Personal finance
The Personal finance is the application of the principles of finance to the decisions relating to monetary of individual or family. It provides the ways in which the individuals or families can obtain, budget, save and spend money over time, taking into account the various financial risks and the future events. The components of personal finance include credit cards, savings accounts, checking and the consumer loans, investments in the stock market, social security benefits, retirement plans, insurance policies and the income tax management. The most important component of personal financial planning is a dynamic process that requires regular monitoring and reevaluation. There are five ways which needs to be implemented, such as Assessment, goal setting, creating a plan, execution and the monitoring and the reassessment. The assessment of the personal financial situation should be assessed by compiling simplified versions of finance balance sheets and the income statements. The personal balance sheet lists all the values of personal assets along with the personal liabilities. The personal income statement gives the lists of all the personal income and expenses. The setting of goals helps in the direct financial planning. The creating of plan is very important to accomplish the goals, such as reducing unnecessary expenses, investing in the stock market and the increasing one’s employment income. The execution of personal financial plan requires perseverance. The monitoring and reassessment of personal financial plan is important.