In this step, you evaluate your alternatives as part of the financial planning process. Use the many sources of financial information that are available. Look at your situation in life, your present financial situation, and your personal values. Consider the consequences and risks of each decision you make. This is like comparing personal financial planning theory and practise (more…)

Economic factors across the country and around the world can affect personal finances. They play a role in day-to-day financial planning and decision making for most people. Economics is the study of the decisions that go into making, distributing, and using goods and services. The economy consists of the ways in which people make, distribute, and use their goods and services. To understand economics and the economy, you need to be aware of the market forces, financial institutions, global influences, and economic conditions that affect global as well as personal decisions. (more…)

Current economic conditions also affect your personal financial decisions and how economic conditions can influence financial planning. There are three important economic conditions: 1. Consumer prices, 2. Consumer spending, 3. Interest rates

Consumer Prices (more…)

Debt begets more debt. Has there been a truer statement? This is especially true right now during a very hard economic cycle. Most people are struggling to pay their debts and it seems that when you take one step forward, you are pushed two steps back. Here are the ways that this happens (and what you can do to get out of the cycle). (more…)

Once you know how much money you need to meet your goals, you then have to think about where to invest it. To make that decision, you need to understand the different risk factors. Also, you should consider each investment’s potential for income and growth as well as its liquidity. You should evaluate the overall risk factor of making investment by examining five different components of risk: inflation risk, interest rate risk, business failure risk, financial market risk, and global company risk. Not only this will saving extra money, but the decision of investment is for long term investment only. (more…)