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Fundamentals of Personal Finance

Fundamentals of Personal Finance. “Your survival guide for though times!”. TAKE CONTROL!. Step 1: Pay Attention Record Transactions Check your balance Read your statement Take action if problems occur. Step 2: Create a spending plan.

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Fundamentals of Personal Finance

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  1. Fundamentals of Personal Finance “Your survival guide for though times!”

  2. TAKE CONTROL! Step 1: Pay Attention Record Transactions Check your balance Read your statement Take action if problems occur.

  3. Step 2: Create a spending plan. Figure out how much income you have and find out where it is going. Make a list of expenses that occur outside the monthly cycle: Doctors bills, taxes, home repairs, etc. Figure out how much money you need for daily life, such as social events, food, and rent.

  4. Step 3:Turn your budget into a plan for spending and repaying debt. Your plan should meet three goals: Meeting ongoing expenses without incurring additional debt; repaying existing debts in a timely manner; and saving money for day-to-day emergencies and long-term goals.

  5. Step 4:Set Goals Control your short-term spending. Save up for what you want to do, instead of throwing your money away. Setting goals will help you spend your money wisely.

  6. Step 5:Protect your credit. Your credit score determines whether a financial institution will give you a loan and how much you’ll be charged in interest. Rule 1: Get your credit Report. Rule 2: Pay on time. Rule 3: Pay down balances. Rule 4: Keep and use old credit cards. Rule 5: Use a mix of credit cards and installment loans. Rule 6: Open new credit lines with restraint.

  7. Step 6: Avoid unwise practices. Carrying a credit card balance. Borrowing from a 401(k) Making personal loans to friends and family. Receiving payroll payments as checks, instead of direct deposit. Relying on payday loans or other “predatory” lenders.

  8. The End. Pay attention. Create a spending plan. Turn your budget into a plan for spending, saving, and repaying debt. Set Goals. Protect yourself. Avoid unwise spending.

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