”It’s not your salary that makes you rich; it’s your spending habits.”

Charles A Jaffe once said ,

It requires strenuous efforts to govern money rather than to earn it. It is truly said that tell your money what to do or it will leave. How to tell your money? What to tell you about your money? These questions are to be responded to through ‘PERSONAL FINANCE’. 

PERSONAL FINANCE ? WHAT IT IS ? 

Personal finance circumscribes the whole shooting match of matters related to money.

Personal finance simply refers to the management or governance of an individual’s finances. In addition to that an individual explores savings, investing, budgeting, taxation etc.

Through personal finance one is being edified about every single inflow and outflow of monetary items. As Benjamin Franklin said, “ Beware of little expenses. A small leak will sink a great ship.”

WHY SHOULD SOMEONE CARE ABOUT PERSONAL FINANCE ?

Where do we see ourselves in the future? Maybe buying a home , buying our car we are passionate about or maybe doing shopping without angst about the price tags. How will someone hold that position in the future if in the present that individual is heaped with debts and isn’t able to save or invest anything?

We all will have to reap the fruits of our financial decisions years from now , either we will have to pay for it or we will be rewarded for it.

COMPONENTS OF PERSONAL FINANCE :

• ESTATE PLANNING – Estate planning can be simplified as the taking up of the assets/ok investments by the next generation. An estate is the various properties and assets you own when you die. A good estate plan comprises of – Real estate ( house )

• Bank account ( of your name )
• Personal property (Jewelry)
• Life insurance
• Stocks and securities

• RETIREMENT PLANNING – Retirement planning is much neglected during young adulthood as a young individual does not have much money to invest but it is to be understood that they have enough time to let their small investments mature. Stages through which a retirement plan can be manipulated as per the needs- 

• Recognize your earnings 
• Recognize your expenses
• Match up your incoming money with the estimated expenses after retirement

• RISK MANAGEMENT ( INSURANCE PLANNING):

Insurance works as a protecting shield for our loved ones that protects them from future contingency in your absence. 

Insurance planning is the crucial aspect of financial planning as it fortifies us from unexpected emergencies. Some must have insurances includes- 

• Health insurance
• Term insurance
• Motor insurance

• CASH FLOW MANAGEMENT- It refers to the management of inflow and outflow of money.

Not realising where all your money drained? Can’t  account for some expenses? 

If the answer is yes then there is an acute need to include budgeting (cash flow management) in your financial plan.

• TAX PLANNING – It allows a financial plan to be tax efficient, that means being able to pay minimum tax ( legally) by the means of exemptions, deductions and benefits of different plans .

By contemplating these components of personal finance one can draw up a wholesome financial plan.

Taking the first step completes the half of your journey, therefore here are some basic words for beginners who want to start Personal financing- 

• Must get benefitted by compounding.
• INVEST than SPEND.
• Stay debt free. Declutter all your debts first.
• Insure yourself. You are important.
• Make emergency funds. Life is unpredictable.
• Be very cautious with the use of CREDIT CARDS. All that shines is not gold.