Financial Basics

When it comes to your finances, you need to have a plan in order to grow your wealth. Even if you’re earning and putting money in the bank, it’s important to plan for your future. Determining your short- and long-term financial priorities is the first step in this process. Your financial priorities should be specific goals that you would like to achieve in the near or distant future. For instance, you might want to be able to afford going on vacation in one year or to buy a new car within five years. Some more long-term goals include saving for a child’s education or opening a retirement savings plan. Once you know what your goals are, you can proceed to implementing a plan that will help you to achieve those goals. A financial planner can help you on this front.

Some of the most basic financial concepts include: banking and saving, investments, and loans. Savings accounts, offered by most major banks and credit unions, are a convenient place to store your money. A savings or checking account can be used to help you efficiently pay for not only day-to-day expenses, but also monthly expenses, such as a mortgage payment, rent, or utilities bills. As you accrue wealth, you will probably want to consider investing your money in order to make a profitable return. On the other hand, if you find yourself in a situation where you don’t have enough money to pay for a purchase, such as a home or a new car, you might want to consider a loan from a financial institution.