What is Personal Finance?
Personal Finance is everything in our life that involves money. Personal finance is all about arranging the money for our expenses, save it, and invest it to live comfortably, having financial security, and achieve life goals. Different persons have different financial goals. Goals are the desires you want to accomplish in your life. For example, getting admission in best college, buying a car, purchasing a new house and starting a business are goals.
Need for Personal Finance Planning
Planning your personal finances is important as it helps you accomplish your life goals and desires. Achieving goals bring happiness to desirer and his family members. It strengthens our confidence when our goals are achieved thread by thread. And happiness and confidence play vital role in living luxurious and comfortable life.
- It helps in arranging money for better living
- It helps in accomplishing goals in much easier way
- Reduces Chances of debt even in tough times
- Increases Confidence and Happiness in Life
- Builds safety and security for Family
- Lowers Stress and bring prosperity
Ingredients of Personal Finance
There are four major ingredients of Personal finance planning viz Income, Spends, Savings, Investments and Protection. Each ingredient pose equal weight in planning and require thorough attention for quick and easy achievement of our life goals. Ingredients are shown in the pie chart given below-
