Personal Finance


Money, money, money… is sweeter than honey! The remark holds very true. Ask any youngster what she or he dreams to own, you will stumble across ideas like bikes, cars, cell phones, music systems, etc. Money holds the key here. Ask any professional, all he dreams is to have a sound bank balance, with a nice house of their own, a vacation to exotic location, a proper pension plan-Money! is the solution, or the everlasting quest, they are all looking for.

Personal finance is that application of the financial plans and monetary decisions of one individual or the family unit. The principles pave the way in which the individual or the family budgets, saves, and spends over time with taking into all the possible risks and debts factor into consideration.Personal finance plans usually involve factors like educational fees, loans, buying real estate, opting for insurance products, investments in stocks, buying consumable perishable goods and articles.

Financial planning

The key to organize once personal finance is proper planning, which is basically a regular process of monitoring and re-evaluation of the investments and expenditures.Let us try and discuss some of the subjective principles that might help our objective of organizing personal finance.

    #1. Assessment: The simplest way of assessing one's own financial position is to take look into his/her income and expenditure status. Where to look for it? Okay, how about the bank statement giving away the earning and saving status. Then try and make one personal balance sheet where in credit column you can incorporate the immovable property like, your house and piece of land you own. Then look forward to your proud assets in terms of gold and expensive jewelry you posses, the company stocks you hold, or the investments that's yielding monetary profit for you. Then turn around and look for your debts now. Yes, the credit card statements, the loan amount you need to pay off, or any other bad investments giving you trouble. Now once you have jotted down your income, expenditure, personal assets and liabilities, it is easy for you to assess you financial status.

    #2. Set Goals: Now once you are done with your financial assessments, you need to set you own personal goals, both long-term and short-term. Where do you want to see yourself in coming 15-20 years? Owner of a posh apartment, a sound bank balance, all your investments yielding good returns, minimum or no liability in debt front, sounds like a utopian situation, but that's possible if you have proper planning, a financial planning.

    #3. Master plan: You set the goals, and now want to achieve them. Yes, the master plan is all you need now. This is something very trivial in nature, you know best how you can cut down your unnecessary expenses, improve your savings habit, how can you earn more, and which are the lucrative sectors you can invest your hard earned money in. Sounds tough, yes it is tough in doing rather than saying. Nowadays, you can avail some assistance too in form of financial planners, your stock-brokers, or any financial guru. But remember the plan's success depends only on you and your understanding, external resources merely provide you some assistance. You have a host of insurance plans that suits your need, stock options, and range of credit cards to choose from.

    #4. Execution: Now comes the part you were waiting for, yes the execution. You have already assessed your financial position, have set goals to improve your monetary status, and armed with an achievable plan. Start applying them. Now, comes one of the most challenging part, it starts to test your patience. Do not get upset if your plans and investments are not yielding any immediate returns. Time is the most important factor here and perseverance.

    #5. Reassessment: Point #4 is just one side of a coin; the other side is monitoring your position closely and analyzes them. Look how are you investments performing? Is it time to opt for debt consolidation or not? Does the plan needs any minor or major tweak? Need another consultation with your advisor?

Hope the above tips will help you to reevaluate your assets and liabilities, and you will start and appreciate the taste of money, if you have not yet. Remember it's your money, and you are the best judge available. The keys are planning, monitoring, and perseverance.