Maintaining your personal finance

How to maintain your personal finance? Everyone has thought about that question and it might even have given you a headache. In most cases, money doesn’t come for free. Therefore you have to decide how to get it to finance your ultimate dreams. Some people just choose to work harder but in most cases we have to approach a bank, hat in your hand to get some loan or a mortgage.

One of the most important matters in all of personal finance is how to earn more money (The Personal Finance Panacea—Make More Money!, 2013, 29). That is the basis of everything, because with great income, doors are starting to open. But how to make more money, that is the million dollar question. Now you are thinking of filling a lottery coupon or playing in a casino, but let’s be more realistic:

Land your dream job and you will be motivated to do your best. There is always room for advancement and presenting yourself as someone who is smart, poised, and professionally curious will help you get ahead … which means a fatter bank account (The Personal Finance Panacea—Make More Money!, 2013, 34). Landing your dream job is easier said than done but with determination and planning everything is achievable.

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Reuben Advani reports in his book a few important steps in order to land in our dream job:

1. Target your job search. Figure out what you’re good at and what you’re qualified for.
2. Polish your résumé.
3. Network online and in person. Social networks such as LinkedIn are great for this.
4. Schedule interviews. Whether you find specific job postings or discover companies that you would like to work for, start arranging interviews.
5. Follow up. Send handwritten thank-you cards to everyone you meet

(The Personal Finance Panacea—Make More Money!, 2013, 30). The last sentence doesn’t really apply in Finland, but I think you got the point.

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I personally think that keeping your household finances in order, you should know about the national economy but global economy as well, because most often national economy is reflected by global economy. Personal finance is usually reflected by global economy too. When you have the 300 000 € mortgage It’s very different to pay interest rate of 0,5 percent instead of 5,0 percent. These last years have been great for people who have a loan, since the interest rate has been almost record-low. (Euribor, 2014)

From 2007 to 2010, the U.S. mortgage crisis first turned into an international banking and financial crisis (in its beginning often called credit crunch). Then, it expanded into a global economic crisis (Social Banking and Social Finance, 2011, 5). This is one thing you simply can’t ignore. The markets have been steadily rising from the lows, but there is still a rise to come since the economic uncertainties haven’t been defeated yet.

The management of a bank is subject to an indispensable liquidity constraint, like any other type of company (Liquidity Risk Management in Banks, 2013, 3). In other words: banks need money flowing in and out as same as usual companies do. They have woken up in that matter, as banks are not loaning money as easily as they did before. Soon you need to have huge savings before you could even apply for a mortgage (Taloussanomat, 2014).

Here’s what we have been talking today: to maintain your personal finance, it’s recommended to land in your dream job and have as many promotions as possible. The second thing is that banks are making lending more difficult, so high-paid job is ever more important in order to get any loans.

 

Sources

The Personal Finance Panacea—Make More Money!, 2013, Reuben Advani. Apress.

Social Banking and Social Finance, 2011, Roland Benedikter. Springer New York.

Liquidity Risk Management in Banks, 2013, Roberto Ruozi, Pierpaolo Ferrari. Springer Berlin Heidelberg.

Euribor, 2014. http://euribor.fi/euriborkoron-historia/. Read 10.2.2014.

Taloussanomat, 2014. http://www.taloussanomat.fi/asuminen/2012/11/03/haluatko-asunnon-onko-tilillasi-20-000-euroa/201241255/310. Read 10.2.2014.