Personal Finance Basics

Personal finance basics are the core of a strong financial plan.

They are:

Pay Yourself First
One of the most critical basics of finance is to pay yourself first!
Putting a percentage of your income away each paycheck in a 401K, IRA or other retirement account will help you build wealth. The higher the percentage the better.

Have this money taken out of your check (if you work for someone). If you work for yourself, strive to make this a habit. It soon becomes transparent and you shouldn’t miss it.

There are a myriad of plans for employed, self-employed and more to put money away. Many are tax deferred.

This assumes you make enough to save (if not, please review the income and expenses page).

Sound Financial Planning
Setting up a sound financial plan is crucial to help you meet your financial goals. This web page covers the high level critical steps to accomplishing this task.

Live Below Your Means
Although a common sense statement, many people never follow this simple guideline. There will be “financial rainy days” in almost everyone’s life. Preparation beforehand can save a lot of stress, worry and sleepless nights.

If aren’t able to do this now, strive to make this a future goal for good financial health.

Become A Student of Personal FinanceThe more you know about money, finances and investing the wiser your decisions will be. Learning the right financial lessons will help you become savvy investor.

This website has been designed to provide strong basics to get you started.

Reward Yourself
When you have accomplished a significant personal finance goal such as paying off your car, your credit cards then reward yourself (without going back into dept!).

Other goals might include improving your knowledge base with more education to help you become more marketable and command a higher salary.

For example, years ago I graduated from Pepperdine University in Malibu California with an MBA. I worked during the day at Hughes Aircraft, and went to classes at night. Between classes I studied during the evenings and on the weekends.

I had a Mustang convertible and use to joke that it was the only time I was able to get fresh air during the two years I went to Pepperdine. Although a fairly accurate statement of my life during school, I never regretted the time or hard work I put into the MBA program.

I gained a tremendous amount of knowledge and experience from the effort.

When I graduated from Pepperdine I treated myself to a week trip to Club Med. It was a well deserved reward for the hard work that had been done.

Some months later I talked to another hard working classmate from Pepperdine and asked what she had done after we had completed the MBA program. She said she had done nothing special and seemed a bit let down.

Personal rewards are important! They are good carrots to put in front of ourselves for a achieving a worthwhile financial or educational goal. Not only that, they encourage us to take on other challenges in the future.

Next Steps
Now that we have covered personal finance basics, please see Sound Financial Planning to learn how to take charge of your finances.

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