What is the Definition of Personal Finance – Budgeting

If you find yourself asking where to begin with learning proper finance, start with the definition of personal finance, budgeting. Why the definition of personal finance is budgeting we will outline in the following article, because truly there is no more important lesson as to what proper financial management entails, and what will most directly contribute to your success with your money.

Proper Budgeting is Personal Finance Mastery

There is no need to look beyond budgeting when beginning your journey towards personal finance mastery. Budgeting can be a scary prospect when you have not done so for a long time, the money tale told by your expenses and income can paint a poor picture. But whether you are a millionaire with investments, countless loans, mortgages and stock holdings, or an honest hardworking fellow just beginning your financial journey, budgeting is the key to continued success with your money.

Proper personal finance budgeting allows you to account for what monies you have coming in and what monies you have flowing out of your accounts. Mastery of your finances, no matter your level of income is a matter of using this information to make decisions that increase the money you have coming in each month, and decrease the flow of cash you have leaving your possession. If you choose to achieve this through additional investments, decreasing interest rates with consolidation loans or a job promotion the basics of personal finance budgeting remains the same.

Proper managing of one’s debt, income and expenses is the soul of managing your money and that is why the definition of personal finance is budgeting. There is no need to get more complicated than this, with your credit cards, payday loans, investments and stock options, you will find yourself on a sound financial footing if you keep a detailed budget, follow your money, and ensure that you spend less than you earn each and every month.

To properly budget your personal finances you simply add up your sources of income, account for every penny that you have flowing to you each month, and track every expense. I am not concerned with the exact system you employ as long as you are detailed and know how your money is flowing. Track your loans, and if you have bad credit lenders, know how much you are spending in interest. Track your credit cards and what amount of your payments applies to principle and what cash goes towards interest. Make knowing your finances your business and when you have an accurate picture of the flow of your money, then work to improve your finances.

Most mistakes of personal finance are made because honest, hardworking people have an unclear, or foggy idea of how their money is spent from month to month. With a little attention to the details of your cash flow you will find that there are countless ways to save additional money, and increase your income. Keep a focus on the basics of personal finance and never forget that the definition of personal finance is budgeting. You too can start making a profit today.

Ariel Pryor is a consumer credit expert who hel

Posted in Uncategorized | Tagged | Comments Off

Charitable Giving and Your Personal Finances

Philanthropy is Full-Anthropy

Has anyone ever asked you what you would do if you had all of the money in the world? Most commonly, people respond with, “I’d buy a bigger house or travel.” This is often followed by, “I’d donate more money to charity.”

People who are charitably inclined usually are living a rich, full life. We all have some affinity to a specific charity we like to support. As a Financial Life Planner, I have come to learn that charitable giving is an important goal for most people. Yet most of us don’t have a process for funding this goal.

A simple way to meet your charitable goals is to contribute to a Donor Advised Fund (DAF). A DAF is like a holding account created by a sponsoring charity that holds contributions from various donors and manages the charitable donations. The DAF will send you a quarterly statement of your contributions, along with a gift receipt for tax purposes. These contributions can then be distributed to qualifying charities at some point in the future.

You can usually deduct the full value of the charitable gift – whether it is appreciated stock (avoiding capital gain), or cash. The deduction is subject to adjusted gross income limitations. The gift is irrevocable and is also separate from your estate. Any income or growth in the fund is not tax deductible BUT is exempt from taxes. Once the gift is made, you can recommend how the donation is invested, through asset allocation strategies. You can name successors to the account, who then can manage the fund and make grant recommendations. This provides for a legacy of giving that can last for many generations.

You can get your kids or spouses involved and create your own account title. I know families who have semi-annual meetings with their kids and grandkids to discuss where the grants should go. What a great way to introduce philanthropy to kids!

The DAF accounts can be set up with as little as $5,000. You can support multiple charities with a single donation, usually with as little as $100. When you are ready to recommend to the DAF to make a gift to a specific charity, you just fill out a form and mail it to the DAF. The donation from the DAF can be anonymous, or can have your name identified as the donor.

What part do philanthropy and charitable giving play in your value system? Think about causes and organizations you would like to help. Most people that give to charity are happier and healthier. They experience a sense of satisfaction of helping people or specific causes.

John Templeton wrote: “Happiness comes from spiritual wealth, not material wealth… Happiness comes from giving, not getting. If we try hard to bring happiness to others, we can not stop it from coming to us also. To get joy, we must give it, and to keep joy, we must scatter it.”

Please note: This article is for informational purposes only and should

Posted in Uncategorized | Tagged | Comments Off