The many aspects of personal finances

In order to have a financially successful life there are different areas of personal finances that should be considered.

08:50 17 September 2013

When we talk about personal finances, it is probably most common to think about a monthly budget and piles of bills. There is a lot more to personal finance than just managing a monthly budget. There are important aspects to consider during different phases of life, or different financial phases. Here are a few different aspects to consider when it comes to personal finances:

• A monthly budget is a great practical tool for managing finances, but in order to get a better idea of how things are for you financially, you would need to take an in-depth look at all of your assets as well as your liabilities. Once you’ve done that you can determine your net worth, in addition to the amount that would be considered cash flow.

 

• Growth and wealth management is another phase of personal finances. This step is where the numbers you determined for your net worth and cash flow really comes in handy. You can figure out how to increase the money you already have with the least amount of risk or effort. Your particular approach will vary based on a number of things.

 

• Tax preparation is another part of personal finances that everyone should be familiar with. It might be the least favourite part of personal finances, but paying attention to your income in relation to taxes can help you ensure that you pay the correct and fair amount without the risk of owing the government.

 

• Retirement planning and estate planning are both done later in life for personal finances, though they are separate categories. This type of planning is essential to ensure that you will have the necessities provided in later years, and that you will be able to continue in the lifestyle to which you are accustomed. Estate planning is also important and can be a great help to heirs.