What is Personal Finance, the areas of financial planning and What are the Best Financial Practices to Follow?
The
post defines personal finance and outlines areas of personal finance, financial
services and the best financial practices.
What is Personal Finance?
Personal finance envisages how you develop a plan to make the best of your income and savings to achieve your individual goals and dreams.
It encompasses managing your income, savings, investments, budgeting, banking, insurance, mortgages, protection, taxes, and retirement planning.
What are the Areas of Financial Planning?
What areas should you include in your financial planning to achieve your personal goals and dreams? The following are the five key areas you need to consider here.
1. Income.
What is your income? Income is the money you earn from your job and other sources like properties, rent, investment dividends, and interests. It is the total cash flow you receive from all sources of your income.
2. Spending
This is the money you spend on expenses like rent, mortgage, shopping, school fees, education, hobbies, entertainment, travel, family support, and contributions.
3. Savings
It is the money left over from your income after you have done your spending. You can set this amount in a savings account to use when a future emergency arrives or your income fluctuates. If no money is left from your salary after you spend, you should discipline your spending to save money to achieve your future plans and dreams.
4. Investing
Investing involves purchasing assets, usually stocks, bonds, mutual funds, and other investments. These investments earn you returns over some risk and grow your wealth over time.
5. Protection.
Protection involves protecting your life, loved ones and assets from unexpected damaging events such as accidents, illness, theft and natural disasters. Protective measures involve life insurance, health insurance, insurance on your properties and assets, retirement and planning.
What are the most essential things in personal financing?
The important aspect of personal financing is cash-flow management, which includes knowing your total income and where every cent goes. This will help you follow through with your financial priorities.
Another aspect is knowing how to manage your finances by becoming more financially disciplined. This will help you meet your financial goals and dreams.
Financial Services.
Deciding the best way to manage your cash flow, investment plans, and protective measures is not always easy. Financial advisers can help you in this area, such as which investment plan helps you grow your asset maximum with the least risk, the competitive insurance plan, and the outstanding retirement plans.
I want to add that it is important to exercise caution when making your final decision. Beware of advertisements that are often glossy and promising beyond the possibilities.
Conclusion
I have explained personal finance, areas of financial planning, financial services and the need for caution in choosing them. If you haven't started managing your financial planning, it is time to start it without delay.
Ref: https://www.newyorklife.com/articles/what-is-personal-finance#anchor1
**
This post was created for the Blogaberry Creative (Monthly) Challenge.
11 comments
I don't think I ever had a goal or dream to fulfill when I grew older so I never saved. Now I'm trying to save as much as possible. Time to invest wisely. Thanks.
ReplyDeleteYou share a common thought among women, who are taken to have less financial responsibilities in the family. But in the modern world, they should consider savings and investments to be serious matters.
DeleteWhat a timely reminder about managing your finances efficiently. I woke up to this quite late in life and suffered for it.I think everyone specially women should pay attention to educating themselves about personal finance and the best practices to follow.
ReplyDeleteI agree with your revelation that women take savings and investments late in life. It is time for all of us to change our mindset towards that.
DeleteYour explanation of personal finance is clear and comprehensive. You've effectively covered the essential areas like income, spending, saving, investing, and protection. I appreciate how you emphasized the importance of financial discipline and the need for caution in choosing financial services. Your advice feels practical and accessible, making the concept of personal finance approachable for readers. Great work!
ReplyDeleteThank you for your deep analysis of my post and savouring each highlight. Keeping good financial practices adds worth, value and peace to our lives.
ReplyDeleteFinancial success requires a long-term strategy with short-term goals; a deliberate plan is essential for security and success. Managing debt is crucial for financial success.
ReplyDeleteThanks for bringing up this important topic.
Being able to manage and understand your finances is really important specially for a women. I really appreciate how your have focus on this and make us understand it much better ways
ReplyDeleteI am ashamed to admit that I am bad with personal finances. I ask my father to invest for me. Your post has motivated me to take my finances in my own hands.
ReplyDeleteThis is such a detailed and helpful post on anyone who wants to understand personal finance. I like how despite its in-depth info, it doesn't seem daunting or confusing. Thanks for this Prasanna.
ReplyDeleteThis is one area where I lag. It's time, I get down to understanding and managing my finances on my own. Your post was a reminder to me to get down to it.
ReplyDeletePost a Comment