1IntroductionWhether it is a personal loan, a mortgage, or in this circumstance, a credit finance for a vehicle, debt is an every day expense in which we all at some stage succumb to. With most necessities in life being out of most peoples price range, it is only through personal finance in which it makes it possible to afford some of life's requirements such as houses and cars.Dr Harry Zaphir, Professor of Business and business management recommended at a recent conference held at the Queensland University of Technology that the one tool in which to survive in business today is not to spend more money than you earn, and to only ever rely on "good" debt which can only increase in time (Dr Harry Zaphir, 2009). It is overwhelming debt which leads to bankruptcy, possibly resulting in for closure of assets until the sum of money owed is paid off which also leaves a bad credit rating next to your names ruining the chance of applying for future personal finance. With the help of a budget, we will make it possible for Sally to pay off a $4000 credit finance of a vehicle in the course of the next 2 years and recommend suitable avenues for her to invest her inheritance.2Personal FinancingPersonal finance as described by google define is "The application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events." Things such as savings accounts, investment schemes, insurance coverages and hospital benefits are all forms of personal finance to which people base monetary matters on.2.1Personal Financing - Loans vs. Credit CardsAs stated in the following paragraph, there are many ways in which to receive personal financing, but in particular we will be looking at personal loans and credit cards. A personal loan as described by dictionary.com, is "a loan that establishes consumer credit that is granted for personal use; usually unsecured and based on the borrower's integrity and ability to pay," whereas a credit card is "A card that entitles a person to make purchases on credit."2.2Advantages and Disadvantages of Credit Cards and LoansAs seen in APPENDIX A, there is a detailed description of the disadvantages and advantages of both credit card and personal loan finance. In observation, the credit card is a "buy now pay later" aspect of debt which is a lot more lenient as opposed to a personal loan which is a more safeguarded measure of credit that is both flexible and harder to obtain level of personal financing. The fault with credits cards are that it is a much easier way to dig yourself into debt, what with the freedom and ease to spend possibly more money than you earn as opposed to loans where it is on a predetermined amount.2.3Comparison between Credit Cards and Personal LoansWith credit cards, there is always the temptation to overspend as...
