Personal Finance

Learn Just How To Handle Your Individual Financial Resources Swiftly

In today’s economic climate, personal financing is the subject of a lot of emphasis and also attention.

Stabilizing individual budget plans challenges many individuals as well as is more vital than ever before.

Dealing with your personal money demands may appear complicated, however, this write-up provides some easy to use pointers to help you manage your finances as well as reach your long-term monetary objectives.

Budgeting is among one of the most vital things to do with personal finance.

Make a note of everything you invest money on for one entire week or a pay cycle.

This will force you to consider what you invest cash on and also probably review it. You can then see where you can reduce or invest even more.

One of the simplest means to conserve a little cash each month is to discover a free bank account.

It is obtaining more challenging to locate financial institutions that still use cost-free checking since the economic situation happening.

Frequently, financial institutions bill 10 bucks or more per month for a bank account, so you wind up with a cost savings of over one hundred bucks a year!

It is important to know who, where, what, when, as well as exactly how, regarding each company that reports on your credit rating.

If you do not follow up with each press reporter on your credit history file, you could be leaving an incorrect account reference on your background, that can easily be cared for with a phone call.

To keep your individual financial life afloat, you ought to place a section of every paycheck right into cost savings.

In the current economy, that can be difficult to do, however, even small amounts accumulate over time.

Interest in a savings account is usually more than your checking, so there is the added bonus of building up more cash in time.

When the cash is great and the economy is doing wonderful, individuals love to invest for convenience as well as convenience.

During times like the present circumstance, you ought to be purchasing off-brand things every opportunity you obtain.

Rather, find healthy things that you can make conveniently at home and take to function with you.

Focus on foods that are similar to what you order when you go out.

If you find yourself investing too much time and money on customer websites like eBay as well as Amazon, eliminate them from your favorites/bookmarks on all your web browsers.

As soon as that one-click access is eliminated, you’ll have time to determine whether you really require to go there to really purchase a required thing, or whether you’re just burnt out, browsing and purchasing.

Whatever your long-lasting objectives are, follow these suggestions to help put you on the path to handling your individual financial resources.

Budgets are tight, you can make significant distinctions in your financial circumstance by making these modifications.

Personal financing matters to every person as well as taking control of your funds allow you to focus on more important things in your life.

Taking care of your individual financing demands might seem difficult, yet this write-up offers some easy to make use of tips to help you manage your funds as well as reach your lasting economic objectives.

Budgeting is one of the most vital things to do with personal money.

To keep your personal economic life afloat, you ought to place a part of every income into cost savings.

No matter what your long-lasting objectives are, comply with these tips to assist place you on the course to handling your personal financial resources.

Personal money matters to everybody and taking control of your finances permits you to concentrate on much more crucial things in your life.

Personal Finance

7 Step Beginners Guide To Personal Finance Management

In this post, you will learn the 7 step beginners guide to personal finance management.

If you apply these steps, you will get better at your personal finance management and eventually achieve financial freedom.

7 Steps Beginners Guide To Personal Finance Management

  • Create a financial calendar.
  • Get on an all cash diet.
  • The 20 – 30 rule.
  • Try to avoid debt.
  • Take money minutes daily.
  • Know your monthly income.
  • Create a plan and stick to it.

Create a financial calendar

If you can not keep track of your spending or just cannot trust yourself with what you are going to buy next, having a financial calendar is your first step in the right direction.

Planning your whole years Income, expenses, and savings paints a clear picture of where you can see your self in 3 or 5 years.

For example, you know how much rent you are paying, average bills, your average cost of living all of it goes into your financial calendar, once you have planned your year in terms of expenses you can work on the savings part which includes your emergency funds and investments plans.

Contrary to a very common approach saving just a small percentage when you can save more without living on a thin budget is always a great idea.

While people spend their extra dollars on luxuries, having clarity where you will be standing at the end of each financial year, will keep you motivated.

Your investment plans can only be realized when you have a certain amount of cash.

Get on an all cash diet

If you are just beginning to start your independent life but scared of getting buried in debt, consider an ALL cash diet, meaning you should only use cash to buy things the old-fashioned way.

Using cash is a great way to ensure you are not using your credit cards for purchasing essential items which you should be budgeting in the first place.

We know it may sound scary to some people. Not having the liberty of buy things they want whenever they want.

The truth is financial management is more about the needs and less about the wants.

Before you cut and throw away your credit card, practice this instead, every time you leave the house to buy groceries make sure you leave your credit card at home so you don’t end up buying things impulsively which you don’t need at the moment.

The 20 – 30 rule

You are young and energetic, the movies are great this time of year, the restaurant by the corner of the street serves the best Sushi.

But wait. First things first,

The 20-30 rule is a great way of enjoying all the things we mentioned along with the peace of mind that you have an emergency fund established.

The 20-30 rule is more of an exercise. While planning your financial calendar, the 20% of your income goes straight to the emergency fund.

And a hint: A wedding is not an emergency.

Having a leaky roof, or serious health risks should be considered emergencies.

And the 30% should be spent on your life style.

This includes movies, restaurants, happy hours, basically anything that’s apart from your basic necessities.

Now the 30% budget can be revised on the lower side as per your preference and all the cash can be saved for a bigger purpose like a trip you have always wanted or to get a nicer car.

Try to avoid debt

In todays world it is not very unlikely for people to have any debt they have to pay. Student loans, credit card bills, car instalments, phone plan.

Basically, everything you currently own and have to pay at a later date.

Many young people with limited resources of earnings often drown in the whirlpool of debt.

But if you have been following the steps, we have just talked about you will never skip this one.

To understand this concept first you need to understand how you should deal with your debt, the larger payments, or the higher interest rates should be paid first. Its simple math, if you fail to make a payment of bank loan with 10% interest it will boost your payable amount.

Take money minutes daily

By setting aside one minute each day to check on your financial transactions.

This 60-second act helps identify problems immediately, keep track of goal progress—and set your spending tone for the rest of the day!

This simple exercise will also help with long term financial goals.

Quickly reviewing your balance amount and expenses also highlights unnecessary costs that can be easily minimized.

This sixty-second window can be in the morning or at night – whenever you feel you will have the time to carve out a minute or two where you log in to your bank(s) or whatever budgeting software program you use and review your transactions from either the previous day or that day (depending on the time of day you have your money minute will determine what day’s transactions you are reviewing.)

A money minute is important because it allows you to see where your money is actually going.

Keeping track of your expenses is great, so as long as you do it consistently you will never lose track.

During your money minute every day, you can use this time to track only one-day’s transactions making it easier to account for your expenses.

This is also a great time to catch any errors made by your bank (fees, incorrect withdrawals, missing deposits, etc.) and an even better time to catch fraud or identity theft.

Know your monthly income

As the saying goes, “what gets measured, gets managed.” How can you manage your money without knowing what you earn each month? If you don’t have a concrete number, determine your monthly income after taxes.

This will be easier if you’re a salaried employee with a regular paycheck. Freelancers may have to estimate their monthly income.

Once you have a number, add in any extra side gig money.

Maybe you babysit sporadically or have a blog that earns ad revenue, or you teach a weekly fitness class.

Whatever extra income you earn, add it into your monthly take-home pay.

There is another exercise you can use if you are starting to manage your own finances.

Even if you are a freelancer or taking a part time job after school.

Determining a number below of how much you actually make can come in handy while trying to save money.

For instance; if you are making $1500 a month and you spend the most of it away before your next paycheck arrives.

If you follow all the steps we have just discussed, you should have a neat idea of your expenses and living costs.

And you should have some amount to spare as well. While you could just go ahead and consider it extra cash to spend.

Considering your actual pay to be your salary minus the amount you are left with after budgeting.

This can help you with your saving and can create a cash pool that can be invested in the future.

Create a plan and stick to it

Now that you have planned everything money wise, it’s time to keep doing these exercises on daily, monthly or quarterly basis.

Once you pick a plan, give it a try for at least a month. You need that long to see if it works for you. Anything less, and you won’t see the benefit of keeping an eye on your finances.

So, find a budget you want to try, get started and stay with it. It’s that simple. If you want, Washington recommends you “surround yourself with visual representations” of your goals. So, if you’re saving for your next international trip, you can put up pictures of your dream trip to keep your goal fresh in your mind.

So there you go, the 7 tips that you can practice to manage your personal finances.

Remember always think before you spend.

And planning where your money is going will always benefit you in the future.

How To Create Your First Budget.

Personal Finance

How To Create Your First Budget

Majority of the population lack the knowledge on how to create their first budget.

One of the main reasons is that, the word budget is associated with deprivation and as such, most people never create one.

If you are new to budgeting, here’s a simple way on how to create your first budget.

Steps On How To Make Your First Budget

These are the steps on how to create your first budget:

  • Get a copy of the last 3 months of your bank statement.
  • Using a note pad and pen, write down all your expenses, debt, and liabilities.
  • On your note pad, write down the following categories, Income, Household, Food, Personal, Transportation, Entertainment, and Miscellaneous.
  • Next, go through your bank statements looking for transactions that fall into one of these categories and jot them down.
  • Now take an average of each item into to determine your average monthly allocation for your budget.
  • Add up all your income(s) and Expenses.
  • Subtract your total expenses from your total incomes and if you have a surplus, awesome. However, if you end up with a deficit, then there is work to do.
  • Here is a link to get a simple budgeting spreadsheet.

Having a budget is the first step to achieving financial security.

The first time you try to create a budget might seem difficult, however with time and more practice, you will become a pro at this.

Budgeting should be fun and should never be associated with lack or deprivation.

A budget is basically a plan or road map for you to achieve your financial goals.

If you want to build a house, you need a blueprint or plan on what type of house you are trying to build.

You must have a plan for your financial life and it all starts with your first budget.

Treat Your Personal Finance Like A Business.

7 Step Beginners Guide To Personal Finance Management.

Personal Finance Wealth Creation

Think Of Money As A Tool

Most people don’t think of money as a tool.

To achieve any form of financial independence or freedom, you must change the way you think of money.

Money as we know it represents a mechanism for exchange and the financially savvy treat it as such.

Throughout history, money has come in different shapes and sizes.

There was a time when salt was used as money and today we use salt as a seasoning for food.

Why Money Should Be Treated Like A Tool

First we must define what a tool is.

Merriam Webster’s definition of money is, “something used in performing an operation”.

Money as a tool helps us in performing tasks which in this case, a medium of exchange.

So if you are in the market to purchase a new home, car etc, in order to accomplish this tasks, you need money.

Money is an idea and unfortunately, most people place too much emphasis on acquiring money.

The wealthy use money as a tool to enhance their lifestyle while the rest of the population chases money due to a lack of financial literacy.

The only way to be financially secure is to increase your value in the marketplace and money will find you.

You must change the way you view money if you intend to elevate your personal finance.

Treat Your Personal Finance Like A Business.

Business Lifestyle Personal Development Personal Finance Success Tips Wealth Creation

Treat Your Personal Finance Like A Business

In this present economic climate, it is vital that you treat your personal finance like a business.

So what does a business have in common with you?

First and foremost, a business provides goods and services and in return generates income.

Secondly, in order to provide these goods and services a business incurs expenses.

Third, in order to expand and grow, a business must invest what ever cash is left over at the end of the week, month or year in it’s growth or borrow money for growth.

Treating Your Personal Finance Like A Business

Just like a business, you go to work to earn income in order to survive.

In order to provide for your basic necessities such as housing, food, transportation etc, you have to incur some expenses.

The difference between your income and your expenses is what is left over for investments.

Investing in income producing assets is the key to your personal financial well being and wealth creation.

You must change how you manage your finances in order to position yourself financially.

Steps On How To Be Secure Financially

  • Create a budget and stick to it.
  • Know your numbers, i.e, know your total assets, liabilities and networth.
  • Increase your income.
  • Decrease your expenses.
  • Invest your positive cashflow in income producing assets.
  • Never fall into the lifestyle expense creeps. Basically, because your income increases doesn’t justify over extending yourself.

These steps might seem simple however, it will require a complete paradigm shift in your thinking to pull this off.

These are the same steps I am applying in my journey to growing my wealth and financial independence.

By staying focused, disciplined and committed, you too can learn to treat your personal finance like a business.

The Main Reasons Why You Are Broke.

Think Of Money As A Tool.

How To Create Your First Budget.

Lifestyle Personal Finance Wealth Creation

The Main Reasons Why You Are Broke

In this post, you will find out the main reasons why you are broke and how to turn things around.

We live in one of the most prosperous times in human history with technological advancements and information overload.

However, majority of the population are living paycheck to paycheck and are broke.

If you find yourself in this situation, don’t beat yourself up, because you are part of a vast majority of the population in the same predicament.

Here Are The Main Reasons Why You Are Broke

  • Lack of financial education.
  • Lack of discipline.
  • The pursuit of instant gratification.
  • Having a consumer mindset.
  • Adhering to old paradigms.
  • Trying to impress people.

Lack Of Financial Education

It’s unfortunate that most people lack financial education.

Financial education is not taught in schools and most families don’t invest the time and effort to educate themselves on financial matters.

This is one of the main reasons why you are broke.

Financial education or financial literacy is the bedrock for achieving financial security and freedom.

In order to stop the madness and get on the right track, you must invest your time and enough in educating yourself on everything financial.

From budgeting to investing, you must make a decision starting today to get financially savvy.

Read books on personal finance, do google searches on personal finance, and go on YouTube to search for topics on finance.

This should be your first steps on getting out of your financial situation.

Lack Of Discipline

The next reason why you are broke is due to lack of discipline.

In order to achieve financial security/freedom, you must be disciplined with you finances.

Most of us lack self discipline and as such struggle with our finances and remain broke.

Having discipline means you create a monthly spending plan or budget and stick to it.

You must resist temptation of impulse purchases and marketing tactics from retailers.

By creating and sticking to a budget, you will develop a great habit and stay disciplined with your finances.

The Pursuit Of Instant Gratification

Yes, this is a big one.

We are bombarded today by advertising and marketing messages on the latest products and services.

In addition, social media platforms are now the main source of the distraction and marketing strategies.

Due to the availability of easy credit, it’s very easy to purchase things due to impulse without giving a second thought.

We see the latest shoe, hand bag, smart phone etc, I feel we must have this item now.

If you do not want to stay broke, you must learn to delay gratification.

Having A Consumer Mindset

Having a consumer mindset also ties into pursuing instant gratification.

Most of us are consumers and because of this mindset, we are leveraging credit cards and other debt instruments to fund our lifestyles.

This is another reason why you are broke.

I am not implying that you shouldn’t buy things, however, every purchase you make should be planned.

As soon as you let go of your consumer mindset, you will see purchases differently and make smart decisions with your money.

Adhering To Old Paradigms

Adhering to old paradigms is another reason why you are broke.

Because everyone is in debt doesn’t mean you too should be in debt.

If everyone is jumping off a cliff without a parachute, does that mean you should do the same?

You must change your mindset and think differently when it comes to your finances.

Do not follow the crowd but do things differently.

There is a reason why the wealthy act poor and the middle-class and the poor act rich.

The wealthy have mastered the art of finance and that is why they are wealthy.

They invest their money in income producing assets while the rest of us invest our money in depreciating assets such as cars, boats, etc.

Change your paradigm and you will change your life.

Trying To Impress People

The truth of the matter is that at the end of the day, nobody cares how big your house is, how expensive your car is, how expensive your clothes are, etc.

Most people try to impress their friends and family by over extending themselves with big purchases.

You may fool people with your so called rich lifestyle, but this comes at a price to your finances.

There are cases of individuals earning 6 or 7 figures income but yet live paycheck to paycheck.

It call comes down to living beyond your means and investing in income producing assets.

If you can afford things, then by no means go ahead and purchase them.

Remember that all purchases you make must be planned without having an adverse impact on your finances.

The Road To Financial Freedom.

Lifestyle Personal Finance Wealth Creation

Cash Is King

Following the principle of “Cash is King,” you can change your life forever.

Life will be less stressful financially and you will be taking your first major step toward “financial security”.

“Cash is King” is an easy principle to understand and for some, however, it may be difficult to follow.

We live in a world of credit and we do not respect or understand the value of cash.

If you follow this simple principle of “Cash is King” you will start on the road to “financial peace of mind”.

Why Cash Is King

Here are two basic suggestions on how to follow the principle of “Cash is King”:

When you are paid make sure you allocate enough money to pay your rent/mortgage, utilities and any other fixed expenses you may have.

Any amount of cash that is left should be withdrawn from your checking account to be used for food, clothing, gifts, entertainment, gas, etc.

The best way for you to control this cash would be for you to create a budget.

Also, you can adopt the envelope system.

The envelope system entails labeling envelopes and allocating funds to each envelope representing an expense.

For example, you could label an envelope groceries and each paycheck, you allocate an amount of cash that you place in this envelope.

Now, remember that this cash is the only way you can spend. Once you have used all your cash there will be no spending until your next paycheck.

This is tough! No credit/debit cards? You must be kidding!

How will I ever get through to my next payday without using my credit/debit cards?

Stick with “Cash is King” and manage your money.

Start by finding the cheapest places to buy gas, run your errands more logically and take your morning coffee from home instead of buying that latte every day.

You will have to find new ways to manage your cash and the first few weeks will be the toughest.

You may even run out of cash before your next payday, however, you will stick to the principle “Cash is King” and eventually find “financial peace”.

After several weeks it will get easier to manage your cash and you will be surprised to find extra cash available before your next paycheck.

What will you do with that extra cash? Many say put the extra cash into a savings account or pay a little extra towards one of your debts.

The choice is yours to do whatever your heart desires.

By following this principle, you will be on your way to establishing a secure financial future.

The Road To Financial Freedom.

Treat Your Personal Finance Like A Business.

Lifestyle Personal Finance Wealth Creation

The Road to Financial Freedom

The road to financial freedom is there for anyone willing to put in the effort.

Most people have 46 to 49 years of income-producing efforts and more if you plan to work into your “retirement” years.

During that time, we must complete our education or training, get a job or open a business, while meeting the many demands of life.

We have to provide for food and shelter, clothes and transportation, childcare expenses, college tuition, vacations, Christmas presents, insurance premiums, and more.

How is it that some people can retire at age 50 in spite of all this while others will never retire at all.

If you’re just starting out, you are nowhere near your peak earning power.

You might have to buy your first suits or business dresses for your new job.

You also want to enjoy life, go on vacations, buy or lease new cars, and rack up debt.

Here’s How-To Create Your Road To Financial Freedom

There are individuals who have figured out the road to financial freedom.

Here is how they have done this.

First they live within their means and save as much as possible.

Take advantage of all the tax shelters the government allows and if possible, save even more.

Invest in or start a part-time business, rental properties, or learn to increase their returns through smart investing.

Have adequate insurance against potential risks that could ruin them financially.

Use debt wisely as a tool to build wealth.

For example, they can leverage to build a real estate portfolio.

Take advantage of tax credits, government-guaranteed loans, or grants offered to small businessmen to fund multiple streams of income.

Don’t use debt to purchase depreciating assets.

They factor in taxes when planning their lifestyle and investments.

For a little over $3.00 a day, starting at age 22, you can amass a portfolio worth over $850,000 in an IRA.

The difference between the financially independent and the rest of us is that they can make investing a priority.

Most people complain they have no money left over and that they live from paycheck to paycheck.

There are stories of very low-income people who manage to put multiple children through college but also graduate school and leave millions to their favorite charity.

These people are special in the sense that they had a goal and stuck to it no matter what.

They worked hard, saved their money, and achieved what they set out to accomplish.

Anyone can achieve financial freedom.

You just have to be disciplined and have your priorities in order.

You must make a conscious decision to be an investor and not a consumer.

This is what it will take to get you on the road to financial freedom.

The road to financial freedom is yours for the taking.

Steps To Gaining Financial Freedom.

Cash Is King.

The Main Reasons Why You Are Broke.

How To Set Goals.

Lifestyle Personal Finance Wealth Creation

Steps To Gaining Financial Freedom

In this post you will learn the steps to gaining financial freedom.

Have you ever wondered how to gain financial freedom so you never have to worry about money?

Are you spending more than you make and going deeper into debt? You can change this trend!

The first thing you need to know is that, if you are making financial planning decisions based on how much money is in your bank account right now, then you are being controlled by money.

This usually creates constant worries about money. You need to control money in order to gain financial freedom.

Luckily there are money management steps to gaining financial freedom.

However, most people are completely unaware that they exist.

This is not the type of financial planning involved in investments such as stocks and bonds.

Steps To Gaining Financial Freedom

1) Create a budget. A budget here is the amount of money it takes for the organization or household to function and to attain its goals.

This is also called the break-even point and shows the minimum amount of income required to stay afloat. This is the first step in effective cash flow management.

2) Find ways of increasing your income. Remember, you’re going after YOUR financial freedom.

3) Figure out your expenses and debt and write them down.

4) Find out how much of your income is actually available to spend. Most people forget that when the money comes in, some of it is already committed.

When you spend more than you brought in, the difference usually ends up on a credit card as debt.

When you are striving for financial independence, spending less than you make is critical.

5) Set aside regular amounts of cash from your income for the future – always pay yourself first and put the money in savings toward gaining financial freedom.

For substantial wealth building, a minimum of 10% is recommended.

6) Apply some of your money towards paying off past-due bills, debt, current bills.

Also, set aside funds for future large expenses that are difficult to pay when they come due. The key is to be consistent.

7) You must invest a portion of your money in income-producing assets.

Why is cash flow management important? Cash flow is your lifeblood. of a business. Life runs smoother when cash is available.

It takes personal discipline and commitment to achieve the goal of financial freedom.

When executed correctly and consistently, the end result is an abundance of cash, all bills paid, and plenty of money in reserves to finance your lifestyle.

Why you need a home based business.

The Road To Financial Freedom.

Credit Resources Personal Finance

The Basics of Debt Consolidation

It’s very easy today to accumulate debt, which is why you must know the basics of debt consolidation.

The basic idea behind debt consolidation is that a consumer takes out one loan in order to pay off other loans.

The advantage of consolidating debt is the ease of dealing with one loan instead of several.

A word of caution is to steer clear of debt consolidation companies.

These are the ones that promise debt help despite your poor credit.

They normally charge application and handling fees, and will oftentimes charge very high-interest rates.

Credit cards often charge high rates of interest, which makes them a popular candidate for debt consolidation.

In this case, the process is relatively simple.

If you have several credit cards with high rates of interest, you can simply transfer their balances to a single credit card with a lower interest rate.

Most times you will find credit cards offering a low introductory APR and introductory rate such as 0% for the first six months.

If you have accumulated credit-card debt because you are constantly spending, then a consolidation loan might be your best option.

If you are a homeowner then you should look into a home equity loan or line.

In this case, your home will act as collateral.

Provided your loan is not more than the value of your home, the interest on the loan may be tax-deductible.

Please consult with a tax professional.

Remember, if you default on this loan, it is very likely that you could lose your home.

Secured Or Unsecured Loan?

In other cases, you could apply for a secured or unsecured loan at your local bank or credit union.

The difference between the two is that a secured loan requires you to put up collateral, while an unsecured loan does not require any collateral.

Unsecured loans however, are much more difficult to obtain.

So remember that the basics of debt consolidation is to get all your loans into one single loan payment, thus creating more cash-flow for you.

Need more information? Check out our credit resources category.