Personal Money Management

1. Formulating a spending plan is the first step to personal money management. True Most people do not think about financial management in terms of pre-planning a budget. Money can be managed wisely by setting up priorities and a list of needs and wants. This process will also benefit from taking a critical look at where an individual or family's finances are currently being spent and how that can be adjusted accordingly to free them up financially. It is crucial for the individual or family to understand how much cash they bring in and how much is spent in order to create a budget or plan that will work with their needs. 2. Personal money management experts recommend having little or no cash reserve. False The experts recommend that each family take the time to create a cash reserve of at least half of their annual income. Good financial planning includes good saving habits. Self-restraint in spending is also important for building a savings account. Moreover, savings accounts also enhance the consumer's credit standing. Saving money for the future is a very big part of financial planning. 3. Using too much credit is a common personal money management mistake. True Families often overextend themselves and have larger payments than they can possibly meet. It is important to always be sure to understand the installments, interest rates, and costs of credit terms before enrolling in credit programs. Taking these steps is a sign of good financial planning that will allow the consumer to be much freer in financial matters in the future. 4. Personal money management programs provide counselors to ensure that financial obligations are met. True These programs provide counselors to write, mail, or deposit checks. They also will keep track of expenses, income, and financial records along with maintaining bank accounts. Although anyone can be protected from financial planning abuse, many programs are specifically set up assist the elderly. Most credit counseling organizations are non-profit and are either free or charge a small fee. 5. Scripture teaches about financial planning. True Proverbs 10:4 - He becometh poor that dealeth with a slack hand: but the hand of the diligent maketh rich. Credit Counselors