Personal finance literally means integrating the approaches by an individual or a family of gaining the financial resources overtime and allocating it in the best possible way. Personal finance is a sort of planning where an individual figures out his or her current position and devise a plan to make it better. In this process, at first we need to access our present financial situation, then we have to work on setting goals and creating tactics to achieve these. Then we have to execute the plan and make a justification of the outcome. Then if the process shows positive financial position we have to scrutinize the whole process to make it better, otherwise we have to come up with a new one.
If we simplify the process of personal finance then it becomes a technique to focus on the stuffs that tend have more and more as well as the stuffs that we want to get rid of. Generally the earlier one includes income and asset. These are the two stuffs that we aim to maximize. Sometimes in case of assets it changes. On the other hand, we want to divest liabilities and cut down our day to day expenses.
The economical condition of the country plays a superior role in determining personal finance decisions. For example, when the interest rate is lower we tend to have more liabilities because it facilitates our portfolio and make it look rich. These liabilities include mortgages, credit card debt and personal loans. Credit rating is another significant factor in personal finance. We should always possess a good amount of knowledge about this because this is handy in a number of situations. We should always try to come up with best possible portfolio and to this we have to consult with the experts in the relevant field.
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