Are youready to get a handle on your finances and prepare for your future? The first step is understanding personal finance.
According to Investopedia, “Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings and retirement planning.”Understanding thesetermscan help youbetter control your funds and prepare for future financial success.
Important Personal Finance Terms
Budgeting— Establishing a budget is an important part of managing your personal finances. A budget helps you keep trackof your spending patterns and plan how you are going to spend your income each month. Start by calculating your total monthly income, then use MyMoney to track all of your expenses each month. This will help you see where your money is going, where you can save and where you can spend a little extra each month.
Insurance — Purchasing insurance is another large part of managing your personal finances. According to Investopedia, bypurchasing insurance— like health insurance, life insurance and car insurance and homeowner’s insurance— you are protecting yourself from risk and ensuring the security of yourmaterial standing.
Savings — Whether you’re in your 20s and just starting to learn about personal finances, or are in your 30s and looking to better manage your funds, one thing is certain, you should be saving for the future. It is important to establish an emergency savings fund to coveranyfinancial hardships anda retirement savings plan to help you in the future.
Articles onPersonal Finance
For more information on personal finances, check out these articles from First Bank’sFinancial Education Center:
- Buying Your First New Car: What to Know
- Simplifying the Home Buying Process
- How to Avoid Paying Too Much for a House
- 10 “Life Hacks” That Will Save You Money
- 5 Tips for Safely Managing Your Finances Online
Source:
Investopedia:http://www.investopedia.com/terms/p/personalfinance.asp#ixzz40uIYOSwU
