Personal Finance

Reviewed by Apoorva | Updated on Aug 27, 2020

Introduction

Personal finance, as a term, covers the concepts of managing your money, saving, and investing. It also includes banking, budgeting, mortgages, investments, insurance, retirement planning, and tax planning. One can consider that personal finance comprises the entire industry that provides financial services to individuals and advises them about financial and investment opportunities.

Personal finance, as a term, covers the concepts of managing your money, saving, and investing. It also includes banking, budgeting, mortgages, investments, insurance, retirement planning, and tax planning. One can consider that personal finance comprises the entire industry that provides financial services to individuals and advises them about financial and investment opportunities.

What is Personal Finance?

Personal finance is mostly about realising personal financial goals, whether it's saving enough for short-term financial needs, planning for retirement, or saving for your child's college education. Mostly, it depends on your income, expenses, living requirements, and individual goals, and the plan you make to fulfill those goals within your financial constraints.

Why is Personal Finance important?

It's very important to become financially literate in order to make the most of your income and savings. Financial literacy helps you distinguish between good and bad financial advice and make savvy decisions.

Few schools offer courses on managing your money, so it is important to learn the basics through free online articles, courses, blogs, podcasts, or at the library.

The new concept, smart personal finance involves developing strategies that include budgeting, creating an emergency fund, paying off debt, using credit cards wisely, saving for retirement, and more.

Tips and tricks for gaining maximum benefits

  1. *Security: *Keeping all your money at home may not be safe as burglars may break into your house when you expect it the least. All your efforts and hard work may go in vain in the case of disasters such as floods and fire. Therefore, the most secure place to put your money is a bank account. As long as you choose a genuine, legitimate bank, the idea of protecting your money is sorted. There are banks that provide guarantee for your money even at the times of financial crisis.
  2. Convenience: Money kept in a bank account can be accessed from anywhere at any time with the many possible options such as bank branch, ATM, debit card, online banking, and others. Money can be instantly transferred to anyone through numerous ways.
  3. Savings and Investments: Banking offers you a variety of ways to save and invest to grow wealth. There are valuable options that cater to all your needs beyond just the savings and current accounts. Savings can help keep you afloat at the times of financial crisis or sudden unemployment. On the other hand, investments in mutual funds can help you grow wealth exponentially over time.