What is personal finance? And Why does it matter?
Those are two very interesting and important questions to ask as one either begins their life as adults, or being asking questions they’ve never approached before. For the past five months or so, this blog has predominantly been centered around personal finance, both the investing side, as well as the money management side.
I realized that before I continue this journey with all of you, I need to take a moment to explain what Personal finance actually is. Personal finance clearly deals with how individuals manage their money.
While the topic briefly touches on the analysis and performance of businesses and organizations for investment purposes, it predominantly centers around the individuals’ approach to managing each dollar in and each dollar out.
Personal finance answers questions like:
What are my financial goals? What use do I have for money? What should my investment approach be? How much do I need to be saving? How large should my house purchase be? Should I buy this trinket or save the money?
Many of these questions are simply answered through quiet reflection or by asking your friends and family for feedback. However, some of these more complex questions like how to invest your money, or how to craft a financial plan can often be better answered by a financial advisor.
Why does personal finance matter?
There are three basic reasons why you should pay attention to your finances:
1. Money has impact
2. Money can be complicated
3. Money is emotional
While we of course don’t have the time to go into the details of Personal Finance in one blog post, I hope this gives you a great picture of what this topic is all about.