Wikipedia defines 'Personal Finance" as follows:
"Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events."
Seeing this definition may make you realize that you have overlooked making such a plan on too many occasions if, indeed, you didn't. And so you decide to ensure that things will not be the same again.
What it means in real terms
To budget, save and spend are actions taken with regard to "monetary resources".
The monetary resources can include the salary you get paid, insurance claims, retirement benefits, investment proceeds, loans, profits generated, and so on.
If you do not budget and or save, the money may get exhausted very fast. And if there is no longer any inward flow of money, then life can become hard. This can only mean one thing: "Everyone needs to budget and save a portion of whatever he or she earns."
The little that you save now will save the day for you in the future.
Financial Risks
These include the unstable value of money, the value of your investment in shares, and so on.
If you have extra money, buy real property. If you invest in shares, look for the stable ones with assured returns.
Future Life Events
These refers to events when you are no longer young, when you are no longer working (or you decide to retire young) or occasions of sickness.
Luck
Some people depend on luck. They get addicted to some form of gambling. And when they win something, they conclude that they are lucky and may get luckier in the future. They long for the day when they strike a jackpot.
But depending on "LUCK" can be classified as a risk - risky behavior - because you are not sure whether you get a return or not. You may be lucky every now and then. It is often said that in most cases the winnings will not come up to the amount spent.
Save what little you can
Whatever amount you earn, save a little of every amount received. It has been said that the amount you receive (salary, investment proceeds, etc) is not as important as the amount you save. It does not matter how much you save. Robert Kiyosaki followed this principle and became rich.
So save whatever you can. And invest your hard-earned money in something which can help you make ends meet in the future. We may not end up very rich but that little money will make life more comfortable.
"Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events."
Seeing this definition may make you realize that you have overlooked making such a plan on too many occasions if, indeed, you didn't. And so you decide to ensure that things will not be the same again.
What it means in real terms
To budget, save and spend are actions taken with regard to "monetary resources".
The monetary resources can include the salary you get paid, insurance claims, retirement benefits, investment proceeds, loans, profits generated, and so on.
If you do not budget and or save, the money may get exhausted very fast. And if there is no longer any inward flow of money, then life can become hard. This can only mean one thing: "Everyone needs to budget and save a portion of whatever he or she earns."
The little that you save now will save the day for you in the future.
Financial Risks
These include the unstable value of money, the value of your investment in shares, and so on.
If you have extra money, buy real property. If you invest in shares, look for the stable ones with assured returns.
Future Life Events
These refers to events when you are no longer young, when you are no longer working (or you decide to retire young) or occasions of sickness.
Luck
Some people depend on luck. They get addicted to some form of gambling. And when they win something, they conclude that they are lucky and may get luckier in the future. They long for the day when they strike a jackpot.
But depending on "LUCK" can be classified as a risk - risky behavior - because you are not sure whether you get a return or not. You may be lucky every now and then. It is often said that in most cases the winnings will not come up to the amount spent.
Save what little you can
Whatever amount you earn, save a little of every amount received. It has been said that the amount you receive (salary, investment proceeds, etc) is not as important as the amount you save. It does not matter how much you save. Robert Kiyosaki followed this principle and became rich.
So save whatever you can. And invest your hard-earned money in something which can help you make ends meet in the future. We may not end up very rich but that little money will make life more comfortable.
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