The best Guides for Personal Finance in 2012

Those of you who allow your heart to be your guide in all matters of personal finance are truly making a huge mistake. So too, when you let your emotions control your wallet rather than your otherwise good sense you are also in a whole lot of trouble or will be in a whole lot of trouble if you end up bankrupt, on the street with nothing to eat.

Then again, there are those who create a personal spending budget and comply with that budget, no matter what might happen during a particular time. That does not mean that there are no exceptions to that behavior. You or someone within your family might require emergency medical care or suffer the effects of a natural disaster.

To a lesser degree, an item that you desire to purchase suddenly is on sale and you must take full advantage of that sale, knowing full well that such an opportunity might never happen again. Buying that item in question is something that you really need and cannot live without, like a home, a mode of transportation and/or equipment that you intend to use for your employment. In other words, they are things that must be purchased because such items are needed in order to earn your living or improve your living situation.

It is also not wise to spend every penny that you earn each month. The reason being is that you do not want to be completely without money after you retire or can no longer work. Therefore, you must save a certain amount of money each month, in order to build a, so called, nest egg for the time when you are retired from the workforce or have an emergency that requires more money to pay for than you earn during a month or more.

Some things do not last forever. One of those things is your job. There might or there will come a time when you become unemployed and now have no income, beside unemployment compensation, for a certain period of time or until you become employed once again. So now you have two great reasons why you should save some of your hard earned income each month.

In times of economic inflation, your income earned might not be enough to pay for all of your current expenses, due to the fact that you did not receive a pay raise that was equal to the rate of price inflation. So now you must reduce some of those current living expenses as best as you can. You can accomplish that goal by using less power that is supplied to your home. You can cancel your monthly television cable or satellite service, if possible. So too, you can cancel your cell phone service if that is also possible for you to do.

Any financial guide will advise you to live within your means. That means that you should not spend more money each month than you earn each month. Since each of us are somehow different from every other person who is alive on Earth, only you can create a financial plan that will allow you to live within your means each month, except for those emergencies that happen to all of us during some time of our life.