Poor financial choices can have a number of negative consequences. So, what you have to do is learn how to budget and save your money. A budget is a plan for your future income and expenses that you can use as a guideline for spending and saving. Save means to keep and store up something, especially money for future use. Saving can help you achieve any financial goal. Financial planning allows you to control your financial situation. These decisions are affected by a person’s life situation, personal values, and economic factors. Our economy plays a major role in financial planning on things such as global influences, inflation, and interest rates (Kapoor, 2010). In the workforce, minimum wage is ridiculously low, which forces individuals to work a full-time position and a part-time one as well.
Personal finance is the financial management which an individual or a family unit is required to do to obtain, budget, save, and spend monetary ...view middle of the document...
These companies are present all over the world and are both public and private in nature. Various kinds of schemes are offered to the public, from which, the one that best suits your needs or purpose can be available. These companies are meant only to provide finances at the individual level and not for organizational levels and later deal in finances of smaller scale.
Personal financial activities involve three main decision areas: spend, save, and share. While everyone makes decisions, few people consider how to make better decisions. The financial planning process is a six step process and can be easily accomplished. Throughout life, your needs usually can be satisfied with the intelligent use of financial resources. Financial planning involves deciding how to obtain, protect, and use those resources. By using the eight major areas of personal financial planning to organize your financial activities, you can avoid many common money mistakes (Kapoor, 2010).
Maintaining control over your spending habits will contribute to your financial goals. The overuse and misuse of credit and or spending may cause a situation in which a person’s debts far exceed the resources available to pay those debts. Bankruptcy is a set of federal laws that allow you to either restructure your debts or remove certain debts. Financial planning is designed not to prevent your enjoyment of life but to help you obtain the things you want. Too often, however, people make purchases without considering the financial consequences. Some people shop compulsively, creating financial difficulties. You should detail your living expenses and your other financial obligations in a spending plan. Spending less than you earn is the only way to achieve long-term financial security (Kapoor, 2010).
Adequate insurance coverage is another component of personal financial planning. Certain types of insurance are commonly overlooked in financial plans. Planning is the foundation for success in every aspect of life.
Kapoor, J. R., Dlabay, L.R., & Hughes, R.J. (2010). Personal Finance. New York, NY: McGraw-Hill