Knowledge of the Basic Foundations in Personal Finance Is Your Most Important Asset

Personal finance involves the application of the basic foundations in personal finance. It is important that you know the proper way to budget, save, and spend your financial resources. Through personal finance, enormous debts or monetary issues can be avoided.

Personal Finance Planning

When people manage their finances, they consider financial risks and possible events when they make monetary decisions. Personal finance planning allows people to consider various ways of obtaining financial security such as obtaining savings or checking account, investing in stock markets, managing income tax payments, and settling credit card debts.

Several areas make up personal finance planning. These areas should be addressed, so that people can prevent financial woes that can affect their standard of living. They need to make the right decisions when spending or investing. It is also essential that they take into account future events that will require them to have some cash or financial resources. The following are among the recommendations in planning personal finance.

1. Determine the financial position or situation.

Effective personal finance planning involves the understanding of the monetary resources and net worth. Individuals should be aware of their net worth or the balance sheet that contains all the assets with deducted liabilities. They should also know the cash flow in the household, by deducting all possible expenses to the expected annual income. When they analyze their financial position, they can determine the time-frame when they will accomplish their personal goals.

2. Consider getting adequate protection from insurance.

After individuals determine their financial situation, they should consider obtaining protection from emergencies and risks. The common risks include property, disability, death, health, and liability. They need to understand the type of coverage they should have for the insurance, as well as the payment terms for the policy. Those who have insurance can have adequate protection from risks, and they can also avail of tax benefits.

3. Manage income tax returns and avoid accumulating tax debts.

It is necessary for individuals to determine the payment date and amount of the tax they need to settle. The government provides incentives such as tax deductions for those who pay their taxes according promptly. These benefits can be a great help to most households, and individuals can prevent severe burdens associated with tax debts.

4. Accumulate properties and make investments.

Many people should also consider saving enough money, so they could acquire valuable items that can upgrade their standard of living. For instance, they should try to purchase their own house, start a business, save for retirement needs, and pay for education fees and other expenses. Before they invest on properties, they need to secure their finances. This way, they will not end up experiencing debts or financial problems after acquiring properties.

5. Save money for retirement needs.

Aside from having short-term life savings, individuals should allocate funds for retirement and future needs. They can expect financial security and stability even when they are no longer employed, as long as they have accomplished their retirement plans.

Personal finance can help individuals meet their current needs and prepare for future risks. They need to understand financial principles that can help them manage their resources and prevent monetary problems.

Successful Personal Finance Has Nothing to Do With Money

What do I mean by saying that successful personal finance nothing to do with money? Most people think that if they had loads of money then all their money problems would be cured. Actually I think the reverse is true - their money problems would just be starting. We've all heard about lottery winners who suddenly get millions of dollars but within a few years it's all gone.  Some people will simply put this down to poor money management but it goes deeper than that. Whether you are successful in personal finance and create wealth in your life, starts with what you think and feel about money.

When we are young we are like a dry sponge soaking up all the information around us - the good, the bad and the ugly. That's where we learn our first attitudes towards money and personal finance, even if we don't realize it at that stage. We accept the financial attitudes and money management of our parents, family and friends without even thinking about whether we agree or disagree with them. Sayings like "Money doesn't grow on trees" and "I'm not made of money" stay with us as we grow older. What did your parents and family say to you about money as you were growing up? 

When you think about what you were taught back then you may not agree with it now, but it may have been valid then. Unless you are aware of what you were taught you may follow the same financial awareness even though it may no longer be valid. Now don't get me wrong I'm not blaming your parents for this, they did their best and taught you what they knew, but in some cases it's simply doesn't work any more. The idea of going to school, then University, getting a job for life and then a state pension isn't valid any more as the population ages. A recent article on This is Money explains the problem we'll have with changing demographics.

What else were you taught about money as a child? Many people were given money on birthdays if they were good children. I stress the 'if they were good children' because as we grow up we tend to associate money with being good. I know we can all find examples of where getting loads of money has absolutely nothing to do with being good, yet we still link receiving money to actually deserving money. If people only received money when they deserved it then I can think of some millionaires who would be much poorer!  

Thinking about rich people: who do you think about when you think of when you think about wealthy people? Do you think of wealthy business people who gives millions of dollars to charity such as Warren Buffet and Bill Gates, or do you think of con and scam artists? This is actually important as to whether or not you can create wealth. If the first people you think of when you think of the wealthy are actually con artists then it's unlikely that you'd want to be like them. If you associate money with bad attitudes and sayings such as 'the filthy rich' then why would you want to become wealthy? It'd be like someone who hates the sight of blood becoming a surgeon.

Money itself is neutral. It's not good and it's not bad - although what you do with it can fall into either of those categories or somewhere in between.  

So in conclusion, take some time to be aware of how you think and feel about money.  How you think about money and personal finance will reflect on how you deal with money and the ways you accumulate money. You could be sabotaging yourself when it comes to personal finance simply because your thoughts and feelings around money are negative. When you realize that money is actually good for you and your family, and that you deserve it, then dealing with money and acquiring it, will become easy.

Four Tips to Effectively Manage Your Personal Finances

If you are looking for information that can help you manage your personal finances responsibly, then you have found the right article. In the remainder of this piece, we have enumerated and discussed five tips guaranteed to help consumers like you to succeed in their quest to handle their respective financial resources in the best way they can.

Helpful Tips for Consumers

• Come up and stick to a personal budget. We encourage all our readers to come up with a personal budget. This tool will not only help you manage your personal finances in the most responsible way you can. It can also help curb overspending, which is the main reason why a lot of consumers today have huge financial obligations and severely damaged credit profiles.

To do this tip, you need to take your time examining your income as well as your monthly expenses. Consider what percentage of your income goes to your expenses and how much money goes to your savings account. If you think that you need to reduce your expenses for the month so that you can save more, then list down all the items that you have spent cash on for the past months. Then, think about which goods and expenditures are necessary and which are not. By doing this, you can eventually come up with a final budget that you can use not only for managing your day-to-day finances but also for reaching the financial goals that you have set for yourself.

• Sign up for automatic savings. If you find it hard to set aside cash that will go directly to your savings fund, then we suggest that you sign up for an automatic savings arrangement with your bank. In this arrangement, your bank will automatically deduct an agreed-upon amount of money from your salary, and transfer it to a savings account, which imposes a significantly higher rate of interest.

By employing this tip, for sure you will find it easier to save up for your future. And, at the same time, you can have a sure source of funds that you can use to finance emergencies and other urgent needs.

• Take out lines of credit only when necessary. Before you apply for and take out a credit account, like a personal loan or a credit card, you need to consider not only if you really need it, but more importantly if you can afford it. Always remember that most credit programs offered to a majority of consumers these days impose steep rates of interest and fees and very stringent payment terms. And if you won't be careful in choosing a line of credit, you might end up with one that will not suit your needs, preferences and your financial capability. This is why we encourage you to take out credit programs only when it is absolutely necessary.

• Look for additional sources of income. If you think that you need more funds to sustain your lifestyle, then you might as well consider applying for a good-paying home-based job that will fit your schedule. For example, you can serve as a part-time virtual assistant to an offshore executive. You can also start your very own online business so that you can supplement the income you earn from your full-time job.

Why Your Life Depends on Personal Finance Planning

Personal finance planning is a topic that many people try to avoid discussing even in these gloomy and worrying economic conditions. This tends to happen out of pure ignorance or out of self-belief that one can manage things without help. The truth is, whether we like it or not, personal finance planning must play an important role in our lives for us to live a happy and dignified life. This article highlights reasons as to why your life depends on it.

1. Life can take some unexpected turns, some for the best, and some for the worse. When life does take an unexpected turn for the worse, such as the death of a loved one, or suffering an accident with serious injuries, you normally have to fork out thousands of dollars almost immediately. Hence, it's vital that you plan to have emergency funds saved up in case of times like these.

2. In life, you never know when it's your time to go. And when you do pass away your assets are typically passed on to your next of kin. However, you certainly don't want your wife and/or children to be inheriting large amounts of liabilities that they will have pay off. By planning your personal finances, you can avoid such a difficult and stressful situation.

3. You won't be working forever. There will come a certain point where your body will no longer be able to put up with the stress and intensity of labour. You may be near this age or far from it, but it will eventually come. And you must be financially prepared to live off your savings and investments. The only way to ensure a well-off retirement is through financial planning.

The 3 reasons above should be more than enough to convince you that planning your financial future is a must for you. You may not realize just yet but your life may just depend on personal finance planning.

The Very Best Way for Young People to Learn Personal Finance

Here's a tough truth for you parents: your college student or young adult probably doesn't know very much about money. I won't go into the detailed statistics, but the fact is financial literacy among young Americans is pretty awful. And I can speak from experience too: most of my friends still don't have a clue about money even now that they're making it.

Let's look at two facts: First, smart money management is essential to building wealth. Second, youth is the greatest wealth-building asset there is. Put the two together, and it's clear that a lack of money fundamentals today has a huge impact on wealth in the future.

There's no excuse not to educate our young adults about money, but most of our solutions aren't very effective. The answer is not to make personal finance classes mandatory in school (nobody remembers anything after finals) or offering free community workshops (who would go?). It's also not about making investing "cool" or using innovative technology.

Even sitting down and talking to your children, which I highly recommend, isn't consistently effective. I have a great relationship with my parents but tuned out whenever they started talking about money. It was just... boring.

The very best way for young people to become more educated about money is to learn from others that are just like them.

Sound simple? It's not. Money is a touchy subject that affects everybody in a different way. Many people love it, hate it, are embarrassed by it or jealous because of it. As a result, many people ignore the subject, thinking that personal finance is something that can be done "someday." Which of course, almost always means "never."

The simplest solution is in blogs and online communities that cater to young adults. That's why sites written by young authors, like MyMoneyBlog and GetRichSlowly have become so popular in a short period of time. Young people form communities around the sites and discuss their real, relevant stories. And by allowing many readers to participate anonymously, these sites make it easy to learn without fear of embarrassment.

As a parent, what should you do? Spend some time online at similar sites and find interesting content your child might find useful. Try blog articles or short e-books (longer books have too much irrelevant information and often don't get read). When you find something, email your son and daughter linking them to it. You don't need to explain it; they'll usually click through out of natural curiosity, at which point the words of the author do the rest.

This is a really effective way to get your kids interested in personal finance. By letting them feel like they've "stumbled upon" something interesting and useful, you won't make them feel awkward or defensive. It worked for me, which is saying a lot.

How to Budget Personal Finances in 3 Simple Steps

Learning how to budget personal finances is very important. Not only does it help you save up for your future, it also keeps you from incurring any unnecessary expenses.

You know exactly what I'm talking about, don't you? No more wild shopping sprees and wrong purchase decisions.

I know this doesn't sound like a lot of fun at all, but that's because you're used to the old understanding of budgeting. This article will change your old perceptions about money and teach you how to budget personal finances in a fun and creative way.

Step 1: List down expenses.

Learning how to budget personal finances may come naturally to others; but if you're not used to it, you may want to start with something simple.

That first step involves listing down your expenses every single day. Everything you shelled money out for, you must list down. Did you buy a train ticket today? Write that down. Did you buy yourself a cup of coffee or perhaps paid one of your friends back the money you owe him? Write those down as well.

You may want to reserve a small notebook or organizer for this list. This way, you are 100% aware of where your cash is going. Writing your expenses down also makes your mind more conscious about what you spend your money on.

At the end of the day, you'll come to a striking realization that you need to cut back on certain things.

Step 2: Save a percentage of your earnings.

Another way on how to budget personal finances is by saving at least 5-10% of what you earn in the bank; or better yet, an investment plan with a higher interest. As soon as payday comes, keep that small percent under lock and key.

It might not seem like much, but you'll be surprised at how much all those percentage shares add up at the end of the year!

Step 3: Budget online.

These days, there is a bevy of budgeting software available for your own personal use. Applications like and Quicken Online help you track your expenses and spending habits down, absolutely free of charge!

These web sites help you understand money and often show you just where your savings are going. They'll paint you a realistic picture of where your money disappears off to and in which areas you have to cut back.

Of course, these applications are only as secure as your password, so you might want to be doubly careful when logging in and out of them.

Learning how to budget personal finances is quite easy as long as you put your mind to it. Don't be bogged down by thinking it's impossible.

5 Ways to Quickly Manage Your Personal Finance

Do you know that billions of people around the world could not manage their personal finance well because they are so plunged into financial debts? In fact, it is one of the major causes of personal bankruptcy filings! If you are one of those people whose balances on their credit card accounts are through the roof, then you are on the right page because this article will teach you things that you should know to manage your personal finance and get rid of your debts.

- The first step involves developing a budget. The very first step towards taking control of your financial situation, reducing your financial debts, and managing your personal finance well again is to develop a realistic assessment of how much you take in and how you much you spend. You may start by making a list of your income. Then, create a separate column for the list all your "fixed" expenses such as rent, mortgage payments, insurance premiums, and car payments. Next, create another column for all varying expenses such as recreation, clothing, and entertainment. Writing down everything is a very good way to track your spending habits, identify the necessary expenses, cut down on the unnecessary expenses, and prioritize those with utmost importance. Your ultimate goal here is to make ends meet and of course to reduce your financial debts.

- The next step is to contact your debtors. If you are having trouble budgeting and making ends meet, then your next step is to contact your creditors. Explain to them why it is difficult for you and try negotiating with them about a modified payment plan that can reduce your monthly payments to a more realistic and manageable level for you.

- Don't forget to deal with debt collectors. If you are already in financial hot water, then your accounts must have been handed over to debt collectors. When you are already at this point, you have to understand the "Fair Debt Collection Practices Act". This is the federal law that states the manner and time a debt collector is allowed to contact you. While there is a federal law protecting you from harassment of your debt collector, you should be nice enough to deal with them. Hiding from them is not a good idea since failure to pay your debts will be reflected in your credit score.

- Managing all your loans is also very important in getting everything in the right track. Your financial debts can be secured or unsecured. Secured debts are often tied to assets like your house for your mortgage and your car for your car loan. If you stop paying these loans, lenders can foreclose your properties or repossess your car. Unsecured debts on the other hand are not tied or linked to any asset and these include most medical care bills, credit card debts, signature loans, and other debts of these types. If you really want to reduce your financial debts, make sure you schedule your payments to both your secured and unsecured debts.

- If you find steps 1 to 4 difficult to accomplish, then it's time to get help from a credit counselor. There are many non-profit credit counseling organizations that can work with you in finding solutions to your financial problems. Credit counselors can advice you on how to manage your personal finance, help you in developing a budget, and offer free workshops and educational materials.

Personal Finance Advice That Doesn't Really Live Up

There's a scene in the popular sitcom Friends, in which Monica, nearly broke after having lost her job, tries to play the stock market in a final attempt to bounce back. She doesn't really know anything about the stock market, and picks companies to invest in the strangest ways - a company with the stock ticker symbol ZXY is her favorite because she thinks it sounds "zexy". She picks another company because it has the letters of her name. Are there superstitions in personal finance? Do people really make their financial decisions based on nothing but gut instinct, a bunch of rumors and a sign handed down to them by their dog? They certainly do. Here are a few choice articles of personal finance advice that get bandied about that are little better.

For instance, lots of people stay away from buying red cars because they believe that they are really doing the smart thing by their bank account. How is this supposed to be financially smart? They've heard of a particularly resilient rumor to do with how in their internal calculations, insurance adjusters tag on an extra few dollars for red cars because this, they believe, is the color of choice of raving maniacs who like to drive at 100 mph at all times. In truth, insurance adjusters don't pay any attention at all to the color of a car. So when a friend buttonholes you and tells you in a conspiratorial whisper that he has this great piece of personal finance advice for you that he knows to be true, you know where you need to tell them to put their advice before you call and tell your dealer that you'll go for that red little number. If there's one thing that's good about this advice, it's that lots of people believe in it. So red cars tend to sell for a little less for the lower demand.

As far as many people are concerned, anyone who rents a home is a sucker. The money you pay each month in rent, they calculate according to a well-worn old formula, is all you have to pay as your monthly payment. After a few years, you'll actually own the home. If you rent, you just pay all this money each month your whole life and have nothing to show for it in the and. On the face of it, this does seem to make a bit of sense. Just imagine - you own your own home!

Actually, this old mantra has a lot to do with how the real estate industry got all of America to buy overvalued homes they couldn't afford up until the housing collapse took off. A lot fewer people would own underwater homes today if they hadn't used this very persuasive argument. In truth, often, renting makes a lot more sense. Today for instance, it's positively difficult to find a good house to rent because there are so many people who have been burned in the housing collapse, they don't want anything to do with buying just now. There are quite a few costs and responsibilities that go with owning your own home. A life without that kind of responsibility is often a richer life to many people.

How about the argument that when you plan for the money you need to save for your retirement, you should assume that you'll get about 8% a year for your investments? Well, numbers like this one have actually been quite real at certain times. For instance, throughout the 80s and most of the 90s, the stock market got you 13% every year. But then, at the end of the 90s, the dot-com bubble got busted, and then the housing bubble got busted. It's been busted bubbles ever since. These days, you'd be lucky to get about 4% a year.

How to Build Good Personal Finance Planning Habits

Good personal finance planning and goal setting isn't much good unless you can develop good habits. It's been said that first you form your habits and then your habits form you. I would add to this that your habits form you and your lifestyle. That said, what could possibly be more important than your financial habits?

In this article, I'll be giving you a peak at some of the strategies for using Powerspending to form good financial habits.

How Are Financial Habits Formed?

Your personal finance planning habits weren't formed overnight, and they won't be changed overnight either. This is why it's important to start with small habits and build up some momentum. People normally try to tackle enormous goals, push themselves hard for a few days or weeks and burn themselves out. This is not the way habits are formed. Habits are formed through subtle changes over a period of time.

So don't be afraid to start small when it comes to forming habits, and don't worry about whether or not you're getting a lot of results. Instead, focus on the fact that you're building empowering habits and the results will eventually come.

Keep a Written Journal

Keeping a hand written journal (not one on the computer) will help you keep track of your progress when forming habits. There are a few reasons to do this. The first is that forming new habits will often challenge beliefs and perceptions which are being used to rationalize your old habits. Keeping a journal will help you identify these beliefs, which are often self-limiting and can cause you to sabotage your own success.

However, if you're aware of these things, you'll have a much easier time changing them and keeping them from getting in the way of forming new habits. Remember, your personal finance planning habits weren't formed overnight, and they weren't formed without reason. Most likely, they're supported by beliefs which aren't going to change easily. Keeping a written journal is the best way to become involved in identifying your self-limiting beliefs about money and replacing them with new ones.

Reward Yourself

Set some landmarks for yourself and find a way to reward yourself for sticking with your commitment to build new personal finance planning habits. Most of us are pretty good at scolding ourselves when we fail, but not good at rewarding ourselves when we succeed. So give yourself the best chance possible to succeed by rewarding yourself for developing good financial habits.

Personal Finance Budgeting: Take Yourself Out of the Equation

We all have bills and we all have to pay them. However, when it comes to personal finance and budgeting, some people pay their bills like this:

1. Get statement (in the mail- as in snail mail).

2. Avoid statement ("ack! a bill! I'm stressed about money!")

3. Two weeks later, remember said statement ("oh &$*%! I have to pay this or I will lose (fill in blank) service!")

4. Write check and send to service provider (and pay almost 50 cents to send it).

Sometimes this happens:

5. Forget about check, spend money that was reserved for bill, check bounces.

6. Never made it to step 3 and service is shut off and the mad dash to pay the bill ensues.

YIKES. If you are stressed about money and bills there are only two things to do: TAKE RESPONSIBILITY and AUTOMATE IT.

Paying your bills this 'old school' way is stressful and it is what is putting you in a financial hole. You are human. Human's aren't reliable. We forget, we make reasons, we are impulsive, we choose 'want' over 'need'. It's our biological nature so don't be offended.

So what is that-person-you-know-who-has-control-over-their-finances doing that you aren't?!?! I mean, they are human too, right??!


They have been responsible about their bills and have set up a system that handles their finances for them. They have taken themselves out of the equation so they can't mess it up! If you do the same, you'll find you are less stressed and more in control of your finances.

Take the following steps today to set your finances straight. Old School is not COOL when it comes to your bank account.

1) You must be responsible about your finances and if you don't know how much TOTAL you need to cover your bills (this includes RENT) every month, you must discover this number, NOW. If you find that your bills leave little for necessities like food, you may need to re-evaluate your income/spending and downsize on services (or get a second job, but who wants to do that?! You work hard enough).

2) Whatever this number is, have it automatically deducted from your paycheck by your employer and put into a separate account. If you are self-employed, ask your bank to take this amount out on certain dates and put it into a separate account. Block the option to withdrawal from this 'bills' account with your debit card.

3) Make every 'mail statement' an electronic statement. 99% of services offer this option. It will come right to your inbox and save trees.

4) EVERY bank and EVERY service offers automatic payments. Most Landlords (if you are still renting-which is just another way of throwing away money by the way) allow e-payments as well. Either set up automatic payment for your bills through your bank or set it up with each service provider. If you do auto-pay with your service providers, I recommend setting them up by bank account/routing number and not debit card number. That way if you lose your debit card, you won't have to go to each service and update them all.

5) Live on stress-free. No more 'bill reminders', no more last minute scrambling. No late fees. Trust me, you will soon get used to only having access to a dedicated spending amount. You will have made your finances 'fool-proof' or rather YOU-proof.

Your credit rating will thank you.

Want a video version of this article? Go to:

Personal Finance Series: No 6 - Shocked! Grandad Bankrupted By Garden!

I read an interesting news article recently. A Grandfather lost everything he owned, including his home because he failed to understand the significance of the single biggest decision made in his Personal Finance Budget - Where to live.

The riskiest yet most rewarding personal finance decision was taken because the man seduced himself into buying a house he couldn't foresee was unaffordable in the medium term. He was ultimately bankrupted, he said, because the yard, the garden, was stunning and it convinced him to buy it. The man, in search of that most primary of needs, shelter, had been seduced by kerb appeal.

Housing Shelter Position: Castles of Deception

The importance of shelter, of a home, connects to a very primitive human need - the need of protection against the cold, the prevailing wind and a place to feel safe, dry and warm.

Searching for a home is therefore a very emotional and deep rooted experience, and all the available advice to house sellers is to make it as easy for the prospective buyers to deceive themselves, to 'see themselves' living in the property.

Kerb Appeal advice lists the following

  1. Paint over blemishes
  2. Remove all visible trash, weeds, and dirt
  3. Groom the gardens and clean the yard
  4. Add foliage, plants, and flowers
  5. Wash the windows

Kerb appeal is all about creating a first impression, making the property sufficiently 'alluring' to make passing cars stop!. Similarly, inside gets the same clean out and clean up treatment.

Housing Shelter Position: The Emotional Sale

The combination therefore of the deep drive for security and the deceptively seductive garden, produce an imaginary high quality of life, imaginary happiness, and imaginary positive experiences.

People stand inside the three dimensional space and 'feel' their future - the conversations, laughter, relaxation, dinners and contentment. If it feels right, the true cost of the purchase, the price, the mortgage and the future repayments are all significantly affordable in the minds eye than if the house is somehow 'wrong.'

That having a home produces this response can be in no doubt - just ask any homeless person what they most desire.

Housing Shelter Position: Taking Preventive Action

Despite the manipulation, buying or renting a home is a big undertaking because of the financial implications of getting it wrong, and the commitment that ensues over a long time The fear of homelessness, or being unable to provide shelter for his family is a very common nightmare among men worried about job security. Housing Shelter Position Spending is one of the 14 different way in which our brain thinks about money. This category includes the hidden costs of moving and settling in, as well as structural changes like adding rooms, conservatories, and knocking down walls.

These are large, considered expenditures because they take out a significant proportion from the personal finance budget, it is important to know how these commitments track over time. Also, by understanding the details of how much and how often you spend within all 14 categories, you can start to control your personal finance budget.

It is very important when taking preventive action, protecting your shelter, that you match up your money in and your money out, and understand the consequences of a variety of decisions regarding spending money.

Large financial commitments such as these can be planned for as a financial budget goal, and having a personal finance budget forecast, an ability to see over time which changes need to be made when times get tough, allow for lifestyle adjustments early - rather than those forced on the Grandfather above, whose lifestyle change was forced on him through bankruptcy. He lost control of his life because he didn't take control of his money.

3 Steps to a Simple, Automated Personal Finance Setup

Personal finance can be scary and intimidating. We all know we should be saving for retirement and large purchases, but don't like to talk or even think about it. This article shows you the 3 steps needed to a simple, solid personal finance system.

The Elements of a Solid Personal Finance System
Everyone needs at least 3 accounts for a secure financial set-up. First, a high-yield checking account for everyday purchases. Second, a high-yield savings account for your emergency fund and large purchases. Third, a retirement account, at least a 401(k) (or equivalent), with preferably an IRA in addition. Let's look at each element in detail.

1) High-Yield Checking Account
The foundation of your personal finances should be a checking account that earns interest. If your current bank charges fees for your account, dump it! The bank should be paying you to use their services.

Interest rates are pretty low right now, but check with your local credit union, they usually offer higher interest rates. By finding a high-yield or rewards checking account, your bank will pay you simply for keeping money in your account!

2) High-Yield Savings Account
Are you one of those conspiracy theorists that keeps their savings under your mattress? Get over it! You're losing money by keeping it out of a bank. Your bank should be paying you to keep money in a savings account.

Once again, check with your local credit union first, but most of the higher-interest savings accounts are now found online. ING, Everbank, and Ally are good options to look into. Set up automatic monthly deposits from your checking account into your savings until you have a 3-6 month emergency fund.

3) Retirement Account
If you aren't saving for retirement, plan on flipping burgers at McDonald's in your 80's. Everyone procrastinates saving for retirement and underestimates how much they'll need; bad combination! Talk to your employer about any retirement accounts they offer, such as a 401(k).

Then, set up your own traditional or Roth IRA with an online broker such as Vanguard or Fidelity. Save about 15% of your take home pay by first funding your 401(k) up to the employer match, then maxing out your IRA, then back to your 401(k) if there's any left.

By following these 3 easy steps, you will have a secure financial future.

Emergency Fund Accounts - Personal Finance Basics

As a financial consultant and I have coached a lot people as to why emergency funds are critical. In an earlier post you learned crucial personal finance basics with regards to creating an emergency fund like budgeting, goal setting and automation. Today I'll discuss a few quick tips to help you pick where to invest your emergency fund.

Convenience - If you are like lots of people, you want to make saving into an emergency fund as fluent and simple as you can. Coaching personal finance basics has also shown me that if it's not easy, chances are it won't get done. You likely have a checking account. If so, you probably have a savings account in place too, if not you could open one with your bank on the Internet or at your branch. I recommend using this account to park your emergency funds. Chances are the interest rates aren't great, but it's an a simple account you probably have, or you could set up in a jiffy.

High Interest Savings - You shouldn't worry too much about the interest rate you get with your emergency fund as it's considered a short-term investment. A personal finance basics way of thinking is that you'll probably use the fund within the next five to seven years, it's short-term. ING is avery popular savings vehicle, as is PC in Canada. There are plenty of high interest savings accounts available to create online, just be careful of their fees, terms and conditions and legitimacy. Money market funds is one other choice, and can even provide higher interest than savings accounts, but they aren't guaranteed. I have personally used ING for my emergency fund and think its excellent.

Liquidity - How quick can I get my money? Another important factor you need to think about is how accessible are your emergency funds. The simple rule with this is that it should be available by less than five days at the very most. You should try to get a fund that could pay out your money within 24 hours of when you need it. The personal finance basics question to ask yourself with this when choosing an account is "Can I get the money when I need it?"

I hope these personal finance basics regarding convenience, high interest savings and liquidity will help you make your emergency find into a reality. Check our resource link for free budget spreadsheets and other financial calculators to give you the head start you may need. We go more in depth in our e-book as well. The best tip I can give is to get it started. Even if you only got a 0% rate of return, you will still have money tucked away for those unexpected expenses that you wouldn't have otherwise.


4 Easy Personal Finance Tips

Every month we end up spending more and feel the stretch over financial commitments. Often people think about saving more than doing it seriously. This recession period and subsequent lamed growth, has compelled us to give some serious thought to managing personal finance prudently in order to save enough. This article gives some significant input regarding administration of personal finance.

1. The first step is to create a feasible budget that allows you to spend comfortably and meet your basic needs as well as save sufficiently. It should not just be put on paper to forget; instead the budget must be followed stringently. Keep a track of all your payments including electric, phone, fuel and your credit card bills. You can pay through direct debit which can ensure your timely payments and create good credit ratings for you.

2. Good personal finance management requires some compromises and sacrifices on your end. Try to keep a check of your unnecessary food, snacks and alcohol expenditure. Even saving on them just once a month can make a big difference.

3. Your outstanding mortgages, loan repayments and credit card bills must be a priority while planning your savings and investments. It is important to remember that even a few non payments towards your loan installments can lead to severe financial problems or even bankruptcy in worst cases. If you sense that your credits are mounting and it is difficult for you to pay them, it is advised that you immediately review the situation and consult creditors for a solution. You can ask for easy payment solutions or even raise money from other sources to get out of raising debt.

4. Diversify your investments in insurance, shares and other policies that are safe and give good returns. Remember that wise financial planning can help immensely in solving many of the economic problems that you may encounter in your life.

5 Personal Finance Tips For Parents

As we grow older our responsibilities also increase and once you become parents you have to deal with them pretty seriously. Taking care of children, providing them with the right education and other facilities can lead to some heavy financial burden for parents. In this case what can you do? What is most important is to prioritize your responsibilities as parents and determine the financial support you need to accomplish it. This article will cover a few tips that can help you manage your personal finances diligently.

1. First of all understand that now you have some serious duties to perform, hence you cannot act as if you are a 20 year old and make liberal financial decisions. You need to create a balance between your instantaneous and long term needs so that you can invest wisely. Manage your income properly and keep a check on spending and investments.

2. Plan for your child's education early and keep funds aside for it. You will need to create a budget and estimate the finances that you will require for his schooling and higher education. Invest accordingly in schemes and investment plans that will have high returns when you require them most for your child's education.

3. It is very common that people when they grow old tend to invest in property and buy a house. It is certainly one of your basic needs and you may take some loan for the same. Adhere strictly to your budget and repay loans in time so that you can avoid getting a bad credit rating or bankruptcy. Remember by simply paying the minimum due you are not doing any good. Try and negotiate with the creditors for simpler installments.

4. Supervise your credit card payments and pay your credit bills in time to avoid heavy interest.

5. Remember that with children you also need some handy cash for few unplanned expenses like medical bills etc which may crop up anytime.

7 Personal Finance Tips For Working Adults

This article aims to provide a few tips regarding personal finance for working adults. In this time of recession and slow growth we all need to save enormously and curb any unnecessary expenditures. But, most importantly we need to manage our finances wisely.

1. Try to spend according to your budget and save some extra cash. Keep track of your income and expenditures. You should be able to save some cash each month and keep it aside for bad times.

2. Invest wisely and ensure that you get optimal returns for your investments. Avoid investing in one scheme or with single company. Instead spread your investments astutely amongst various schemes and companies.

3. Avoid missing your credit card or loan payments; else you may receive a bad credit rating. Do not miss the payment dates otherwise you may have to pay huge interests and find difficulty in getting further loans.

4. There is much we can do to save on our expenditures. Go green and save on expensive energy bills. Even the government is providing some tax rebates to people trying to make their homes more energy efficient. This way you can save doubly by receiving tax rebates and paying less on your energy bills.

5. Usually in tougher times people tend to invest less, but this should be avoided. Keep your investments regular whether small or big. Remember that even these small investments will pay you good returns in the long run.

6. Avoid exorbitant spending on expensive food and alcohol. These are few things that can be avoided in rough times. The more you save the better it is for you.

7. In case you need financial advice, do not hesitate in consulting. You can also do some research online to make wise investments.

These tips will certainly guide you to control your personal finances and pass through rough times easily.

Household Saving Tips - Personal Finance Help

Got Gas? - Part 3

There are a lot of elements in your house that use Natural Gas to run. My parents have a gas stove, fireplace, furnace, hot water heater and a clothes dryer. I think they are in need of personal finance help if they want to reduce these costs. When they discover their budget one day, they'll understand if their gas bill is in line with what it should be based on their income. I've already shown them to our resource link to get a detailed budget spreadsheet and various financial calculators, but they can also search Google. Here are three quick gas saving tips you can implement in your house.

It's Getting Hot In Here - I know you've heard the song. You shouldn't get to the point of wearing shorts at home in the dead of winter. Can I offer a simple bit of personal finance help you can use to lower your heating costs. Drop the thermostat setting by 2 degrees and you will save a large 5% on your gas bill.

Mmm Smells Fresh - Why does no one hang clothes out to dry. If your dryer is gas powered, you could save a lot of cash by hanging your clothes to dry. This is my favorite personal finance help tip as it helps with gas bills, because of the fresh odor it creates. If you find them stiff, tumble them on low heat for 5 minutes.

I Burnt Myself Again - Have you burned your hands while washing them or doing dishes? Think of all the things you use hot water for. I don't believe your water should be so hot that you are unable to hold your hands under it with minimal discomfort. If it's too hot to hold your hand under it, you water temperature is set too high and is costing you cash. My personal finance help tip regarding hot water heaters is adjust the setting so it's not around 100 degrees, but is warm enough to get your dishes clean.

As a personal financial consultant, I've helped many families reduce their overall costs. Their first step when receiving my personal finance help is to get their budget figured out. Simply doing this has often allowed them to allocate or free up hundreds of dollars a month. The next step is always to see where you can reduce expenses in other areas. In this case, I hope these tips will help you reduce your gas bill. Stay tuned for Part 4.


How to Improve Your Credit Score - Personal Finance Basics

The health of your credit score is incredibly important to your finances for a number of reasons. To begin with good credit scores are exactly what banks are looking for when deciding whether or not they will lend you money. More often than not insurance brokers or landlords often look into your credit when determining whether or not to choose you as a potential client or possible tenant. This article will describe to you a number of ways of improving your credit score and will assist with your personal finance basics.

1. Pay Your Bills On Time

The reason why this is first on my list is because this is likely the most important rule to follow when trying to boost your credit score. If you visit a bank and want to apply for a home mortgage the first thing the bank will search for is if you regularly make bill payments when they are due. These bills include everything from your cable, home or cell phone, credit card or any other types of bills. Your credit score will directly reflect if you pay for, miss or are late on your bills. If they discover that you always miss or are late for payments, there is a good chance they will not approve you for the loan.

Helpful advice so you will make every bill payment:

-Create a new checking account and allocate enough cash at the beginning of each month for your bills so you always have enough.

-Create automated email reminders a few days prior to when your bills are due.

-Create automatic payments through your online banking.

-Keep a written calendar of when each bill is due. Update and check it regularly.

-Purchase everything possible with cash. Not having a credit card means one less bill to forget.

2. Never Let Bills Go To Collections

This may seem very simple but these collection agency's exist because thousands of people allow their unpaid bills to go this far. You can't forget about your bills. Your bills won't just disappear. If just one of your unpaid bills go to collections you will have to pay surcharges, major interest and your credit rating will be tarnished.

3. Keep Credit Card Balances Low

The most simple of personal finance basics is if you must use a credit card, keep the balance at zero or as low as possible. The less of your available credit you use the better. The number that most reflects your credit score the most recent balance on your statement. Even if you pay your bill in full every month you should never exceed more than 30% of your available credit. The less you use the better.

4. Use Old Your Credit Cards

This may seem a bit odd but try not to switch from one credit card company to the next. If you jump around and continually open and close credit cards your credit score can be adversely affected. If you can use the credit card you got when you were 20 and stay with it. If you primarily use a different credit card, attempt to keep your old cards active and use it every once in a while. Make certain you pay it off in full each time.

5. Check Your Scores Once A Year

Credit scores can change fast. One day everything may be going well and tomorrow your credit score might be awful. Looking into your score each year is a personal finance basic tip we all should follow. This will allow you to correct any mistakes that the banks or you might have made. Keep in mind, if you check your credit rating more than once a year or on a regular basis it will affect your scores negatively. Checking once a year is your best option. Be sure to dispute any errors like unpaid bills or late payments when you are certain that they were paid on time or there might be other issues that you could find.

High credit scores create the chance for lower interest rates on mortgages, car loans, personal loans and credit cards. The most simple of personal finance basics you should follow is to maintain the health of your credit score so you will be able to take advantage all sorts of different financial opportunities. The sooner you rectify any issues you might have with your credit, the sooner you will get everything back in order. By following these tips you will be completely on your way to improving the health of your credit score.

Controlling Your Credit Cards in the Name of Personal Finance

There's no doubt that the credit card is a common culprit in the destruction of our personal finance. However, we mustn't let it control us. We are ultimately in control of our personal destinies and that includes of course our financial destiny. If you feel that your credit card is taking control of your life, then reading the tips contained in this article will do wonders for you.

Ratios, Ratios, Ratios

What do I mean by ratios? By this, I am referring to your debt-to-income ratio and the need to constantly monitor this. Of course, the most ideal ratio would be 0, however a healthy and more realistic ratio that everyone should aim for is 15% or less of your after-tax income. You might be now thinking that such a ratio is too low or unrealistic, but keep in mind that if this ratio exceeds 15%, then you credit card is indeed controlling your life. Make a stand and take action.

You Make The Rules

If you don't feel in control of your credit card, then it's probably because you're playing by the bank's rules. Your bank keeps sending you statements highlighting the "minimum amount due" when all it wants to ensure is that you never fully pay off that debt and keep accumulating interest for the rest of your adult life. You're better off paying off the whole debt as soon as possible without having to pay potentially thousands of dollars in interest over many years.

It Doesn't Hurt To Ask

Don't ever forget that you are the customer and that your credit card company would do anything to keep you. Especially given these tough economic times. You now have more leverage than ever before to ask for lower interest rates and lower fees. All you have to do is ask or threaten to leave your lender for a rival company. It's as easy as that.

My only hope is that this article will greatly assist you in taking control of your credit cards for the sake of your personal finance and financial future.

Taking Control of Your Destiny With Personal Finance Training

Your future, whether you like it or not, will be affected by your financial situation and as a direct result, personal finance training becomes very important. There are a lot of people out there that avoid talking about money saying "it's not important because it won't make you happy" and other similar comments. However, these are most likely the same people that worry day in day out about whether they will lose their jobs or have enough money to pay off the debts. Let's face it: money IS important, it's all around us and if we are to successfully manage it and our future, we need personal finance training.

Construct Your Destiny

Before diving into the gritty bits of the training process, take a moment now to close your eyes and create the destiny you wish to create. Use all 5 senses. Picture it, feel it, hear the sounds from it, touch it and taste it. Once you have used all your 5 senses to envision to destiny, grab a pen and a bit of paper and write everything you saw, felt, heard, touched and tasted. Everything. It doesn't matter how long it takes, or how many pages you fill up, just do it. Once you're done, read over it and recognise that this is the destiny that you are determined to create at all costs.

Identify Those Bad Habits

Now the second step of personal finance training is to think about any bad and horrible habits you may have when it comes to spending money. Take some time to think about these and then make a list of all of them. It's more likely than not that these habits have led you to a poor financial situation. Don't be scared about admitting these. The first step towards fixing any problem, whether it's financial or not, is acknowledgement. The longer the list the better.

Eliminate Debt From Your Life

Your bad habits have most likely created a situation of high debt for you. If that weren't the case, then you probably wouldn't be reading this article right now. So once you've acknowledged your bad habits, you can then progress to rectifying the problem. You may have accumulated a high level of debt by taking out too many credit cards and getting charged a lot of interest for it. Or you may have taken out too many bad loans. Whatever the case, you must identify the cause of the problem and stop it in its tracks. You can only move on to the final step of personal finance training after completing this step.

Develop A Habit To Save Money

The final step involves developing ways to save money. Now, you will have probably already done this as part of eliminating debt, however, it's only now when it becomes your number one focus. The best way to save money is to make a list of your necessities and your wants. You have to be honest with yourself during this process. Once you have made up the list, you should restrict the amount of wants you buy. That doesn't mean that you completely stop accessing those wants, because you should always have something to reward yourself with for your efforts saving money. Over time, a saving habit will put aside a sizeable amount of money which will come in handy to realize the destiny you created for yourself in step 1.

As you have seen, personal finance training is a necessity if you desire to successfully construct your destiny in life. It should not be avoided or ignored, for it will only mean that you will live in financial uncertainty, with a lot of pain and suffering. It would be nice to have some financial certainty in our lives, right?

Personal Finance - Believing You Can Rid Yourself of Debt

Most people at the end of their life don't wish they'd spent more time at the office, but they do often regret not spending more time with their family, especially when their children were young. Unfortunately, people who find themselves with debt payments that exceed what they can reasonably afford usually cast about for ways to increase their income.

Instead of taking a part-time job, working overtime every week, or getting involved in a get-rich-quick scheme, look at your budget for ways to cut back your spending. Decreasing spending is usually a lot easier than increasing your income. Plus, you won't sacrifice time with your family in exchange for a paid off credit card.

It can be daunting to owe a bundle to your creditors and to be faced with the change and sacrifices that are necessary to turn your finances around. Success may require every ounce of determination and self-discipline you can muster.

It definitely requires that you be able to maintain a can-do attitude a get out-of-debt attitude over a sustained period of time, because your finances are probably going to improve gradually, not overnight.

A positive, 'I can get out of debt' attitude is key to turning your finances around. You have to believe that you've got what it takes. Here are some proven strategies for helping you believe in yourself and set your resolve:

Draw strength from tough challenges you've faced in the past. Maybe draw strength from tough challenges you've faced in the past. Maybe someone in your family had a serious illness, you went through a divorce, a close relative or friend died, or you experienced a major disappointment in your career.

If you believe that you're largely responsible for your family's financial problems, don't beat yourself up about what you did or didn't do. You can't change what happened, and letting feelings of self-recrimination and guilt bog you down makes it a lot harder to do what you need to do now. Benefit from your mistakes and move on. When negative thoughts come into your head, shrug them off, knowing they cannot control you after all.

A negative attitude can be contagious. If you act bummed out all the time about your family's financial situation, your bad attitude is likely to spread to everyone else in your household. If you have kids, don't forget that they are observing how you behave in the face of adversity, so set a good example.

Remember that you're not the only person who has ever experienced financial problems. Millions of people have been where you are and have had to do what you must now do to get out of debt. If they can do it, so can you!

Boost your self-confidence by getting smarter about money. Enroll in a basic personal finance class or read a good article on the subject (such as this one). Make regular visits to personal finance web sites for practical information about all aspects of everyday money management.

Robert Kiyosaki's Cashflow Quadrant - Why You Need a Home Business to Help Your Personal Finances

This is a simple review of one page of Robert Kiyosaki's book the Cashflow Quadrant. Imagine what's in store for you if you read the whole book! If your personal finances are not where you would like them to be this article will explain why instead of taking on a second job you need to consider starting your own home business; your own online home business. Imagine working in your pj's if you would like!

p.4 is Robert Kiyosaki's famous buckets of water analogy.

At the end of the story he asked the question: Are you carrying buckets of water or are you building a pipeline?

WOW! OPRAH LIGHT BULB MOMENT! AHA MOMENT! REVELATION! LET THE BELLS RING OUT AND THE BANNERS FLY. [Who said that by the way? A cartoon character?] Call it what you will. If you have read Cashflow Quadrant and this wasn't your experience you need to read it again.

My thinking was forever changed.

I had a job. I was carrying buckets of water. When I stopped the money stopped. I had all my eggs in 1 basket. Any number of things could take me down. My health, my employment situation could change, my family situation could change. We see it all the time and in this economic downturn it is magnified. We all know someone who has been down-sized, had health issues, become widowed or divorced. Any number of catastrophes can befall us. Yet we never believe it will happen to us.

When you are completely reliant on wages or salary for your income you are in a very precarious position.

If your personal finances are not where you would like; consider diversifying. Instead of getting by with less and less; instead of having an ever decreasing income circle; why not expand it? Why not take Robert Kiyosaki's advice? Instead of taking on a second job; why not start your own business? Why not start a home based business?

As long as you are working a job; you are carrying buckets of water. When you stop the money stops.

The definition of insanity is to keep doing what you are doing and expect different results. Perhaps this economic downturn is a wake-up call? It should be. Is your ladder leaned up against the wrong wall? If you are in corporate America that could well be the case.

Most people think they are financially literate but then you look at their personal finances. Their personal finances are a shambles. If you could see what people actually own versus what they have on credit there would be a lot of naked people driving around in phantom cars and sleeping in empty houses. Kind of like the story of the Emperor's New Clothes.

People tend to think if I only made an extra $10,000/year everything would be fine. Not true. People with 6 figure incomes are simply broke at a different level. They are wearing more expensive clothes, driving fancier cars and living in larger houses but they are still broke.

How many people do you know that have 3-6 months of wages saved? Do you?

If I ask you: "Is your house is an asset or a liability?" If you answer an asset you are not financially literate. People have stopped reading Kiyosaki's book at this point. So to clarify; he is not saying not to buy a house he is just making sure you understand the vocabulary of the financially literate. His definition of an asset is something that puts money into your pocket and a liability is something that takes money out of your pocket. If you stopped working tomorrow would your house feed you?

The confusion arises when you go to the bank and they get you to list your assets. They even let you name your car as an asset. And it is an asset; an asset for them! Not you! If you re-neg on your payments they get your car.

In conclusion the reason I recommend Robert Kiyosaki's Cashflow Quadrant is to give you a desperately needed wake-up call. What are your personal finances really like? Do you pay yourself 1st? Does 10% of your income get put where you can't touch it? Instead of taking on a 2nd job; I strongly recommend that you seriously consider starting your own home business.

Balancing Your Personal Finances Made Easy Part 1

In order to balance your personal finances and save money, you need to create a budget. This is the first step toward paying of your debt and saving for retirement. It leads to a future of financial security and peace of mind.

Approximately one half of your income should be used to pay for things you need. Experts disagree about the exact percentage, but it definitely should be no more than 60%. Write down all the areas that you NEED to spend money on each month from your personal finances. This includes food, gas, house/apartment payments, etc. Make sure you are honest and include only things absolutely necessary. (Do not include credit card debt or other debt here; they will come later.) Then write down how much you are paying for each of your needs that you listed. Take the total amount you are spending on your needs and divide that number by your total income so that you can see what percentage of your income goes for your needs each month. For example, if you make $2,000 a month, and spend $1,350 on your needs, you divide $1,350 by $2,000. This equals 0.675, or 68% of your income. If the amount you are spending on your needs is much over half of your income, as in this example, you are going to have to look for ways to save money on your needs.

Re-shopping your insurance: auto, renters/home, health, life, motorcycle, etc are some of the ways to save money on your needs. It's important to re-shop insurance every 18 months to two years to make sure you are still getting the best deal. If you have an overwhelming car payment, you may have to sell your car. Maybe the expense most out of control is your housing. Try renting one of the rooms in your house out, staying with a family member for a while, or moving to a more affordable place. Get creative, and find ways to save money on your needs, so that approximately one half of your income is spent here.

Take the time today to find out what percentage of your income you are spending on your needs. Then, look for ways to save money on them in order to begin balancing your personal finances. Look for my next article to balance the second part of your finances.

Personal Finance Budget

Setting up a personal budget for you and your family isn't as hard as you might think. What's hard is maintaining and keeping it working for you for any length of time. If you are setting up a personal finance budget, here's 3 tips to keep in mind.


That might sound like a given, but with so many budget programs and plans out there, you'd be amazed just how easy it is to try and shoe-horn your personal finance situation into another person's perfect design. Don't do it.

By trying to make someone else's ideal, your own, it will only be that much easier to give up on it later when it turns out that it doesn't work for you. This means setting up categories that are specific to your situation and lifestyle. If you do a lot of camping, for example, and that's not one of the categories on your pre-formated budget sheet, don't try to squeeze it into "Recreation" or "Entertainment." Make a category for "Camping."


One of the quickest ways to give up on a personal finance budget is to have it be so complicated that the week after you set it up, you're not sure why you did what you did and can't figure out how to update it. Keep it simple.

Keeping the budget simple also means not having it be too much work to maintain. If it's too much work, then you are really not going to feel like doing what needs to be done, because, it's too much work.


Do what you can to make things happen automatically so that keeping and maintaining a budget doesn't wear you out. For example, if you want to track how much you are spending on entertainment during the month, just keep your receipts and stash them in an envelope somewhere. At the end of the month, just add them up and you know how much you spent. This is much easier and "automatic" than writing down everything on a daily basis.

As I mentioned at the start, this article was about how to keep the budget going once it gets started. You could sit down tonight and make up a budget, but will it work for you? Will you be able to maintain it over the long-term?

Follow the 3 budgeting strategies above and you will greatly increase your chances of designing a personal finance budget that will last as long as you need it to.

Test Your Personal Finances IQ With This Quick Quiz

Managing your spending habits, saving sufficient funds and clearly seeing your personal financial situation are important elements in managing your personal finances correctly. This test will give you an idea whether you need some more help, or if you're on top of this important part of your life. (The answers are listed at the end of this article.)

Question #1. What does "living within your means" really mean?

Question #2. What damage can only paying the minimum credit card payments each month do to your financial future?

Question #3. What is the most widely advocated and proven method of getting your finances in order?

Question #4. What are the most important financial goals you can set?

Question #5. Why is it not safe to spend all your income each month?

Question #6. What is the recommended percentage of my income that needs to be saved for emergencies and a savings nest egg?

Question #7. In what order should your bills be paid?

How did you fare with these questions? Did you know the answers? If not, or if you wish to check your responses, check out the answers listed below.

Answer to Question #1.
"Living within your means" means spending to live as comfortably as possible, from your income, while saving sufficient funds to adequately cater for emergencies and building your savings nest egg. It also means that you should not rely on external funding such as credit cards and bank finance just to live day-to-day.

Answer to Question #2.
Paying only the minimum credit card payment each month can condemn you to life-long poverty. It is that serious. If you only pay the minimum off your credit card each month you quickly start paying interest on the interest and the debt can spiral out of control. Live within your means, don't add to your debts, pay cash and pay down that credit card debt as quickly as possible.

Answer to Question #3.
The most widely advocated and proven method to getting your finances in order is to prepare a budget. Please don't go glassy-eyed and lose interest now. This is an easy task that can finally put you in control of your finances once and for all. There are many resources available on the Internet to help you quickly make a start.

Answer to Question #4.
The most important financial goals you can set are as follows:

a) Set a goal to pay down that credit card debt, both for the amount and the time period. For example, I am going to pay $5,000 off the credit card debt in the next 12 months. Commit to only living off my income starting today. I will always pay cash from today onwards.

b) The second most important goal is to set a savings target. A budget can show you how much you need to set aside for emergencies and that savings nest egg.

c) The third most important goal is to determine to be debt free. This will transform your life. Work out what you need to live and see how much better your life would be if there was no money being applied to debts each month. It's like giving yourself a pay raise.

Answer to Question #5.
It is not safe to spend all your income each month for the simple reason that life is unpredictable. If you have no savings buffer then how will you afford the bills that occur when you least expect them? Will you pay for them with your credit card? Then how will you pay that bill?

Answer to Question #6. The most common percentage recommended to keep aside from your monthly income is 20%. This is a target of course. Not everyone can manage this immediately. Any amount you put aside will be better than nothing as long as you are shooting for a target.

Answer to Question #7.
If you are struggling with paying all your bills each month, the most vital bills are listed below in order of importance:

a) Housing - rent or house payments. If you don't pay these you may have no home

b) vehicle

c) groceries

d) power, water, gas etc.

e) credit cards

The costs of shelter, food, clothing and transportation always come ahead of paying the credit cards.

Are you now a little more understanding of this critically important part of your life? Could you do with some help? There are many agencies and websites dedicated to offering advice and tools to help you better manage your finances. Check them out today. Financial success can be yours. Don't you deserve it?