Simply put, it is an unsecured loan taken by individuals from a bank or a non-banking financial company (NBFC) to meet their personal needs. It is provided on the basis of key criteria such as income level, credit and employment history, repayment capacity, etc.
Personal finance is about meeting personal financial goals, whether it’s having enough for short-term financial needs, planning for retirement, or saving for your child’s college education.
It all depends on your income, expenses, living requirements, and individual goals and desires — and coming up with a plan to fulfill those needs within your financial constraints. But to make the most of your income and savings it’s important to become financially literate, so you can distinguish between good and bad advice and make savvy decisions.
However, like any other loan, defaulting on a personal loan is not good as it would reflect in your credit report and cause problems when you apply for credit cards or other loans in future.
Do you find yourself worrying over:
- Whether you’ll be able to afford groceries this month
- What the total bill will be at a restaurant (and trying to hide your anxiety)
- Whether you’ll ever have “enough” saved
- Becoming destitute if you can’t get a job
- Having too much money, and how that would be bad or never happen for you — so you’ve given up trying to get a hold on your current financial situation
- If so, then take a breath before reading the rest of our tips to help you on your journey with overcoming your negative feelings about finances.
United Arab Emirates
Credit Score in #UAE is issued by #AECB, a Federal Government company, Individual Credit Score is a three-digit number used predicts the likelihood of an individual making his loan and credit card payments on time, based on previous credit and payment behavior.
The Credit Score number in UAE ranges from 300 to 900. A low score indicates a higher risk, whereas a higher score indicates a lower risk.
Issuer of Credit Score is Al Etihad Credit Bureau. its a Public Joint Stock Company wholly owned by the UAE Federal Government. As per UAE Federal Law No. (6) of 2010 concerning Credit Information, the company is mandated to regularly collect credit information from financial and non-financial institutions in the UAE.
Al Etihad Credit Bureau aggregates and analyzes this data to calculate Credit Scores and produce Credit Reports that are made available to individuals and companies in the UAE.
Credit Scoring is relatively new in UAE, But All major banks started using the same which shows its high importance hence.
Personal Finance Principles
Once you’ve established some fundamental procedures, you can start thinking about philosophy. The key to getting your finances on the right track isn’t about learning a new set of skills. Rather, it’s about learning that the principles that contribute to success in business and your career work just as well in personal money management. The three key principles are prioritization, assessment, and restraint.
Prioritizing means that you’re able to look at your finances, discern what keeps the money flowing in, and make sure you stay focused on those efforts.
Assessment is the key skill that keeps professionals from spreading themselves too thin. Ambitious individuals always have a list of ideas about other ways they can hit it big, whether it is a side business or an investment idea. While there is absolutely a place and time for taking a flyer, running your finances like a business means stepping back and truly assessing the potential costs and benefits of any new venture.
Restraint is that final big-picture skill of successful business management that must be applied to personal finances. Time and time again, financial planners sit down with successful people who somehow still manage to spend more than they make. Earning AED250,000 per year won’t do you much good if you spend AED275,000 annually. Learning to restrain spending on non-wealth-building assets until after you’ve met your monthly savings or debt-reduction goals is crucial in building net worth.
Few schools offer courses in managing your money, which means most of us will need to get our personal finance education from our parents (if we’re lucky) or pick it up ourselves. Fortunately, you don’t have to spend much money to find out how to better manage it. You can learn everything you need to know for free online and in library books. Almost all media publications regularly dole out personal finance advice, too.
The Importance of Learning Personal Finance Early in Life
An additional year of schooling increases the probability of having an investment income by 4.4% for whites and 1.7% for blacks (Harvard Business School).
A statistically significant association was determined between negative financial habits, such as gambling among Australian youth, and the influence of peers and parents (Science Direct).
“Without financial literacy, divorce rates soar, families rupture, and women stay with abusive men for financial security. A lack of jobs contributes to riots and illegal activity. Name any situation and it goes back to money. We need to focus on poverty eradication.” — John Hope Bryant, CEO of Operation HOPE
“Academic qualifications are important and so is financial education. They’re both important and schools are forgetting one of them.” — Robert Kiyosaki, founder of the Rich Dad Company
“Financial literacy is an issue that should command our attention because many Americans are not adequately organizing finances for their education, healthcare and retirement.” — Ron Lewis, former United States Representative,
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