What is personal finance?
I spend a great deal of time every day reading, writing, and thinking about personal finance. In reality, you probably do too, at least the thinking part (and probably the reading part too). Pretty much every decision we make has an impact on our bottom line. Going out or staying in. Pizza or steak. Generic or name brand. If you are reading this then you already know personal finance is important. But personal finance is more than just how you spend your paycheck. It’s also about protecting and growing what you have. There are five categories that go into financial planning. 1. Insurance. Disablilty, life, homeowners/ renters, car, malpractice, did I get them all? Probably not. Are you properly insured? Do you have all the policies you need? Do you have the proper coverage on those policies? Are you paying too much? Are you sure? It can be confusing. We currently have life, homeowners, and car insurance. And even with those basic everyday policies I’m still not sure that we have what w
Though literally speaking, personal finance may mean arranging finance to meet your personal needs, personal finance is the implementation of the rules of financial economics in making personal financial decisions. It takes into account the sources of income or finance including mortgage loans, channels of expenditure, savings for emergencies, old age, payday payments and so on. Personal finance includes keeping income records, budgeting based on those records, preparing and net worth statements, credits, savings, investments, estate planning, insurance, taxes and so on.
Personal finance is the process of effectively managing assets in the possession of an individual or a family. The approach dictates that attention is given to the generation of income for the household, allotting specific amounts of that income to cover all expenses associated with the household, and take action to create reserves of cash and other assets for ongoing financial security. A wide variety of resources can be called upon to aid in the process of personal finance. Basic to the task of personal finance is having a firm grasp on the flow of income into the household. The income is usually in the form of wages or salary from a job, although other forms on income may apply. Interest earned from investments, alimony or child support payments and other forms of compensation all qualify as income. Along with identifying the sources and total amount of income, effective personal finance also requires a clear understanding of the fixed and variable expenses associated with the house
Personal finance 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.
