Managing your spending habits, saving sufficient funds and clearly seeing your personal financial situation are important elements in managing your personal finances correctly. This test will give you an idea whether you need some more help, or if you’re on top of this important part of your life. (The answers are listed at the end of this article.)

Question #1. What does “living within your means” really mean?

Question #2. What damage can only paying the minimum credit card payments each month do to your financial future?

Question #3. What is the most widely advocated and proven method of getting your finances in order?

Question #4. What are the most important financial goals you can set?

Question #5. Why is it not safe to spend all your income each month?

Question #6. What is the recommended percentage of my income that needs to be saved for emergencies and a savings nest egg?

Question #7. In what order should your bills be paid?

How did you fare with these questions? Did you know the answers? If not, or if you wish to check your responses, check out the answers listed below.

Answer to Question #1.

“Living within your means” means spending to live as comfortably as possible, from your income, while saving sufficient funds to adequately cater for emergencies and building your savings nest egg. It also means that you should not rely on external funding such as credit cards and bank finance just to live day-to-day.

Answer to Question #2.

Paying only the minimum credit card payment each month can condemn you to life-long poverty. It is that serious. If you only pay the minimum off your credit card each month you quickly start paying interest on the interest and the debt can spiral out of control. Live within your means, don’t add to your debts, pay cash and pay down that credit card debt as quickly as possible.

Answer to Question #3.

The most widely advocated and proven method to getting your finances in order is to prepare a budget. Please don’t go glassy-eyed and lose interest now. This is an easy task that can finally put you in control of your finances once and for all. There are many resources available on the Internet to help you quickly make a start.

Answer to Question #4.

The most important financial goals you can set are as follows:

a) Set a goal to pay down that credit card debt, both for the amount and the time period. For example, I am going to pay $5,000 off the credit card debt in the next 12 months. Commit to only living off my income starting today. I will always pay cash from today onwards.

b) The second most important goal is to set a savings target. A budget can show you how much you need to set aside for emergencies and that savings nest egg.

c) The third most important goal is to determine to be debt free. This will transform your life. Work out what you need to live and see how much better your life would be if there was no money being applied to debts each month. It’s like giving yourself a pay raise.

Answer to Question #5.

It is not safe to spend all your income each month for the simple reason that life is unpredictable. If you have no savings buffer then how will you afford the bills that occur when you least expect them? Will you pay for them with your credit card? Then how will you pay that bill?

Answer to Question #6. The most common percentage recommended to keep aside from your monthly income is 20%. This is a target of course. Not everyone can manage this immediately. Any amount you put aside will be better than nothing as long as you are shooting for a target.

Answer to Question #7.

If you are struggling with paying all your bills each month, the most vital bills are listed below in order of importance:

a) Housing – rent or house payments. If you don’t pay these you may have no home

b) vehicle

c) groceries

d) power, water, gas etc.

e) credit cards

The costs of shelter, food, clothing and transportation always come ahead of paying the credit cards.

Are you now a little more understanding of this critically important part of your life? Could you do with some help? There are many agencies and websites dedicated to offering advice and tools to help you better manage your finances. Check them out today. Financial success can be yours. Don’t you deserve it?

A very important part of personal financial planning is tax planning. This article will help you take the mystery out of personal tax Planning by providing a financial planning perspective for your overall tax situation.

1. Be aware of the different types of taxes

Many people are not aware of the different types of tax systems that we have. Income: Federal, State and Local. Real estate tax. Tax on Investments: Dividends, interest, capital gain, and passive income on stocks, bonds, mutual funds, and investment real estate. Estate or Inheritance Tax: Federal and state tax due on the estate or the inheritor. Gift tax: tax on giver of large gifts. Entitlement Tax: Social Security and Medicare (FICA), Federal Unemployment (FUTA). Sales, self employment, and corporate taxation.

2. Consider working with a Qualified Tax Professional

Tax planning can be complex for many people, therefore it may be wide to work with a trusted professional tax advisor.

Tax advisors not only prepare your taxes but can help make decisions that will affect your future. They can serve as advisors for a whole host of matters and they can represent you if you face the dreaded audit. Consider the following when selecting a tax professional:

- Local: Someone that you can easily meet with face to face

- Personable: Someone that you can interact with and who cares about you

- Proactive: Some tax preparers simply look at your previous year’s return and plug your current numbers into last year’s format. This of course assumes that last year’s preparer knew what he/she was doing. Try to find a preparer who knows your situation. A proactive professional will ask questions that will help you anticipate changes in your tax situation to help you properly plan in advance

- Reputable: Find a professional with a good reputation. Ask people you admire for a referral.

- Skilled: Look for an accountant that is very competent. You have to be smart to obtain a degree in accounting or law.

Fees: Find out up front what they estimate their fees to be, what they charge to file electronically and whether they will represent you in an IRS audit. Avoid any ‘early refund’ ploys. Some well known tax preparation companies ‘provide’ this service which charges a hefty fee (with a lot of small print) and a lot of advertised hype for you to get your refund ‘early’. It is basically a high-interest loan. Just waiting for your actual refund will save you a lot of money.

3. Remember, tax preparation entails both art and science

The science involves the mathematical calculations that in most instances can be figured using calculators and software, and the infinite number of complex tax laws.

The art of tax planning comes into play with interpretation of any special circumstances. There are some areas of tax law that leave the government’s intentions unclear. No law can completely anticipate each person’s situation. You could call a dozen different IRS agents with the same question and get as many different answers. A proactive planner will research any unusual circumstances you may have and help you plan a course of action.

4. Doing Your Taxes Yourself?

I firmly believe in getting professional tax assistance. However, I realize that many people prefer to do their own taxes perhaps to save money, or perhaps you have cleaned up the mess a ‘store front’ preparer made of your taxes and vow to do your own. It has been my experience that often the professional tax preparer has saved us the amount of their fee in our taxes. The peace of mind that the taxes are done right has a value all its own.

However, people who have prepared their own taxes at least once with paper and pencil or software usually understand taxes much better. If you self-prepare your taxes, consider having a qualified accountant review them before you send them in. They may find things you or the software might have missed.

If you made less than $54,000 in 2007, you can file your taxes electronically for free through the irs.gov website www.irs.gov/efile/. If you use tax software and wish to e-file be aware of the fees so that you can budget and compare prices properly. For example, a download of Turbo Tax Home and Business Federal and State for 2006 cost just under $100 and the filing fees cost around $30. Some States allow you to ‘phone in’ your State return for free.

If you choose to mail your return, go to your local post office and send it ‘Certified Return Receipt’ mail to insure that you have a record that the IRS received your paperwork. This will cost around $10 or less and will be worth every penny should the IRS contest the receipt of your return.

5. Keep great records

If you are already very organized you may read this section just to feel great about your organization skills or skip to the next section. If, however you have heard ‘get organized’ many times before and if you are the type of person who balks at the idea of organizing that mess of receipts just remember how you felt last year as tax time approached. You could become organized in only one evening of television viewing with the right tools. Arm yourself with an accordion file with at least 16 sections. Label them according to your situation or use the following sections: Auto, Bank, Business, Credit Cards, Dental, Medical, General Receipts, Grocery, Income, Insurance, Mortgage, Utilities, School, and Taxes. Now sort your receipts into these sections. Organizing your receipts will help you “Take the mystery out of…” your financial situation. Use a new accordion file every year. Not only will this help you find needed information, it will also help you find a receipt in case you need to return an item you purchased. . Your tax professional will be sending you a tax organizer the end of December or the first of January. In this organizer will be a list of information that you will need to gather. Becoming organized will help you easily gather the information you need to fill out your tax organizer.

6. Start early

Do not procrastinate on your taxes. Tax professionals are unbelievably busy January through April. Firms who prepare business returns also have a crazy March 15 business deadline. We are providing this information because we want you to get the most attention from your preparer during their craziest season. As soon as you get your organizer, begin gathering the needed papers. If you are only missing one or two pieces of information return the organizer to your accountant with a note that says what is missing. They will begin entering the information in their software. Try to get a January or February meeting with your accountant. These months are the best to meet because they will have more time to spend with you and they will be able to think proactively. If you are looking for a professional, start looking now.

Another reason to start early is allowing yourself time to look for records, ask financial institutions for copies of lost information, or calling investment companies for statements.

7. Judicious Paycheck Tax Withholding

Many people like to overpay their taxes, so that they get a nice refund in time for vacations or other wants and needs – Kind of like a forced savings. Overpaying taxes is like a giving the government an interest free loan of your money.

Good financial management involves developing savings habits so that you set aside money in an interest bearing account from each paycheck for future needs, wants and emergencies. This helps you to avoid using credit cards for those things and not having to wait until refund time. Secondly it then allows you to manage how much you can afford or are able to put into 401(k) plans at work. This accomplishes two things, first you are managing your money better and you are saving for retirement. Saving for retirement in tax deductible retirement plans like 401(k)s will also lower your taxes, enabling you to save more for retirement and everyday needs and wants.

If you want to lower the taxes that are being withheld from your paycheck, file a new W-4 form with your employer to claim an additional withholding. Make adjustment for getting married, divorced, having children and for increasing contributions to tax deductible retirement plans. Your accountant will help you estimate this.

8. Tax planning is not the tail that wags the dog

Taxes consume a large if not the largest single percentage of your income, therefore good financial planning should strive to lessen them, by whatever means possible as allowed by law.

However, tax planning is not the only core issue of good financial planning. Tax planning works in concert with your overall goals and your individual situation.

Not everyone is always financially well. Also, a cold fact is that not everyone has a home. Those who have nothing to place find hard arranging fund from any outside sources. In a move to kick-start, lending authority has come up with the concept of unsecured personal finance.

Innumerable loan shops are working in this prospect. You can find them online and, offline across the money market. Locating them online however is gaining precedence. You can not stop hearing various commercial advertisements on the radio or television, or the newspaper. But availability of such finance option on internet has taken a new shape altogether. You can collate information on the finance from various companies and their functioning. In today’s world of information technology, internet has proved itself the best applying tool. Your information gathering gets very easy. Everything is just couple of clicks away. You can start your search for these companies online.

For all of your sundry purposes, you get a denomination of £500 to £25,000. That amount you will have to repay in an agreed time. The repayment period fixed for the unsecured finance is usually based on your financial capacity. However, you can pay your loan sum in six months. In some special cases, lenders can extend you reimbursement term further for 10 years.

In the meantime, you pay the finance amount in full. The amount you have to pay is principle fund of the loan, interest rate and some service charges. You need to make sure you to look at the interest rates and also the annual rate, so that you can compare it with other loan quotes. Knowledge of the loan quote will help you find a company which best-suited to your needs.

By and large, if you come across with money problem but you do not have worth asset to place then unsecured personal finance will work for you.

Being disciplined when it comes to personal finance budgeting is a key component for anyone seeking financial freedom. Taking control of your finances is the first step to starting down the road to building the life you always wanted and the quickest and easiest way to do this is with a budget. The most critical part of the personal budgeting journey is the emotional and mental side of the equation. Why?

Our behavior with money is the reason most of us get into financial problems in the first place. Our own wants over ride our common sense and before we know it we have a house full of stuff that we end up paying for twice over. Many financial experts say that personal finance is 80 percent behavior and 20 percent math.

This is where the household budget comes into play. In this day and age the great majority of people have no idea how much money they make each month let alone where the money goes once they cash their pay check. Before long this behavior catches up with everyone and they are in perpetual catch up mode when it comes to paying bills and meeting their financial needs. A budget, if done honestly, allows you to see exactly how much money is coming in and not only how much is being spent but also what it is being spent on.

Once you see what you have been spending money on you can come to grips with the bad behavior that has gotten you, and so many others, into a financial mess. Eating out two or three nights a week, going out to lunch everyday, that morning visit to the coffee shop, they all add up and chances are once you look over your written budget you will find many areas where expenditures are a little to high and are breaking the budget.

Here are four personal finance budgeting secrets to help keep a new budget on track.

1. Probably the hardest part of keeping a budget is keeping track of daily expenditures. One way to do this is to keep a small log book or ledger where you can keep track of your daily expenses.

2. Before going grocery shopping it is a good idea to make a list of the things you need. Check the fridge, the cupboards, and the pantry to make sure you aren\’t buying stuff you already have. Stick to the list once at the store and do not buy things not on the list.

3. Going to the store just to do some shopping is one of the easiest ways to suffer from an impulse purchase. Nothing will destroy a well thought out budget quite like an impulse purchase.

4. For large purchases over $300 or more it is a good idea to step back and wait a day or two before committing. Once given the chance to think it over chances are you will realize you don\’t really need it.

Personal finance budgeting is about taking responsibility for your money and hunting down and killing those behaviors that are costing you money. The beauty of the budget is it shows you exactly how your behavior with your money is affecting your financial situation.

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It is quite unnerving to realize that when confronted with financial needs, you are not able to fulfill them. Arranging finance can prove to be difficult as the choice between the available options is difficult. Through Personal Finance, the borrower can take up the money easily for his needs without much difficulty and hassle.

When the need arises for arranging finance, the borrowers are suggested to look online and research. This will help him in getting lower rate deals as competition is very stiff through the online mode. The borrowers can compare the deals that are available to them and can choose the one with the lowest rates.

Any personal needs of the borrower can be fulfilled with the help of these loans. Debt consolidation, home improvement, car purchase, wedding expenses, educational expenses, travel expenses, holidaying expense etc can all be dealt with using the borrowed money.

This finance is available to the borrowers through the secured and the unsecured form. The borrower can take up the secured form of this finance by pledging an asset with the lender and borrowing money in the range of £5000-£75000 for a term of 5-25 years. Rates are lower for these loans. The borrowers can also take up the unsecured form of these loans without the need of pledging collateral. The amount that can be approved through these loans varies between £1000 and £25000 and has to be repaid in 6 months to 10 years.

Research and comparison between the loans quotes offered to the borrowers can help him in getting knowledge as to which loan deal is the best for him. This research is very beneficial when conducted through the online mode. The borrowers do not have to meet every lender personally to get the loan deals. The processing is faster and competition is stiff in the online financial market.

With personal finance, the borrowers will never face any financial difficulties. Their needs will be easily solved with the borrowed money.