Personal Finance Tools

A wide variety of personal finance tools are available to anyone who wants to maintain financial stability today while planning for a secure tomorrow. Such tools can provide a means of setting appropriate priorities and carefully controlling both spending and savings activity over the course of a lifetime. Solid, sensible budgets are always a good place to start. By learning to meet material needs within the confines of individual income, many consumers can succeed fiscally while protecting their names and reputations. Maintaining a high credit score is the best way to keep a financial reputation in good standing. The only way to do this is to pay bills on time and keep debt under control. Wise banking and savings habits are also a must. Good investments can go a long way in making personal wealth grow. One such investment could be a family home. This investment obviously can have a twofold benefit. As the value of the home grows over the years, the family is also supplied with a roof over their heads. Most families who are concerned about the educational needs of the children will take advantage of personal finance tools to plan ahead for these expenses. Retirement issues are another area that needs early and astute planning.

Debt is a fact of life for most families. Handling debt in a sensible and responsible way can make a huge difference in the material stability for any family. Some consumers make the mistake of amassing a huge amount of debt early on in life. This debt has a way of growing as the years go by. Repaying the debt and keeping a reign on further indebtedness is always a good rule of thumb. A budget that reflects current debts as well as a plan for paying this indebtedness down is only one of many valuable personal finance tools. Some financial experts believe that an individual should put off adding to their savings accounts in favor of paying off indebtedness. Others feel that a two pronged approach that includes both savings and debt pay off is the way to go. If the amount of indebtedness is large and it will take the borrower many years to get the loans paid off, some savings in the meantime is wise. At the very least, a small nest egg should be set aside to cover any emergencies that might arise. Making timely payments and keeping credit scores high are also effective personal finance tools. A higher credit score will guarantee better interest rates and generate significant savings over time.

While understanding the don'ts of utilizing personal finance tools is important, getting a handle on the things that a consumer should do is equally important. It is always a good idea to shop around for the best available interest rate whenever borrowing money or setting up a charge account. Obviously, this is because the higher the interest rate, the higher the cost of the debt. This comparison shopping should also investigate the kinds of fees that might also come with the loan or charge account. And it is always a good idea to read the fine print of any loan agreement. Overlooking these sometimes hidden details can be a costly mistake. When a borrower has questions about the details of a loan, whether it is a small unsecured loan or a full blown home mortgage, the borrower should not be hesitant to ask those questions. Loan payments should always made on time. Skipping a payment, making a late payment or paying less than the specified monthly payment should never happen. If a crisis occurs and a late, low, or skipped payment becomes necessary, a borrower should take pains to communicate with creditors and communicate good faith intentions to make good on the debt. By observing these helpful personal finance tools, a consumer can usually keep their financial reputations in good standing.

Business software can provide effective personal finance tools for many consumers. These products offer helpful features including balance sheets, asset listings, and lists of liabilities, income statements, and monthly expenses. Users of this software will input data about their own financial situations. This data could include monthly income, household expenses, loan payments, and savings expectations. The software can then present this information in an easy to understand format. By providing a visual assessment of just where an individual's money goes each month, these software products can provide a quick overview of expenses, income and monthly progress. After assessing a user's financial situation, there are functions that will also help the user create a plan to achieve fiscal goals. The ability to monitor progress is another valuable feature. By handling monetary issues conveniently and from the privacy of a user's home, consumers can manage sensitive fiscal issues easily and privately. According to the Bible, believers should not do good things just for the sake of public attention from other people. "Take heed that ye do not your alms before men, to be seen of them: otherwise ye have no reward of your Father which is in heaven." (Matthew 6:1)

In the event of a financial crisis such as overextended indebtedness, debt consolidation opportunities can be useful personal finance tools. Consolidation can be done by rolling outstanding unsecured debt into one loan. Professional debt restructuring services can also be of help. These services can work with creditors to map out a reasonable plan for repayment. A debtor's monthly payment is then sent to the service where it will be distributed among the creditors.

Personal Finance Tips

Learning about personal finance tips can mean the difference between a life of economic security and a life overshadowed by debt and fear. Yet for all its importance, basic financial principles are seldom taught to high school and college students. As a result, many teens don't know how to balance a check book or reconcile a checking account. Many college graduates find themselves facing a dim future of overwhelming student loan and credit card debt. Of course, there are many aspects to financial planning and not every individual has the same goals, dreams, or circumstances. But certain economic realities hold true for everyone. For example, the most important of all personal finance tips is this simple one: income must exceed expenses. More money coming into a household than going out of a household means additional discretionary funds for saving and giving. When the expenses consistently exceed the income, financial disaster will soon be knocking on the door. The expenses must be lessened or the income must be increased.

Most people want to be good stewards of their finances. They believe in the promise of the Old Testament prophet: "Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the LORD of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it" (Malachi 3:10). The remainder of the income, after the tithe, is used for the benefit of the household and additional giving. By keeping in mind some basic personal finance tips, the household can be financially secure. Most families have the same or very similar set monthly expenses. These include a rent or house payment, utilities, landlines and cellphones, insurance premiums, and perhaps membership fees or other personal monthly obligations. In addition to these set expenses, individuals should set aside a predetermined amount each month for such annual expenses as homeowner association dues, automobile license renewals, club membership dues or fees, and any other payment that is due once or twice a year. Additionally, money should be set aside for special holidays such as Christmas and family birthdays.

Experts that provide personal finance tips stress the importance of an emergency fund that equals three to six months, at a minimum, of the household's income. For example, if a married couple's combined monthly income is $6,000, then they should set a goal of setting aside $18,000 to $36,000 in a liquid account in case of job loss or other major emergency. This simple tip alone, though it may take time to reach, can help a family avoid putting emergency expenses on a credit card. Even setting aside a small emergency fund of a few hundred dollars is a worthy goal because those funds can be used when the car needs repairs or the plumber needs to be called. Putting these kinds of unexpected bills on a credit card can put a strain on a household budget. High interest rates can cause the balance to quickly grow into an unmanageable amount. Credit card issuers most certainly do not set minimum monthly payments at an amount that helps the consumer pay off the outstanding balance. This is why so many lists of personal finance tips include a variation of this one: pay off all credit cards every month. Again, the best tip is to save an emergency fund, even a small one, to handle household emergencies while also setting a goal to save a larger emergency fund for major needs.

Some personal finance tips are divided up into various categories. For example, prospective homebuyers will be interested in ideas for making wise home-buying decisions. Certain mathematical formulas are often given as guidelines for the prospective homebuyer to consider when making decisions regarding how much money to spend on a home and how much a monthly payment can be. Experts suggest having at least a twenty percent down payment and financing eighty percent of a property's purchase price. By financing only eighty percent or less, the borrower avoids having to pay private mortgage insurance (PMI) which is required on practically all loans that are over eighty percent. Some borrowers can get around this by taking out a first mortgage at eighty percent and a second mortgage for any balance owed after the down payment is calculated into the equation. Lending institutions look at certain ratios, such as debt to income, to help in making underwriting decisions regarding mortgage applications. Numerous resources provide more information on these ratios and other personal finance tips to help novice homebuyers make prudent financial decisions throughout the home purchasing process.

Another major element of personal financial planning is investing for the future. Financial experts stress the importance of time and compound interest to novice investors. A person who begins saving for retirement at a young age can invest a much smaller out-of-pocket amount than a person who postpones investing until other financial goals are met. From researching personal finance tips on investing principles, it's clear that the time to start is immediately even if the amounts dedicated to investing are small. Unfortunately, indebtedness has a detrimental effect on the ability of individuals to invest money into appropriate retirement accounts. Instead of saving for the future, too many people find themselves paying for what they bought in the past. Changing spending habits and cutting up credit cards may be the most important financial tips a person can follow so that other goals can be pursued. No matter the money topic, resources abound for the person who is willing to do a little research and then put what is learned into practice.

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