Citizendia
Your Ad Here

Personal finance

Credit and Debt
Credit card
Credit union
Debit card
Debt consolidation
Loan
Moneylender
Mortgage
Pawnbroker

Employment contract
Salary
Wage
Paycheck
Employee stock options
Employee benefit
Direct deposit

Retirement
Retirement plan
IRA
Pension
Social security
Business plan
Corporate action

Financial Planning
Financial adviser
Estate planning

Finance series
Financial markets
Financial market participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation
edit this box

Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. Credit is the provision of resources (such as granting a Loan) by one party to another party where that second party does not reimburse the first party immediately thereby generating Debt is that which is owed usually referencing Assets owed but the term can cover other obligations A credit card is part of a system of Payments named after the small Plastic card issued to users of the system A credit union is a Cooperative Financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift providing credit A debit card (also known as a bank card) is a plastic card which provides an alternative payment method to Cash when making purchases Debt consolidation entails taking out one Loan to pay off many others A loan is a type of Debt. This article focuses exclusively on monetary loans although in practice any material object might be lent A moneylender offers small Personal loans at high rates of interest, usually higher rates than the market rate charged on Credit cards or on A mortgage is the pledging of a property to a Lender as a security for a Mortgage loan. A pawnbroker is an individual or business entity that offers monetary loans in exchange for an item of value to the given pawn broker A contract of employment is a category of Contract used in Labour law to attribute right and responsibilities between parties to a bargain A salary is a form of periodic payment from an Employer to an Employee, which may be specified in an Employment contract. A wage is a compensation workers receive in exchange for their labor. An employee stock option is a Call option on the common stock of a company issued as a form of non-cash compensation. Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, perqs or Retirement is the point where a person stops employment completely A retirement plan is an arrangement to provide people with an income or Pension, during Retirement, when they are no longer earning a steady income from employment An Individual Retirement Account (or IRA) is a Retirement plan account that provides some Tax advantages for Retirement savings in the United A pension is a steady income given to a person upon Retirement, typically in the form of a guaranteed annuity. Social security primarily refers to a Social insurance program providing social protection or protection against socially recognized conditions including poverty old A business plan is a formal statement of a set of business goals the reasons why they are believed attainable and the plan for reaching those goals A corporate action is an event initiated by a Public company that affects the securities ( Equity or Debt) issued by the company A financial planner or personal financial planner is a practicing professional who helps people deal with various personal financial issues through proper planning which includes A financial adviser is a professional who renders investment advice and Financial planning services to individuals and businesses Estate planning is the process of accumulating and disposing of an estate to maximize the goals of the estate owner The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds There are two basic financial market participant categories Investor vs Corporate finance is an area of Finance dealing with the financial decisions Corporations make and the tools and analysis used to make these decisions Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Financial regulations are a form of Regulation or supervision which subjects Financial institutions to certain requirements restrictions and guidelines aiming to The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated It addresses the ways in which individuals or families obtain, budget, save and spend monetary resources over time, taking into account various financial risks and future life events. A personal budget is a Finance plan that allocates future personal Income towards Expenses Savings and Debt repayment Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management. A transactional account ( North America: checking account or chequing account, United Kingdom and some other countries current account Savings accounts are accounts maintained by retail Financial institutions that pay Interest but can not be used directly as Money (by for example A credit card is part of a system of Payments named after the small Plastic card issued to users of the system A loan is a type of Debt. This article focuses exclusively on monetary loans although in practice any material object might be lent A stock market, or (equity market is a private or public market for the trading of company Stock and derivatives of company A retirement plan is an arrangement to provide people with an income or Pension, during Retirement, when they are no longer earning a steady income from employment Social security primarily refers to a Social insurance program providing social protection or protection against socially recognized conditions including poverty old Insurance, in Law and Economics, is a form of Risk management primarily used to hedge against the Risk of a contingent loss

Contents

Personal financial planning

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:

  1. Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. In Financial accounting, a balance sheet or statement of financial position is a summary of a person's or organization's balances An Income Statement, also called a Profit and Loss Statement (P&L is a financial statement for companies that indicates how Revenue (money A personal balance sheet lists the values of personal assets (e. In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. 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. An Income Statement, also called a Profit and Loss Statement (P&L is a financial statement for companies that indicates how Revenue (money Income, refers to consumption opportunity gained by an entity within a specified time frame which is generally expressed in monetary terms In common usage an expense or expenditure is an outflow of Money to another person or group to pay for an item or service or for a category of costs
  2. Setting goals: Two examples are "retire at age 65 with a personal net worth of $200,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
  3. Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
  4. Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
  5. Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.

Popular Tools

See also

References

© 2009 citizendia.org; parts available under the terms of GNU Free Documentation License, from http://en.wikipedia.org
 Dapyx Software network: MP3 Explorer | Ebook Manager | Zenithic