Personal finance management, Examples, Definition, Factors, Types
What's Personal Finance?
Personal finance is the financial management that an individual or a family unit performs to budget, save, and spend monetary resources in a controlled manner, taking into account various financial risks and future life events.
When planning personal finances, the individual would take into account the suitability of various banking products (checking accounts, savings accounts, credit cards, and loans), insurance products (health insurance, disability insurance, life insurance, etc.), and investment products (bonds, stocks, real estate, etc.), as well as participation in monitoring and management of credit scores, income taxes, retirement funds and pensions.
What is the meaning of personal finance?
Personal finance is a term used to cover the management of your money, including saving and investing. It also entails budgeting, banking, insurance, mortgages, investments, taxes, retirement planning, and estate planning.
What is the 70/30 rule in personal finance?
With just one number to remember, every time your money comes in you can immediately transfer 30% into your savings or towards your loan repayments. Done! The other 70% covers your essential and nonessential payments. But you don't have to feel restrained by these numbers.
What are the 5 Cs of personal finance?
Called the five Cs of credit, they include capacity, capital, conditions, character, and collateral. There is no regulatory standard that requires the use of the five Cs of credit, but the majority of lenders review most of this information prior to allowing a borrower to take on debt.
What is the 50 30 20 rule in your financial plan?
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.
What are the five basics of personal finance?
There's plenty to learn about personal financial topics, but breaking them down can help simplify things. To start expanding your financial literacy, consider these five areas: budgeting, building and improving credit, saving, borrowing and repaying debt, and investing.
