[ad_1]
Extra effort in managing one’s personal finances will result in a more positive use of personal resources. With attainable, realistic goals, one’s financial situation will be progressing in no time. However, on the part of the person concerned, it demands proper planning and monitoring. It also needs to be assessed at some point to see whether the set targets are being met or further interventions are needed to ease the financial situation.
Available Income:
- regular household cash flow
- after budget cash or net flow
Regular household cash flow is what is left after subtracting expected annual expenses from expected annual regular income. Cash or net flow after budget is what is obtained after subtracting regular household liabilities from known assets. The portion of regular income that doesn’t go toward normal expenses is a very important resource that can be diverted toward other personal financial goals. A balance sheet should be able to determine net worth before planning ahead on how to save enough for larger and more important purchases.
Factors to be considered when 50% net increase is desired:
- full liabilities
- Outstanding Debt
- investment tools
- Savings Yield- Savings + Interest Received
- outstanding student loans
It simply says that when liabilities decrease, a person’s net worth also increases along with it. The number one piece of advice for anyone planning to progress financially is to avoid taking the juicy bank loans on offer as they are sometimes a potent threat to one’s credit score, especially when the interest piles up. Recovery from loans would be very essential to boost personal finance. The more liabilities are settled, the lesser are the liabilities and this has a positive impact on one’s balance sheet and his credit position as well.
Personal investments make up the majority of an individual’s net worth and thus it is a good move to acquire as many valuable assets as possible during his or her lifetime. This is not to say that forethought should not be employed here but quite the contrary. Buying and investing in profitable properties should be done with careful analysis, so that the purchase really adds excitement to one’s portfolio. The general trend is that high risk investments are best avoided if you are a risk averse type of investor. These are assets that have a value that changes with the fluctuations of time such as real estate, precious metals such as gold and other physical goods that are known to have volatile values.
The most risk-averse among us, whose ability is more resistant to fear than the ease with which we trade in stocks and other financial instruments of our time. The rule in these types of assets is that the higher the risk, the higher the potential profit. Undoubtedly such investments need to be researched and studied again and again due to its nature to avoid excessive losses and capture gains when they are likely to fall.
Since savings are an important and integral part of an individual’s net worth, proper research is called for to get the names of institutions that offer better products or offer better rates for one’s hard earned money. For example, US troops have the option and privilege to take advantage of the DOD Savings Deposit Program, which has an interest rate of 10%.
Savings accounts and CDs serve you in two ways: first by increasing your overall net worth and second by giving your personal finance portfolio a much needed buffer zone, as seen by prevailing trends everywhere. This is because such equipment is federally insured and increases at a steady, favorable rate each year.
One thing that has permanently damaged net worth is student loans because they can persist long after a person has graduated and is working. To counter its negative effect, an effective practice is to take advantage of seasonal tax breaks. With the American Opportunity Tax Credit alone, a person can save as much as $2,500. And those still studying should steer clear of private student loans altogether in favor of federally funded loans because these are generally low or fixed. Let’s go to the rates.
Most effective ways to maximize cash flow:
- highly informed financial decisions
- budgeting and following it
- controlling impulse buying
- take cost cutting measures
Smart financial choices can sometimes tell the difference between ruin and progress. For example, there is a choice between buying a house instead of renting a modest accommodation which later becomes unaffordable. If the selling price of the home proves to be a multiple of 20 when the actual selling price is divided by the annual rent, you would be wise to rent. Managing personal finance doesn’t have to be a daunting task; It only requires patience and practice.
Where you can cut costs:
- cut unnecessary expenses
- cooking instead of eating out
- View Car Insurance Cost Cutter
- Collecting and Using Coupons
- Buying wholesale instead of retail, wherever applicable
There is no shame in using coupons and the benefits are tremendous, it may even become a habit. Why pay full price when a little vigilance goes a long way in clipping coupons and saving? If there are no printed materials available to obtain coupons from, the Internet is always the perfect place to find printable coupons.
Cook at home and cook in batches. Then freeze for later meals. Do your due diligence to take care of leftovers and you’ll likely save a lot on your take-out budget. There’s no shame in having edible food and it does wonders to a family’s or individual’s food budget.
Cut down on company offers like phone packages, cable or internet packages, zero in on whatever hidden charges there are and just ask to get basic service, pay only for what you really need and use . The cost of the extra features and adds up in the long run.
Carpooling is also a way to save, and if you absolutely must drive, drive safe to avoid fees. These little things contribute to managing one’s finances in a sensible and productive way. And habits that are changed tend to stay, so it’s best to make sure you change for the better.
How to Estimate: Tools in Pricing
- simple net worth calculator
- Retirement Calculator – Many are downloadable
- Mortgage Rate Calculator, Re-Downloadable
- Spouse Income Calculator for Multiple Income Families
- Loan calculators, free from many sites
- Currency converter – already in wide use everywhere
- Home budget calculator – a standard for many housewives
- FICO Score Range Tool – again available free online
- Student Loan Calculator – for up to date interest rates
These personal finance calculators are absolutely essential when strategizing and setting your long and short term goals, tax payments and schedules, mortgage proposals and other financial moves. The closer the estimates are to the actual figures, the closer you are to realizing your plans, and this largely depends on the calculator.
Personal finance is simply net worth, cash flow, contextual planning, savings, investment instruments, budgeting or allocation and cost cutting. If the concepts are understood in theory and applied wisely, the personal balance sheet and credit score will continually improve and grow well beyond recovery.
[ad_2]
