Personal Finance
PERSONAL FINANCE
Personal finance in a nut shell is how to manage your money and how to set your financial goals for the future. After reading a couple of things it’s a little more complex than what it sounds like. It is the application of the principles of finance to making decisions of an individual or a family. It addresses the ways in which individuals or families obtain, budget, save, and spend resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management. If money isn’t a problem for you than you can spend and invest any way you want, but that’s if you won the big jackpot, and the chances of hitting is one to impossible. The average person can’t spend money with their eyes closed because it’s a reality out there. You have to plan wisely with the income your working with. After reading from wikipedia, it proposes a process that requires regular monitoring and reevaluation. Like assessment, setting goals, creating a plan, execution of the plan, and monitoring and reassessment of the plan. The assessment is to compose a balance sheet that consists of personal assets for example, your car, house, clothes, stocks and bonds. It should also include your liabilities such as credit card debt, bank loans and a mortgage. Setting goals are fun but sticking to them is the challenge. It can be to retire at age 40 or 65, also to buy a home for what you could be able to afford which is typically 25% of your gross weekly income. People didn’t consider that when they bought their homes in the past five years, banks where approving anybody to get the loans and don’t forget that adjustable interest rate, that’s why the market is in a crunch because people cant afford it anymore. Your income plays a big role...
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