Personal finance defined
Our Personal finance a combination of many factors that involveÂ how we spend and save money. It includes the various financial events that occur, planned or unplanned over a period of time. Personal finance includesÂ our budgets and spending plans, our checking and savings accounts, credit cards, personal and consumer loans, investments and retirement plans, insurance and even our state, local and federal taxes and even charitable donations.
Why are personal finances important?
Personal finances make up a large portion of our lives. We start learning from a very early age the importance of money in our society, therefore it’s especially impotant to understand our own personal finances and how to control them. Planning our personal finances usually consist of five important components which include:Â know your finances,Â setting goals, creating a plan, following the plan, and giving yourself a checkup.