The application of the principles of finance to an individual’s or family unit’s monetary decisions is called personal finance. There are many aspects to personal finance, and they include but are not limited to checking and savings accounts, credit cards, consumer loans (car loans, mortgage), market investments, retirement plans, and insurance policies.
For a better understanding of where your hard earned money is going, keep a journal of your daily purchases. However, if you document it somewhere you are never going to look, it will do you no good. A better option is to track expenses on a large whiteboard that sits out in full view. It will be front and center during your daily activities and hard to avoid.
Selling some household items that are never used or that one can do without, can produce some extra cash. These items can be sold in a variety of ways including many different online websites. Free classifieds and auction websites offer many options to turn those unused items into extra money.
To avoid debt, you should keep your credit balance as low as possible. You might be tempted to accept the offer you qualify for, but you should borrow only as much money as you actually need. Spend some time to determine this exact amount before you accept a loan offer.
Pay off your high interest credit cards first. Come up with a plan for how much money you can put towards your credit card debt each month. In addition to making the minimum payments on all your cards, throw the rest of your budgeted amount at the card with the highest balance. Then move on to the next highest balance and so on.
Set up a deduction from your paycheck to automatically go to your savings account. Saving is much easier when it requires no further conscious action. As you begin to think of your spendable income as the new, smaller amount, you can adjust your budget accordingly while your savings keep growing with every deposit.
Support from the people you love is one of the best ways that you can improve your motivation to succeed from a monetary perspective. Surround yourself with your friends and family and tell them about the goals that you wish to achieve. Therefore, if you ever get off track, you will have people to help you get back on the right path again.
If you work a full time job, make sure that you are setting money aside each pay period towards your retirement fund. This will be extremely important later on in life after you have put in your last hours of work. Ascertain that money is being wired into your 401k, each paycheck for a stable future.
Personal finance is a way to address the various uses of monetary resources allocated to an individual or family unit. It takes into account the ways in which the monetary resources are obtained, budgeted, saved, or spent over time and also encompasses the various financial risks and possible future events.