Personal finance is the implementation of the principles of finance to fiscal decisions of a family unit or an individual. Personal finance shows the path to individuals or family, which involves different financial risks and future life events like budget, saving and spending monetary resources over time. Consumer loans, credit cards, retirement plans, investment in the stock market, checking and saving income tax management, and insurance policies are same elements of personal finance.
Rules of personal finance:
Having ability of maintaining money and making proper financial decisions with own common sense and is the first rule of personal finance. Money management and finance are not magic, and not so difficult. Following the others’ advice and developing self common sense regarding money skills is responsible for one’s personal financial growth.
Spending less than earning is the second rule. Setting long term goals for development with good financial habits and discipline, all comes under personal basics. Aiming success with steady focus on minimizing monthly spending and maximizing earnings. This must be steady for life long, by keeping maximum efforts.
Understanding how money works is the next basic rule that is important in life. Understanding the different financial instruments, successful business practices which exist today, investment tools can be done by allotting a little time in life. One should be aware of all the options available in order to maintain good personal finance record.