I’m Marsa and I’ll be putting a few blog entries up as a sort of way of checking in on myself to get out of debt!
Personal finance. I would include the definition I found on wiki but I kinda got lost/bored half way through the long, hyperlinked aspects of personal finance, sentences. What I really need is the how-to. What makes this work day in and day out? What is the correct mentality?
I seemed to be getting the hang of making ends meet on very little towards the end of my under plus before I got a full-time job. Maybe it’s just a matter of going back to that. But how do I simulate the urgency and get myself out of debt?
There are all these opportunities that are so easy to justify in my head.
Well, I’m determined to turn this boat around. And I liked what wiki said further down about logistics:
Personal financial planning process
A key component of personal finance is financial planning, which is a dynamic process that requires regular monitoring and reevaluation. In general, it involves five steps:
- Assessment: A person’s financial situation is assessed by compiling simplified versions of financial statements including balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statementlists personal income and expenses.
- Goal setting: Having multiple goals is common, including a mix of short term and long term goals. For example, a long-term goal would be to “retire at age 65 with a personal net worth of $1,000,000,” while a short-term goal would be to “save up for a new computer in the next month.” Setting financial goals helps to direct financial planning. Goal setting is done with an objective to meet certain financial requirements.
- Creating a plan: The financial plan details how to accomplish the goals. It could include, for example, reducing unnecessary expenses, increasing the employment income, or investing in the stock market.
- Execution: Execution of a financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
- Monitoring and reassessment: As time passes, the financial plan must be monitored for possible adjustments or reassessments.
Typical goals most adults and young adults have are paying off credit card and/or student loan debt, investing for retirement, investing for college costs for children, paying medical expenses, and planning for passing on their property to their heirs (which is known asestate planning).