Personal Finance Success Personal Finance Success

Personal finance is a term used to denote several different yet closely related aspects of monetary decisions made by either an individual or a family whose members live together. These closely related aspects include the rate of income, budgeting said income, inevitable costs (e.g. taxes, electric bill, gas, mortgage, etc.), and even frivolous spending. It refers to anything and everything having to do with one’s money and its allotted uses. One of the most important aspects of personal finance, though, is financial planning; this is the cornerstone concept on which the term and all its denotations are founded because it is the most common meaning to which the aforementioned term is ascribed.

One must carefully analyze bank statements to determine a net profit and net loss. A net profit is essentially the total amount of earnings accumulated once all expenses have already been subtracted, and a net loss is the total amount of expense paid over the course of the same amount of time. If one’s net profit is lower than one’s net loss, then that means he or she is living beyond his or her means and will eventually run out of money. After evaluating things like this, factoring in all income and expenses, one can begin to set goals to further his or her financial stability, and this, too, is very much apart of personal finance. These goals could be practically anything since they are dependent on what one deems necessary. For instance, one may be ambitious enough to decide that he or she wants to go to school and further his or her education. Furthering one’s education can be rather expensive, and setting this goal from a financial perspective means knowing how much it will cost (cost per semester or year, including books and materials), how much time will be allocated toward it, and whether or not that cost is less than the margin of net profit at one’s disposal. This is merely an example of a goal, but as stated earlier, financial goals can be anything; it could just as easily have been a goal to simply accumulate a certain amount of money in savings.

Personal finance also refers to banking, assets, investments, and insurance. With regard to banking, it is inclusive of how many accounts one has, what types of accounts they are (checking, savings, etc.), how many (if any) credit or debit cards one owns, or how many (if any) loans one has as well as the type of loan(s) in use (business, consumer, etc.). As for assets, this refers to important things that one owns like a house/mortgage, car, clothing, or stocks, and even bank accounts themselves can be considered assets. Part of personal finance is also life insurance, health insurance, house insurance, car insurance, or disability insurance if applicable. Additionally, it deals with any investments one may have made dealing with anything from stock to mutual funds.

Personal Finance and Investment – In a Nutshell

Knowing the principles of personal finance and investment better allows a potential investors to make the financial decisions with much prudence and confidence. Having a sound knowledge of the financial and stock market allows the consumers to be more rational in their personal finance planning and in the decisions they make.

Financial knowledge is particularly of importance to the masses who rely upon the stock and investment market as a source of their income. It is important for such individuals to know,at least, the basics of asset allocation, cash flow statements, estate management and even the insurance essentials.

Knowing the Capital Market- Money Never Sleeps

Knowing about the tools of financial planning is important for the masses too. Calculating the personal finance and investing rate of return, knowing the psychology of the investment market and how it responds to the ups and downs, being capable of performing the investment analysis and interpreting the prospective trends of the market are a few of the prerequisites that are essential for effective planning of personal finance and chalking out the correct investment routines for positive returns.

Investment and personal finance are the financial practices that allow you to use your money resources and make more money through it. Like the Wall Street puts it,”Money never sleeps…”, the whole idea of investment and personal finance revolves around the stock market theory that money should always make more money. Any money left idle and not tied up, is the capital unemployed and potentially being wasted. This whole practice of using the capital resources to create more funds and earnings for personal finance is referred to as,”compounding”. It is a practice of multiplying your funds by means of applying the interest rates to it and seeing them inflate as a result.

What is personal finance? It is money that you control. Times are tough these but they are getting better as more and more people are returning to work and earning a living once again. In fact, the unemployment rate is only 7.7% according to Google’s public database. Today, more people are employed than at any other time in the history of the United States.

What does that mean for you? Well, if you’re looking for work chances are you’ll find a job pretty fast if you apply yourself. Once you’re employed, you should begin saving for your retirement and in case you get laid off. As a financial security rule, you should always have at least three months’ worth of salary in a savings account. You need to have at least that much because if you become unemployed, you won’t be at the mercy of others or worse yet, the welfare system.

Take control of your life by saving more money. It is better to have money than it is not to. When you’re broke you are at the mercy of others and that’s not a good feeling. You should also save money for your children’s college education so they get a head start over everyone else.

We are constantly being provided with bad news that the market is down, inflation is rising, insurance costs are rising to high levels, and Social Security might not be around by the time you reach retirement age. Managing your personal finances is an on-going process that never ends until the day you die.

Luckily for most of us, we have more control over our personal financial situation which is a power that is both good and bad. Only you can control your saving and spending habits. You can learn how to manage your assets online as there are thousands of websites dedicated to personal finance.

If you feel your debt is out of control because you owe thousands of dollars on credit cards, you can change that over time. It’s not going to happen next month, but if you apply yourself, you shouldn’t have any problems getting back on track and achieving your financial independence goals.

Here are a few tips to help you save money, and get the most out of your present income. If you are in really bad shape, you should consider getting help from a professional personal finance accountant.

1. You present income aside, it’s not what you earn on a weekly basis, it is what you save on a consistent basis. Get in the habit of setting aside at least 10% of your income every week. The important thing is to spend a lot less than what you earn. In other words, try to live within your means until your finances improve.
2. In order to establish a nice sized bank account, you have to control your spending every chance you get. For example, you can purchase generic products and you can save money by clipping coupons. You can also save money on most of your purchases if you shop online. Create a spreadsheet in Excel and keep track of every penny you spend so you have a better idea of where your money is going.
3.  You may have to switch banks so you can get a higher interest rate. It may not sound like a lot right away, but it adds up over time. Remember that you’re not trying to fix your personal finances overnight, instead you’re going to take a long-term approach so a few percentage points in your interest payments can really add up over 5, 10, 15 or even 20 years.
4. Only use credit cards that offer 0% financing. Try to pay each credit card bill in full every month and begin using cash to make purchases. Once you get out of the habit of whipping out your card at a cash register, you’ll notice a significant difference in the amount of money you spend on a monthly basis.
5. Purchase a home instead of renting. You may be thinking, “I can’t afford a home”, and you’d be wrong. There are plenty of government programs that can put you in a home for as much money as you’re currently paying on rent. Moreover, your home is an investment that will pay you handsomely if you ever decide to sell. You can also use a reverse mortgage when you reach retirement age so you have an extra $500 to $1000 coming in every month for free.

Finally, begin investing. Learn how to invest and begin small. Don’t drop $1000 on the first investment. Instead invest a few hundred dollars to see what happens. Once you begin noticing returns, you can reinvest the profits so you’ll literally be getting free money. Remember, only you can control your personal finances. Don’t depend on any one else to help you.

There are two things I always say to anyone who will listen, “Don’t mess with a man’s money” and “Don’t mess with a man’s women.” Unfortunately, we don’t do the right thing when it comes to our own finances so we need a little advice to get us back on track. The personal finance tips listed below will help you get back on track quickly and save money at the same time.

It is important that you consistently monitor your personal finances, especially during tough times because you never know if you’ll be fired from your job or you face an emergency where you need money right away. After reading this short article you will learn how to get the most out of your money through savings and proper spending habits.

Credit Cards and Spending Habits

You may have to cut all your credit cards in half if you’re abusing them. If you want to save money for the future, you should either learn how to use your credit cards responsibly or get rid of them for a little while. For example, Joy was a single mother who owed more than $3,000 on two credit cards.

She cut the cards in half and didn’t order new cards until she had accumulated $1,000 in savings. Joy wasn’t alone as there are hundreds of thousands of Americans that owe a lot of money on their credit cards because of their inability to effectively use the cards.

In order for to save money and control your personal finances, you should pay your credit card bills in full and on time every month. If you pay only the minimum amount due it’ll take you more than 10 years to pay the entire balance. Credit card companies don’t want you to pay in full every month because they make the bulk of their profits on interest rates. First, don’t use any of your cards until the balance is paid off. Once you have paid all your cards, consider having only one card for emergencies.

Save Money by Buying Household Products in Bulk

If you purchase your household items in bulk, you can save a lot of money on a yearly basis. The more you buy, the more you save. For example, purchase toilet paper and cleaning products in bulk and anything else that you use on a regular basis.

You can even purchase your food staples in bulk. A big bag of rice will feed your family for a few months. You can also purchase a lot of canned goods and store them in your garage or create a special place in the kitchen to store extra food products. You can also buy packs of diapers and other child products in bulk.

Learn to Buy Money Saving Generic Products

Most generic products are the same high quality as the national brands that are advertised on television. When you purchase a national brand, you are helping the company pay for those expensive commercials, not for better quality products.

Companies that sell generic products don’t advertise so they are able to charge a lot less than the expensive brands. In fact, most products come from the same manufacturer, the only difference is the label that’s pasted on the product.

Use Cash When You Go Shopping

When you go to the supermarket make sure to take cash instead of a credit card or a check. When you know that you’ll be paying with cash you’ll be more inclined to find cheaper products and you’ll stay within your budget.

You’ll also be more than willing to find and use coupons either online or in the Sunday newspaper. Coupons really add up, especially if you find a store that offers double coupon savings. Using cash will also prevent you from making impulse purchases that can really set you back.

Use the Envelope System of Personal Finance Budgeting

To save money and to stay within budget, try to use the envelope system of budgeting. It’s pretty simple. At the beginning of each month you can put a designated amount in an envelope that will be earmarked towards a certain category of spending.

The trick to following this system successfully is not spend any more money on a particular item once the envelope is empty. Once you get in the habit of spending this way, you’ll become accustomed to budgeting and you’ll realize the benefits of sticking to a budget.

These tips will help you save money so you can have a nice savings account when you retire. You’ll also have money in case of an emergency so you won’t have to borrow any money to get out of a jam. Try to remember that you have to learn how to make your money work for you.