Personal Finance Information

Many people seek personal finance information from their parents, other family members, and friends. This is fine as long as these people know what they are talking about and have experience making good financial decisions. If they don't, then it's probably best not to seek their advice. Unfortunately, very little is taught in either our high schools or colleges on how to handle money matters. Financial illiteracy is a major problem that results in overwhelming indebtedness, the major cause of a great number of divorces, mortgage foreclosures, and senior citizens living in poverty during the retirement years. However, numerous resources are available that provide relevant information on all kinds of money issues. Some of the resources provide the basics and others are geared toward specific money issues or for people in varying life stages. For example, some resources focus entirely on investments while others target potential homeowners. A young adult preparing for marriage and a family has different financial concerns than the empty-nesters who are only a decade or two from retirement. But personal finance information is easily accessible that can answer questions and help in making wise economic decisions. Such resources include books, magazines, Internet sites, and even television and radio programs.

The experts aren't necessarily going to agree on every economic detail, of course. Financial gurus can have very different investment philosophies, for example. But they agree on the basic reality that a person's finances must be built on a solid foundation that begins with living within one's means. The amount of income going into a household absolutely must be more than the amount of expenses. Someone wanting to get control of her money must begin by assessing her own personal finance information. This begins with creating a net worth statement and an income/expense statement. The net worth statement lists all assets and liabilities. The difference between the total assets and total liabilities shows a person's net worth. For budgeting purposes, the income/expense statement is more important. On the income side is the amount brought into the household on a monthly basis less federal withholding and other payroll deductions. On the expense side are several components. The first is savings (though many people choose to tithe first and consider savings their second priority). Next comes all set monthly obligations, such as housing and utility payments. Another component in developing one's personal finance information, which many people overlook, is an account for annual or semi-annual obligations. For example, a person may pay homeowner association fees of $360 once a year. This amount should be divided by twelve and $30 set aside each month so the money is available when the fees are due. This should be done with every recurring obligation. The next component is for such items as food, clothing, housekeeping and toiletries, entertainment, and so on. This is a difficult category because the amounts spent on these types of items can vary from week to week.

Tracking daily expenditures is part of the process of assessing one's personal finance information. Many experts suggest writing down every single purchase made for a specified time, such as a week or a month, in order to get a good idea of where the cash goes. People are often surprised at how much money they spend without even realizing it. If the expenses are out of control, the tracking record can show where holes can be plugged. For example, it may be more financially prudent to bring snacks from home instead of buying snacks out of the employee break room vending machines every day. Even saving small amounts on a daily or weekly basis can make a difference to the monthly bottom line. Jesus once taught a parable that ended with this lesson: "He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much" (Luke 16:10). The principle holds with money issues. Being faithful with small amounts of money can truly help the household budget. Several websites that provide personal finance information also include downloadable programs to help track expenses.

For many people, overwhelming indebtedness is the largest and scariest component of an expense statement. But ignoring the problem will not solve the problem. This is a very important step in assessing one's personal finance information. All debts, except for the home mortgage, need to be listed and totaled. Along with the name of each creditor, the list should include the total amount of the debt, the interest rate, and the minimum monthly payments. Using the income/expense statement, the individual can see how much money is left after expenses are paid. While the minimum payments need to be made each month, some financial experts suggest setting aside an emergency fund of several hundred dollars with any additional money before tackling the debt. This way, when an emergency car or home repair occurs, the money can be taken from the emergency fund instead of placed on a credit card which only increases the debt.

After assessing the income and expenses, a workable budget can be created that meets monthly obligations, sets aside funds for recurring annual obligations, establishes an emergency fund, and tackles indebtedness one debt at a time. This is a great start. Other goals need to be established, too, though. Retirement planning can never start too early. Here again, there are many resources on personal finance information websites about getting started in investing long term for the future. Insurance is another large area and consumers need to compare policies and benefits for auto, health, home, and life insurance. Other types of insurance may also be needed depending on individual circumstances. The important thing is for each person to learn as much as possible and then to make solid decisions. That way, a solid economic foundation secures one's financial future.

Personal Finance Program

A personal finance program can greatly help consumers keep track of day-to-day money transactions as well as enable them to plan long-term into the future. In the past, individuals have sought assistance from the government and business professionals to guide financial planning, but more and more financial management is becoming the responsibility of each individual and family. In our highly specialized world today, people are expected to be able to handle personal budgeting, banking, savings and investing without much help. Personal financing goes beyond the basics. It includes saving for college, planning for retirement, buying a home or car, controlling debt, tax planning and purchasing insurance for health, home, life or an automobile. Individuals cannot be experts in all these fields. A personal finance program can help.

When people thinking about individual financing, most imagine financial advisers at banks or brokers in stuffy suits who sit across a mahogany desk trying to explain charts and graphs that make little or no sense to the consumer. Granted, these traditional methods are still in use today. Many people feel more comfortable with a personal finance program that involves a professional in the field guiding them along the confusing rocky road of financial management. Banks, brokers and other financial firms offer programs to help these individuals set and achieve individual goals and objectives. Often, going with a traditional approach is best when dealing with the more difficult aspects of financial management such as accessing home equity, consolidating loans, and getting debt under control. Advisers can help consumers find the lowest rates and give them pointers on how best to approach their individual situation. But it is crucial to find the right person. Consumers much ask the right questions and do research before deciding who will determine their financial futures. As in any financial issue, God calls us to persevere. "Cast not away therefore your confidence, which hath great recompence of reward. For ye have need of patience, that, after ye have done the will of God, ye might receive the promise." (Hebrews 10:35-36) But there are also other options to personal financing.

Several companies have developed home computer software to help consumers manage their finances without the assistance of an expensive adviser. A personal finance program like this will manage checkbook entries, track investments, and even help file taxes - all at home on a personal computer. They generate reports to help individuals track spending in categories, establish budgets, and identify trends that will increase or decrease net worth over time. While these are the most popular software packages, they aren't the only ones. More basic programs are available for free, but include only limited features. Some do offer extended applications, but usually are associated with additional charges. Before purchasing or using a free software, check with local software stores, ask friends about the programs they use, and make sure that the program chosen is user friendly, is updated frequently and has internet connectivity.

Online programs are gaining popularity especially with younger generations. In this type of personal finance program, individuals create secured account and enter bank account user names and passwords. The website accesses their accounts and provides the big picture of a person's current financial activity, including account balances and summaries of where money is being spent. Consumers can set up email alerts when they overspend in certain areas or within an overall budget. With the ability to check accounts in live time, the need to reconcile monthly is virtually eliminated. They not only offer financial management tools, but social networking as well. Users can access discussion boards, instant messaging and set up personal profiles right on their financial website. However, as with any website, security is always a concern. These three sites use advanced levels of encryption. Even if someone broke into the site, money could not accessed or moved. The person would only be able to see how an individual spends his or her money. Many individuals like the instantaneous aspect of using online financial management. Fraud and theft is detected much quicker than waiting for paper statements to arrive. However, like many software packages, online programming only offers simple financial management. It doesn't include mortgage calculations or portfolio management.

Many other websites off personal finance program tools as well. Most financial sites will include various calculators to assist with tax preparation, insurance premiums, mutual fund planning, and retirement allocations. In addition to a library of news and feature stories, some financial websites also offer ways to get easy quotes and rates from banks and insurance companies, find personal advisers, track portfolios, and compare rates from various companies. These tools help individuals manage personal finances without leaving home. One site now even offers a podcast including tips, testimonials and interviews with financial experts to help individuals with money issues.

In order to use many of these programs, individuals usually must have a bank account with a financial institution. Unfortunately, the people who need it the most, those in poverty, often rely on payday loans over traditional banks. Organizations such as Financial Literacy Corps offer a personal finance program to such individuals by connecting them with financial advisers who volunteer their time to help those without access to banks. Several states have started to require financial education within high schools. The National Endowment for Financial Education (NEFE) offers curriculum for schools to use for such purposes. More than four million students have completed the program through 2005.

Each individual must choose the personal finance program that works for them. No matter which program is chosen, it is crucial to keep accurate records of transactions, pay bills on a schedule and reconcile accounts to make sure they are accurate against online records. The options are almost endless, but likely there is a choice that will work for you.

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