Personal finance is a professional term for ?money management?; a process that most people tend to blatantly ignore. When we talk of money management, we are actually talking of budgeting, financial management, handling expenditure and savings etc . People happen to totally ignore the need of organizing expenditure and going through personal finance, which is why they often get engulfed in credit debts and other loans. If by any chance they lose their jobs, life takes a very ugly turn.Hence, as the wording goes, always save for the rainy day. With this note, I will take you through some basic ideas associated with personal finance.
Make a Budget
Maintaining a good budget is the leading stage of personal finance.You need to record each and every source of expense as well as your total monthly income. In this way, you would automatically know when your expenditure is crossing the limit of income. Cut down on luxury spending, on eating out, on club memberships that you don?t really need. Budgeting requires you to have intricate details about your cash flow, so make sure you make it go well.
Insurance Planning
This is also where a considerable amount of your money goes to. Insure only on the basic needs, such as medical, life, auto and home. Do not go for each and every insurance scheme, as they don?t really matter. Insurance takes in a lot of your money, so think carefully, before you take on any other insurance besides the basic four.
Plastic cards
Plastic money or credit cards is one of the main reasons why people worldwide get into severe debts. Its easy access, ?bill to be paid later? strategy has made people very careless with their expenses. Credit card management is a critical part of personal finance, and if you don?t curb this one down, you may have to face a continuous stream of bill payment, interest rate, debts and so on. The more credit cards you use, the more problems you face.
Investing
Investing is a good way to secure your money, and also earn a good return on them. There are loads of investment strategies out there. Research well and find out ways to save your money.
Retirement Planning
Retirement planning needs you to save money for your future needs. Retirement planning, requires you to dig into various strategies and schemes that could help you to save a considerable amount.
Loans
If you have taken on auto loans, student loans or mortgages, you need to be having a very rigid and well disciplined way of handling finances. These loans and mortgages if taken lightly could very soon cause you to be bankrupt.
Personal finance encompasses much more details than what is given in this article. But for people who do want to get into this habit, the basics given here are guaranteed to give you a control over your cash.
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Source: http://mortgagesbuytolet.co.uk/mortgage/mortgages/personal-finance-the-basics/
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