Every morning when we wakeup from sleep, I am sure all of us thinking about financial, but what is financial is all about.  Maybe we should look in more detail. The word finance can be defines as science of funds management. In generals terms finance can be categories into business finance, personal finance and public finance. It also includes saving money and lending money. The fields of finance also include concepts of time, money and risk, money we have to spent and budget.

Let see in more broad aspect of finance. I can say that most of us will think that finance is all about individuals and business organizations depositing money in a bank but is it true. Before we jump into conclusion, I think we should ask our self how much money we need, how to get the money or where the money came from. I can say finance is all about money.

I don’t want to go to more detail about what is finance all about. I want to focus on personal financial. Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.

There are lots personal finance components. It might include saving, loan, credit, investments, insurance, income tax, retirement plans and so on but the major key component of personal finance is personal financial planning. Basically, I can say that there are hundred steps on how to monitoring financial but I like to share five major steps.

First step:
Create simplified versions of financial balance sheets and income statements. A simplified versions of financial balance sheet is a lists of personal asset, along with personal liabilities and list of income value.

Second step:
Set your goal. Two common things that every person will set in mind is retirement age and buying house. The target normally will be how much money you get when you retire and the good time to buy house.

Third step:
One of the major steps towards financial freedom is creating plan. You must have financial plan. Financial plan details out how to accomplish your goals. It may include, for example, reducing unnecessary expenses, increasing one’s employment income, or investing in the stock market.

Fourth step:
Execution of your personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners and investment advisers.

Fifth step:
Think of cycle. You must monitor your financial in one cycle process. It is because your financial plan maybe should be review and readjustments to suit need.