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Helping Japan: How to Make Sure Your Money Goes to the Right Place

Helping Japan: How to Make Sure Your Money Goes to the Right Place

    The events that have unfolded in Japan over the past week are horrifying, sad, and devastating.  The country is facing death and destruction at the hands of a massive 9.0-magnitude earthquake and the subsequent tsunami. Now they are also on the verge of a nuclear disaster.  Many countries and organizations are pledging volunteers, supplies and money to help.  But what about you, average Joe citizen, how can you help?  How can you be sure that your hard-earned money will actually go to the people who need it?  How can you be sure that it will get there as fast as it can, instead of months later?  How can you be sure that half of what you’re giving isn’t going to “administrative” fees?  If you are inclined to donate, please keep the following guide I have created in mind before you write that check, hand over that cash, or push “Send”.

    Finding a Reputable Charity

    One great resource to finding a charity to donate to is CharityNavigator.com.  Using this site, you can search through their database of charities and find one that interests you.  Each charity has star ratings as well as a complete, detailed profile.  Information is included such as the organizations efficacy, how much goes to administrative costs, and so on.  There are also links that will take you to the charity’s site where you can complete your donation.

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    See Where Your Money is Going

    Be wary of the organization that assures you that 100 percent of your donation goes to help the victims or particular effort.  They are likely not being truthful.  Every organization, even charitable non-profits, have some overhead expenses.   To make sure that you get the most bang for your buck, you’ll want to be sure that you avoid middlemen.  Some groups may simply collect the money and then pass it on to more hands-on charities.  Avoid diluting your dollars by giving directly to groups that are already on the ground and helping the victims in Japan.

    Be Skeptical of Offers that Promise to Donate Money for Things You Buy

    Lady Gaga’s heart might be in the right place with the new bracelet she has launched, with all profits going to help the victims in Japan, but you’re really not helping as much as you could.  If your goal is to help and not score some cool gear, you’re better off giving directly to the charity yourself.  The entire cost of that $5 item isn’t going to Japan, only the profits are, and what the company might deem to be “profit” can be kind of sketchy.  From that five dollars, subtract the cost to produce the item, to market it, etc.  If you’re going to spend anyways though, by all means, spend away – at least a portion will go to help.

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    Forget Putting Together Your Own Care Package

    While it might be tempting to put together a “care” package for a needy family in Japan, it’s probably not the best idea.  Right now, infrastructure is severely damaged in some areas, making things like delivering packages impossible.  It’s also a logistical nightmare.  You’re better off giving to a group with people on the ground and a plan in action.

    Reconsider Texting Your Donation

    Making donations through a simple text message became popular during 2010’s massive earthquake in Haiti.  But one thing that a lot of people didn’t seem to know was that there’s a delay between when you send the money by text.  The charities don’t get it for at least 30 days later.  And while Japan will likely need help for many months and years to come, if you are wanting your money to help immediately, it’s better to send them a check or money order by mail.  They’ll get it a lot faster that way.  Even using your debit card or Paypal balance is a lot faster.  Just keep in mind that when you donate digitally, there will be hidden fees taken out of your total donation, so it will get diluted somewhat.

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    Avoid Newly Formed Charities

    Getting a new charity off the ground is a difficult venture in itself.   In the midst of a disaster it’s virtually impossible to succeed.  You wouldn’t trust your life savings to a financial firm that just opened, has no track record, and whose employees have zero experience, so why would you donate to a brand new charity?  Find a charity with a proven history of success, and ideally one that’s already on the ground in Japan helping. Research before you write that check.

    Watch Out for Scams

    In the wake of disasters, it seems that while there are a lot of people willing to help out there are also plenty of unsavory types looking to cash in on your goodwill for their own devious means.  You’re better off sending in your money to an official organization’s address than handing it over to a person going around collecting donations. While they might actually be doing good, there’s a chance they’re just looking to run off with your money.

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    Some Carefully Vetted Charities That I Recommend

    • Doctors Without Borders USA
    • American Red Cross
    • Save the Children
    • Relief International
    • Food for the Hungry
    • Direct Relief International
    • AmeriCares
    • Action Against Hunger
    • Catholic Medical Mission Board
    • World Vision
    • Global Giving
    • International Medical Corps
    • Convoy of Hope
    • Oxfam America

    All of these organizations are have high ratings on CharityNavigator.com, and have people already in place in Japan distributing aid.  You can find additional lists of reputable organizations to give your donation to on their website as well.  If you don’t see a charity listed either on my list here or on their list that’s not to say it’s a scam, but you’ll want to make sure you do your research first.

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    Julie McCormick

    Julie McCormick is a writer, and co-owner of The Cleveland Leader, a Technorati Top 1000 site.

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    Last Updated on September 2, 2020

    How to Set Financial Goals and Actually Meet Them

    How to Set Financial Goals and Actually Meet Them

    Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

    In this article, we will explore ways to set financial goals and actually meet them with ease.

    4 Steps to Setting Financial Goals

    Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

    1. Be Clear About the Objectives

    Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

    It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

    Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

    2. Keep Goals Realistic

    It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

    It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

    3. Account for Inflation

    Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

    Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

    For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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    4. Short Term Vs Long Term

    Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

    As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

    By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

    How to Achieve Your Financial Goals

    Whenever we talk about chasing any financial goal, it is usually a two-step process:

    • Ensuring healthy savings
    • Making smart investments

    You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

    Ensuring Healthy Savings

    Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

    This is the focal point from where you start your journey of achieving financial goals.

    1. Track Expenses

    The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

    Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

    If you’re not sure where to start when tracking expenses, this article may be able to help.

    2. Pay Yourself First

    Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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    Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

    The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

    Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

    3. Make a Plan and Vow to Stick With It

    Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

    Nowadays, several money management apps can help you do this automatically.

    At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

    Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

    You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

    4. Make Savings a Habit and Not a Goal

    In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

    Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

    • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
    • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
    • If you go shopping, always look out for coupons and see where can you get the best deal.

    The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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    5. Talk About It

    Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

    Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

    6. Maintain a Journal

    For some people, writing helps a great deal in making sure that they achieve what they plan.

    If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

    When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

    Making Smart Investments

    Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

    1. Consult a Financial Advisor

    Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

    Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

    2. Choose Your Investment Instrument Wisely

    Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

    Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

    As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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    3. Compounding Is the Eighth Wonder

    Einstein once remarked about compounding:

    “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

    Use compound interest when setting financial goals

      Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

      Start saving early so that time is on your side to help you bear the fruits of compounding.

      4. Measure, Measure, Measure

      All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

      If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

      Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

      The Bottom Line

      Managing your extra money to achieve your short and long-term financial goals

      and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

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      Featured photo credit: Micheile Henderson via unsplash.com

      Reference

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