Wednesday, April 30, 2008

Financial Advisor: Savings Calculators and Compounding Interest

Personal Finance: Savings Calculators and the Power of Compounding Interest

In my last post I explained the importance of savings small amounts of money over time. As you all saw this is very important in achieving your goal of financial freedom and is not something that can be ignored. You also saw calculating what saving can do for you can be done very easily through the use of a savings calculator.

This post is intended to show how financial freedom can be achieved easily if someone just has TIME and small amounts of savings. It shows how starting today with small amounts of money will help you to have millions of dollars in the future and experience personal financial security. I have once again included a savings calculator for your use and also used a savings calculator for all of the calculations I have included.

What if I told you that if a person wanted to achieve financial freedom and take control of your personal finances and be extremely comfortable with their financial situation at retirement it would only take $20,000 of investments. Most of you probably would not believe this but I am going to show you how this can be done. This is a very basic tip financial advisors tip that all people should know about. The ultimate key to financial freedom is time and money. Not a lot of money but a lot of time and some money.

The concept I will be explaining today is the power of compounding interest and how you can using savings calculators. Compounding interest is very important in relation to personal finance. You can find many very good examples explaining the power compounding interest on the Internet but most fail to provide simple examples that are easy to relate to. Here I have include an example that should sum it up for my readers. This example will show you how easy it is to achieve financial freedom and take control of your personal finances


There are two 18 year old students that are about to graduate from high school. When they graduate they both receive gifts from their parents. Their parents goal is to help them achieve financial freedom at retirement and have enough to live off of.

Jim gets $20,000 from his parents and puts it into a savings account while John gets $20,000 and puts it into a mutual fund. Jim's parents have also agreed to deposit another $20,000 into his savings account each year until retirement. Jim's parents are well off and feel that giving him another $20,000 each month will help him to have a larger amount of money at retirement and give him more financial freedom.

In both situations the children agreed to not spend their graduation gifts until they retire.

Sounds like John got the shaft and Jim has an amazing deal right? Wrong! Think again! I will explain below.

For this example we will assume that Jim's saving account earns 3% per year and John will earn 10% per year through the stock market. Then we will use a basic savings calculator to find out how the numbers shake out.

After getting these gifts Jim and John decide that they will compare the values of their accounts at each 10 year high school reunion and then at retirement. The results are listed below.

10 Year Reunion: At their 10 year reunion, Jim and John compare accounts. John's account is now valued at $54,140 and Jim's account is valued at $232,948. Naturally John feels like he got burned in comparison to Jim. Both individuals are and the right track in achieving financial freedom but time will show that John is actually better off.

20 Year Reunion: At their 20 year reunion, Jim and John once again compared accounts. John's account is now valued at $146,561 and Jim's account is valued at $547,279. Naturally John still feels like he didn't get a good deal. Both of them are now 38 years old and are certainly on their way to financial security.

3 0 Year Reunion: At their 30 year reunion Jim and John compared account for a third time. John's account is now valued at $396,748 and Jim's account is valued at $977,422. Of course John still feels like Jim got a better deal.

Retirement Reunion: John and Jim both decided to retire at 68 years of age and that this time get together again to compared accounts. Now John's account is valued at $2,907,398 and Jim's account is valued at $2,314,612.

There you have it. John's parents gave only $20,000 while Jim's gave exactly $1,000,000 and yet John ended up with more money in the end. This is due to the power of compounding interest. John only ended up with more money because he was making 10% per year for a long period of time while Jim was only earning 3% per year. This is a powerful example that shows how taking control of your personal finances today and beginning to save can help you in the future.

All the while Jim is happy to take is $2.3 million dollars but does not realize that if he would have had his money in a mutual fund at 10% instead of his 3% savings account he would have had over $28 million at retirement.

I hope you can see from my post how important the power of compounding interest is and how saving often and early in live can help you to reach your goal of financial freedom.

Please follow this simple personal finance tip and get started on your way to financial freedom.

Here I have again included a savings calculator for you convenience. Just put in the numbers you feel are correct for you and see how it comes out.


Tuesday, April 29, 2008

Financial Advisor: Personal Budgeting Strategies and Savings Calculators

Financial Freedom Mini Series: Lesson 3

In this post I want to focus on giving you some specific personal financial advisor tips about the part of personal finance budgeting that I find to be the very important.

Many people dream about winning the lottery but for most this is highly unlikely. Despite this I am here to tell you that there is another way to reach your personal finance goals. This way takes lots of time and discipline but is also guaranteed, unlike the lottery. It is a consistent and steady plan of saving and investing.

In personal finance budgeting the most important part is the savings part. Savings in the most crucial step in achieving financial freedom and using a savings calculator can help you to determine how much you should save. This is hands down the most important part, no argument about it. Without saving some of the money that we earn there is absolutely no way we can ever even think about achieving financial freedom. If there is one piece of personal finance advice that you take from my whole blog it should be this. Savings is by far the most important component in achieving financial freedom.

Today I am going to go over the importance of savings, how saving can help you achieve personal financial freedom, give you some practical tips to help you save a portion of your money, and provide you with a savings calculator that can help you calculate how much your savings can add up to.

In order to achieve financial freedom and create wealth we must save money now. This means that we must live below our means at the current time in order to experience financial freedom in the future. We must save our money and invest it properly so that it can work to our benefit. If we save our money and invest it properly the money itself will begin create more money with little to no work on our end and the result will be us achieving our goal of financial freedom.

Savings is very important initially because it can help us to stay out of debt and as we know one cannot experience financial freedom when then owe more than you have. Having an emergency savings account fund will allow you to pull from that in times of need instead of charging the expense on your credit card. Unexpected expenses that savings can help with can be almost anything such as car repairs or medical expenses. Having this emergency savings account to pull from is so important because it allows you to stay within your personal finance budgeting plan that you have set for yourself. Most financial advisors suggest that each person have at least an equivalent of 3-6 months of expenses set aside in an emergency savings account.

After you have set up and established your emergency savings account the next step is to begin to save for the future. Plainly said, if you want to experience financial freedom you take control of your personal finances and have a significant reserve of money that will last you a long time. In order to do this you must save small amounts of money over a long time. Saving small amounts over time coupled with good investment decisions (done through a personal financial advisor) will help lead you on the path toward your goal of personal financial freedom.

Here is an example of how savings small amounts can add up over time. I got these numbers very quickly from using a savings calculator and you can do the same. You can either use the savings calculator I have included or you can search google for "savings calculators" and find a bunch of different savings calculators.

Now, back to the example. A person that has a take home income of $3000 per month should try to save at least 5%-10% of this each month. That is $150 to $300 per month. If someone was able to put away, we will say, $150 per month and merely make the average stock market return of 10% per year a savings calculator shows that they would have roughly $30,000 after 10 years and over $200,000 after 25 years. Now if this person saved $300 per month instead then after 10 years the savings calculator says they would have over $61,000 in 10 years and after 25 years would have about $400,000. The numbers are ever more astounding if done over 40 years or if the person makes slightly over the stock market average of a 10% return per year. As you can see, the power of compounding is very powerful and saving a small amount can help you to have a lot of money down the road and in turn bring you financial freedom.

I have include a savings calculator so that you can see how much money you will have after a X number of years by savings $Y amount of dollars each month and earning Z% interest each month.

The most important aspect of saving is to set goals for how much you plan to save and then stick to it. We must treat savings like and expense/bill or we will skimp off of it each month. Taking money from our paycheck and putting it into savings should be the first thing we do when we get paid. Without setting goals we will tend to take away from our planned savings and this will hinder our efforts at achieving financial freedom.

We should never ever plan to "save whatever is left over" this is a recipe for disaster and will almost certainly leave us saving nearly nothing. It is OK to set a certain amount and then add "whatever is left over" as an extra amount of savings.

The only tip I can really give you to help you stick to your savings plan is to stick to your personal finance budgeting plan and put the planned amount toward savings first.

It is all about self-discipline now so that you can achieve financial freedom in the future. As I have said before this all comes back to personal finance budgeting. This is the most important aspect of personal finances and will help you to succeed.

Please check out the savings calculator I have include in this post and calculate how saving small amounts of money will help you to gradually build up a lump sum of money.

Without building up this lump sum of money you will never succeed in achieving your goal of financial freedom. Please take this personal finances information seriously and do yourself a favor and begin your quest for personal financial freedom.


Tuesday, April 22, 2008

Financial Advisor: Personal Budgeting Strategies

Financial Freedom Mini Series: Lesson 2 - Part 2

In our last lesson I wrote about living within your means. Today I want to give you some more practical financial advisor tips that should help reinforce the previous lessons and also build upon them.

In order to achieve financial freedom we must live within our means and be take control of our personal finances through personal budgeting strategies. In order to do this we must track our income and expenses through personal finance budgeting. The first step in financial freedom - living within your means - is done by tracking our income and being sure to spend less money than we bring in.

Tracking income and expenses and preparing a personal finance budget is the easy part. The difficulty comes in sticking to your personal finance budget and continuing to track your personal finances on a daily basis. For most people this is very hard to do once we get caught up in the rush of daily life. In order to be successful we need to set up a personal budgeting strategie that allow us a planned time each day to keep our personal finance budgeting tracking up to date.

If you are reading this and wondering what a personal finance budget is or what living within your means is then I suggest you check out my previous posts. These will get you up to speed on the building blocks to financial freedom and then this post will make more sense to you.

Now, finally onto today's lesson. Today I want to give you all some practical real life personal finance advising tips and personal budgeting strategies that will help you stick to your personal finance budget and live within your means.

1) Take control of your spending- The most important thing in personal budgeting is to establish personal budgeting strategies that allow youto control your spending. Americans savings rate has dropped from 11% in the 1980's to a negative savings rate today. This is certainly not the way to live within your means and achieve financial freedom. You need to take control of your spending and be sure to only spend money that you actually have. This means absolutely NO CREDIT CARD DEBIT. Using a credit card is perfectly fine but only to the extent that you can pay off the full balance every month. As of today the average American has roughly $7000 in annual consumer debit. That averages out to an astounding $583 per month. You must give up on the debit and begin to stick to your Personal budgeting plan or you will never succeed in achieving financial freedom.

2) Be Organized- To achieve financial freedom we all must be organized. Without organization there is no way we can possibly track our income and expenses and stick to our personal finance budgeting plan. We need to keep receipts from all purchases and then add them to our personal finance budget on a weekly, if not daily basis. This is a very important personal budgeting strategy.

3) Hire a Personal Financial Advisor- The average personal does not have enough financial knowledge to properly use their money to have it work for them. For these people the smartest thing to do is hire a personal financial advisor. This person can help you to set up your personal budgeting, stick to your personal finance budgeting, help you with investment decisions, and even give you advice about the potential large purchases you are considering. There are also many other things a personal financial advisor can help you with, basically anything you can think of that has to do with money. The end result of sticking with a financial advisor should be financial freedom at some point.

4) Set Goals- Setting personal finance goals for your future is very important. If you can set goals for your future then it can help you stay on track right now. Seeing what the payoff will be at the end often helps people to stick to their personal finance budgeting strategies.

5) Cut the Unnecessary Expenses- In order to achieve financial freedom we need to live somewhat frugally today. Living frugally today will payoff and you will be much for financially free in the future because of it. We all have those unnecessary expenses that we can cut from our personal finance budget. All it takes is small things like packing a lunch for work instead of eating out.

OK, now I am going to get more specific with little everyday tips.

1) Buy Store Brands When Possible- You will be surprised at how much money this helps you save. Finding small money savings tips like this one will help you out significantly in sticking with your personal finance budgeting and will have you on your way to financial freedom.

2) Don't Eat Out So Often- Besides being extremely unhealthy eating out is also very expensive. If you could cut your eating out to 1-2 times a week instead of 4-5 then you could save $150-$200 per month. That would equal an extra $2400 per year. This is once again another way to cut out small expenses and help yourself stay within your personal budgeting plan and within your means.

3) Never Buy a Brand New Car- When you buy a new car for $25,000 it is instantly worth $18,000 once driven off the dealers lot. Buying new cars and getting a car loan will put you years and years behind in your quest for financial freedom. A new car should never be bought because it is to large of an investment into something that is simply going to lose value very quickly with each use.

4) Use Coupons and Stock Up on Sale Items- This can help you pinch those pennies and save money on groceries. Once again, another way to save money and be on your way tofinancial freedom.

I think you can see from my posts today that pinching pennies is the most important thing in achieving financial freedom and sticking to your personal budgeting plan.

Its not that you have to live like a poor person but instead you need to cut out the unnecessary expenses. Most people don't realize how much these add up to each day and each month. If you can follow all of the tips above I can promise that you will save at least $300-$400 each month. And maybe more depending on your circumstances.

Financial freedom is a great thing to experience but it definitely takes sacrifice for today in order to have that freedom tomorrow. If you can stick with personal finance budgeting and follow the personal budgeting strategies I have suggest I guarantee that you will be on your way to taking control of your personal finances.


Monday, April 21, 2008

Personal Finance: Quicken Personal Finance Software

Today I wanted to give all my readers a financial advisors tip about a personal finance software program that I highly recommend. This product is from Quicken and is called Quicken Deluxe 2008. It is the best personal finance software I have seen on the market. It is highly professional, very detailed, and easy to use.

Click Here to Get Quicken Deluxe 2008 for 20% off and Free Shipping

This product could go a long way in helping you to achieve the financial freedom that you are looking for and in a way will act as a personal financial advisor for you.

If you are interested in Personal Finance Software I would highly recommend this product to you.

Below I have listed details about Quicken Deluxe 2008 and given you the reasons why I believe it is a must have for anyone who is serious about achieving financial freedom.

Use Quicken Deluxe 2008 to easily track and manage your personal finances and assets all in one place -- they're the perfect companion to online banking.

Quicken Deluxe 2008 helps you manage and part of your personal finances including spending, savings, investments
and assets.

Bring it all together. Manage your personal finances more efficiently with Quicken Deluxe 2008. Get the software tools that will help you manage personal expenses, simplify tax preparation and help maximize deductions.

Want to stop late fees from chipping away at your spending money? Quicken Deluxe 2008 makes it easier to see where your money is going.

If there was any product on the market that I would suggest that you get to help you with your personal finances I would suggest this or another product for Quicken. Quicken has by far the most professional and comprehensive personal finance software available on the market.

Do yourself a favor and get Quicken Deluxe 2008 to help you with your personal finance budgeting and get on the fast track to achieving financial freedom.

Saturday, April 12, 2008

Financial Advisor: Personal Finance Budgeting

Financial Freedom Mini Series: Lesson 2 - Part 1

I wanted to start out this lesson by giving a quick recap of lesson 1. Lesson 1 was about the importance of having a personal finance budget and personal finance budgeting. As we saw in lesson 1 without a personal finance budget people have no way to track their income and expenses to be sure they are being personally financially responsible. Setting up and sticking to a personal finance budget is probably the biggest key in achieving financial freedom. If you would like to get caught up on Lesson 1 of the series you can see is here: Personal Finance Budgeting.

The concept behind a personal finance budget is to determine how much you make and spend accordingly. Once you begin personal finance budgeting you can then begin to live within your means. Living within your means is the topic for today's lesson and now that you have the foundation for living within yours means (a personal finance budget) we can move on to the concept of living within your means. Simply put, living within your means means that you can pay for the things you need without having to take on debt to do it.

As stated in a previous post, Americans on average now have a negative savings rate (Usually unknowingly because they do not know anything about personal bugeting finance). This means that on average Americans spends more money that they bring in. In my mind this is astounding and certainly is not the way to achieve financial freedom. Living this way is also clearly not living within your means. When you spend more than you make the extra money has to come from somewhere and more often than not, for Americans, it comes in the way of credit card debt. Without a personal budgeting finance plan in place it is almost impossible for someone to achieve success in this area.

Another problem here is that most Americans have seriously confused the two words want and need. Americans think that getting the next designer label shirt or brand new car is a NEED and not simply a WANT. The more depressing part of this is that a lot of Americans think that their self-worth is somehow attached to these expensive, yet pointless, things. Americans need to put aside their wants and instead live responsibly and stick to a personal budgeting finance plan.

When someone establishes a personal finance budget they are able to consider all factors and realize how much money they are spending and better live within their means and control their personal finances. Most people do not realize all of the small expenses that add up and this ends up causing them to spend more than they take in. It's a coffee here, a soda there, some fast food after work and before you know it you have dropped an extra $200 a month on junk.

The main concept of living within your means is to spend less money that you bring in. When you set up a personal budgeting finance plan and stick to it you can track these expenses better and it will allow you to live within your means.

When you are not living within your means you are robbing yourself of financial freedom. Instead of funding your dreams your money fills the pockets of credit card companies. It would be better if the money you paid in interest could go into a savings account or an investment account. Paying for items by going into debt limits your choices because you are stuck paying for yesterday instead of moving toward tomorrow.

As I have said before, the best way to live within your means is to establish a personal finance budget for yourself and stick do it. Most people do not have the self-control to live with their means unless they have a specific plan laid out for how they are going to do it and this is where personal budgeting finance is so important.

That's all for today's lesson. In the next post I am going to continue lesson 2 by giving you all some real life examples of things you can do to help you stay within your personal finance budget and live within your means.


How to achieve Financial Freedom: Summary of Lessons 1-6

Financial Freedom Mini Series: Lesson 1

Financial Freedom Mini Series: Lesson 2 - Part 1

Friday, April 11, 2008

Financial Advisor: Personal Finance Software - Reviews

Today I want to take a short break from our Financial Freedom Mini Series and focus on Personal Finance Software. This article should give you good practical financial planning advice on some of the potential personal finanace software programs available.

Personally I really enjoy doing things myself so I use Excel to do my personal finance budgeting. If you are interested in doing your personal finance budget this way you will have to be fairly skilled in Excel. I took three college classes on Excel alone and have just the minimum amount of knowledge that it takes to essentially build my own Free Personal Finance Software in Excel.

Despite this there is hope for those of you who are lacking Excel skills. There are many free personal finance software programs out there on the Internet that you can get. If you go to Google and simply search "free personal finance software" you will get many relevant results. Of course though as always, if you choose to go the free route it will require a little more work on your part. No problem with this at all though, like I said, I go the free personal finance software route myself.

If you do decide to use free personal finance software you should look for one that includes the following. Your personal budget worksheet needs to have a section for all income and expenses and a spot to total the differences between the two. The personal finance software template should also allow you to make revisions and also include a section for future months. The most important part is the cash flows section that figures the difference between income and expenses. This way you can keep track and make sure you are bringing in more money than you are spending. A personal balance sheet section would also be a nice add on to keep track of all of your assets.

If you have decided that you want to be very serious and very professional about your personal finance budgeting then I suggest you spend the measly $20-$50 and find a really good personal finance software program. Below I have included some suggestions of a couple good personal finance budgeting software programs available. I have also provided links so that you can go directly to the personal finance budgeting software websites and check them out for yourself. Like I said before, buying actual personal finance budgeting software is not necessary and is simply a personal preference from person to person.

1) Quicken Deluxe Personal Finance Budgeting Software

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Positives: Quicken personal finance software has some of the most comprehensive and professional personal finance budgeting software programs out there. These personal finances programs are very good, give you any tool you could imagine, and quicken also provides good support/updates. These are by far the most complete and well known products available.

Negatives: More expensive that other personal finance budget software programs out there.

2) Living Within Your Means: Personal Finance Budgeting Software

Positives: It is very inexpensive. It includes a book about living within your means, a budgeting and bill organizer program, 35 money management articles, 10 budget calculating forms, a bill pay management systems, and a credit card interest software program.

Negatives: Not as professional as quicken. Home-made product with potential glitches and less product updates.

Now that I have given you information about what a Personal Finance Budget is and also shown you two excellent personal finance budgeting software programs you have absolutely no excuse.

Please do the smart thing now and either start your own free personal finance budget through Excel or make the small purchase of a personal finance budgeting software program that will pay for itself hundreds of times over.

Time is of the essence here, if you plan to take control of your personal finances when do you plan on doing it??? 6 months from now? 1 year? 5 years? If you can do it then why can't you do it today? Give yourself the peace of mind and start today. And as always, for those who think this is to hard or time consuming getting a financial advisor might be right for you.


Wednesday, April 9, 2008

Financial Advisor: Personal Finance Budgeting

Financial Freedom Mini Series: Lesson 1

This financial freedom mini series is intended to help the average person gain a knowledge about that concepts of personal finance and help enable them to manage their own personal finances in a responsible way. If you are a first time visitor I suggest you go back to the previous post and catch up on all that this Financial Freedom Mini Series is about.

Okay, now that you are up to speed I want to get into today's lesson. The topic for today's lesson is Personal Finance Budgeting. The first step in becoming financially responsible is to begin with a personal finance budget. Without a personal finance budget there is no way one can possibly track their income and spending properly.

Before moving on to what personal finance budgeting is I want to explain why budgeting is so important. Okay, lets say you decide to start a new business. We will say a personal financial advising firm (just for the sake of this subject). When you start your personal financial advising firm the first thing you would do is plan out all of your expenses. Any person would logically set up a finance budget for their expenses before they began because without financial planning you would have no idea of whether our not your personal financial advising firm would succeed. The next step would be to plan out your expected revenues. Then you would take the difference between the two and see how the numbers came out.

This is exactly what personal finance budgeting is for a business and people should handle their personal finances in the exact same way. When making a personal finance budget it is important to include everything that involves your money. This includes all income and expenses.

A personal finance budget should include the following components in it (The components listed below are just a sample and many different ones can be found on the Internet). You can also find personal finance software on the Internet. You can find personal finance software that must be purchased and also free personal finance software. This personal finance software is made so that you can easily enter all your income and expenses and it does everything else for you.

The components included in a personal finance budget are both income and expenses. Examples of income in personal finance budgeting include job income, gambling winnings, capital gains, social security, tax refund, etc...

Examples of expenses in personal finance budgeting include savings, electric bill, health insurance, cell phone, groceries, books, shoes, clothes, car insurance, gas, entertainment, travel, miscellaneous. This expense list is my no means complete. Anything possible thing that you can think of that you might need to spend money on should be included in your personal finance budget.

I have to go off on a little tangent here. I know that some of you readers are thinking to yourselves "Savings? What? That is not an expense!" Wrong!! As a personal financial advisor I'm here to tell you that savings should indeed be considered an expense. Each month people should set up their personal finance budget for a certain amount of their income to go into savings. This should not be a "if I have money left over" situation. It should be definite and as automatic as writing that check for your house payment each month. The most fundamental concept of personal finance budgeting is to control spending and use your money wisely so that you have money left over rather than having no money or being negative (going into debt).

After listing all of your income and expense on your personal budget worksheet you need to subtract the expenses from your income and get a Net Cash Flow for the month. The goal is to include all income and expenses and come out with positive net cash flow on your personal budget worksheet. If the number comes out negative then you have a problem and your expenses will need to adjusted accordingly.

Now you know exactly what personal finance budgeting is and how to make one. The next thing I would suggest for you to do is run a few Google searches and try to find a template of a personal budget worksheet or free personal finance software. I would suggest searching "personal finance budgeting", "personal budget worksheet", or "personal finance budget". I actually ran a few searches myself have provided one link to some free personal finance software (I hate to drive track away from my website by providing links). Here is a link to a Personal Budget Worksheet . This free personal finance software is made to run with excel and come from the Microsoft website.

A personal budget worksheet should be used on a monthly basis. Yep, that's right! You need to keep personal finance budgeting for every month. You cannot simply make one personal finance budgeting plan for the whole year and stuff it away in a drawer somewhere to forget about it. Every month things change. Our income levels change and your expenses change and these changes need to be accounted for in our personal finance budget.

What you need to do to be successful with your personal finance budgeting plan is make out a projected personal finance budgeting plan for the whole year. Then as each month goes by you can make individual monthly adjustments. The other important thing to do is keep track of your actual income and expenses and compare that to your personal budget worksheet. You want to make sure that your original estimates were correct or at least close.

When making comparisons between personal finance budgeting estimates and your actual financial a situation you want to adjust everything to make it work.

The great thing about a personal finance budget is that it helps set you up for success and helps keep you from needing to use credit cards to get by. If you have set up your personal finance budget then you will be prepared for those unexpected financial burdens in life. If you have been sticking to your personal finance budget for six months and saving, say $100 a month, and also end each month with a positive $50 cash flow then there should be no issues when your car breaks down and you suddenly need $300 to fix it. All is good because you have $600 in savings and an extra $300 from your positive cash flows each month.

This is the essence of financial freedom, personal finance and personal finance budgeting. If you can eventually build up a good level of savings then you can begin to be at ease with your personal financial situation and now be stuck worrying about how the next bill is going to be paid. Most people are clueless and don't realize that their unplanned/unwritten actual personal finance budget includes something like $2500 of income and $2700 of expenses each month. If you are interested in seeing how small amount of savings can help you I suggest you read my post about Personal Finance Savings and check out the savings calculator I have there.

That should be about it for today's lesson. I know things were a bit jumbled and all over the place but I hope I was at least able convey what a personal finance budget is and why it is important to have one. I hope all of you can now go out and create your own personal finance budgeting plan. And for those that find it to hard, employing a personal financial advisor might be a better option.

Next my next post I am going suggest a few personal finance software programs that are available out there. That could help assist you in creating and maintainig your personal finance budget


How to achieve Personal Financial Freedom: Summary of Lessons 1-6

Financial Freedom Mini Series: Lesson 1

Financial Freedom Mini Series: Lesson 2 - Part 1

Monday, April 7, 2008

Financial Advisor: Financial Freedom Mini Series

Financial Freedom Mini Series

After reading my last post about Personal Financial Advisors some of you might be asking yourself where you fit in in regards to having a personal financial advisor. Some of you might be thinking that having a personal financial advisor is simply not for you and that you can personally handle your own personal finances. If that is you then this lesson series will be just for you.

A personal financial advisor is not right for all of us and if not then we must each take the time to educate ourselves about the key concepts of personal finances. In doing this we can be reasonably assured that we will be able to make good financial decisions and in turn eventually reach our goal of financial freedom.

The upcoming series is by no means considered to be fully detailed or your only source of information. If you are interested in more details about personal finances I would suggest finding a book by Dave Ramsey. I will admit, he is a bit extreme in how conservative his approach to personal finances is but with the American Epidemic today maybe he is right on.

Americans now have a negative savings rate on average, this means as a whole Americans spend more than they make (kind of like our wonderful government). This means we are on average operating on a budget deficit in regards to our personal finances and are adding more and more credit card debt each day.

There is obviously some point of disconnect here because Americans are just not getting it. American is not like most other countries where people are more financially responsible and have high savings rates.

My goal with this lesson series is to give you all some basic, general, surefire tips to help you on your journey to FINANCIAL FREEDOM! The inability to succeed in achieving financial freedom is a epidemic among middle class Americans. Middle class Americans have had their faces stuffed with so many advertisements that it is tough to be prudent and live within your financial means. Americans are so caught up in the here an now that they are simply not able to look toward the future and future personal finance goals.

In this series I plan to cover each of the following topics in great detail and relate them to how you can be successful in achieving financial freedom. This series is intended to be a personal finance training lesson that should allow you to succeed in your own personal finance management.

1) Personal Finance Budgeting
2) Living Within Your Means
3) Savings - Savings Calculator
3) Credit Cards - Debt
4) Home Loans
5) Car Loans
5) Investing
6) Future Planning

This is just a basic outline of some of the key topics related to Personal Finances. My goal in writing this is to help at least a few people with their financial planning because I know there are people out there that want to be financially responsible but just don't know how.

As I move through the lessons I expect some things to change and other topics about personal finances to be added. I hope that this can be morphed into whatever my readers want to see me write about and whatever they want financial advice about. After all I am here to serve my readers, not myself.

If you have any questions about personal finance, how to achieve financial freedom, or any financial topics you would like me to cover please don't hesitate to email me at

How to achieve Financial Freedom: Summary of Lessons 1-6

Financial Freedom Mini Series: Lesson 1

Freedom Mini Series: Lesson 2 - Part 1

Thursday, April 3, 2008

Personal Finance: Personal Financial Advisor

What is Financial Advising and a Personal Financial Advisor?

In order to manage your personal finances you first need to learn about personal finance and personal financial advisors.

I'm sure the that question you are asking yourself as you read this is "What exactly is personal financial advising and what is a personal financial advisor?" These terms can mean a lot of different things to different people and I'm here today to tell you what Personal Financial Advising is, what a financial advisor does and exactly how all of this can help you on your path to financial freedom.

The National Association of Personal Financial Advisors (NAPFA) defines personal financial advising as a situation where professionals help people to manage their money for both the short and long term by assisting them in deciding which stocks, bonds, mutual funds, and other financial products to invest in. This is an excellent explanation of what a personal financial advisor does at its most basic level but does explain everything.

A personal financial advisor is usually hired because someone needs assistance in managing their money but does not have the time, knowledge, or resources to do this in the most effective way.

The goal of a Personal Financial Advisor is to help their clients reach all of their personal finance goals. A Personal Financial Advisor should be involved in every aspect of a clients financial situation beyond their day-to-day finances. In doing this one might be involved in helping clients save and invest for retirement, save and invest for a child's college, make the correct investment choices, or even help with mortgages or car loan advice.

When someone uses a Personal Financial Advisor there is often a fee associated with the use of their services. Often times though the fee is largely outweighed by the financial gains one notices from the advice they receive.

In the end though Personal Financial Advisors are exactly as they seem. They are merely advisors who gives clients educated advice on how they should handle their money so that it works for them instead of them working forever because they have no money. When it comes down to it, it is ultimately the individuals decision on how they want their money to be allocated. Using a personal financial advisor is a great idea for anyone who wants to seek financial freedom but does not have the knowledge, time, or resources to do it on their own.

I hope this article has at least shed some light on what a personal financial advisor is. This article merely skimmed the topic of Personal Financial Advising and a whole book could most certainly be written to explain exactly what it is.

Wednesday, April 2, 2008

Personal Finance: Personal Finance Articles

Welcome to my Personal Finance Blog. This site consists of Personal Finance Articles that provide tips and techniques for the average person to help them manage their money in a more effective way. Financial advising by a personal financial advisor helps ordinary people to become extraordinary and take control of their financial situations and their life. This site covers loans, mortgages, investments, personal finance budgeting, personal finance help, personal finance management, personal finance training and much much more. If you have any questions not covered my blog Personal Finance feel free to email me at