ss_blog_claim=a269636d7e1dddbc1e13f97cea83418c

HOME

ABOUT

BLOG

ADVERTISE

CONTACT

SITEMAP

Personal Finance Help

Download the FREE Guide to the Top Sources of Passive Income

Personal Finance Help. Personal finance article on the crucial personal finance basics and important personal finance tips for success.

What is Personal Finance

Personal finance refers to the management of your money (or that of your family’s). The processes involved is well summarized by the phrase “make it, spend it, keep it, grow it”.

These represent the four quadrants involved – or as Robert Kiyosaki suggests, the four main quadrants are Income, Expenses, Assets and Liabilities. While the difference between income and expenses would build your net savings, the difference between assets and liabilities would build your networth.

Importance of Personal Finance

As life becomes more complex and less stable, jobs can no longer be taken for granted. There are no more ‘iron rich bowls’ that guarantee a fixed monthly income.

Living costs are rising rapidly, as the cost of homes, cars and college education increase rapidly. Financial markets are now less predictable, and government welfare benefits are now gradually declining.

The nutshell? Income and expenses are now increasingly volatile and unpredictable. The best way to ensure a comfortable retirement nest is to take personal finance into your own hands – do not rely on anyone else, take matters into your own hands.

Personal Finance Tips

In order to manage your personal finances successfully, you need to have discipline and commitment.

Discipline – Growing your net worth, or at least eliminating debt, involves a significant degree of discipline on your part. You need to be willing to delay gratification – that is the only way wealth can be accumulated. If you were to spend all that you earn every month, you would get immediate gratification – but your net worth remains close to zero.

Commitment – Success is not a one-time-off endeavor. Wealth accumulation depends on your sustained commitment to managing your own money well. There are many stories of people who had it all, then lost it all quickly. Imprudent financial management can easily lead to financial ruin.

As Thomas Stanley and William Danko found out in their research of many American millionaires, those who accumulated wealth successfully were those who were highly consistent in their management of wealth. They did not spend lavishly, and consistently saved a portion of their income in order to grow their wealth further. Discipline and commitment are key to financial success.