Are you frustrated by always having to deal with financial issues? Not enough cash for this, not enough cash for that. Well, if you plan your personal finance properly, this would not be a problem. What do I mean by personal finance?
What exactly is personal finance? Personal finance involves financial planning which covers a wider range of financial issues. This includes, budgeting, expenses, debt, saving, retirement and insurance among.
The most basic guide to personal finance would be budgeting. The thought of budgeting to some of you may mean skipping some meals to save more money but let me tell you; it doesn’t have to be this way. In budgeting, all you need to do is to differentiate between your needs and wants. It may be difficult at first but you will get the hang of it.
If you set a budget for every little thing, you will be able to see the breakdown of your income thus; you will know where your money goes to and how you have spent you money. By doing that, you are able to see the difference between your needs and wants.
However, there are five key steps to personal financing. They are assessment, goal setting, creating a plan, execution and monitoring and reassessment. All these may sound difficult and not achievable but trust me, it can be achieved.
How do know if you have spent you money correctly? What I would do is to compile a balance sheets. The balance sheet will contain list the value of my personal assets, liabilities and also personal income statement.
Goals are set to be achieved, be it short term or long term. Some people choose to clear their debts and thus this means their goal is to clear their debts. However, some people have more than one goal. Don’t worry this is very common. As long as you have a goal you are safe.
The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one’s employment income, or investing in the stock market.
Whatever the plan and goal is, here comes the most difficult part. The execution. Whether or not the plan works depend on you. It’s a test of whether you have the discipline and perseverance to achieve what you want.
As time passes, one’s personal financial plan must be monitored for possible adjustments or reassessments. Sometimes, some people do not have the discipline to continue their tight budget plan.
Moving on, do you own a credit card? Do you own more than one credit card? Well, if you do this may spell trouble. Take this tip.
Look into ways to lower your credit card interest rates. It is very easy to do. All you need is just give a call to your credit card company and ask for lower rates. If you have been paying on time for your bills there is a good chance that they will lower your rates. In lowering your rates, you can also reduce your total interests paid in a year.
Now that you are armed with this information, you should be on your way to get your personal finance on track. Remember, to get you personal finance on track you need to have good credit.
