A basic understanding of financial concepts and personal finance is essential to manage your money well. Whether you are paying your bills or doing your taxes or saving for a home, financial literacy will help you make better decisions at every step of your financial journey.
Money management is an important skill that will benefit you throughout your life so it is important that you understand the basics of personal finance and gradually build your knowledge from there.
In this chapter, we will aim to understand the basics of personal finance along with its different elements and know some of the principles of personal finance.
What is Personal Finance?
Personal finance is the process of planning, organizing and managing money in one’s life. Personal finance includes savings, budgeting, investing, credit management, insurance, retirement and tax planning.
The primary aim of personal finance is to help you reach your financial goals, both short-term (buying a car, or a gadget) and long-term (planning for retirement). All your financial goals depend on your income, expenses, future desires and dreams and planning your personal finance will help you to fulfill all your financial goals.