How To Avoid A Personal Finance Crisis | General Information of ...

Most people do not spend time in front of their personal finances in sufficient detail before incidentals and fair. This causes major financial crisis for many families. This article deals with issues of proper planning to avoid a personal financial crisis.

It?s in the news today everywhere on the mortgage crisis crippling the housing industry in the United States. In other parts of the world, there is similar news about the housing slowdown. Many families can not keep rising energy costs as oil prices soared. To add to this is the cost of college education for children, car payments and other payments from revolving credit card and the net result is a massive level of stress in the financial health of the family and a any personal financial crisis.

The old adage that prevention is better than cure applies here once again. The only way we can avoid a personal financial crisis is proper planning. Keep it simple, you do not complicate things more than it should be. Start with your income and housing budget to take a certain amount for rent or mortgage, a certain amount of energy, food, transportation, education and miscellaneous. It is necessary to classify each of these subdivisions more and really settle the budget expenditure. Must have a savings plan for a rainy day and adequate coverage of the insurance costs of living also in the case where the main breadwinner dies.

Once these costs have been written, further tests must be performed. If your income meets or exceeds the costs, then you?re in good shape. If income is less spending, then you only have two choices. One option is to reduce costs. The other option is to find additional sources of income. There is no magical way in which you can fund the debt by borrowing more money by any means. You do not want to be caught in the machine of perpetual debt. Debt has a price and I can not believe that people are increasingly borrowing to pay for things they can not afford in the first place. A good personal financial planning is absolutely essential to prevent future crises and we must be honest in the development and implementation of these plans.

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Posted under Real Estate and tagged with Adequate Coverage, Article Deals, Avoid, Breadwinner, Budget Expenditure, Car Payments, Crisis, Energy Food, Finance, Financial Health, Food Transportation, Good Shape, Housing Industry, Housing Slowdown, Incidentals, Insurance Costs, Old Adage, Perpetual Debt, Personal, Personal Finance, Prevention Is Better Than Cure, Rising Energy, Transportation Education, Two Choices
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Source: http://www.finsout.com/2011/06/13/how-to-avoid-a-personal-finance-crisis/

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