What is Personal Finance?

You often hear the word personal finance get thrown around a lot but do you really know what it means? More importantly, how can you expect to improve your personal financial situation amidst all the financial challenges and limitations given today’s economy? Gaining knowledge from a personal finance informational blog is one way. With debt, expenses, and limited income to deal with, personal finance is a daily struggle that one has to overcome in order to be more at ease with your financial situation.

Simply put, personal finance is defined as “All financial decisions and activities of an individual which could include budgeting, insurance, savings, investing, debt servicing, mortgages and many others. Financial planning generally involves analyzing your current financial position and predicting short-term and long-term needs.” When you talk about personal finance, you are essentially looking at how your current income can be best utilized to serve all your other needs.

Amongst the biggest challenges in personal finance are debt management, budgeting, and making sound investment decisions. Today, there are many individuals saddled with debt and do not know how best to pay off these debts. The common forms of debt include credit card debt, mortgage debts, and even payday loans to make ends meet. Other loans from private and public agencies are also responsible for inflating date numbers all over the world.

Personal finance seeks to find a balance between one’s income and expenses in order to reduce and then pay off all of these debts. This is where the practice of budgeting comes into the fore. In other cases where more serious debts are involved, debt management or debt consolidation may become options that have to be assessed.

Investment decisions are also an area in personal finance that demands attention and focus. No one can hope to be truly financially independent if they don’t make the right investments to improve their passive income. Passive income, in simple terms, is income that you don’t have to work hard for because the money is doing the work for you. Contrast this with active income like your monthly wage which does not come in when you choose to not go to work.

Overall, personal finance is an extensive field that deals with many concerns of the individual or the household. When put into good use, it can help families and individuals find personal financial freedom, overcome their circumstances, and transition into a more stress-free form of living where money is not a major concern. This is the ultimate goal of personal finance, and one that all individuals and families should aspire to so no one has to be tortured by the stresses of debt, insufficient income, and foreclosures among many other unfavorable monetary consequences.

13 Responses to “What is Personal Finance?”

  1. Kacy 2 April 2013 at 6:58 am Permalink

    I’ve read that you will find great shape of private Finance Debt and that we people use these kinds of financial obligations within our daily routine. Can there be anybody who are able to please answer this question of mine.

  2. Joel 4 April 2013 at 7:10 pm Permalink

    I am considering beginning an individual finance blog. The kinds of subjects I intend to cover are: budgeting, building wealth, risk management, resource management, along with other subjects that, of course, could be a little “dry” to a lot of people. I wish to attract a multitude of people, not only bean-counters I’d want it to be for everybody.

    What can it take to help you read your blog like this? Humor? Some additional, more interesting subjects? Bios of wealthy people? Contests?

  3. Jimmy 30 April 2013 at 11:04 am Permalink

    i’ve 20 credits of math left and my teacher offered me a choice between personal finance and geometry. he stated which i must do personal finance before geometry however i type of desired to do geometry.. idk what is your opinion?

  4. Dione 9 May 2013 at 1:02 pm Permalink

    If there is one book or perhaps a couple of books about personal finance for example “Wealthy Father, poor father” and “Think and grow wealthy” that actually transformed your existence into understanding money and trading what exactly are they ?

    I am talking about if there is a magazine that actually described stuff and managed to get obvious about trading and getting money meet your needs, what will it be ?

  5. Lacy 20 May 2013 at 2:25 am Permalink

    I must choose classes for next semester and that i saw personal finance being an option. Will it require lots of difficult math and confusing terms? Thanks!

  6. Selina 20 May 2013 at 4:43 pm Permalink

    Personal finance was slightly trained in my experience by my parents or perhaps in school. I needed to learn to balance a chequebook, the risks of charge cards contributing to saving all by myself. What personal finance lesson do you want you’re trained inside your more youthful years & wouldso would which have transformed your present economic status?

  7. Shawn 21 May 2013 at 2:22 am Permalink

    I’m searching for an individual finance software that’s easy to use, safe which can download information in the banks websites. I haven’t got time for you to sit and enter every transactions and so i want something which works using the websites. Any ideas??

  8. Hoa 21 May 2013 at 11:43 am Permalink

    My research subject is coping with personal financing and budgeting – controlling a person’s own money, and using their personal expenses, etc…. essentially the issues they encounter, however i am concentrating on hospital staff. 10 points would go to the very best answer.

  9. Sally 23 May 2013 at 4:19 am Permalink

    I’m playing a game title call virtual business: personal finance for DECA in order to obtain a scholarship. I simply ended the very first year and today i have to understand how to file the taxes on the overall game, however i have no idea how. Can anybody let me know how, or at best let me know where i’m able to discover how? Help!!!

  10. Minnie 16 June 2013 at 3:54 pm Permalink

    I have to compete for the Pennsylvania FBLA conference in Personal Finance in two weeks. If anyone took this test in the past couple of years, I would be greatly obliged.

  11. Perry 16 June 2013 at 10:02 pm Permalink

    I understand Microsoft Money and other alike softwares are available, but I am wondering what individuals feel is easily the most effective and efficient personal finance storeOrprogram.

    Interesting input!

  12. Domenic 29 June 2013 at 6:41 pm Permalink

    I’m writing articles that is titled, “Teaching the youthful personal finance- who ought to be responsible”. After finishing the content a week ago the outlet continues to be nagging me thus meaning if only to possess a brand new one. An estimate or a sentence would do nicely. Keep in mind, i literally mean the very first two lines.

  13. Sabrina 14 July 2013 at 1:52 am Permalink

    I’ve been hunting for a good free personal finance software which has both nice asthetics and good usability. Any suggestions?

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