Personal Financial Freedom

Personal Financial Freedom – Personal Finance Budgeting

The topic for this article is Personal Finance Budgeting. The first step in becoming financially responsible is starting out with a personal financial budget. Absent a budget there is no way one can possibly track their income and expenses.

Before getting into what personal budgeting finances are I want to explain why budgeting is important. For this idea we will say that you have decide to startup a business, a personal financial advising firm. When establishing your financial advising firm the first thing to be done is the planning out of your company expenses. Most people would logically budget for their expenses before they began because without this financial planning you would have no idea of whether or not your financial advising firm could potentially be profitable. The next thing is to plan out your revenues. Then you would take the difference between the two and see whether things looked good or not.

This is what a financial budget is for a company and people should handle their personal finances in the same manner. When establishing a personal financial budget it is important to include everything that involves your money.

You can find personal finance software on the internet. This software is made so that you can easily enter all your income and expenses and it does everything else for you.

The components in a personal financial budget include both income and expenses. Examples of income in a personal finance budget include job income, gambling winnings, capital gains, social security, tax refund, etc… Examples of expenses in a personal budget worksheet include SAVINGS, electric bill, health insurance, cell phone, groceries, books, shoes, clothes, car insurance, gas, entertainment, travel, miscellaneous, etc.

This expense list does not include all potential expense, I’m sure you can think of others right now. Anything possible thing that you can think of that you might need to spend money on should be put on your personal budgeting worksheet.

I know that some of you are thinking to yourselves “Savings? What? Thats not an expense!” Well I’m here to tell you that savings should indeed be thought of as an expense. Each month one should personally budget for a certain amount of their money to be saved. This should not be an “if I have money left over” situation. It should be definite and as automatic as writing that check for your mortgage every month.

The most basic concept of personal budgeting is to control spending and use your money wisely so that you have money left over rather than having no money or going into debt.

After listing your income and expense on your budget worksheet you need to subtract the expenses from your income and get a Net Cash Flow for the month. The idea is to include all income and costs and come out with a positive cash flow on your personal financial worksheet. If the number comes out negative then you have a problem and your expenses will need to lowered.

Now you know exactly what a budget is and how to make one. The next thing to is run a few Google searches an find a budget template to make things easier.

You need to keep a budget every month. No, you cannot simply make one plan for the whole year and stuff it away somewhere to forget about it. Our income levels change and our expenses change and these changes need to be accounted for.

To be successful with your personal budgeting plan you need to make out a projected personal budgeting plan for the whole year. Then as each month passes you can make monthly adjustments.

The other thing to do is keep a record of your actual income and expenses and compare that to your personal financial budgeting worksheet. You want to make sure that your original estimates were correct or at least close.

The thing about a personal financial budget is that it sets you up for success and helps keep you from needing to use credit cards or other debt to make it.

If you have an accurate personal financial budget then you will be prepared for the unexpected financial burdens that happen from time to time.

There should be no issues when your car breaks down and you suddenly need $300 to fix it. All is good because you have been putting money into savings each month.

This is the most basic idea of personal financial freedom and personal finance budgeting. If you can establish a sufficient level of savings then you can begin to be at ease with your financial situation.

Most people are clueless and don’t realize that their unplanned/unwritten actual personal finance budget includes something like $4500 of income and $4700 of expenses each month.

Next time I will take a short break from the Mini Series and instead suggest a few personal financial budgeting software programs that are available out there.

Financial Investing

The Basic Personal Financial Investing to Consider

Investment is a great way to develop a stronger financial future and a greater chance of gaining wealth. However, it is also evident that investments can also be affected by many national and international economic issues. Learning the basic on investments can help you with your financial goals through the many different personal financial investing options you can consider.

The information you need initially is identifying the different personal financial investing that you can consider. There are three different types of investments. They are the short-term investments, bonds and stocks.

o Short-Term Investments

This kind of option for your personal financial investing includes certificate of deposits, money market investments and many more. Interest on these investments can be earned just for a short time. The interest you can receive can be realized in as short as one year or even less than a year. The risk in this kind of investment is really low compared to the other types of investment options available to you. However, the growth of investment is a possible. Large returns on short-investment cannot be expected here unlike in stocks or bonds.

o Bonds

The idea of investing on bonds is close to lending money to the company where you get the bonds from. One example of this investment is the U.S. Treasury; you will be able to get paid back after cashing in your bond certificate. The risk involved in this personal financial investing is not as high as the risk involved in the stock investments. However, the gain you can get from the investment has the potential on getting a big wealth gain with more protection from inflation in the economy.

o Stocks

This is usually and is commonly referred as equity investments. The investments of your money are held in the in public companies. This form of personal financial investing awards you with the chance of holding some ownership of the companies where you invested your money through stocks. The size of ownership that you can get depends on how many stock units you availed for your financial investment purposes. Long-term investment on stocks has great chance for you to realize growth. On the other hand, with the big chance of financial growth comes with the risk as well. Your earning will depend as well in the rise and fall of the stock price. Therefore, it is wise to put your stock investment in a company that have nice track record on stock prices.

If you are seriously considering putting your money on any of these personal financial investing, studying more of the investment type would help. A reputable financial adviser may be a good source of advice on your plans and they would even provide great assistance in your investment portfolio development. Finding a financial adviser that you can trust will make it easier for you to listen on the expert advice that your adviser will provide. Remember, these are financial decisions and trust is the main key to developing a good relationship with your adviser and financial growth on your part. Doing your own share will make it easy for you to learn and understand the different investment types available for you; research and do your homework so you can start gaining the financial wealth you want for your future.

Good Financial

What Will a Good Financial Adviser Do For Me?

The one sentence version: Your trusted adviser will help you to achieve your short, medium and longer term goals and objectives in life by using a comprehensive financial planning strategy over time.

The longer version: You think you need financial advice – maybe on something specific such as a mortgage or an inheritance, or perhaps you realize that you can no longer put off planning for retirement. But where do you start?

You are nervous. It’s understandable and good financial advisers recognise this and want to reassure you that their focus is on their clients, and helping them to make best use of their resources over time. It’s our job to help you to make your money work harder!

Hopefully our other articles will guide you to a financial planning professional with the expertise you require or you are fortunate enough to have family or friends who already work with one, but once you find this person, what will happen next?

This is what the good guys do: First, a good IFA will meet with you to establish your current position and what it is that interests/concerns you.

This discovery meeting is often without charge and will be without obligation so that both sides can decide whether it is appropriate to take matters further. At this stage you may gain enough information to fully answer your query, you may be pointed in the direction of someone else who can help you, or the IFA may decide to offer his/her services.

The IFA will clearly explain the services offered by the firm and the ways in which they will be paid for these services. The proposal may be for one-off work or may be for an ongoing relationship. Ideally an agreement should be drawn up, understood, and signed by both parties.

The next step is for your IFA to gain a thorough understanding of your current circumstances and your future goals and objectives. He/she will review your current financial arrangements as well as appraising your attitude to investment risk.

This information should be put into a report, with recommendations for immediate or future action along with the implications, advantages, disadvantages and cost of this action. It will highlight cost effective and tax efficient strategies.

The next stage is for you to meet to discuss the report and for the adviser to add detail and answer your questions. You will agree upon the action to be taken now and provisionally, in future. You will confirm the cost and the way in which the adviser will be paid.

The adviser will then implement the recommendations and set up any new contracts of insurance or investment, as well as rearranging any of your existing policies and plans to give you a more coherent and appropriate structure to your affairs.

Financial planning is an ongoing process, as your circumstances will change and the financial world will definitely change. No plan is going to remain entirely appropriate throughout your lifetime. In recognizing this, the best financial planners will set up a formal review schedule to ensure that you remain ‘on track’ to meet your objectives

Top Tips

* Don’t be afraid to ask searching questions; the best working relationships are based on openness and honesty

* Check whether there is an automatic review of your affairs included or whether you have to request one, and ask what it will cost.

* Disclose everything about your affairs so that the adviser gets a full picture.

* Keep your adviser up to date with changes in your life or future plans so that they can amend your strategy if required.

* Introduce your IFA to your accountant, solicitor or other professional adviser so that they can work together on your behalf.

* If you are fortunate enough to have linked up with a good professional financial adviser don’t keep it to yourself – we need to spread the word!

Financial Adviser

Financial Adviser

Financial Adviser, it’s a fancy name but what does it mean? The name is supposed to tell you everything but in fact tells you nothing. If you have some questions about something regarding money then it could be an idea to talk to a financial adviser. That could be anyone such as a bank manager, an accountant, an insurance man, a solicitor, an IFA. a credit union employee, someone in the post office, a good saver, a rich person. There are so many to choose from it becomes a nightmare. Which one is the best person to talk to?

How can you tell if a person is a proper financial adviser? Well that person may have a business card with the words FINANCIAL ADVISER on it. That would be a good hint. The person may have a desk in a bank, building society or life office. The person may even have an office with FINANCIAL ADVISER above the door. All of these are good initial indicators that a person is a FINANCIAL ADVISER.

You then may want to know if that person knows anything about the subject which gives you concern. I would first look on the walls to see if there are any certificates of passed examination in the subject you wish to discuss. Next I would look at the Initial Disclosure Document (I.D.D.) to see if the person is both qualified and licensed to give recommendations in that particular subject. You could even go as far as to ask the person what level of qualification and experience they have.

If you find that at the beginning of the meeting you are doing all the talking then you are not finding out much about the quality of the person whose recommendations you are going to consider. They should begin the meeting by introducing themselves and telling you why you should listen to their advice.

So titles which don’t tell you very much. I have asked many people what they believe an Independent Financial Adviser does. Usually I am told that they search the entire market for the best insurance deals available and then they get commission. I don’t think there are many of them who would be pleased with that definition and in many cases it isn’t even true.

Seeking out a good financial adviser is very important. You may have a particular question or problem and they may have the solution. You should first seek a recommendation from someone you trust whose has already used that adviser. There is safety in numbers. Next you should see if that person has a good reputation. Last, but by no means least, you should check to see if that person is in the Financial Services Authority register. The register is easy to find on the internet. Just type in FSA.

Personal Finance

Personal Finance – What Is Personal Financial Advising?

So the answer you are looking for as you read this is “What specifically is Personal Financial Advising” This term means different things to different individuals and I’m here to inform you about what Personal Financial Advising is and how it can help you on your way to personal financial freedom.

The NAPFA defines Personal Financial Advising as a situation where industry professionals help people to manage their money for both the the near future and long term by helping them in deciding which stocks, bonds, and mutual funds to invest in. This is an excellent definition of Personal Financial Advising in general terms but does explain everything.

Personal Financial Advising services are used when someone needs assistance in managing their money but does not have the time, knowledge, or resources to do it in the most effective way.

The goal of a Personal Financial Advisor is to help their customers in attaining all of their financial goals. A Personal Financial Advisor should be involved in all areas of a customers financial situation beyond their day-to-day situations. In doing this one might be involved in helping customers invest for retirement, invest for a child’s college, make the proper general investment choices, or even help with home loans (mortgages) or car loan advice.

When people uses a Personal Financial Advisor there is often a charge associated with the use of services. Often times though the charge is greatly outweighed by the financial gains one sees from the advice they receive.

In the end Personal Financial Advisors are just as they seem. They are simply advisors who give clients advice on how they should handle their finance so that their money works for them instead of them working forever because they don’t have any money. When it comes down to it, it is ultimately the individuals decision on how they want their money to be handled. Personal Financial Advising is a great tool for anyone who wants to experience financial freedom but does not have the knowledge, time, or resources to do it on their own.

I hope this article has at least give you an idea of what Personal Financial Advising is. This article was very brief on the topic of Personal Financial Advising and a book could most certainly be written to explain it in full detail.