Personal finance is the financial administration which a person or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.
When planning personal finances, the individual would consider the suitability to his or her needs of a range of banking products (checking, savings accounts, credit cards, and consumer loans) or investment private equity, (stock market, bonds, mutual funds) and insurance (life insurance, health insurance, disability insurance) products or participation and monitoring of and- or employer-sponsored retirement plans, social security benefits, and income tax management.
Personal Finance Concerns
Whether you like it or not each of us must consider, a division of personal financial concerns and try to make the wisest possible choices. What makes this even more challenging is it takes far more effort to plan accurately and efficiently than it is to try to play everything will work – out without doing so. While it’s true money doesn’t make you happy many things in life become easier when you are more financially secure and prepared. With that in mind, this article will try to briefly consider, examine, review, and discuss 4 effective personal financial considerations and why each matter and some strategies to perhaps consider.
- Claims: One of the obstacles many undergo is the addition of unnecessary amounts of debts and the implications of doing so. Many financial institutions send many credit card invitations beginning when people are college – age. While nearly everyone has some debts it’s how much and whether an individual is prepared emotionally and financially to hand these, which makes a big difference. Credit card debt often becomes somewhat debilitating, because it is so easy, to simply repay the minimum payment and when one does so the accumulation of interest charges often creates an overwhelming burden.
- Present planning: It takes a willingness and ability to balance present/ current financial needs and planning smartly for your future. At various stages of our lives, there are different needs. Some of these include planning for a family; purchasing a home; retirement plans; pleasure and leisure (the so-called bucket – list, etc). In present terms life becomes far less stressful when one shuns overspending on an impulse, and, balancing logic and emotion, in a head/ heart balance!
- Short – term: In the near, or short-term it’s wise to prepare for financial needs and requirements, Some of these needs depend on your present situation and planning accordingly.
- Intermediate-term: Different people have differing opinions of what the intermediate-term means. Most consider this, to be a period from about 5 to 10 years from the present time. Again it depends on your current age and condition. Will you be buying a home? Will your children be going to school? Will you be retiring during that period? What other situations do you expect to face? Will you put funds aside in case of emergencies, etc? Always have an emergency plan!
Be programmed. The better you plan, and face reality responsibly, the less stressful your life will be!