Personal financing can sometimes require the assistance of professionals. Getting loans through a bank or credit union for a house, car, or other personal lines of credit may require extended knowledge of how the financial system works. Here are some important financing terms.
Budget - When applying for a loan, a budget may be need to show a solid financial history. Proper bookkeeping and budget planning can show monthly or yearly incomes and expenses and show that an applicant is organized.
Portfolio - A financial advisor may look at an applicant's portfolio to see where their money is invested. A portfolio can show if money is in stocks, real estate, or other accounts for reference.
Interest - When receiving a loan it is most likely an interest rate will be applied at some point. They can vary depending whether the loan is an auto, home, or personal loan.
Consultant - A person who is educated in finances and can give expert opinions to a prospective applicant. Using a consultant can help in managing debt as well as managing capital when trying to purchase a new asset.
Accountant - Some larger companies or more affluent individuals may have a personal accounting firm handle their money and savings. Such experts can direct where cash needs to go and who to pay off in order to manage debt successfully.
Knowing financial terms can help when approaching banks and credit unions about car loans, refinanced mortgages, and other questions about tax and finances. Consulting with experts can also help when discussing personal finances.
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Personal finance is the management of one's own finances and can include checking and savings accounts, loans, stock market investments, and estate planning. It can also involve managing credit cards, 401k plans, home or auto insurance policies, and social security benefits.
Often boasting accounting backgrounds, financial planners are the professionals who provide these services. They may assist clients with budgeting and bookkeeping, and provide information on the latest stock market news. There's no shortage of financial tips out there, with helpful online how-to guides that offer retirement checklists, how to improve a bad or poor credit rating, mortgage calculators, and information on capital investments. Some financial planning sites also offer college savings calculators and home refinancing basics.
Financial planners, drawing from their backgrounds in accounting and finance, are experts in money management, taxes, budgeting, and debt consolidation. They typically see clients within an office setting, but some are available online or on the phone for consultations to give advice on interest rates, debt reduction, and wise purchase decisions.
Customers can even create their own personal finance plan with a little research and dedication. Everyone needs a sound financial services plan, especially the sole provider for the household. Personal finance planners can help people manage the money they must pay each month, balancing that with spending money and bank savings. He or she can help clients determine their net worth by adding up all assets and then calculating all debts. The difference between the two numbers is the net worth, and anyone can start budgeting at any time to maintain a positive net worth.
Spending only cash and reducing credit card spending is a good start. Financial planners, advisors, consultants, and brokers can help clients work out a plan for anything from stock portfolios and investments to auto loan financing and tax filing.