Do you really know about finance? It is important for us to know about finance. In this entry, I’ll write about the basic of finance.
WHAT IS FINANCE
Finance is activities that involved on skills to manage fund. The finance is branch of economics to manage money and assets. Business finance, personal finance and public finance is the main topic of finance. It includes loan and saving. The concept of finance related of money, risk and time. (forget where I get this definition but I think you can understand the definition)
From InvestorWords.com, finance define as
1. A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.
2. To raise money throught the issuance and sale of debt and/or equity ( new update)
WHY FINANCE IS IMPORTANT
As this blog is more focuss on personal finance so I’ll write the important of finance to individual. As we know, we all need money to live. Finance helps us to have the money when we need it and even when we want it. Finance is not just for business only. As a person that uses money, finance teaches us to understand the other side of every transaction.
Many people face financial problem even though they may be successful in their fields. For example, we’ve heard many people become millionaire but flat broke just a couple of years. It could avoided if he/she have some basic financial knowledge and financial discipline.
One of important subject of finance is retirement planning. Finance is important because we do not want to have to worry about money. Money worries could destroy or life and financial knowledge can help prevent these problems. ( Finance Professor )
In this blog, I’m more focus abouot personal finance so let’s get the definition.
WHAT IS PERSONAL FINANCE
From Investopedia, it define personal finance as all financial decisions and activities of an individual, this could include budgeting, insurance, savings, investing, debt servicing, mortgages and more. Financial planning generally involves analyzing your current financial position and predicting short-term and long-term needs.
Investopedia also explain personal finance looks at how your money and future is managed. Often individuals will seek advice from financial planners but the use of software or website is also an option.
For my definition, it is on how we know about our money. How we spend, how we save and how we earn it. That’s my simple definition.
Without the knowledge of finance, we can’t manage money or assets properly and our budget will lose. It will effect on our expenses.
p/s : – This is old article and I’ve published it on 14 Nov 2009. I’ve upgrade the article for you.