Most individuals are not proficient at managing personal finances. Although, management an easy task, usually only for some people who have the experience with managing their finances. In contrast, others find it a daunting due to lack of knowledge. Because, the economy have transfigured drastically since the1980’s, and the cost of living, insurance rates, and interest rates on student loans have all increased along with health care having doubled, managing money well has become more difficult. Therefore, it is imperative to acquire the skill of managing one’s personal finances. Through budgeting, saving and advice from a financial planner will ensure any individual financial success and stability. As an accountant, I know the key to gaining control over personal finances requires a realistic budget be in place. A budget involves several important steps. First, total all sources of monthly income; second, prioritize expenses from most important to least like, mortgage, loans/cost, and automobile, utilities to cell phone and cable expenses. Finally, measure the monthly income versus total amount of expenses. If the monthly expenses are more than income received, this signifies living beyond one’s means. Most people should understand that “Budgeting, either by a formal or informal plan, is a first step in deciding what needs and wants must be meet and what resources are available” (Brown, 2007, p. 316). After all, conquering financial stability gives one the ability to control savings, as well. However, setting a budget is only the beginning of structuring finances. In order to uphold a budget one must stay focused on their needs instead of wants. This focus is often extremely difficult to gain or maintain. Bad spending habits for long periods make controlling finances complex at times. Compulsive shopping, obsessive credit card shopping, and over spending are all bad spending habits. In contrast, learning from experience, good and bad can be the best teacher. In my mind, the triggers of bad spending habits are due to easy access of cash, misuse of credit card, and compulsive shopper, as well. First of all a person has to identify what influence bad spending habits. Next, analyze ways to correct the problem. Finally, develop a plan to prevent over spending. Recognizing how financial mistakes were easily done will help better understand how to avoid the monetary miscalculations in the future. Most consumers have a savings account for emergencies, like unexpected medicals bills, a change of resident, or decrease in one’s pay.
“The Total Money Makeover” is radio star and financial speaker Dave Ramsey’s viewpoint, ideas and techniques on the financial world put into words that are not only simple, but super helpful to those seeking motivation in their financial lives. Throughout this book Dave Ramsey projects his attitude on how to begin a debt free life. In this particular book Dave Ramsey constantly presents the ideas of an emergency fund, myths and truths, savings, loan and credit card use. Out of all these chapters the most important and useful information I learned was the obstacles in getting to a debt free life, Ramsey’s Seven Baby Steps and the priorities of money.
In Finance is Personal, Kim Stephenson and Ann B. Hutchins, explain concepts that support decision making around money. The authors base their concepts on personal values, attitudes, beliefs, and goals. Stephenson and Hutchins also teach the reader how to cope with thinking, feelings, and behaviors. In doing this, the author`s help the reader learn how they can handle their money to get what they want—not what someone else thinks they must have to be happy.
This is the main reason why people overdraw their bank accounts. People have the tendency of impulse shopping especially when they are in distress. Although this behavior is illogical, often people under duress tend to act more impulsively than usual, thus leaving their better judgment behind. For example, after receiving an overdrawn notice from your bank or an overextended notice on your credit card, there is a tendency for wanting to spend more.
Budget is a simple plan that outlines of all income verses all expenses on monthly basis. Responsibility is successful implementation and personal budget needs to be championed at responsible way. A realistic and focused time line needs to be set the beginning to ensure that desired outcomes are achieved. Timetable is obviously shaped by the target date for introduction of personal budget. At basic level our personal budget will provide an accurate picture of our income verses dept,monthly expense and savings. It is also essential as we create our budget that we remember that we are trying to hit our balance between various part of our financial image. When we create personal budget we will add our past spending and personal depts.. There are so many kind of methods and tools are available to create, using and adjusting a personal budget. A budget allocates or distributes expected income expected expenses and intentioned savings. A good personal budget needs honest financial assessment but most of the people creating a personal budget is the first time they take a hard look at the they spend money. The main goal of personal budget is that minimize expenses and maximise saving its simple theory. We can cut down our unnecessary needs and increase our saving each month. After a month we can calculate how much money we can save exactly If make a creative budget. Perhaps the most important ingredient of a successful personal budget is a commitment. Budget needs an active participation of entire family. (D.Roos,February 2014)
money attitudes, financial knowledge, and credit-card debt in college students. Journal of Applied Social Psychology, 36(6), 1395 - 1413.
Summary: The book “Complete Guide to Money” is written by a financial planning expert and a radio talk show Host Dave Ramsey. Mr. Ramsey also conducts “Financial Piece University”, where he teaches people how to be smart with their money. The book that I read is actually a textbook for one of the courses of the program that Dave teaches. The author introduces himself in the book as someone who was making good money at one point of his life and later lost it all because he made some foolish choices. A valuable life lesson that he learned that in order for “The money to work for you, you need to know how the money works”. Dave Ramsey received his degree in Personal Finances and got his life, as well as finances back in order to be able to teach others about managing money. The “Complete Guide to Money” discusses the Baby Steps of Savings, the importance of having a plan and sticking with it. It prepares the reader to manage finances in a family setting or as a single individual. Going over the income, expenses and the importance of the budget, makes it easy for the reader to understand how to create a budget (the actual template at the end of the book is also very valuable). The material also covers how to get rid of debt, the meaning of credit scores and functionality of the credit reports. It goes on to discuss different types of insurances, how to negotiate a good deal, and saving for the future. Each chapter has real life examples and quotes from the actual clients of the Financial Peace University, as well as their stories about how they got their finances in order by following the simple ...
When people have low levels of financial literacy, they often make unproductive financial decisions. Consumers spend their money in suboptimal ways, borrow more than savings, and hence miss opportunities for investing. Through communicating the knowledge, taking advice about financial problems, developing skills, and attitudes associated with money management, financial education can offer communities to be successful in commercial world by using means to use their scarce financial resources more effectively and efficiently. It will enable people to choose the financial services and products that best meet their needs. One needs to plan of the future consequences namely illness, education for upcoming generation, marriage and other problems that may come up. Likewise, if one starts to save money from now there will not be any financial difficulty in future. This all will contribute people to be wise when handling finance resulting to lift the poverty line for the
Developing a thorough financial plan is a process that comprises a comprehensive analysis of a particular individual’s financial position and their long-term commitment to apply and observe the set financial plan through one’s life. The plan includes but not limited to, how an individual spends, saves monies and invests his or her financial assets. It encompasses knowing how to budget, manage cash and taxes, borrowing of funds, the use of credit cards, minimizing risk, investing and planning for retirement. Such a plan also requires a vigilant thought process for the future so he/she can tweak their financial plans as needed due to changes in lifestyle and economy.
Financial planning can often be complicated based on each individual's needs, desires, short-term and long-term goals. In each of these individual and deeply personal situations, multiple variables must be considered before substantial recommendations can be made to develop a comprehensive financial plan (Kapoor, Dlabay, & Hughes, 2014). However, by utilizing the six key fundamental steps of financial planning, including, 1) assessing and acknowledging the current financial situation, 2) establishing attainable short term and long term financial goals, 3) recognizing financial options, including saving, spending and sharing funds, 4) assessing and analyzing each alternative and its' consequences, and 5) developing and executing the most reasonably
When searching for a book that discussed personal financial planning, I couldn’t find a more appropriate one. Right off the bat, the title caught my attention. “Your Money Your life” seemed pretty personal so I flipped the book over and the back read, “This new edition…explains their 9 step program and shows you how to: get out of debt and develop savings, make values-based decisions about your spending, resolve inner conflicts between values and lifestyle etc. The book now has my attention, I opened it up and began reading right there in the bookstore. Immediately at the beginning of the prologue of “Your Money Your Life” the authors started with a series of questions to ask yourself. Some of the questions included, “Do you have enough money, are you spending enough time with your family and friends, do you come home from your job full of life, do you have time to participate in things you believe are worthwhile and so on and so forth”. After answering no to most of the questions, I knew this was the book for me.
Budgets are an important part of personal financial responsibility because it helps control what your spending. It will help identify wasteful expenditures such as everyday take-out and buying expensive clothing, it also helps to adapt quickly as your financial situation changes, For example being in debt, and achieve your financial goals. A budget can help understand your spending habits. For example: By figuring out where your money is going, you’ll be more aware of where you need to cut back to pay off your debt and contribute to saving. Budget is important because it can help you to stop living paycheck to paycheck. By creating a personal budget, you can to see how much money you are spending throughout the month.
The future is always uncertain. However, having a financial plan for the future can save a person a lot of grief. More importantly, it can help tremendously for that young adult who is fresh out of college, and at the beginning stages of life; for the young adult who is preparing to attain his or her Doctorate, and will be living, most likely, completely on his or her own.
Personal financial planning is important because it helps you prepare financially for the future. My first short-term financial goal is to have an 8-month emergency savings account. This class helped me understand the important steps needed to achieve my financial goals. “Successful financial planning requires specific goals combined with spending, saving, investing, and borrowing strategies based on your personal situation and various social and economic factors, especially inflation and interest rates” (Kapoor, Dlabay & Hughes, 2012). First I evaluated my spending habits. This allowed me to see where I was
Money is essential for our everyday lives and people have to face choosing whether to save up or spend their money. Of course earning our money can difficult considering that it is a necessary asset that affects every aspect of our life. Every day we see people working hard to earn as much money as the can. However how they use using the all the money earned is a frequently debated topic have seen many people who earn money and can no restrict themselves from spending .They usually act like wild animals fighting for food and being separating from the delusions of business. People are usually confused and frustrated by the amount money the use in a week without knowing that their daily impulse buying objects have piled up. Although it can be very hard to control there are many easy steps to stay away y from spending and instead saying up. Setting a goal, recording the amount you spend and even lowering your expenses can be small steps that will lead to great success in saving for the future
Saving money brings security for any future expenses. The earlier in life an individual begins to save, the better they will be set financially in the years to come. There are several reasons why it is important to save money. A few of these reasons are for emergencies, retirement, and simply for luxury spending. Having money will benefit each of these examples.