Five Key Aspects of Personal Finance
Savings
Saving can be done in many ways, including traditional savings accounts, retirement savings funds, investment portfolios and emergency funds.
Investing
One of the best ways to build wealth over time is to invest. When you invest, you put your money to work on your behalf. Through the power of compound interest.
Protection
Insurance is a way to manage your risk. Protection through insurance ensures you and your family are able to sail through during the hard times.
Taxes
Our government provides us with many ways to save money by offering tax breaks and benefits. There are plenty of free alternatives for preparing your taxes.
Retirement
Many people have a hard time saving for retirement. But learning a little more about different kinds of accounts, and tips on saving can help you get started.
It's Never to Late to Learn Financial Literacy
We are helping families learn how to use credit properly, spend wisely, plan for their financial future, and protect their families.
Why Is Personal Finance Important?
It might be hard to handle your own finances. Especially if you don’t know how money works. You’ve come to the correct site if you’re looking for help on how to make sound financial decisions with more assurance. It’s fantastic that you’re making efforts to develop your personal financial knowledge.
Personal finance skills are essential because, without them, people can spend their entire lives working for money but never getting ahead.
Personal money is crucial for this reason. You can succeed by learning how to handle your own finances home and all things monetary!
12 Financial Principles You Should Know
Take time to list your financial goals, along with a realistic plan for achieving them. You can eventually reach the places you want to go without a roadmap, but seldom without getting lost first.
Before paying bills and other financial obligations, set aside an affordable amount each month in accounts designated for long-range goals and unexpected emergencies.
Recognize that your total savings are determined both by the interest you earn on those savings and the time period over which you save. The sooner you start saving, the more funds you’ll be able to amass over time.
Recognize that no one will pay you high interest rates on a sure thing. In most cases, the higher the interest rate offered to you as the investor, the higher the risk of losing some—or all—of the money you invest. Diversification of assets is the best protection against risk.
To determine how long it will take your money to double, divide the interest rate into 72. For example, an account earning 6% interest will double in twelve years (72 divided by 6 equals 12).
Create an annual budget broken down into monthly detail to identify expected income and expenses, including savings. This will serve as a guide to help you live within your means and prepare for the future.
Before committing to significant expenditures, calculate how much income is likely to be available for you. Net income, after all mandatory deductions, is far more appropriate to use when considering new purchases and expenses than gross income before deductions.
Be leery of advertisements, sales people, or other financial sales pitches promising anything free. Like non-financial opportunities, if it sounds too good to be true, it probably is.
Be aware that credit bureaus maintain credit reports, which record borrowers’ histories of repaying loans and credit. Negative information in credit reports will adversely affect your ability to borrow at a later point.
Obtain rate information from multiple financial services firms to get the best value for your money. Remember, these companies compete for your business!
Be a responsible borrower who repays as promised and proves you are worthy of getting credit in the future. Before you borrow, compare your total payment obligations with the net income that you will have available to make these payments.
Purchase insurance to avoid being wiped out by a financial loss, such as an accident or death. An insurance plan should be part of every personal financial plan.
