Erziehung » Introduction of personal finance

Personal finance is all about how individuals and households, rather than companies or organizations, manage their income, spending, saving, and investments. Financial management is how much to spend, budget, save, invest, plan for retirement, and other future events. Personal finance may refer to the whole field from a person's point of view or that of the sector that provides people and their families with financial service. There are five main personal finance areas like income, spending, saving, investing, and protection. First of all, income as income is the money we receive, and then we use them to buy things, support loved ones, pay bills, save, and invest. The second one is spending, and this is the opposite of income, and you can also call spending an expenditure. Spending includes all those features or bills that take money from us. Then comes saving as if you have an income higher than the spending, then the money that exceeds spending is called saving. Ordinary people say this money as saving, and economist says it is deferred consumption. The money saved then you can use that money in investing as if you can buy stocks and hope that it would raise its price. Apart from stock, there are other places to invest which are considered ideal for investing as real estate, mutual funds, bonds, or commodities. The last one is protection, as this refers to guarding against adverse or unexpected events and protecting yourself and your loved one's financial interest. Examples are that house insurance, car insurance, insurance for a person, etc.

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