Personal finance is a term that refers to personal money management. Things like budget, investment savings, banking, security, insurance, mortgage, belong to a personal budget or finance class.

Financial security is not a top science. It is easy, but it requires active and conservative thinking. Here are 5 rules and principles that apply to everyone on the planet when it comes to their financial well-being and financial health.

Most financial tips and tricks you can find here, such as contribution methods and savings strategies, are based on various assumptions about which counseling can benefit.

In this section, we examine the five most important areas or "pillars" of personal finance that you need to understand to keep your finances in balance.

1. Income Or inflow


The main or first column is your payment or entry, and the entry is in cash. (You can understand that, okay?) This is usually related to your paycheck. However, much remains to be done.

Inputs can be cash from stocks you sell, pensions, or more support (if you work for the ministry). Be it gold, comics, or share can also be.

In fact, Pokémon cards can be seen as tickets. However, you are basically receiving compensation (if you can convert it to cash). This can be seen as income or payment.

Your payment is one of the main factors that will affect your financial condition. Your family's salary directly affects your lifestyle and financial independence.

Here are some common payment methods:

  • Salary / Wages
  • Contract price
  • Benefit
  • Income from rent
  • Pension

As mentioned above, your salary has the most impact on your financial situation, and increasing it will improve all aspects of your financial situation!

2. Expense


The expense classification includes ways to spend money without making a profit. No investment is included in this category.

Some types of expenses include:

  • Fuel for your car
  • Rent / Mortgage
  • Food
  • Trip
  • Electricity
  • Entertainment

Its cost reduces the amount of money you still invest and in this sense, it creates wealth.

It is also important that you manage your money properly as you are expected to roll over your payments to achieve financial independence.


No matter how much money you make, if you cannot limit your spending, you will continue to have bad times.

Good ways to manage your money are a way to financial freedom and security.

3. Debt Management


The loan is obtained from all funds that are repaid in bulk, subject to terms and conditions, and agreed with the credit professional.

Examples of common debts are auto loans, credit card debt, student loans, mortgages, etc. In rare cases, the loan may be appreciated (if controlled). But for the most part, it is just bad.

Why? More importantly, it limits your choices about what you can do, especially what you need and want to do, but not necessarily. The value of money and fortune is also falling.

4. Investment


Investment is one way to increase your capital. This is not limited to simply buying trading stocks and mutual funds or real estate or starting a business.

Whenever you engage in activities that add value to your fund, invest more.

For example, getting paid regularly, sticking to a financial plan, or constantly improving your skills to keep up with demand in your area can be an investment.


The truth is whether you are raising your expenses, reducing your savings, or investing in your property insurance… In short, you lead them all for future gains and to increase your wealth. are doing...

5. Financial Security


Personal financial security refers to the things you can use to protect yourself from unexpected negative events that may arise.

Examples of security schemes:

Emergency Savings Account:- In case of job loss or crisis that prevents you from maintaining a continuous income/payment.

Insurance:- Life, Car, Home, Social Security, Disability, Property, etc.

Avoid identity theft and reduce the security of your property, net worth, and more.

We all need to consider proper estate planning and protection.

It is recommended that you seek professional advice when developing a safety plan for yourself and your family.

Conclusion


Things like budget, investment savings, banking, security, insurance, mortgage, belong to a personal budget or finance class. As mentioned above, your salary has the most impact on your financial situation, and increasing it will improve all aspects of your financial situation! Good ways to manage your money are a way to financial freedom and security.