Personal Finance is a term you may hear quite a bit throughout your life. It has become a term that is more frequently discussed these days. But what is it, exactly?
Personal finance is just that: the handling of your personal finances. But there is more to it than that. It is budgeting, saving, investing, trading, and so much more. Essentially, it is how you spend your money, how you save your money, and how you invest your money. After all, you should know exactly where every last bit of your money is going. You work hard to earn it and wasting it is the equivalent to wasting that time.
Know Your Debt
There are a lot of aspects to personal finance that are worth noting but one of the most important things is to know how much debt you have. Know where your debt is, how much, and what the interest rates are. This allows you to create a game plan in regards to eliminating your debt, creating more financial flexibility in the future.
Pay More Than the Minimum
To achieve this, it helps to pay more than your minimum required payments. Things like credit cards, car payments, or mortgages will come with a standard minimum required monthly payment. This will pay down your principal but will do so at a much slower rate, allowing for interest rate fees to be racked up. Paying more than your minimum, regardless of how much extra you can kick in, allows you to pay off your cards/home/car quicker, saving on those interest fees that can add up to quite a lot of money.
Savings Are Key
Why do we save? Well, for a few reasons. Mostly, though, it is to protect against unforeseen circumstances in the future. You car or home needs repair, you have an expensive medical bill, or you lose your job; you can use your savings to help with these things, at least in the interim. Saving any amount of money from each check is important, regardless of how small the amount is. It all adds up over time.
Your personal finance is something that you should be paying a great deal of attention to. After all, it allows you to live your life the way you see fit and helps to protect you against emergencies in the future. Those with healthier personal financial situations will have less money-related stresses and we can all use a little of that in our lives.