As the term suggests, personal finance is all about the concept of managing your money. Your money may come from income, saving, or investing. Personal finance deals with your banking needs, budgeting needs, renting or mortgaging, investment planning, retirement, insurance planning, or tax planning. Thus two primary areas of personal finance are your income and your expenditure. And your focus ought to remain on saving, investing, spending, and remaining protected through life insurance and health insurance.
Personal Finance Expenses
Since humans are unique, their personal finance expense needs are also unique. And no one has fixed expenses forever. One person may have to pay a mortgage or rent, while another may need a loan for buying a car. Similarly, another person may be looking for health insurance or daycare for their child.
Basic Personal Financial Skills
Since financial decisions impact every area of your life, it is important to have some basic personal finance skills. The basic fundamentals of smart saving, effective budgeting, prudent investing, and risk-free debt must be clear to every human.
Having a financial plan never hurts anyone. It also does away with the habit of figuring out how much of your monthly income is left after your bills are paid. Saving for the short term and investing for the long term makes you financially free. Using credit wisely or choosing a reasonable rent for your dwelling are great ideas.
Impact of Technology On Personal Finance
Before the advent of technology, personal finance was managed and balanced on books that each household kept. But over the last decade or so, technology has dramatically changed the way most of us handle our financial transactions, including balance transfers. In the 21st century, online banking, mobile payments, virtual wallets, and cryptocurrencies are the new buzzwords. In fact, technology is changing and evolving so fast that it is hard to keep pace with it.
Using Technology For Finance Basics
Technology can be used to create a financial calendar, track your net worth across your investments, set a budget, and allocate income for financial priorities.
Online Banking & Personal Finance
Online banking has made checking your account and keeping a close eye on your finances, very easy. In the absence of online banking, calling or stopping at the bank was the norm, even if you simply needed to know your account balance. How painful that all sounds now!
Paying Bills Online
Thanks to technology, paying bills has become the easiest thing to do. It also eliminates the risk of your checks getting lost in the mail. You can schedule your payments ahead of time, and pay your bills on the same day each month.
Earning Money Online
Just as paying bills online has become easy, earning money online is easy too. Earning money online can be your primary income or supplementary. It can help you stay out of debt or reach your financial goals in time. Making little extra money online is becoming pretty cool.
Getting Paid Online
Those days are gone when employers paid you physical checks. Now every employer pays through direct deposit or Internet apps. This hastens up the payments.
Smart Use Of Credit Cards “Personal Finance”
Using money on credit has become an easy way to instantly satisfy your desires. But the big deterrent here is the high-interest rates charged by most credit card companies. However, the smart use of technology helps to overcome this challenge as well. In order to save money on interest. Many people apply for a new credit card and use that for balance transfer purposes to transfer debt from one card to another. Thus they move the balance debt from one account to another. This move makes them enjoy lower interest rates.
Thus, there are many ways technology affects the way we manage our personal finance. We are indeed dependent upon our online systems.