Definitions – What is Personal Finance?
There is no definition set in stone to describe what ‘personal finance’ means. As the phrase suggests, it is a personal affair depending on your unique requirements and goals. However, if we were to sum up the broad area of what personal finance is, we would give you the below elaboration;
“Personal finance is the management of the wealth of an individual to match their goals and expectations. This could encompass fields such as income generation, expense management, budgeting, financial planning in the short run. In a medium to long term, an individual could even look at wealth protection and enhancement and even retirement planning.”
If you are like the rest of the 80% of this world’s population, you would have to run the course from income generation all the way until retirement planning. Some of you may have inherited wealth, which still only accounts for the easy part of this whole process. Earning money is rather easy as compared to managing it.
We all look for financial freedom at some point in our lives. To achieve this, you need to equip yourself with the right tools and strategies, and have goals and put it all into practice.
Personal finance goals of each individual could vary drastically. For a college student, their highest priority would be to pay off the student loans. For an entry-level employee, their financial goal could be to start a savings fund for foreign travel. For a father or mother, their personal finance goal at this point could be funding their children’s education. For an experienced employee, they could be looking at starting his own enterprise with an investment or borrowing. These individual cases have to be looked at independently at each stage of their lives. But if you are smart enough, you can plan all of these ahead.
Depending on various unique situations of each and every individual (as described above), their requirements and financial planning strategies will have to differ. This is where the role of an expert financial adviser comes in handy. But with a little bit of self-study, motivation, determination and self-control, you yourself can be the master of your own financial success. Because, only you know what is best for you.