Personal Finance Management • economics24.com

September 1, 2008

Basic Tips on Personal Finance

Oyvind Hennum asked:

Do you ever wonder where your money goes every month? Does it sometimes seem as though you cannot afford to do things because your financial obligations are holding you back? If you find that you are asking yourself these sorts of questions, perhaps you should take a look at your financial situation and assess whether you are practicing good personal finance management or not. Good personal finance management spends within their income, plan for the future and solve financial problems as they arise. Poor personal finance management pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.
Planning your personal finances doesnâ€™t always come naturally, and even if youâ€™re just beginning to take your financial matters seriously, then you likely need a few personal finance tips.
Evaluate your current financial situation. One of the most important goals for most people is financial independence. Collect accurate information about your personal financial situation. Calculate your net worth which includes the real estate, saving and retirement accounts, and all other assets. This will help you decide how much money you can set aside for meeting future needs and goals.
A basic personal finance tip is to make a budget. A personal finance budget is information made up of your income and expenses and the more accurate this information is, the more likely you are be able to meet your goals and realize your dreams. A personal finance 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 recure every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.
Get an 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 personal finance budget, so that your expenditures are automatically entered in the appropriate category. Personal financial management can be really easy.
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. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.
You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you donâ€™t have to worry about debt taking control of you.

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August 30, 2008

5 Action-Ideas To Manage Your Personal Finance

Filed under: Finance — Tags: Bad Credit, Bad Debts, Coins, Credit Rating, Credit Report, Credit Worthiness, Financial Future, Gas Station, Grocery Store, Habit, Interest Rates, Late Fees, Managing Money, Managing Your Money, Money Savings, One Hundred Dollars, Personal Credit, Personal Finance Management, Personal Management, Personal Savings — admin @ 6:45 am

Joseph Then asked:

It’s unbelievable that schools does not teach us everything that we have to know but left out one important subject, that is Personal Finance Management. No wonder we see rising cases of people with bad debts and bad credit.
Here are 5 ideas to better manage your personal finance.
Build a savings account
Your money is something that you work very hard for. If you want to build a savings account for yourself, and for your family, you can do it – but perhaps a little slower than you might like. You can get started by saving all the change you get from shopping at the grocery store, from the gas station and from anywhere else you might go. Putting all this change into a container, you can then fill the container, day by day. As the container is full, roll the coins and deposit this money into your new savings account. You might be surprised, but in just two weeks it is possible you saved twenty dollars, or even one hundred dollars. Your savings account will grow, and you will be managing your money at the same time!
Paying bills on time
Paying your bills on time is going to be a something you need to make a habit for your entire life. Your credit report, your credit rating and your personal credit worthiness is going to depend on how often you are on time when paying your bills. Paying your bills on time is important for a solid financial future. As you pay bills on time, you are less likely to pay higher interest rates, you are not going to pay late fees, and you will build a good credit rating at the same time. To pay your bills on time, all the time, use a system that will have all your bills put into a pile in the same place. Put the bills that are due first on the top of the pile. Put the bills that are due at the end of the month in the bottom of the pile. Look at the pile every day, or at very least every other day. When you have the money, pay the bill on the top of the pile and work your way through all the bills for the month, and then you can start on the bills for next month!
Building good credit
To build good credit you want to pay your bills on time, and avoid paying those higher interest rates. If you have good credit, you want to keep it. What some people do not realize is that you can hurt your credit if you are moving often. Moving every month, moving every year, and moving more than needed it going to lower your credit score. If you live in the same house, the same apartment for over five years this is going to help your credit. Avoid moving when possible. Get a copy of your credit report; review the addresses that are listed for you. Remove addresses that are not applicable to where you have lived in the past.
Use coupons and save money
If you are not using coupons now, you should be. With the price of everything going up, and up, you need to learn to make your money ‘go further’. To make your money last longer, and to get more for your money seek out coupons for the goods and services that you always purchase. The secret to using coupons is this: don’t use, clip or keep coupons for items that you don’t usually use in your home. Coupons are enticing to get you to try other items, and sometimes can cost you even more money. Clip coupons from the Sunday paper, from the Internet online coupon sites, and look for coupons on the products you already purchase. This is going to give you the best savings possible, stretching out the money you have, and that you want to make last much longer for your household budget.
Money management involves working for a living
Money management is a budgetary thing, meaning you need to know how much money you have, and how much money you can spend. If you are spending more money than you are earning, you are most likely relying on your credit cards just way too much. If you are relying on your credit cards, your payments are going up and you will never pay off those credit cards. Money management involves your earning money, and spending the money you earn, and not more than that. If you need more money in your home budget, you can do a few things: get a new job with better pay, ask for a raise, get a second job, or build a business of your own. Relying on others for handouts, making minimums payments on credit cards you can’t afford, and living beyond your means is only going to come back to cause you trouble later in life.

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August 29, 2008

Proper Personal Finance Management

A Bohart asked:

Rising consumerism and easy access to credit has given rise to overspending, even by an average income earner. The result has been an increasing number of people caught in a growing debt burden. The problem is worsened simply because most people care very little about managing their finances, or about proper personal finance management. The fact is, you’d get more benefits if you take your personal financial management seriously. Here are some ideas which could help you

Wisely Use Credit Cards

Credit cards are the most popular method of getting credit. They are easier to secure, and easier to make use of – just select an item, carry it to the cashier and swipe your card. Not needing to carry cash around encourages many people to simply swipe their cards on the ever-present credit card terminals, not realizing or not caring that everything ultimately goes on their tab. Please remember that the more you swipe your card, the more debt you are building up.

Proper financial management means taking precautions so one can minimize credit card debts. For one, use your credit card only when there is no other alternative. Two, spend on your credit card only the amount of money you have to spend. Bear in mind, the credit card company will start charging penalties if you are not able to settle your dues on time – which will only add to your debts and will worsen your problem.

When applying for a credit card, shop around first. Look for the company that charges the most favorable interest rate. Keep in mind that paying a low interest rate means saving some money for other expenses.

Consider Debit Cards

Another approach is to avail of debit – not credit – cards. The advantage here is that your spending is limited by the amount you have in your account. As such, debit cards have inbuilt protection against overspending and the ensuing loss of financial control.

Go with Secured Personal Loans

Personal loans are another source of finance. Personal loans will make you financially stronger and more secure – if you use the loan constructively, that is. If you are taking out a personal loan just so you can spend some more money you don’t have, taking out a personal loan is just going to speed up your financial decline.

If you decide on this approach, your priority should be minimizing loan costs as much as possible. As such, you should avail of personal loans that charge the most favorable rates of interest so you can save up on interest charges that will only add to your indebtedness.

When taking out a personal loan, opt for the secured personal loan – that which puts up any of your properties as collateral. With a secured or collateralized loan, lenders will be more willing to lower their interest rates and offer you a more favorable payment schedule.

Save First

To have more financial control, you need to exchange your habit of expenditure for a habit of saving. If you save enough money, you won’t need to take out a loan or a credit card for sudden and unexpected expenses. You can just use your own savings and as such, you’re not going to have to pay interest.

Wise financial management encompasses spending only on what’s necessary and what’s within budget. Never borrow money so you can spend more. This will never work and you will be just digging your financial grave when you do this.

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July 5, 2008

Get control of Your Personal Finance with a Budget

Filed under: Finance — Tags: Car Payment, Common Knowledge, Control, Gasoline, Household Budget, Matter Of Choice, Money Matters, Money Spent On, Monthly Budget, Morning Coffee, One Time, Personal Budget, Personal Choice, Personal Finance Management, Personal Management, Spending Habits, Taxes, Time Purchases — admin @ 11:47 pm

Joseph Then asked:

It is fairly common knowledge that money matters can be simplified and controlled with a budget. One of the keys to personal finance management is creating and using a household budget. It is not a really hard task, but one that many people avoid. The reason is that it can often be hard to avoid overspending and having a budget really puts spending problems out there.

A budget is basically a list of expenses and income. It should include all expenses, even the seemingly little expenses like a morning coffee purchase. The budget can be made out weekly or monthly, whatever way is best for the household. For someone who gets paid once a week, a weekly budget may be best. For someone who gets paid once a month, a monthly budget would work nicely. Although, it is really a matter of personal choice as to how the budget is made out.

The income section of a budget is usually fairly simple. Most people can easily track their income. Some people choose to list their income after taxes, while others list the income before taxes and include taxes as a expense. That is strictly a matter of choice.

The expenses section is where most people have trouble. It can be hard to see our spending habits in black and white. It is really important, though, to be honest and list everything. You may find it is helpful to keep a spending log for a week. Your spending log is where you will write down every purchase you make. This can be a good way of tracking all the little expenses you incur throughout a week.

Your expenses section of your budget should also include utilities and housing expenses. If you have a car payment, include here as well. You need to include money spent on gasoline, bathroom items, food and any other thing you spend money on. You do not have to include large, one time purchases, though, as they are not a routine part of your expenses.

Once you have your income and expenses listed you need to add each up. The total of your expenses should not exceed the total of your income. If it does then you need to cut back on your expenses. You may have to stop some spending or try to find creative ways of reducing your spending.

The whole idea of a budget is to ensure that you are not spending more then you are earning. Your budget is a blueprint for how you should be spending your money. Once you have your budget made out and it is balanced you need to stick to it. Only spend as much as you have allotted in your expenses and you should find your personal finance situation becomes much easier to deal with.

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November 23, 2007

5 ways to Better Personal Finance Management

Filed under: Finance — Tags: Chores, Doing The Dishes, Folding The Clothes, Lamps, Least Three Months, Managing Your Money, Money Management, Monthly Household Budget, Need Money, Personal Finance Management, Personal Financial Management, Pets, Rainy Day, Rainy Days, Saving Money, Savings Accounts, Special Occasions, Sweeping The Floor, Teaching Children, Watt Bulbs — admin @ 1:57 pm

Joseph Then asked:

Personal Financial Management is not easy and you have to learn what it means to better manage your finance.
Here are 5 tips to better Personal Finance Management:
Teaching children about money management
Do you find your children often want things that are expensive and out of your range for any budget? If you find that you don’t have the money to buy your children everything they want, you need to teach your children a little more about money. Children should be given an allowance, but only for the chores and things, they help you do around the house. Simple things like folding the clothes, sweeping the floor, doing the dishes and feeding the pets. As your child earns money, and receives money for their birthday or special occasions, they can then buy their own things they want. As they realize how long it takes to save that money they will treat it better, and they will appreciate it more. Money management can start at a young age, and children will learn easily, taking their habits to their older years.
Money management and your home
Do you need to save money in the home? Managing your money is all about saving money, finding more money to do things you want, and to create savings accounts for rainy days. If you need to save a little more money and to spend less on household things, you can start with your utilities. Shut off the lights when you are not using them, and shut down that computer when you are not working on it. This will lower your bill a little. Look at the lights you are using in the house, if you have forty or sixty watt bulbs you are using less energy than seventy five and one hundred watt bulbs in all the lamps in your home. Cut costs by starting with the electric bill. Manage your budget; manage your money by adding more to your monthly household budget.
Saving for a rainy day
The basic thoughts behind any type of savings plan is that you should have at least three months savings in the bank, or at least have access to three month of your pay in case of major disaster or problems in the home. Right now, if you were unable to get to work for three months, how would you survive? Prepare for the future and start now. Your personal finances demand that you prepare to protect yourself. You can start by putting just ten dollars a week in a savings account. If you find this is easy, up that to twenty dollars per week. If you have the money taken out before you get your paycheck, you won’t even miss the money. When you are putting, at least $200 a month away you are preparing yourself for a great savings and in the long run, you will find it easier and easier. Yes, it is going to be difficult to start, but after a few weeks, you will adjust and your household budget will as well.

Spend less on entertainment
Are you finding it difficult to pay your bills on time all the time? If you are not paying your bills, your heat, your credit cards, and your utilities on time, you are putting yourself at risk for bad credit, and a lower credit rating. To keep your personal finances on track you should sit down and write out a list of all the bills you have every month. Next, you are going to write down everything that you spend other money on. If you are not able to pay all the bills every month, you need to find where you can cut back on money spent. Generally, this is going to be in gifts, gas, going out to the bar, to the movies, renting movies, your television channels, the subscriptions for your cell phone, and the long distance bills you pay for your landline. Review your budgets, cut back on expenses so you can afford your bills, and when they are paid off, you can get back out there, and have a bit of fun!
Personal money management and your future
Your personal life involves more than the job you are working at, but also the welfare of your family. If you were unable to work, or if you died, how would your family continue on, paying the bills and getting groceries? If you don’t have an answer, you should look to personal lines of insurance. Insurance policies are a form of money management that will protect your family in case of emergencies or in case of death. Many families find that disability insurance comes in very handy when someone breaks their legs, or perhaps needs an operation and can’t get back to work for a few months. Insurance in the case of an accident, for a disability or in case of death is going to protect your family and everyone’s financial future. Get some amount of insurance and protection for the future.

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