Simple Personal Finance For EveryoneUpdated: September 22, 2014
Good personal finance is essential for everyone. That’s why I try to make these tips and strategies as simple as possible. With enough focus and patience, you will soon learn how to properly handle your money and make it grow.
Do you have the habit of spending more than you earn? Are you finding it hard to get out of bad debt? Is it difficult to live within your means? If so, then maybe you should start a personal budget system to account for your monthly expenses.
This financial calculator uses the principle of compound interest to calculate how your money will grow. It gives us a strong vision of what’s possible for us. By estimating our financial status and using this simple tool, we can have an idea how far (or how near) we are to becoming a millionaire.
Are you planning to open a bank account? If so, then the first crucial step you need to take is to determine which bank is the appropriate one for you. There are so many banking institutions available nowadays that choosing the best one can be a bit confusing. However, this process need not be complicated.
One of the best ways to see how financially healthy you are is to calculate your net worth. You do this by preparing a personal statement of assets and liabilities. This means determining the value of everything you own, getting the amount of all your debts and then computing the difference between the two. In mathematical terms, your net worth is simply your assets minus your liabilities.
Your financial records and personal documents should not just lay there and gather dust for the next few years. You would need to manage them and keep it updated. At least once a month, add your recent statements and new documents and receipts. Moreover, take note of policies and other records that will soon expire so you can renew them on time.
I asked some of my friends if they have a checking account and most of them said they have none. This doesn’t surprise me because opening a checking account is not usually a priority among people. However, as your journey in the world of personal finance continues, chances are you’ll eventually need to open a checking account.
Your Simple Guide To Investing
The next time you find yourself with some extra cash that you may want to invest, I suggest you follow these simple tips. It’s my personal step-by-step guide to investing in anything and everything. Ask yourself these questions and not only discover the right investment for your money but more importantly, help increase your financial literacy.
The formula is simple, and the rules are: ONE: Invest half your age in low-risk investments. TWO: Subtract your age from 100 and divide it by 2. Invest the result in high-risk investments. THREE: Invest the rest in moderate-risk investments.
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Photo courtesy of nnaloh