Personal finance has long been a financial cornerstone of consumers in managing their money. It is one of the most talked about topics when it comes to finances and people have different approaches on it. Some rely on experts and try to tread the same route they took while others make their own path. Whatever road they take, it all leads to the same goal – financial independence.
In the country, Marketwatch.com shares that North Dakota residents are the most financial savvy in the country when it comes to saving and investments and Mississippi has it worst. But this should in no way be the basis of you would handle your finances. It does not mean that if you are from Mississippi you don’t have to put too much focus on your finances.
It is important to take note that personal finance is important but the words doesn’t seem to fit with they way people approach it. Yes it is all about finance but it is not just a personal undertaking. Along the way, there are a lot of people who would help you along the way whether it is getting into a great investment or letting your borrow some funds for an emergency.
There is no doubt that technology can help finances but that is not the only help you get when dealing with money management. It can help you monitor current and even past transactions, automatically pay for expenses and even schedule your investments in a way that you automate adding to each fund. But there are others who helps you along the way.
It is not personal
It could be called personal finance because at the end of the day, you need to make the decisions by yourself but there are a lot of people who helps you get to a specific decisions. Here are some of them.
- You work with your partner. This is especially true when you are married or any type of relationship. The idea when you get into a relationship is to create a future for the two of you together hopefully with children in the near future. You might start to save money on dates and eventually plan a marriage together. You then put together a budget for the expenses around the house and in reaching your financial goals. You do not only work alone but with your partner as well.
- You work with the family. Capitalgazette.com reiterates the importance of having family meetings especially when it comes to managing finances. When you have a goal like saving up for a few months for a trip, the whole family needs to chip in to reach their goal. The kids need to understand that they need to do their part like helping save electricity around the house or even with eating out and preferring to eat home cooked meals. You work with the whole family and not just yourself.
- You work with employer. Your retirement fund is part of personal finance but again, this is not something you can do on your own. You need to look into working with your employer and checking how you can automate your 401(k) contribution. You need to work with them again to make sure that you are putting in enough to max out the allowable contribution every year and get the matching program. There is also the vesting schedule that you need to agree on to make sure that you enjoy those matches the company puts in your retirement fund. You need to work with your employer and it would be hard to accomplish this on your own.
- You work with your lenders. There will be times when you need to take out a loan as a stepping stone in reaching your goals. This is again considered a part of personal finance but this is something that needs to be accomplished with a lot of players. Primarily, you would need to work with your lender to make sure that you have the right papers to apply for the loan. it can be a mortgage loan or a car loan and even a personal loan. The idea is to make sure you work out all the details with your lender to not only ensure approval but to have the ability to repay the loan in the future.
- You work with your utility providers. When it comes to your utilities, you need to work closely with your providers to make sure that you are within budget and that you get what you need every month. When you are missing out on some payments, you need to reach out and talk to your lender to see how you can get back on track.
- You work with your bank. Apart from taking out loans, personal finance includes working with your bank to look at some of their financial products that can meet your needs. It can be a separate retirement fund account or a separate one for your reserve funds. They can also help you when you are ready to make investments. They have fund managers that can help manage your investments and show you how to grow your money and manage risks at the same time.
All these forms part of your personal finance but you will notice that none of these examples are done on your own. You always need to work with someone to reach your financial goals.
Getting finances on the right track
It will be hard to keep on a straight path financially meaning problems will come and creep up every now and then. Here are a few things to help you stay on track with your finances.
- You need to start with a budget. Your household budget is very important if you want to stay on track. It will help you see where you are with your income and expense and let you know if you are still able to cover all your expenses. It lets you know where you need to make adjustments in order to meet your financial responsibilities.
- Have a goal to aim for. You risk being a rudderless ship wandering aimlessly out in the sea if you just keep on working, earning and paying bills without a long term goal in mind. You need to determine if it is buying a house, saving up for a business or making sure that your kids have a college fund in the future. This keeps you on a path to reach your goal and get lost wandering what the point is for all your hard work.
- Reward yourself. Every now and then, you need to find a way to motivate yourself with rewards. But the key ingredient here is striking a balance between what you can afford and what will deplete your bank account. You are not a machine and at some point, you could burn out and lose steam. One way of preventing this is to set rewards along the way that can get you excited along the way. This also helps you mark financial milestones and achievements with a happy thought with the rewards you allow yourself to get.
Personal finance is not something you can take lightly and obviously not a task that you can handle alone. It might be personal because the financial decisions you make at the end of the day can be from past experiences that is unique to you but in almost all stages, you need someone’s help to arrive at a particular choice.