We are living in a society of consumerism. Prices can skyrocket, and demand can multiply. The only thing that remains static/the same is your income. How do you survive in a consumer society keeping a control of the expenses?
Personal finance is all about planning your finances. You need to keep a budget in every step of your life. Start from the household budget and categorize the household expenses as follows.
Fixed expenses: These are monthly bills to be paid such as rent, telephone, cable, electricity, etc.
Variable expenses: These include the cost of all essentials including your food, medicine, entertainment expenses, etc., and may vary slightly depending on the items purchased.
The extra cash that you have after deducting the expenses for the above determines your true financial status. If your extra cash is zero, or negative, you should seriously consider reworking your personal finance plans.
What if you have loans and debts to be paid off? Most of the people have mortgage payments, auto loans, credit card payments and other types of loans recurring every month.
The best possible way to balance these is to maintain a decent debt-to-income ratio. Always make sure that your debt-to-income ratio is never higher than 50%. If you are overloaded with too many loans, consolidation of the heavier loans will be a better option than keeping a bad record of the debts.
Refinancing your mortgage is chosen as the best option by many debtors to consolidate their debts. The only thing you need to be careful of while refinancing, is to get a better deal, in terms of the market value of your property and the best interest rate. The higher the market value of the property, the higher the loan amount. With lower interest rates and a longer mortgage period, your monthly payments will be reduced considerably, relieving you from your debt worries.
Insurance is another important factor in personal finance. Having personal insurance, home insurance, and auto insurance are the smart ways of dealing with the hurdles that may jump in your way.
Personal Finance For Self-Sufficiency
These days everybody wants to be completely self-reliant. Nobody wants to have to depend on others. There is a great sense of achievement in being able to deal with one’s own needs and requirements without taking the help of others. The personal finance markets have realized this need that the people of the world of today have. As a result, we are witnesses to the great proliferation in the numbers of loans to help people help themselves.
Are you looking for a car loan? How eager are you to invest in real estate? Are you going to need a lot of cash to fund your child’s education? Well, whatever it is, there are many lending options available out there, from small to large amounts, from low to high interest rates, to adjustable payments, you name it.
Loans are not the only things that help us to be self-sufficient. What about the good old credit cards that we always take with us no matter where we go. There is no longer a need to carry bundles of cash when going out shopping for more expensive things. A credit card swipe works just as well and is certainly much more effortless. If your wallet gets robbed, you really cannot do very much about the money in it. However, you can do your part by informing the credit card company that your card has been robbed.
Life has become extremely convenient in the world of today. I find it very liberating to be able to walk out of my house with only my little credit card for company. And yet, I can return home with bags and bags of groceries, some DVDs of my favorite movies, and maybe even something that cost me a little too much.
Of course, the downside is that credit cards usually tend to make us overspend. They say that women are the shopaholics but put men in the right store and they too end up spending much more than they had originally calculated on. The culprit has to be the credit cards.
In a similar way, when it comes to loans, we are developing the tendency to take on loan after loan. Eventually we have no choice but to keep repaying a multiplicity of loans that charge different interest rates and drain away various amounts of money from our bank accounts.
Yet, despite the many problems, loans and credit cards have made us more self-reliant and far more willing to look at life from an independent standpoint.
Personal Finance Issues After Retirement
Age brings about a number of new expenses. Expenses keep on increasing as the years keep growing. Old age merely brings about a rise in the number of expenses. Visits to the doctor have to be made. Medicines need to be bought. And there are so many more bills. However, even as expenses keep on multiplying, the income with which these bills can be paid remains stagnant. Post-retirement, one must be dependent on one’s pension and on the monies that accrue from the various investments that one has secured for oneself. Given these sources of income, it does become difficult to pay for the expenses of daily life.
However, with a little bit of research and some application, one can use the mechanisms of personal finance to add quality to life post retirement. For starters, let us take the case of bank accounts. Now, there are various kinds of bank accounts that people can apply for. But which bank account would be a good choice if one has just retired? Ideally, one should be looking at a bank account that offers a high rate of interest. High interest savings accounts are a dime a dozen these days. Joint bank accounts are worth looking at. Elderly couples often pool their monies together and start a joint account, thus, earning higher interest amounts on a regular basis. Just check with the bank that is nearest to you. Moreover, senior citizens are eligible for some other offers that cater specifically to their needs. So, anyone who falls into this age group need to be on the lookout for deals like this.
Credit cards are often the knight in shining armor for aged people. After retirement, a lot of people find it difficult to carry on with their earlier standards of living. Thus, many end up running up their credit card debt as they pay for various recurring expenses, with medicines being one of the recurring ones. Now, credit card debt cannot be run away from. It had to be settled in the near future. However, senior citizens can approach their credit card providers and try to negotiate a reduction in debt. Many a provider is eager to comply with such requests.
Naturally, leaning on the credit card is not the smartest financial advice that you can get. All the same, you can certainly use the credit card judiciously and let it help you when you are in dire need. For that purpose, you must make sure that you are not splurging on any goods and services that are not really required. Of course, it can be argued that everything is “required. But that is not the way a smart consumer thinks.
Of course, sometimes cash advances and credit card payments are not enough. Turning to loans can be quite costly for people who do not have a fixed salary. Things are simpler for people who own property for a secured loan is usually cheaper. However, nowadays, cheap unsecured loans are not such a faraway dream either.
Personal Finance Is Your Responsibility
Whether or not you choose to ignore it, you cannot deny the truth embedded in this statement: Your personal finance is and always will be your responsibility.
When it comes to finance, many people put an impractical blind eye to the fact that finances need to be managed. Personal finance is an ever-growing popular term for adults and teenagers alike, regardless of whether you are earning the money or not. After all the bills are paid, family members have to be fed and your lifestyle has to be maintained.
The biggest and most neglected step for many families is teaching their teens how to manage their money. Teenage finance is about educating teens on the value of money. Teach them how to save by showing them how to use their primitive form of book-keeping. This can often be incorporated through the child’s upbringing via
piggy-banks, savings accounts, and little chores in exchange for money.
Teenage finance is an important part of your personal finance because, too. When your children learn to save and use money wisely, you are subsequently saved from having to bail them out of financial troubles in the future.
Personal ethics and finance go hand-in-hand. If you have a good relationship with yourself, you will be able to save money. You won’t feel the urge to do things that go against your ethics like sign-up for a credit card using someone else’s name.
Personal finance involves taking a few steps toward safe-guarding your money. Your money spent should not exceed your money received. In order to prevent this from happening, you should make a balance sheet and use it to record all your transactions. There are a lot of apps and software programs that can help you keep track of your expenses as well.
Each month write down/keep track of/log how much was received and how much was spent. Make a list of all the things the money that was spent, so you can keep track of your money.
I bet you will be amazed at how much you spend on things that are not necessities.
Make a list and stick to it. Always try to get the best deal for your money and remember that cheaper does not necessarily mean lower quality.
After all, it is your money. Managing your personal finances should be a mandatory part of making your money work for you.
3 Steps To Becoming A Millionaire – https://www.therealmjtheterrible.com/3-important-steps-to-becoming-a-millionaire/
