Why Is Personal Finance Important ?

Have you ever wondered why some people are free from financial headaches and don't worry about their monthly expenses?
That's because they know how to manage their earnings and supervise their cash flow. and that's called money management or Personal Finance. And by reading this post you are also going to know about Personal Finance and money monitoring which reduces your Financial uncertainty.

So, What is Personal Finance?

It includes a wide range of financial management practices taken to drive the budget, spending and savings of a person or family. It includes short term and long-term planning that considers potential financial risks, investments and how your financial circumstance evolves over a lifetime.

Why Is Personal Finance Important?

Personal finance is an important part of not only managing your day-to-day financial needs but also planning your future. The earlier you get a grip on personal finance, the better your long-term financial prospects are for things like investing or retirement planning and by learning the factors of personal finance, you can better recognize opportunities to improve your finances. This knowledge can help you to budget for current needs while planning for long-term financial goals.

Five elements of Personal Finance:

Though there are many aspects to personal finance, they easily fit into one of five categories: income, saving, investing, spending and security. So Let's start with,

  1. Income: Income is the main base of your personal finance and it includes all parts of your money flow including money from salary, pension, any rental property or investments.
  2. Savings: Saving includes any money from your income that you do not spend but set aside for the future. Saving can be used to accomplish objectives in the short-term such as buying a mobile phone, or in the long run such as continuing to study, or else buying a car or property. also, it can help us to cover any unexpected expenses.
  3. Investing: Investing is different from saving, it includes purchasing things that deliver you profit in future, it may include purchases of mutual funds, stocks, bonds or real estate that expect to provide you with a good rate of return. But investments come with risk. So invest your money wisely with investment knowledge,
  4. Spending: Everyone has their own needs and expenses, which can't be ignored but spending money on unnecessary things leads you to a financial problem. so controlling the amount of money you spend can allow you to save more money that can be invested to secure your financial future.
  5. Security: Security means the protection of yourself or your family from financial risks, which can be handled by taking a variety of services like life insurance, health insurance and annuities.

So these are the 5 aspects of personal finance and by following these aspects you can get relief from financial problems. And if you want to know about it better then you should talk to a financial advisor.

So, Who are Financial advisors?

Financial advisors are experts who are specially trained to provide client-based financial services and advise them on their financial status. They are registered with a regulatory body. So, if you are facing any financial problem then you should consult a financial advisor.

And here we have listed the Top 10 financial advisors firms in India with the best track record.

Our list starts with,

  • BCG(Boston consulting group)
  • EY
  • KPMG
  • Avalon Consulting
  • Deloitte
  • McKinsey & Company
  • Cordence Worldwide
  • Bain & Company
  • Cedar management consulting
  • Alvarez & Marsal

All the companies given above are well known financial advisory companies of India, which have a very good track record, but still, you should do a little investigation from your side.

In this post, we have learned what is a personal finance and what are its benefits, how a person can improve his financial status by controlling the extravagant expenses of his daily life, as well as we have also mentioned well known financial advisory firms in India.

We hope this post will be helpful for all of you.


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