The Four Principles of Personal Finance

The Four Principles of Personal Finance

The four principles of personal finance can help you maintain financial stability. Not only that but sticking to these core financial principles could help you accomplish your financial goals. Almost everyone has financial goals, whether this is moving into a home or paying off debt. However, if you are dealing with bankruptcy, you may want to ask a Tullahoma bankruptcy attorney for help.


The four principles of finance are income, savings, spending, and investing. Following these core principles of personal finance can help you maintain your finances at a healthy level. In many cases, these principles can help people build wealth over time.

Almost everyone starts building their personal finances with income. Having a secure job is the key to building your income level fast. Some people have to work multiple jobs, side jobs, and odd jobs to build up financial stability. Others may have to go through years of additional training before securing a healthy level of income.

Income serves as the basis of the other three financial principles. Once you have income, you can start saving. What saving money does is gives you more money to use in the future. The more you save now, the more you can escape financial emergencies, afford expensive purchases, and work toward financial goals.

Spending serves to reward yourself for working hard at your job. What spending does is give you the motivation to make more money or save more if you run out of money. Controlling spending is vital for financial stability.

At the same time, spending money through investing can build wealth. Investing in stocks, real estate, and other investments can build substantial funds in the future. The problem is the risk associated with investing in something that will make you lose money.


Saving and investing seem to contradict each other. However, learning how to invest in smart ways could potentially help you save more. You can also save more money effectively by budgeting. Creating a budgeting plan can help you control spending to build enormous wealth for your future.

A budgeting plan starts by adding up your monthly expenses and subtracting this from your monthly income. Use this to estimate future spending and the money you will have leftover each month. When you want to save or plan financial goals, you can use these monthly estimates to know what expenses to cut.

When it comes to investing tips, the most important ones to keep in mind are risk versus return. Learn about which bonds or stocks are risky and which ones are worth the risk. Government bonds and certificates of deposit tend to be safer than stocks. You can base your decisions on your income and level of savings.


You may not have to face bankruptcy alone. Do not hesitate to call us at Tom Bible Law today at (423) 690-7712 for a consultation. Our experienced Tennessee bankruptcy lawyers can work with you to navigate through your bankruptcy situation. We serve clients in the Tennessee cities of Chattanooga and Tullahoma.

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