The study of Personal Finance typically involves developing an understanding of the essential concepts of effective budget management; banking and credit; financial and tax planning; insurance; and the purchase of capital goods such as real estate or automobiles.
My first lesson in financial planning occurred when my parents opened a Christmas club account for me when I was 12 years old. Banks, at the time, would promote vacation club and Christmas club accounts as a way to save for major purchases by making small regular deposits. In addition to opening the account, my parents also began to give me a small …show more content…
Most people look forward to receiving a large refund check from the government when they fill out their yearly tax returns but that money that is being withheld from them for most of the year. By changing their tax withholding, that money could be received during the year and be used to increase their savings. There are certain saving programs which allow people to save for medical, college and/or retirement expenses by using pretax dollars which lowers their taxable earnings thus lowering the total amount of taxes owned. Conversely, investing in stock and mutual funds may cause an increase of taxes owed due to dividend interest and capital gains for the sale of profitable holdings so funds should be set aside to pay the additional taxes owed. A financial plan can help to highlight opportunities to lower taxes that are owed and to identify when higher than normal tax expenses will