Personal finance

Personal finance is the application of the principles of financial economics to an individual's (or a family's) financial decisions. It asks, "How much money will you need at various points in the future?" and "How do you go about getting that money?". It deals with questions like:

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• What is my annual income?
• How can I increase my income?
• What are my annual expenses?
• How can I reduce my expenses?
• How do I best budget my available income each year?
• How much money can I save each year?
• How much will I accumulate over my working lifetime?
• Will this be enough to support me after I retire?
• How much will it cost each year after I retire?
• How many years will I be retired?
• How do I pay for large expenses (like children's education, or buying a house) when they arise?
• How can I reduce my financial risk? Through insurance? Through pensions?
• What do I do with the savings that I have accumulated? What is the best way of investing this capital?
• How much debt do I have? What are the monthly debt servicing payments?
• What is the value of my assets?
• What effect will taxes have on these issues?
• How do I minimize the taxes I must pay?
• What effect will inflation have on these issues?
• How will these issues change as I go through the stages of my life?
 
Personal finance: A Question of Time ►