Personal finance is a scary subject for some people
because it conjures up all sorts of personal fears about
budgeting, managing investments and buying Vs
renting a home. Fear and anxiety are common
responses to the topic of personal finance regardless
of an individuals level of education or experience in
other areas, particularly business. As a result, many
people avoid dealing with their personal finance issues
until they are almost at crisis point and in serious credit
or debt trouble.
But before you can make any decision about your
personal finance or take any action regarding your
finances, you should obtain a firm understanding of
your current financial position. Surprisingly, many
people have only a vague idea how much income they
actually bring in each month and then how much they
actually spend each month and whether there is a
positive difference between these amounts that are in
you favor.
So the first thing to do is assess you financial situation.
Gather together all of the information and documents
that will give you a picture of your financial position.
Tally your net worth, including real estate,
superannuation, monthly income and all other assets.
You may be pleasantly surprised by the total. Then, set
yourself up a budget by listing all of your expenses. Be
completely honest and dont leave anything out. If you
cheat on this you will only be cheating yourself. List
everything including luxury items such as take out,
cosmetics, magazines and movie tickets.
While a budget is absolutely the first step to taking
charge of your personal finance, this is by no means
the only step you will need to take. You can investigate
other services in the marketplace, such as electronic
bill pay, investment counseling and seeking out hints
and tips for financial health. Electronic bill pay or BPay
as it is more commonly known, is particularly useful for
people who tend to be disorganized or who
procrastinate on keeping their bill paying in order. You
can even arrange for your bills to arrive by e-mail rather
than through snail mail. You then pay them
electronically, by direct withdrawal from your bank
account and the transaction gets processed straight
away.
Once you have assessed your budget and established
a regular and efficient bill paying mechanism, you
might feel that you are then brave enough to investigate
other areas of personal finance such as investments
and stocks and shares. Once again, the Internet can
be an invaluable resource, allowing you to thoroughly
explore all of the different options and strategies
available. You can find all sorts of useful references
about investments such as term deposits, managed
funds, purchasing stocks and shares and participating
in share clubs. You might like to start simple though
and merely open a short term savings deposit account
so that you can deposit from your pay check each
week or month. This way, in no time at all you will
begin saving for your next goal whether it be for a car,
holiday or some minor surgery.
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