Moneynet adds weight to intelligent finance with new personal finance product guidesWritten by moneynet
Moneynet adds weight to intelligent finance with new personal finance product guidesMoneynet.co.uk, UK’s longest established online personal finance information website, has recently published three online product guides to help consumers get to grips with increasing complexity of personal finance products. With a strong stance on ethical finance, company felt it was important to be proactive on educating consumers about different aspects of credit related products to get best deal. This is crucial, as a recent report by Credit Action indicates that less than half of adults are financially literate, which drops to a third for young adults aged between 21 and 24. According to National Statistics website, 91% of men and 90% of women in UK have at least one credit card, collectively accumulating over £54.3 billion of debt. Credit Action, a national money education charity, states that 50% of people who take out credit in shops, hadn’t planned to do so
| | Planning Starts with the BasicsWritten by Jonathan Citrin
When developing a plan for your finances, toughest question often is: “Where do I begin?” Before investing in stocks and bonds or buying life insurance, before implementing any change or making any decisions, you first need to analyze and understand your entire financial picture. Two documents allow you to do just that. A Balance Sheet and a Cash Flow Statement enable you to take an in-depth look at your current financial situation and make better decisions about future. With a little work, you can develop these two tools and be on your way to a solid plan for your finances.Balance Sheet A balance sheet is a snapshot of your personal finances at one point in time. It contains two main elements: what you own (assets), and what you owe (liabilities). Your net worth is expressed as: Net Worth = Assets – Liabilities. That is, what you own minus what you owe. A balance sheet clearly lists all assets and liabilities. Examples of assets include: house, investments such as stocks and bonds, savings and checking accounts, 401(k), IRAs, business interests, artwork, and jewelry, among others. Liabilities include mortgage balances, credit cards, education loans, and any other debt. Once you have created a list of everything you own and everything you owe, simply subtract sum of assets from sum of liabilities- this is your net worth. The ultimate goal of most investors is to increase their net worth. The balance sheet is a very useful tool to identify strengths and weaknesses in your current finances, as well as to determine your goals for future. Someone with a disproportionate amount of liabilities might set a goal to eliminate this debt. On other hand, someone with a positive net worth (more assets than liabilities) might plan to save and invest towards retirement, college, or another goal. Cash Flow Statement After analyzing your balance sheet and determining your goals, you need to decide how to fund these goals. A well formulated plan is one not only with realistic goals, but also a sensible means of achieving them. That is, having goals is good, but you must be able to pay for them. Using a cash flow statement will enable you to determine how to pay for your goals.
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