Personal Finance
🤑 PERSONAL FINANCE Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. Personal financial planning process The key component of personal finance is financial planning, which is a dynamic process that requires regular monitoring and re-evaluation. In general, it involves five steps: Assessment : A person's financial situation is assessed by compiling simplified versions of financial statements including balance sheet and income statement. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses. Goal setting : Having multiple goals is common, including a mix of short- and long-term goals. For example, a long-term goal would be