Building Wealth From Scratch: A Beginner’s Guide to Personal Finance

Anyone who needs to plan their financially strong future must learn about personal finance. It is all about making plans and dealing with managing your financial affairs. Personal finance engages with a person’s income, expenses, spending, and savings. All aspects of your finances such as investing, savings, spending, insurance, and retirement taxes require proper planning that comes under personal finance. Financial planning refers to managing personal finance, to achieve your financial goals in a better way. All of you must understand the concept of personal finance because this helps you make effective and smart decisions regarding your money. It provides you with proper guidelines about financial security. If you do not understand personal finance, you might face long-term consequences because you fail to make proper financial planning.

Here is a complete guide about personal finance because it helps you manage your finances for any unexpected event in your life such as disability, joblessness, and illness. 

It is often referred to as r/personalfinance is a subreddit dedicated to everything related to the management of your money, investing, budgeting as well and achieving your financial goals. This community with millions of members acts as a welcoming and convenient space where everyone asks queries and looks for proper guidance on financial topics. They also share their personal experiences.

It is necessary to join Reddit personal finance, as there are several benefits associated with it. However, here we provide you information about five basic things to tell you why there is a need to join Reddit Personal Finance.

·        Diversity in perspectives: In this community, people share their experiences, challenges, and triumphs related to finance which helps you to figure out the best solutions.

·        Learning from experience: You can improve your financial journey by learning from the real-life experiences of the people who share their problems and situations.

·        Advice from experts: By joining Reddit personal finance, you may get free pieces of advice from financial experts, advisors, and professionals. The personal finance advisor is the expert or professional who provides you with the best finance advice and other finance-related services according to your needs. Such as helping you in making financial plans for saving through investment as well as helping in decision-making regarding tax laws, insurance, and investment.

·        Empowering and Encouraging Yourself: This community is a welcoming zone free from judgements and it encourages people to ask any question without hesitation. In this way, you may become stronger and more confident to make good decisions related to your finances.

The finance books assist you in developing the financial knowledge that you need in your life to maintain a healthy financial position and, freedom. This helps you effectively handle your money for a better future. Following is the list of best personal finance books such as;

·        Rich Dad Poor Dad

·        Think and Grow Rich

·        The Barefoot Investors

·        The Intelligent Investor

·        Money: Master the Game

·        The Richest Man in Babylon

·        The One-Page Financial Plan

·        The Millionaire Fastlane

·        Financially Fearless

·        The Little Book that Beats the Market

·        The Total Money Makeover

·        Secret of the Millionaire Mind

It is not easy to manage your money and for many of us, it is difficult to balance tracking expenses and checkbook. Personal finance apps help you keep pace with your spending by connecting with your bank accounts. There are many personal financial apps with different features to help you manage your overall finances. The features include tracking subscriptions, email reminders, shared wallets, bill due dates, etc. You may either use these apps on your smartphone. Here we enlisted the best personal finance apps;

·        Mint

·        Prism

·        Mobills Personal Finance

·        YNAB (You Need a Budget)

·        Spendee

·        Empower

·        Every Dollar

·        Goodbudget

Every personal financial app varies in its method, features, and scope but all have high rank among users. These apps work for a specific niche but among these best apps “Mint” is on top because it is easy to use free, reliable, and efficient. Prism is best for managing bill paying specifically.  

Personal finance software helps you efficiently manage your money and come across different ways to meet or achieve your short as well as long-term financial goals. The are many personal financial software, some assist you with expense tracking and master budgeting while others may assist with investment portfolio management. It depends on you to choose software according to your financial needs. Here is the list of popular and the best personal finance software;

·        Quicken (Overall best software)

·        Turbo Tax (This software is best for taxes)

·        Tiller Money (It is top recommended for spreadsheet management)

·        FutureAdvisor (It is best for investing)

·        Mint (Best software for budgeting)

·        Empower (It is best for investment advice)

The personal financial statement template is a great tool or document that summarizes the financial standings of an individual over a particular period. The personal finance statement enlists your;

·        Assets-what you own (examples are cash, personal properties, real estate, stocks, etc.)

·        Liabilities-what you owe (examples are mortgage, loans, credit card debt, etc.)

·        Net-worth

To get your net worth or profit, then minus liabilities from assets. Your profit or net worth may be either positive or negative. It may be positive if your assets are more than liabilities and it may be negative if your liabilities are greater than assets.

A personal financial loan is the amount of money you may get from any financial institute or from a bank with a set paying-back timeframe and consistent payments every month. You do not need to put down any security or collateral to borrow money for most of the personal finance loans because they are unsecured.

·        Loan amount is between $1000-50,000 (maybe more)

·        Current interest rate ranges from 6%-36%

·        The period to repay the money is from 1-7 years (on-time repayment assists you in building a positive credit history)

One of the most important benefits of a personal loan is that you can use it for any purpose that you want. The most common uses and applications of personal loans are financing big events like weddings, vacations, or honeymoons and investing in yourself as well as utilizing them for emergencies.

The concept of personal finance and financial planning is important for every person because your life will be stress-free and smoother with effective personal finance management. It assists you in investing smartly and saving your money as well as helps you in achieving both short and long-term financial goals. There are a large number of finance rules. The focus of these rules is on the savings from income that a person earns. The 50-30-20 personal finance rule suggests putting your money towards 50% needs, 30% wants, and 20% savings. This rule helps you maintain your financial position at a healthy level. Better personal finance practices assist you in managing your daily expenses as well as ensure a financially independent and happy life.