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.