To avoid certain financial problems and unnecessary surprises, you always need a good and clear awareness on your personal finances. Assessing your personal finances involves looking at the how you currently manage your money, as well as, how you plan on managing it in the future; this further includes keeping a track of your budget & savings (income minus expenses), along with a detailed outline of your financial goals.

Face your budget like you would face a diet – you need to maintain to have a healthy financial life. A personal budget helps you on two fronts: 1) To figure out the exact amount of money you make and 2) Your spending habits & how much you spend. It is imperative that you be very honest with yourself every time you sit down to weigh your finances. By stopping and taking an honest look at the way you spend money, you can come to amazing conclusions that will easily help you to save more – like brewing your own coffee at home, instead of spending a certain amount per month at Starbucks! And this is exactly the main goal of a personal budget: Minimize expenses in order to maximise savings.

By efficient budgeting, you will be able to put extra money into more important long-term financial goals – be it lowering your credit debts or paying off debt collectors, like arrow financial services. You can also pay off loans, or save for your childrens education, or invest in retirement accounts, or just simply save for bigger investment opportunities.

The most important ingredient of any personal budget, is an all-around commitment. If parents make financial sacrifices, but the son has a credit card – and spends $300 on a pair of jeans – this brand of budgeting is doomed to fail.

To start things off, assess your monthly balance where you can clearly see what you earn and what you spend; you can either do this old school pencil, paper and calculator or use one of the available apps, such as Mint.

Mint is a free web-based personal finances tool to plug in to your bank, investments, credit cards accounts, and quickly gives you an exact portrait of your personal finances. It only works in the USA and Canada. –is more than a simple budgeting software: it gives you access to budgeting tricks, financial classes and tutorials, and a community to talk too. It also guides you in how to set financial goals and sticking to them; it helps in cross-referencing financial accounts to create a budgeting process in a very clean & easy way.

GnuCash is an accounting software that is available for Linux, OS X and Windows (operating systems); it has an easy to use format that allows you to do accounting for small businesses or an individual. It reconciles accounts, creates reports and graphs in detail so you can better understand the Who, What, Where, Whens & How’s – in regard to your finances.

BudgetSimple focuses on making sure your budget works for you; it analyses your finances and produces a budget plan, provide you with suggestions on where you can save your money, cut expenses and increase savings; the main purpose of BudgetSimple is to make the whole budgeting process as easy (and as understandable) as possible; it is guaranteed that within an hour of use, you will better versed in the status of your finances.

However you do it, there are six main areas you need to understand in personal finance.

  1. Have your financial position your position after considering assets, liabilities and equity clearly defined.
  2. Create realistic goals for your finances, either in a short-term, as well as long-term – this will help bridge you to better planning.
  3. Design a plan where the road to your goals is deeply detailed.
  4. The most important part, execution – will require discipline and perseverance; you can also have professionals helping you execute.
  5. And never forget to monitor your finances, and make the necessary adjustments as you see fit.
  6. Lastly, always reassess your financial goals.

The main idea you need to retain is that, with enough attention, discipline and patience, sticking to your personal finances goals can save you quite an impressive amount of money! It can be quite tempting to go and buy the latest gadget, but if you are patient and dedicated, you will end up having more money to buy income-producing assets – investments that’ll allow you to make more money, even while you sleep.

With a financial set up like this, you’ll be able to buy as many gadgets as you please, without ending up in the poor house.