Getting your financial situation under control sounds daunting, but it’s an essential aspect of adulthood, and a great way to potentially save some money. In general, planning for personal finance can help you prepare for retirement, develop more robust savings, and fortify your portfolio– the steps that I will outline here will be general enough for you to apply them to ANY personal finance goal you want to work toward. Before setting personal finance goals, you should tabulate your finances and compile a summary that is easy to read and make changes to.

Debt consolidation is the practice of taking out one large lump loan to pay off many other smaller loans; the effect of debt consolidation can be lower interest rates, fewer debtors, and ease of servicing one loan over many. To consolidate debt, you typically need something extremely valuable as collateral, such as a house. The collateral is seized if you can’t pay the consolidated loan. Credit card debt is the most common reason for debt consolidation, though many other debtors have differing reasons for wanting to consolidate their debt. In the US, the Department of Education is willing to consolidate student loans as well. Typically, debt consolidators are private.

Usually, in order to consolidate or settle debt, the debtor must have a lawyer, who may also be a debt consolidator. Though people can act as their own attorney, this is not advisable.The job of the debt consolidator is to take a monthly sum from the debtor, and to distribute it to the lenders. The debt consolidator typically asks for a large fee up front to pay for their services.

Ever bought a new car? If so, you’ve fallen for a brutal trap by buying one of the most wicked depreciating assets.

So, what IS a depreciating asset? Simple: a depreciating asset is a resource which loses monetary value over time. A depreciating asset is the opposite of an asset which gains value over time, like a house, or fine wine collection. In a way, many of the things we own are depreciating assets; apples, clothes, and computers all lose value the longer they’ve existed/been exploited. The key word in the previous sentence is “existed” not “own”. Once an article of clothing or an apple becomes yours, it only loses value relative to the merchant’s reservoir of the same thing the longer you use it, which is closely correlated with the time it has existed in your possession. Apples lose value as they ripen to the point of being rotten; clothes lose value as they are worn from brand new to tatters.

As a child, I was blessed with many relatives who realized that my future was more important than the present. Every holiday, many of my relatives would give me a small amount of cash, and also a certificate for a bond. To a child, the bonds were entirely useless– after all, they wouldn’t even be worth the price on the front for many years. As an adult, I’ve realized that bonds were an essential foundation of a nest egg which I was eventually extremely grateful for in a pinch. Let’s look at some of the properties of bonds that make them a good way to invest in your child.

Money in your pocket today is all well and good, but it’s too liquid– too easy to use and lose. In an emergency, the first thing that you will turn to is the money in your bank account, and rightfully so– dollars are, by definition, 100% liquid, and can immediately be transformed into whatever goods or assets or services that you need. Bonds are different, however. Bonds can’t be redeemed before the maturity date without a substantial loss of value, meaning that they’re longer term investments that you will be unwilling to exit before their time has come. This fact means that bonds typically aren’t factored into your gross savings, because they’re not money that you actually have access to for the purpose of financial transactions.

A lot of people suggest that saving money and cutting back on luxuries is the path to wealth. Even the legendary Warren Buffet seems to agree– he claims to eat only a homemade sandwich for lunch.

This line of thought has a few unstated assumptions included in it:

1. Money saved in a bank will accumulate interest at a rate greater than inflation
2. Saving money is the safest form of investment
3. Skimping on luxuries will eventually “add up”