Personal finances are not a problem that you have to face when you are in a crisis, as many people end up going through. Your personal finances are vital to your life, security and prosperity. Accept it and don’t sweep your financial problems under the rug. Learn and practice personal budgeting. Create your own financial destiny and your life will be much better.
You will have to
- know your current personal financial situation
- estimate how your financial situation will develop in a short-term perspective
- Set long-term financial goals, make a plan to achieve them, and then execute it.
Get a view of your current financial situation
Collect accurate information about your personal financial situation. Calculate your net worth, this information includes:
- real estate
- savings and retirement accounts
- stocks and bonds
- all other assets.
What is the total? Are you surprised?
Make a budget
A personal budget is information made up of your income and expenses and the more accurate this information is, the more likely it is that you will be able to achieve your goals and realize your dreams. An income/expense budget should be made for a maximum of one year and include a list of your monthly expenses. All expenses must be included. To be sure of that, review all your paid bills, check your credit card register and receipts to find expenses that recur each month and expenses that occur less frequently. Divide that total by twelve and you have your average monthly expenses.
In order to make good personal financial decisions and set priorities, you need to know where your money is really going.
Get electronic bill payment
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 budget so your expenses are automatically entered in the appropriate category.
Personal financial management can be really easy, don’t you think? Take a look at programs to enable this on the Internet
Make an investment and financial plan
Now that the foundational state of your personal financial security has been established, it is time for the most prosperous part of your personal financial life. What I want to say is
- investments
- retirement planning
- purchase loan
- other ways to build a fortune.
You need to make a plan of what you really want in life that money can buy. Then you have to figure out how to get the money that is needed to finance it and finally start implementing this plan. This is the long-term part of your financial life: the process of personal financial development from the state you are in now to the state you want to be in. This journey to financial freedom is, in my opinion, the most interesting and exciting part of personal financing that you can have.