What Is Personal Finance

Personal Finance plays a very important role in a person’s life, because we know that in today’s world only earning more money cannot make us rich, but how we are spending the money we earn. And how to spend money so that we become financially strong in future, we learn all this in personal finance.

Personal Finance:

There is a kind of system or process, through which we can manage our money well.
Or we can say that when a family or a person makes such plans to spend their money properly, so that they can save their money for the future, and save their money Can invest properly, so that the money invested becomes wealth of the person/family in future.

All types of activities done by a person related to money come under personal finance.

for example :-

1. Budgeting
2. Banking
3. Insurance
4. Real Estate Planning
5. Mortgage
6. investments
7. Retirement Planning
8. Tax planning

Now we will understand all these activities in detail:-

Budgeting means in Personal Finance: –

Budgeting means making a budget, now understand the budget in more simple language, then the budget is a statement, in which complete details are given, how much money we have and how many projects we have , How much money we have to spend on Particular project, how much money we have to save from the saving money, how much money we have to invest in stocks, business, market, etc., so that our financial growth also continues.

Now let’s understand what budgeting means, with Personal Finance: Budget We have understood what is the definition of budget, so when we make budget for our family’s expenses, then we will call this budget , budget for personal finance. .

Personal finance budget is made according to the monthly income of our household.
In this budget, how much money do we have for the whole month (i.e. monthly salary), now in this budget, we spend ration for our house, if there are children, then children’s school fees, if they need clothes, money for them, If we have taken insurance then its monthly deposit, if house is on rent then monthly rent of house, if we have taken loan then also monthly deposit of loan, and how much we have to save, how much we have to invest in market/business, stocks Is . And also when we write the complete details of all the expenses on a paper, or save these details anywhere, we will call this type of statement as personal finance budget or we call this type of budget as personal budget or family budget. .

Banking in Personal finance:-

Banking means depositing money in the bank to make savings for future, which is a very safe zone for our money.

Insurance: –

Some expenses are to keep our property / person healthy / safe, such as we insure our health insurance, life insurance, and to keep the things we need safe, such as car insurance, bike Insurance All types of insurance that a person gets done. How to manage insurance money also comes under personal finance.

Real-Estate Planning: –

In today’s time, everyone wants to have their own house or own land, so to achieve this goal, we have to understand finance. And if you learn personal finance, you can achieve all these goals.

Mortgage: –

Mortgage in Hindi language means to borrow / take a loan or take a loan.
If a person has taken a loan, then after meeting all his expenses, how to save money for the EMI of the loan, or where to put the money taken from the loan so that it will be profitable, all this management is also personal. belongs to finance.

Investment: –

In simple language, investment means to invest our money in such a place, from where we get more in return than the money invested, that is, we get profit from that money.
Now where should we invest our money, in today’s time we can invest our money in the stock market, we are going to start a business, we can take investment equity from any company so that in future when the company will grow The price of our share will also increase.

All this also comes under finance. And when such process is done by a person then it comes under personal finance.

Retirement Planning: –

Here two meanings come out of the word Retirement, Retirement which a govt employee gets after 60 years,
And the second Retirement flows when a person does not have the ability to work.

Now we understand Retirement Planning, to invest or save our money in such a way that even after retirement our life does not face any money related shortage. Or don’t let money fall short.

When a person does this type of planning, even then we call it personal finance.

Tax Planning: –

We all know that we have to pay a tax to the government according to our income, which we call income tax.

Now another expense which we have to pay year after year, how to deposit the tax money, for that also we have to do finance planning.