Risk is the possibility of damage, injury, or loss caused by external or internal events. There are two types of risk: pure and speculative. Pure risk involves only the possibility of loss.
Credit can be used in very positive ways to enhance personal financial planning. Following are some of the reasons people use credit:
To make sound financial decisions, you need to know where we are in the business cycle, how well the economy is doing, and where the economy might be headed. You can do this by paying attention to some economic statistics that are regularly reported in the news as well as on TV business shows.
Despite its benefits, the use of credit has a downside. Negative aspects include interest costs, the potential for overspending, credit’s negative effect on your financial flexibility, and concerns about privacy.
Interest Itself Is Costly Interest represents the price of credit. It is the “rent” you pay while you use someone else’s money. When stated in Rupees, interest makes up part of the finance charge, which is the total Rupee amount paid to use credit
Interest is the price of money. During times of high inflation, interest rates on new loans for cars, homes, and credit cards rise. Even though nominal interest rates for savers rise as well, the increases do not provide “real” gains if the inflation rate is higher than the interest rate on savings accounts or certificates of deposit.
People become over indebted when their excessive personal debts make repayment difficult and cause financial distress. Signs of Over-indebtedness:..
Good financial behaviors to follow include these: Develop a plan for financial future, Start or increase savings, Follow a budget or spending plan..
A loan is borrowed money with an agreement to repay it with interest within a certain amount of time. If you were considering taking out a loan, your immediate thought might be to go to your local bank. However, you might want to explore some other options first.
Bad financial behaviors to avoid include the following: Purchasing something expensive that was wanted but not needed, Reaching the maximum limit on credit card, Spending more money than available…