Everyone's personal finances are important for achieving personal goals and achieving success. With this in mind, everyone should take care of their personal financial situation, but considering the few people who do not have a personal budget, or those who exceed their own means without pay but do not care about their personal financial status, this is not the case. When should you start managing your personal finances, and why?
Franco Modigliani, winner of the 1985 Nobel Prize in Economics, developed the model life cycle, and he analyzed a person's consumption behavior during his lifetime. It takes this into account when analyzing changes in personal income and savings. He continues to study several aspects of personal financial economics at different stages of life. The author divides the life cycle into two parts, activity and activity or retirement. The period of activities, including both parties, revealed changes in the individual's personal financial situation. In the first phase, their personal financial status was not very good because their consumption was very high and sometimes they did not include their income.
They use consumer credit through credit cards and have no legacy. In the second phase, people borrow money to buy consumer goods and investments. In fact, they accept credit for buying cars, buying credit for real estate; credit cards... At the time, personal finances were beginning to improve as savings became active and important heritage until their end of life. This is due to a reduction in consumer spending, as their children can grow up, leave the roofs of their families, and pursue less credit. During the event, personal finances began to deteriorate because their income dropped and they wanted to maintain the same standard of living. They have reduced their savings in order to meet higher consumption and lower income. In order to maintain their previous level of consumption, they use their savings; sometimes they tend to deal with their legacy.
This shows the importance of dealing with financial issues during our teenage years, because this is the best period in our lives, because during this period, we have the opportunity to influence our personal finances through the income of our activities. Our tradition, how positive are savings and short-term budgets?
Orignal From: Managing Personal Finances in Youth
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