Reasons Why Good Personal Finances Fail

How many times have you heard that “money is not enough and I am not happy with my finances”? Alright, this is actually the voices from my heart. I use to blame the government because our education system does not include financial education classes for us to manage money well, sometimes I would blame my parent for not managing their money well enough for their kids to live better in future. But wait a minutes, is it their responsibility? This really got me thinking.

When something is at fault, there is always someone to be blamed. Let’s think about it, before pointing finger to others, look at yourself what have you done. Let me share with you, recently I open a poll in a well known finance forum asking about how many people who has emergency fund on their hand if they do not work for 3 or 6 months. I wasn’t surprise with the results, there are only 5 persons out of 53 that have emergency fund on hand. This is so common I was not shocked. From the 53 people that responded to my polls, I am sure they are smart and disciplined person. Emergency fund is essential in personal finance and why do this people not following? Perhaps it was just one example and I can’t justify overall about personal finance but why do this good personal finance fail in the first place?

It kept me thinking for awhile and I think you may know how important it is to budget and manage your money. No doubt that there are still many people I know still don’t keep track of their expenses. Hmm…I use to think, if everyone is practicing, personal finance would not exists and this blog will not exists neither. Probably this is what I want it to happen.

To get a picture why these good personal finance idea is hard to follow and fail, I would use myself as an example and additional feedback from the poll that I had gathered. Here’s some of the reasons and obstacles:

1. Not taking action and lazy to get started

Lazy could be the number one reason. They simply do not want to take action to get it started, all sort of excuses popup such as lack of time or rather spend the time in leisure to rest or do things they always wanted to do. In fact, the first step to get started will not take you long to plan and budget your day-to-day financial affairs. Despite doing all these planning will enable you to do the things that bring you satisfaction and enjoyment in later days. After all, it is completely up to you to take the first step. In my opinion, I think everyone should track where their money goes and I have not met people who is good in their finances that don’t need to track their money unless they have a personal finance adviser.

2. Get lazy along the way

I know I know is lazy again. The second big obstacle required discipline and you may lost focus follow through. At this stage, even though you have make the right move to get started, but along the way you get lazy and the intention to give up is strong.

Since many will give up at this stage, if you continue to sticks to your goals, you’ll will be better off others. You can cultivate good habits to keep you stay focus, for example, writing journal to remind you to sticks to your goals like I did, to blog about personal finance, and each time I wrote and reread what I wrote, it will automatically entered to my subconscious and keep me stay focus all the time.

See, this works for me, there is other ways to stay motivated, such as keep yourself a to-do-list all the time to force a daily routine to track your expenses. You can take about a minute or two a day after dinner or before you go to bed to list down what you had spend for the day.

3. It is not the right time yet

I know you may have a better important things to take care, you may thought of it is not important enough to take care personal finance now . But let me ask you, when is the best time? It is always the best time to start right now, start it small and you will eventually formulate a plan for yourself in long run that works for you. What’s more important than paying attention to yourself. As with anything else in life, without financial goals and specific plans for meeting them, we drift along and leave our future to chance.

I always heard this anywhere in self development books or website -> “most people don’t plan to fail; they just fail to plan.” So, it reminds me that if I fail to plan, I will fail to reach my financial goals.

The Best Personal Finance Software Available

I have recently been introduced to a brand new software application that helps you to take control of your personal finances. Simply setting up a budget to compare income and expenses can be the first step on a journey that will result in building data you can use to manage the key financial decisions in your life. It’s ease of use and product support make it the best personal finance software you can buy.

The different stages of family life tend to lead to changes that will have a big impact on household expenditure, like having a baby, getting married, changing schools, or children leaving school to go off to university.

Household income can change dramatically too. During the recession many adults in the UK have been made redundant, or have had to reduce hours and accept pay freezes to stay in a job. Of course Income can also increase through windfalls, promotion, and changing jobs, etc., all opening up new opportunities!

The ideal accounting software should be simple to use, but also a very powerful tool to look at the year ahead. You should be able to create and save as many budgets as you like to look at all of the possibilities, and even to consider ‘what if’ scenarios. The budgeting tool is intuitive and powerful in home accounting software.

Inserting an annual total for an account which will be evenly distributed throughout the twelve months of the year or you setting up a distribution for each account using a slider, or input the figures manually if you prefer. You should be able to have as many accounts as you like and you can have accounts within groups and sub groups according to the structure that reflects your needs. As you populate an account you should see the group within which the account resides changing to reflect the sum of all of the parts. You can then look at your budget at a simple macro level or expand the chart of accounts to show all of the parent and child relationships within the Groups at the micro level! Remember the devil is in the detail!

Once you have built a budget to mirror your chart of accounts you can then track actual income and expenses against it. If you have forgotten to budget for certain income or expenses it is very easy to edit your budget or you can refine the budget when you come to create it for the next 12 months. If you are happy with your budget and don’t want to make any changes then you can lock it. At the end of year you can archive it which means that you can still access it to review your financial history.

If you find your planned expenditure exceeds your income having all of your expenses presented in one view allows you to plan a course of action that can lead to positive change. It has long been said that ‘what gets measured gets done’. By looking at the budget you can rank the essential from non essential expense categories and make some decisions to change the status quo before your finances become unmanageable. You can also target certain areas for cost reduction. There are so many price comparison websites that allow you to check out the best deals around. Don’t forget that if you budget to reduce energy costs based on a pitch from an energy provider, with a good home accounting package, you will be tracking actual expenditure against your budget and can check to make sure that the deal really was as good as it was made out to be. If not you’ll be ready to check the market again!

If your income is increasing then a budget allows you to plan for extra treats and luxuries and/or forecast how much surplus income you will have at the end of each month/year, after all of your financial commitments have been taken into account. Perhaps this is money that you want to pay into a tax free or long term savings account or use to pay off your mortgage?

Setting a budget puts you in control of your finances leaving you to enjoy the important events in your life.

Such a software is Home Accountz – a multi platform personal accounting software package that will run on PC, Mac or Linux, can be installed on up to two computers and I think, the best personal finance software for the money.

Personal Finance Blogs

More and more personal finance blogs are popping up every day. Some discuss how they are going to make their first million dollars, others are about how to be frugal and save money, while others are more focused on paying down debt. It’s great to see such an interest in personal finance, and it’s fantastic to be able to be an observer and watch step-by-step how people take control of their financial situation.

One thing to conscious of as you read through personal finance blogs is that they are often not written by professionals in the field. In my opinion this has some strengths, as they are true accounts of strategies, products and systems that actually work for the author and it’s readers. But that also means it is even more important for you to do your due diligence before acting on any of the information given on these sites, as it should be regarded as opinion rather than professional advice.

That’s not to say there isn’t very valuable information that can be found within the pages of these personal finance blogs. Many have been listed in Money Magazine’s best personal finance websites, and listed in the New York Times and the like, so they do come with a level of credibility. Secondly, authors tend to do their very best at publishing accurate information in order to maintain their level of credibility and attract more readers.

The real gold, however, is often found deep in the comments section after each article found in the archives. Since most of these blogs allow anyone to leave a comment, it is not unusual to see people with competing views debate an issue, which is great for the readers. This is where you will often find certified professionals give their thoughts, argue points or include some additional background to help you make the most out of your financial situation. These comments allow you to see things from all angles so you can make the best decision based on the information at hand.

You probably don’t wan to let these personal finance blogs be a substitute for professional advice, but rather help guide you to a starting point and give you some general background information. Each person’s situation is slightly different, and what may work for one person may not work for everyone. However, the same fundamental concepts generally apply when working to pay down debt, manage money or accumulate wealth, so they are a great starting point.

Beyond that, you will often find honest personal finance software reviews, documents to help you stay organized, and general stories that will help you stay motivate and inspired to reach your goals.

With all of the personal finance bloggers out there, there is a wealth of information at your finger tips that can truly make you rich. Find the one’s you can relate to the most, and add them to your RSS feed. That way you can easily read through the new content on each site in one place, making it easy to read all of the fresh material.

The Best Free Online Personal Finance Tools

Proper financial management – most coveted by millions and millions of consumers all over the globe. Faced with this tough economy, it is harder than ever to handle your finances well. But the great news is that establishing a solid financial plan for your future has become more affordable and attainable. There are a lot of online personal finance tools that are offered to individuals for free to help them manage their finances better. These are effective instruments to become financially stable while saving yourself from getting into debt trouble.

In today’s modern time, tracking every single detail is quite hard and even more difficult when money is the issue. Thus, getting help from online personal finance tools sounds very beneficial. In addition, these tools come free and very handy. Calculating your cash inflow and outflow can be easily done in the comfort of your home facing the computer.

Personal finance is a method of following your finances in a more streamlined manner. Since listing down on a paper every detail of your expenditures does not function well any longer, a personal finance device found online gives a far bigger and better assistance.

The following are some of the best online personal finance tools from budgeting to checking one’s credit score that are offered to individuals for free:

For Money Budgeting

1.) Mint.com

·Mint.com is one of the most popular and well-loved free online personal finance tools by the people. With over 8,000 financial company connections worldwide, this online means offers a wide variety of understandable and easy to use tools.

·Once you have registered an account, you get 100% access of your whole finances such as your credit cards, grocery bills, loans and other personal expenses.

·It offers a very detailed tracking program about everything that goes on with your finances from – the things you spend your money on, how much monthly savings you have as well as your investment’s performance.

·Automatic alerts are also given to you through a text message or an e-mail especially when you are on the brink of reaching your card’s credit limit or if you have too little money deposited in your bank account.

·In addition to these services, this online tool can also show you budgeting charts and spread sheets that teaches you how to budget in every expense category.

2.) Wesabe

·Wesabe.com is a website that provides strong financial management instruments while at the same time having that social networking appeal since it offers an active forum for clients who seek support and give encouragement to each other in order to reach their respective monetary goals.

·Since it is more hands-on website as compared to Mint, you have the choice of putting your bank or credit card statements on your own. Since this is not done automatically, you safeguard your identity as well as important details such as your account numbers and passwords better.

For Financial Planning

3.) Buxfer

·A more basic and less updated free online personal finance tool found in the web, it is best for people who are looking for fuss-free financial planning instruments.

·However, what makes it stand out among other online financial planning device is its user-friendly interface. Buxfer is equipped with a step-by-step how to guide, easy to understand instructions as well as fast account set up.

For Investment Tracking

4.) Social Picks

·SocialPicks.com is a business based online company that focuses more on tracking a person’s investments. It provides an independent service wherein you can easily gain access of your asset’s performance while at the same time allowing you to make comparisons with other investors. Financial advice is also provided to help you market your investment better.

For Credit Score Checking

5.) CreditKarma.com

·Functions just like your credit score bureau company, this website offers you an updated status of your credit score. Also, advice is given on how you can improve your rating as well as tips on how you can repair a rating with glitches.

·The only main difference is that you need not give out your credit card details. All you have to type in is your name, address and SSS (Social Security Number).

Online personal finance tools are great devices in keeping yourself up to date with your finances current status while at the same time giving you help to make financial planning more effective without the scare of getting scammed.

Top 10 Books on Personal Finance

Many people entering the workforce today are making money, but are struggling to manage it. For many, personal finance is a mystery. They struggle to understand the basic personal finance principles, concepts and ideas.

Are you one of those who are struggling to manage money? Then seek assistance from the experts in the field. Read their books and learn the basics of personal finance. Gain the knowledge of saving and compounding your wealth over a period of time.

Here is a list of top 10 books on ‘Personal Finance’ which will help you manage your finances in the right way.

• The Total Money Makeover: Dave Ramsey
Dave Ramsey gained popularity as the author of the best-selling book, ‘The Total Money Makeover’. In this book, Dave provides simple personal finance advice on how to get out of debt, no matter how worse the situation is, by falsifying popular myths. He explains the concept very clearly using simple techniques, so that even a layman can understand and follow. The strategy involves how to pay-off debts by focusing on paying-off small debts first, while paying only the minimum for all other debts.

• The Millionaire Next Door: Thomas Stanley
The best-selling book ‘The Millionaire Next Door’, authored by Thomas Stanley, identifies some common traits of Americans who have accumulated wealth. He says that most wealthy people do not live in Beverly Hills or on Park Avenue – they live next door. The author finds common connections among millionaires after conducting a survey on them in U.S. He discovered that millionaires ‘live below their means’ and this is the secret of becoming wealthy. The book “The Millionaire Next Door” examines both sides of wealth equation: saving money and earning money.

• Rich Dad, Poor Dad: Robert Kiyosaki
“Rich Dad, Poor Dad” covers Kiyosaki’s philosophy and his relationship with money. The author has achieved his unique economic perspective from two different persons. The story is about two dads – one, the author’s father, who was the superintendent of education in Hawaii, ended up dying penniless and the other is his best friend’s father, who was a drop-out of school at age 13 and went to become one of the wealthiest men in Hawaii. Kiyosaki uses the story of these two men and their financial strategies which varied a lot. He illustrates the need of a new financial paradigm in order to achieve financial success in the new millennium.

• Your Money or Your Life: Vicki Robin and Joe Dominguez
This is one of the best personal finance books which focuses on how to gain control of your money and begin to make a life, instead of just making a living. The authors explain the concept of “time is money” in a very literal sense and how to transform your relationship with money and finally achieve financial independence. These authors encourage readers to sort out their priorities, cut expenses, and then to seek passive income and retire early in the pursuit of financial independence.

• The 9 Steps to Financial Freedom: Suze Orman
Ms. Orman, a former waitress and stockbroker turned personal-finance adviser, combined practical investment tips with more psychological advice in her first book “Financial freedom”. This book teaches us how to approach money from a spiritual and emotional point of view. She advises people to do nine things in nine steps that are needed to attain financial freedom. She says, when we have power over our fears and anxiety, we have attained success to financial freedom.

• How to Get Out of Debt: Jerrold Mundis
“How to Get Out of Debt” provides step-by-step guide to getting out of debt once and for all. It is based on the proven techniques of National Debtor Anonymous Program. Jerrold Mundis was actually a debtor, and the story is based on his own experience. This book contains real tips and is based on real stories of people.

• Clark Howard’s Living Large in Lean Times: Clark Howard
“Living Large in Lean Times” is a powerful guide to save money. The book covers everything from cell phones to student loans, coupon websites to mortgages, paying electric bills, and beyond. This book paves way to financial independence and wealth. It offers more than 250 tips on saving money.

• All Your Worth: Elizabeth Warren and Amelia Warren Tyagi
Warren and Tyagi will tell you the truth about money in this book. They show you how to balance your money, how to get out of debt, cover your bills etc. They make people learn how to balance money into three essential parts: 1) the Must-Haves (the bills you have to pay every month), 2) the Wants (some fun money for right now), and 3) your Savings (to build a better tomorrow). They help you to get your finances on right track. Warren and Tyagi advice not to keep complicated budgets. In this book, they both simply show a whole new way of looking at money and yourself.

• After Shock: David Wiedemer
An aftershock helps you know how to protect and grow your assets before, during, and after the next global financial/economic crisis. Placing your cash in on the best new investment opportunities will make you know which jobs, careers, and business sectors will gain the most rather than lose when asset bubbles collapse around the world. The author says that for those who act quickly, there is still time to protect yourself, your family, and your business in the coming ‘Aftershock’. Thus, this book shows you what to do right now to protect yourself from aftershock before it’s too late.

• The Money Book for Young Fabulous and Broke: Suze Orman
Suze Orman, the world’s most trusted expert on money matters advises on how to get out of generation’s debt in her book “The Money Book for Young Fabulous and Broke”. She depicts the specific financial reality that young people encounter today by credit card debt, student loans, credit scores, buying a first home, lack of insurance (such as auto, home, health) and the financial issues of the self-employed. She says that this generation should be aware of the urgent need to take the matter under their control.