deposit some amount on your retirement account each month.

Tip no 5 - Get multiple insurance policies with the same insurer to earn a discount

If you are planning to purchase multiple insurance policies for your family, then it is better to take them from a single insurer. This is because the insurer will offer you a heavy discount when you purchase multiple insurance policies (home, life, travel, auto, funeral, health, etc.) from him.

Only a handful of people buy multiple insurance policies at one time. So, when you buy several policies from the same insurer, he gets a bulk of money suddenly. He is getting a substantial amount of money from a single consumer. This implies that he won’t have to spend extra money on advertisements or brokers to get some new clients.