We know that finance is a private sector or an organization from that we can borrow money for our urgent needs. Personal finance is the term which denotes all in an individual point of major areas in personal finance are income, savings, spending, investing’s, protection. Let us see one by one in detail.
Income is the money that we earn for our monthly work. Nowadays at least one in a family should have an income otherwise it is very difficult to lead a peaceful life. To have a sophisticated life then both the partners in a family should have an income. Income is a basic need that every human being should need. Without income our life in this competitive world cannot exist. There are lot ways we can earn income via by doing business, doing agriculture, selling fruits and vegetables, etc.
Spending is a way of spend our money by buying the basic things, buying groceries, buying some medical products, buying Cosmetic, etc. There are lots of ways we can spend our money. We can also spend our money by traveling to tourist spots. Too much of spending income is not good. Some of may feel better by spending for their basic needs.
Savings is an essential part of our life. Parents save most of their income for their kids. Savings makes our life more bright and colourful. Savings is necessarily needed for the smooth running of our future. After spending if there is some surplus amount exists then we go for savings. There are private and government banks available, we can use those banks for saving money. Banks are really secured and legally acceptable one. We can keep our money in the bank without any hesitation. If we don’t want to keep our earnings in the bank then we keep it with ourselves.
Investment means investing our money in any authorized sector, which may be public or private for purpose of getting interest. Even people keep money in the bank to get a monthly interest, which is also a kind of investment. The main purpose of investing money is to get interest. Even some people may invest their savings in some others start-up company. We can also invest our savings by starting a new business which gives a lot of profit.
Protection is the way of safeguarding our money for future use. Nowadays a lot of fraud organization that they will cheat us. One of the best ways of protecting our money is keeping it in the bank. Protection is the ultimate and final step in personal finance. Properly protecting our money is an important thing. It includes house insurance, car insurance, etc.
What is the various finance system?
Apart from private finance we also have public finance, corporate finance, etc. We have different types of finance system but their main theme is to provide funds for the people. The wealth of a country is majorly determined by the financial status of that country.