Personal finance management

Hello.

The subject of personal finance management, in my opinion, is important for every person, regardless of gender, age, social status, wealth (the ability to manage, preserve and increase personal capital is not important to the rich than to the middle class). I believe that it is necessary to learn how to manage your finances from an early age, this knowledge will be useful in life, unlike some school subjects, but which is given a lot of time in school and university. Having learned how to manage money effectively, you can avoid a lot of unpleasant moments in life and improve it.

Finance accompanies us throughout life, are an integral part of our lives, and we must be able to competently manage and manage them.

The main idea is that, at an active and able-bodied age, a person must learn how to properly manage his personal capital, invest it, so that in his old age, when it is difficult or impossible to work, a person could live worthily on the capital that he he created for his life with the help of competent management and investment. But investing also carries the risk of losing capital, so it is important to learn how to find the right balance between risk and return, and this course will help you deal with these issues.

First let's see how the financial flows change throughout the life of a person.

From the moment of birth a person encounters money, expenses begin immediately.

Purchase of necessary children's things, food, toys. Of course, there is no income for the child, all expenses are borne by the parents. The child grows up, goes to school, then to the institute, the expenses increase, but in some cases the students have income, they start to work part-time.

The student gradually builds a career, gets knowledge, after graduating from the institute enters a mature active age, which lasts from about 25 to 60, these are average figures, it is clear that there are different cases, some work longer, some less.

At this stage, a person usually has a normal income, his income begins to exceed costs, there is a surplus of funds and these means it is important to manage and manage them competently.

Why is it important to have a competent management in adulthood? Why not just spend all the surplus funds for entertainment and pleasure, for buying expensive things, traveling and other joys of life?

Because inevitably there is an old age, a person can not work hard, his incomes start to decrease, and expenses begin to increase, in old age the body weakens, a person often begins to ache, costs for treatment increase, and there is a lack of funds. A person has retired, and can no longer afford the old standard of living, the state pension allows only to not die of hunger, and for a normal life, a pension will not suffice. There are different options for living in retirement.

Someone is hoping for their children, that they can provide a normal life in old age. But in my opinion, the best option, in my opinion, is to secure financial independence in old age, with the help of surplus funds that are in maturity, this surplus should be preserved for a normal life in old age.

What is the purpose of financial planning?

1. Ensure personal financial well-being, as long as there is no family, this is an auspicious moment, because when the family costs appear inevitably will increase.
2. Financial independence, first of all from parents, is pleasant to have own means to the young man, not begging them from parents, secondly, to be independent of the state, to take care of your old age pension, and for this you need accumulations made during the course of life , and it would also be good not to depend on children in old age, because it is not uncommon for older children to provide themselves, let alone elderly parents.

Any plan is built to achieve some goals, and these goals must be clearly presented for themselves.

Goals can be divided into three types:

1. Short-term goals, the time to achieve these goals is limited to one year. These goals are aimed at achieving a balance between costs and revenues and are achieved by drawing up and planning a personal budget.
2. Medium-term goals, these are goals from one to ten years. Are directed on the decision of large financial problems: purchase of habitation, the car and so on. It is important to clearly articulate the goal, not just "I want a house, but where and what else I have not decided," and specifically "I need a house with such and such an area, in such and such an area, it should cost a certain amount." This goal can be achieved by clearly planning your budget, so the exact figures here are very important.
3. Long-term goals, the achievement of these goals requires more than 10 years. The accumulation of funds to ensure their own old age, the creation of a personal pension fund, are included in long-term goals and should begin to be implemented as soon as possible.

Thank you.