Understanding Personal Finance

Reported by Bahiyah Shabazz, MBA

” Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit.”

In a nutshell, personal finance helps you look at how your money is managed and how it will affect your future.  In order to be successful when managing your personal and/or household finances one must consider savings, spending, investments, budgeting, goals and monitoring & assessment of your situation.

You can begin by accessing your current financial state by creating a balance sheet and income statement.  This will allow you to view your income and expenses (liabilities).  Once you assess your financial state of mind you then must set personal and financial goals for yourself and/or household.

Only set goals that you plan to achieve.  As harsh as this sounds it’s true.  How many of you said you want to save for a vacation to find yourself one week from your “due date” with nothing in your account? Yes, excuses I’ve heard them all.  That’s why it’s important to make goals that are obtainable and you are serious about.  While doing so it’s important to create a strategic plan.  Don’t be afraid of the word strategic. It’s a fancy way of saying a doable action plan with measurable goals that will continuously be revisited.  Keep your action plan in plain sight as a reminder of your goals.

In order to execute your personal financial goal you must change your behavior and mindset about money and goals.  You can’t expect to achieve the “impossible” without making possible steps toward your future.  Realize and understand where you are, where you want to be and how to get there.  This is when you improve yourself through practice and self-awareness.  Discovering self-awareness allows you to choose the path less traveled for improved results.  Although this path may not be easy it will lead you to your financial destination with lessons to apply toward future circumstances.

As time goes on you must monitor your personal plan for any adjustments.

In order to completely understand your personal finance you must address the concerns of your financial existence, financial destination and behavior toward your monies.

“Love Yourself Enough To Support Yourself.”

Property of SMG, LLC

Reference:

http://www.answers.com

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