Personal finance is not an issue you should be forced to face
when in a crisis like so many people end up doing. Your personal
finances are vital for your life, security and prosperity. Face
it and don't hide your financial issues under the rug. Learn and
practice personal budgeting. Create your own financial destiny
and your life will be so much better.
You’ll have to:
know your current personal financial situation
estimate how your financial situation will develop in a short
term perspective
set long term financial goals, make a plan to achieve them
and then execute your plan.
Get a view of your current financial situation
Collect accurate information about your personal financial
situation. Calculate your your net worth, This information
includes:
real estate
saving and retirement accounts
stocks and bonds
all other assets.
What is the total? Are you surprised?
Make a budget
A personal budget is information made up of your income and
expenses and the more accurate this information is, the more
likely you are to be able to meet your goals and realize your
dreams. An income/expenses budget should be made for at most
one year at a time and include a list of your monthly expenses.
All expenses must be included. To be sure of that go through
all your paid bills, check register and credit card receipts
to find expenditures that recur every month and expenditures
that happen less frequently. Divide that total by twelve and
you have your monthly average expenses. To be able to make
good personal financial decisions and set priorities, you
must know where your money is actually going.
Get electronic bill pay
This is a very convenient way to pay your bills. You pay them
electronically, by direct withdrawal from your bank account.
The transaction is processed immediately. You can even link
your bill pay service to your budget, so that your expenditures
are automatically entered in the appropriate category. Personal
financial management can be really easy, don't you think? Check
out programs for enabling this on the internet
Make an investment and finance plan
Now that the fundamental state of your personal financial security
has been established, the time has come for the more prosperous
part of your personal financial life. What I mean is:
investments
retirement planning
loan shopping
other ways to build a fortune.
You need to make a plan of what you really want in life that
money can buy. Then you must find out how to get the money it
takes to finance it and finally start to implement this plan.
This is the long term part of your financial life - the process
of personal financial development from the state you are in
right now - to the state you want to be in. This journey toward
financial freedom is in my opinion the most interesting and
exciting part of personal financing you can have.
