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Before you can start saving or investing for the future, you need to work out what your aims are. Only if you know what you are saving and investing for can you choose the best products to help you realise your goals. Otherwise, you’re likely to end up with completely unsuitable personal finance products.

Some of the financial goals you have may include clearing your debts, buying a house, starting a pension or helping out your children.

Most people have short and long-term personal finance goals. In the short term you might want to buy a new car or pay for a summer holiday, while in the longer term you may be keen to build up savings for retirement. And, you may have more than just your own future to consider: If you have children or plan to have them at some stage, they may want go to university or need help getting on the housing ladder, and you need to plan to fulfil those personal finance goals as well.

Different personal finance goals require different investment vehicles so it’s important that you work out what you want and then prioritise them. If you are investing for the long term for retirement, for example you should invest in equities because, historically, they produce the greatest returns over time.

However, they aren’t suitable for short-term investment goals because they are extremely volatile the value of your shares may plummet just when you need the cash to buy your new car. But if you don’t need the cash for many years you have plenty of notice as to when you need to sell your shares so can do so when you stand to make a profit. There may well have been times during the years you own them when you suffer losses at least on paper. But it doesn’t matter as potential losses aren’t realised unless you actually sell up.

How to Save Without Sacrificing

If you are saving for a holiday or new car, investing for the short term, stick to a savings account paying the highest rate of interest you can find. At least you are guaranteed to get your capital back, plus some return. You aren’t risking your cash. You won’t make the big returns you might have made on stocks and shares but at least you know there won’t be any losses either.

If you are saving for a holiday or new car – investing for the short term – stick to a savings account paying the highest rate of interest you can find. At least you are guaranteed to get your capital back, plus some return: You aren’t risking your cash. You won’t make the big returns you might have made on stocks and shares but at least you know there won’t be any losses either.

Creating a Personal Finance Emergency Fund

Before you consider investing for the longer term, you need to set up your own personal finance emergency or rainy day fund for contingencies that you can imagine but couldn’t pay for out of your purse or wallet.

The fund should contain enough money to pay for events such as a sudden trip abroad if you have close family in distant lands, any domestic problem that wouldn’t be covered by insurance, a major repair to a car over and above an insurance settlement, or a vet’s bill not covered by insurance.

It may be prudent not to put your emergency fund money in an account that offers a higher rate of interest in return for restricted access such as not being able to get hold of your money for five years. The problems and penalties associated with getting your cash on short notice outweigh any extra-earning advantages.

An emergency cash reserve serves as reassurance so you can ride out investment bad times more easily. Know that you’ll rarely be able to access investments in an emergency. You shouldn’t be put in a position where you’re forced to sell. And your credit card can be a temporary lifeline, giving you breathing space to re-organise longer-term investments when necessary.

By: Elizabeth Mathers Stankovic

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Young people get a bad reputation in society these days. Actually, the concept of blaming ills on younger adults is nothing new. Certainly the non-conformist generation of the 1960’s got their fair share of bashing in their day. Nowadays, young adults contend with many stereotypes, some imagined, others that are real and are completely unique to their generation. One of the preconceptions is that they are not responsible with money. In a lot of cases, that notion is true.

Most college graduates leave school with an average of $20,000 worth of school loans saddled to them. Couple that figure with several more thousand from the numerous credit cards they’ve accepted and possibly even a car loan, and some college graduates can feel as though they’ve lost before they’ve even begun. Irresponsibility and indebtedness is common within younger generations, yet that fact doesn’t make the challenges that debt presents easier to deal with. There are, however, some very real ways to manage debt and to prevent falling back into it.

If young adults are already in debt, then the ship has already sailed on preventing themselves from getting into that trap. It is never too late, however to right the ship. Even though a person may be starting in a harder position, they can always learn from their experiences and add those experiences to their money management-personal finance knowledge.

It’s important to note that debt is necessary for most people and that not all debt is bad. For instance, lenders look upon student loans and mortgages favorably as positive debt if the account is in good standing. Credit cards, though useful at times, are the things that get most young people into trouble. Many credit card companies approach people as young as eighteen with credit card offers, often times on college campuses. If a parent or another guardian hasn’t properly taught a young person of the pitfalls of credit card debt, ignorance and irresponsibility could very well be causes that makes a young person indebted. There is no such thing as a free anything!

To prevent young adults from falling into poor money management habits, it’s important to give them money management-personal finance responsibilities early. In addition, an overall financial education is vital to a responsible view of how money flows through our global economy and how it affects their bank account. For instance, opening a low balance checking account, requiring them to get a job and budget and save income can be key learning tools and a good foundation for young people. Fiscal responsibility is essential to understand how money functions as a tool in our society.

Once they’ve reached adulthood, encouraging young adults to continue to educate themselves about money management – personal finance becomes even more important. The doors that open to further indebtedness are just as vast as the doors that open to financial freedom. An understanding of money as a tool and a respect for it will help to make smarter, more financially savvy adults. It’s also important to review that how you see money and wealth is a choice. What will happen is that financially savvy adults teach their children to be financially savvy, and it becomes a domino effect. Think of the doors that would open to so many more people if they chose financial freedom versus indebtedness.

Young adults can learn proper money management-personal finance techniques if they are taught early on in life and stay committed to those principles. Once a young person becomes independent, it’s easy for that newfound freedom to turn into irresponsible spending habits. Young people, with help and the proper money management strategies, can become responsible adult consumers and investors.

By: Jeri Atleson

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Most people start to understand they have a need to change their attitude towards money when they start to get into debt. They begin to realize their personal finance knowledge is not all it could be. Their money is being mishandled and they realize their lives will be a whole lot easier and their stress levels will decrease if they simply changed their attitude towards their own money.

Are you one of these people? Do you understand that by preparing a budget you will see clearly where your money is being spent? You will learn, possible for the first time, where your money is being wasted. Once you come that that realization, you are well on the way to improving your personal finance knowledge.

If you know where your money is being wasted you now have an opportunity to do something about it. You will also be able to understand how you can change your methods to get the same results while spending less money.

Try and consider exactly what you can do with all that ‘lost’ money you are about to find. With your budget prepared and with this additional money coming in you will be better off financially almost at a stroke.

Think about what you spend your money on now. How much do you spend on minor expenses such as daily coffee or takeaway food or anything else like those? You will be able to quantify that with your budget. Then you will know, not guess, how much you can save without reducing your quality of life. Work out how what you can do with that money if you save it for a year. You will be amazed.

You must be aware that, at best, spending money will alleviate your emotional problems temporarily. If you do spend for emotional reasons you will find yourself spending more and more without getting any lasting benefit. You also run the risk of increasing your debt which will increase your emotional problems. I am sure you do not want to go down that route.

You are in charge of your own finances. So it is in your interest to start increasing your knowledge about all aspects of your personal finance. The first thing to do is to prepare your budget. Then start setting yourself financial goals, both short term and long term. Make your goals realistic because no-one wants you to be unhappy then set about making your goals a reality.

The common saying is ‘money cannot buy happiness’ and it is true. But it does not tell the whole story. A lack of money can definitely promote unhappiness. If you follow these steps and increase your personal finance knowledge you will be able to take control of your own finances. Then you will be financially better off than the majority of people, especially in the long term.

Your attitude towards money and debt has a huge bearing on the quality of your lifestyle.

By: Barry Wilkinson

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In this article I would like to conduct a personal finance software review of the Quicken product offerings designed for personal use. There are several personal finance software products on the market that do wonderful jobs of helping families manage their finances, but I am most familiar with Quicken as I have been a user of its products for over eight years. I have been completely satisfied with the features Quicken provides and would like to review and compare the benefits that its product offerings deliver.

Quicken Starter Edition

Formerly known as Quicken Basic, the Quicken Starter Edition is an excellent solution for individuals who will be using personal finance software for the first time. The three main features the Quicken Starter Edition delivers are: (1) balancing of your checkbook electronically, (2) tracking how you spend your money by being able to categorize purchases, and (3) monitoring and updating all your investment and banking accounts in one place. It basically provides a “one-stop shop” for all of your personal finance concerns.

Quicken Deluxe

Although the Quicken Starter Edition is a fantastic product, I believe the average family considering a personal finance software product should start with Quicken Deluxe. The reason is that, in addition to offering all of the features of the Quicken Starter Edition, Quicken Deluxe provides the capability to download banking and investment account transactions automatically. This makes reconciling your checking account, as well as your other accounts, extremely simple. In addition, Quicken Deluxe allows you to create savings goals and track their progress, store statements and records electronically, and plan for a new home, a baby, or retirement. For most families, this is the best place to start.

Quicken Premier

For those families who manage their own investments and require additional tools to monitor and measure their progress, Quicken Premier is the perfect solution. Quicken Premier offers all of the wonderful features from Quicken Deluxe plus several others, including: (1) generating various investment performance reports, (2) analyzing and optimizing your portfolio with special tools, (3) generating Schedule A, B, and D tax reports, and (4) setting investment alerts to notify you when certain conditions are in place. A truly remarkable tool for the do-it-yourself investor!

Quicken Home & Business

The three software solutions above are all excellent choices, but if you own your own business, none of these will be sufficient for the additional monitoring and record keeping required of you. Enter Quicken Home and Business. Though not as powerful a solution as Intuit’s QuickBooks products, it is the perfect choice if you have a small business with no payroll requirements, or especially for a part time business. In addition to providing all of the wonderful features of Quicken Premier, Quicken Home and Business allows: (1) tracking and categorizing of both business and personal expenses, (2) creating customized estimates and invoices, (3) generating profit and loss reports, (4) tracking vehicle mileage and other Schedule C items, and (5) monitoring upcoming bills and unpaid invoices. If you are considering a small part-time business, this solution is perfect to get you started.

In conclusion, Quicken offers a wonderful lineup of products that are designed to meet the varying needs that different families require. This personal finance software review has aimed to provide you with a basic overview of each product to help you decide which solution would be most appropriate for your family. Hopefully this discussion convinces you of the incredible value personal finance software delivers to its users. I can only speak from personal experience.

By: Charles Hebert

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All forms of educated people, intelligent individuals from all walks of life in professional occupations are often the authors of these complaints. They have managed to come to grips with law, the working of the medical professions or indeed the law of the land but when it comes to tackling the policy documents of a mortgage protection insurance plan, they tend to be totally bewildered.

I am not surprised. For far too many years the financial service industry has smothered itself in complete jargon, essentially to bewilder the consumer and conceal poor value for money . Successive UK governments have not helped, making some areas of personal finance such as pension or tax related issues impenetrable to understand, to some of the finest brains in Britain. Indeed, on such occasion they have been instrumental in causing some of the biggest problems to impact up personal finance world. A good example is mortgages interest rates.

It is against this existing backdrop that I will undertake to write a series of articles related to personal finance. Wherever possible, I will try compare personal finance views and then seek to cut the verbiage and highlight complex financial areas in simple, good old plain English. And I don’t suspect that this will be no easy task. Indeed, I will spend many a Friday or even Saturday night burning the midnight oil and banging my head against the study wall in attempt to penetrate the deepest bowels of the current personal finance world.

This article on personal finance will not actively solve your personal finance worries – that is completely down to you. But if it helps to expand your knowledge or indeed understanding of the personal finance world, or if provides you with just one tip to go out and improve your knowledge of personal finance, these articles may indeed proved a worthy aim.

By: Elizabeth Mathers Stankovic

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In the good old days, personal finance for most people meant simply balancing their checkbook once a week and making sure they had enough money in the bank to cover the monthly bills. Of course that was long before the days of multiple credit cards, electronic fund transfers, PayPal, and the dozens of other complicated financial transactions made by even the average person on a daily basis. These days, keeping track of person finances can be quite a chore and can often overwhelm you, leading to a less than perfect financial situation.

Modern life has created additional headaches in our daily lives, but fortunately it has also provided new tools to use to control them. Personal finance software is the best option for keeping one’s personal finances organized and up to date.

Personal finance software comes in many varieties, each offering a specific set of financial tools. The simplest forms simply keep track of multiple bank accounts, including credit card accounts. The most complete versions offer tax tracking, investment tracking, budget analysis, electronic banking and a long list of other features. How much you need depends on your situation and how closely you want to track your finances.

Most banks now offer free electronic banking to their customers. Make sure that whichever program you choose, it is capable of taking advantage of electronic banking. The vast majority of programs offer this feature as standard so you shouldn’t have to look hard. With electronic banking, you can easily check your balance, automatically download statements, transfer funds among accounts and have all your information seamlessly transferred into your electronic account register.

The two powerhouses of financial software are Quicken from Intuit Corporation and Microsoft Money. Both companies offer several versions of the program and generally offer the same features. The interfaces are slightly different and one’s preference will likely come down to which one appeals to you most. New editions are released each year to account for changes in banking and tax law and owners of the previous year’s edition will receive discounts to upgrade.

Another option that is growing in popularity is software that is kept entirely online. You never actually download a program to your computer and can access your information from any computer connected to the Internet, including SmartPhones. This is referred to as “cloud computing.” Some websites offer a low monthly fee to use the software and other sites are free and entirely advertising supported. Some people prefer this method for its convenience and other people stay away from these programs due to security fears.

Once you begin to use personal finance software you’ll wonder how you ever managed your finances without it. People become addicted to seeing the computer generated reports of exactly where their money goes each month. They often find this makes it easier to create a budget and stick to it. Even if you simply want to keep your basic checking account up to date, personal finance software is worth the small price.

By: Victor Kramb

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The area of personal finance covers a broad variety of topics involving money which include areas such as budgeting, expenses, debt, saving, retirement and personal insurance among lots and lots of others. It can almost seem a little overwhelming for those of us without a good plan how to tackle it. Understanding how all of your incomes and expenses work together can lay the groundwork for a solid financial foundation for you and your family.

My advice if you feel that you’re a little over your head financially is create you own personal financial statement. A statement, done the right way, acts as financial roadmap; guiding you from where you are now to where we want to be tomorrow. A personal financial statement can also provide fixed points of reference when measuring progress over a period of time. They also help you make smart decisions about financial matters.

Here is how you can create you own personal financial report quickly, easily, and most important, correctly:

The first thing you need to do is find the type of financial report which will be the easiest for you to maintain on a monthly basis and for this I recommend Microsoft Office. Their programs make it quite simple to use. You can even find some pre-formed financial reports and monthly ledgers at most of the leading office supply stores. Organize all of your monthly bills together and then and separate them into categories for housing, utilities, medical expenses, school loans, and car payments. There should also be a separate category put together for things like dining out and other miscellaneous expenses. Now that you have your entire monthly expenses organized, begin to enter them into your personal financial report by whether or not they are tax deductible. Also make sure it contains payments you make on both an annual or semi-annual basis, like insurance. This is done by dividing the annual payment into twelve equal installments. Gather all of your sources of incomes such as pay stubs from work, pensions, retirement income, rentals, child support, etc., and add them all together. Simply divide your payout by twelve, if you receive an annual payout, for determining what your monthly income would be. Once again, you’re working in the financial report. In the appropriate space enter you total income, the net amount from your paycheck. Your net amount would be the amount you take home after all the taxes have been deducted. The total amount of all of your monthly expenses should next be added together. Once you have that number, enter that into the financial report. Subtract the number you get as your total monthly expenses from the total monthly income you figured out earlier. That amount is your monthly cash flow which could then be saved or used for extras expenses. Keep the financial report up to date every month by choosing at least one day a month for updating.

By: TL Kleban

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The various ways and methods you use to obtain money and the things you spend it for are what make up your personal finances.It implies not only the various channels through which you acquire funds for your personal use like loans and credit cards; it also includes the process of budgeting, saving and expenditure.

We need to, first of all, take a glance at the differing ways we borrow money. If you borrow money through credit cards you have to pay it back later with interest. Today the use of credit cards is quite widespread, but it is necessary to take caution when using them. Overspending when you are using credit cards is easy to do, so you may regret it when it comes time to make payments on the high interest balances.

In contrast, personal loans will reduce your spending because you will be borrowing only the amount you need for the purpose of your loan. You may use a personal loan for differing purposes, like home loans, auto loans, debt consolidation loans and to do cosmetic surgery. A personal loan has interest attached too, so you must abide by the terms of this loan to make repayment. If your loan is secured by collateral, you have to be more careful because if you fail to repay, you stand a chance of losing your assets.

The best results with the financial opportunities you have offered to you may be simple to arrive at and it could begin with you. The characteristic of prudence, and being economically minded and taking the time to research the loan market are all helpful. When you understand your financial limits and ability to repay, you can create a proper budget and maintain the habit of keeping with it. If you keep accurate record of your expenditures and begin to understand your spending habits and make the changes you feel are necessary, you will also be given an understanding of your credit card usage.

The loan market has trends and offers you must become acquainted with before you make any final loan deals. Do not hesitate to ask for a loan quote, this is the best way to get an idea of the cost of the loan. When you have the loan quote you will better understand whether or not you can afford the loan and comfortably pay for it, however, make sure you read the fine print to carefully look for hidden fees and costs.

Personal finance controls your quality of life and measures your ability to keep the economy of it under your control. When handled well, your finances will take care of the other parts of your life, but when mishandled, your finances will cause you nothing but anxiety and concern. If you gather as much information as you can on personal finances and learn how to handle your own you will be able to live a relatively safe and stress free life. Personal finance for each one of us consists of our own particular puzzle pieces to fit together to form a complete financial picture for us.

By: Alisdair Cosgrove

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Last fall, after years as a “do-it-yourselfer” in the area of fitness, I surprised myself and decided to hire a personal trainer, Laura Creagan of New England Endurance Training. No, I’m not a Hollywood starlet trying to get her pre-baby, red carpet-ready body back or an elite athlete trying to win Olympic gold. I’m not even trying to compete in, much less win, any races at the local, “age group” level.

I’m just someone who loves the same activities Laura loves – cycling, cross-country skiing, running, etc. Someone who gets a kick out of reaching new milestones in old favorite activities. Someone who loves getting out in the great outdoors for a couple/few hours of aerobic activity. Someone who values the resulting health benefits…

So why on earth would I need a personal trainer? The thing is: I like these activities so much so that I sometimes overdo it and end up injured. (So much for those health benefits!) Plus I’ve got a few new milestones in mind for next bike season.

So when I read an article about Laura describing how she’d excelled in a grueling winter triathlon in Austria, I couldn’t help but think: “If she can perform at that level, she obviously knows something I don’t. And I’d sure love to know whatever that is (sooner rather than later) without Googling and poring over books and distilling boatloads of information and using trial and error.”

It took a few months before I could convince myself to take action – what with not being a starlet or star athlete – but I kept hearing the echo in my head of words I’d said to potential financial planning clients thinking about making the switch from do-it-yourselfers. “Yes, you might achieve your goals on your own, but getting one-on-one advice from someone who’s been trained and is around this stuff all the time is likely to get you there sooner with fewer missteps.”

So I finally decided to give it a try. And – no surprise – it turns out Laura does know plenty that I don’t about training, but our work together has also taught me a lot of lessons about advisor/advisee relationships of all sorts, especially those I have with my clients. Not all of these lessons are new, nor are they rocket science. But my experience working with Laura has helped me to better understand them from the advisee’s perspective, which I’m convinced will reflect benefits back in my practice.

In keeping with the fact that this is the third in a trilogy of articles of physical/fiscal fitness analogies ( see footnote for other two ), and to reuse a fun gimmick I recently ran across, those lessons… each in exactly 3 words.

1. It’s not magic. There are no guarantees in personal training or personal finance, but if you stick to a plan based on time-tested principles, you’ll get better results.

2. Goals dictate actions. Only do enough to reach your goal, no more, no less. Less isn’t enough, and more could cause burnout or injury. (Remember, you can always up the ante with a new goal once the current one proves achievable.)

3. Trained eyes see. If there’s a hole in your plan, the advisor can’t help but notice cause/effect relationships that the advisee may not recognize. For example, just as having no emergency fund can lead to costly credit card debt in the personal finance realm, no strength training can lead to physical strain and injury.

4. Reach new heights. With the help of an advisor who has more insight into what’s possible AND what needs to be done to achieve it, you can reach new heights, e.g. “You really think I can retire (complete the Assault on Mt. Mitchell ) this year?”

5. Reconsider discarded ideas. Just because you tried spinning (monitoring expenses) before and hated it doesn’t necessarily mean it won’t work this time. Getting creative with a new tool or technique, or finally seeing the power of the idea, may be just the thing that makes it click.

6. Apply technology judiciously. You can benefit greatly from using the technology that exists to measure heart rate (investment performance), but if you try to watch it 24/7, you’ll probably get distracted from your goal, perhaps even crash.

7. Measure progress periodically. Monitoring your heart rate, power, and strength (net worth and cash flow) over time will tell where you are vs. your goal, allowing you and your advisor to adjust as necessary.

8. Accountability is good. We’re all adults here. Still, having to ‘fess up to having skipped an important workout (IRA contribution) sure is a great motivator.

9. Avoid boom/bust. Overtraining (living like a pauper) when you first start a plan is more likely to result in injury (binge spending) than in improved performance (a bigger nest egg).

10. Persist through setbacks. Reaching your fitness (financial) goals takes time, and you won’t always make progress in a nice straight line. Instead of getting discouraged and abandoning your plan for the new hot shortcut you saw in “Get Fit (Rich) Kwik” magazine, check with your advisor. While you may need a course correction, it’s possible a few words of encouragement will do the trick. (Thanks, Laura!)

By: Sherrill St. Germain

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You can think that it is easy to recognize excessive personal spending when you observe someone buying goods and services according to what appears to be an extensive appetite of wants. This observation maybe true, but is at risk of passing judgment, and perhaps not having enough information about the person being observed. A better approach is to evaluate personal spending within the context of fulfilling a desired goal and then decide if the spending pattern can support the resource need to accomplish the desired goal. The following is a basic plan that can quickly help you to determine excessive personal spending.

1. Establish a future reference by visualizing your desired position three to five years from today. It is best to establish the long-term position first before the short-term in order to remain focused and motivated

2. Write down this visualization in a statement titled”Vision Statement” and include a projected emotional response as you journey towards fulfillment

3. Write an achievement goal that is essential to realizing your vision within each of the following areas such as: Social – e.g. Marriage, or Children or a major vacation or a visit to at least three continents; Educational – To receive an advanced degree or certificate or Career change; Financial – Double household income or Start a business or Establish a fund for your children education; and Personal health -Actively engaged in the practice of “good” health habits

4. Project the dollar amount that will be needed to achieve your goals and realize your vision within three to five years

5. Determine your current spending pattern/month to see if you will have the resources or if you will need to make adjustments in order to realize your vision in three to five years

This step by step method allows a self-evaluation for determining your spending pattern and provides data for you to decide if you are spending excessively.

By: Frederick James

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