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According to investordictionary.com, personal finance has been defined thus - "Personal finance is the application of the principles of financial economics to an individual's (or a family's) financial decisions. Personal finance is a detailed analysis of financial flows at various points in time. For example, we may receive employment income today, but have to pay college tuition fees next year." http://www.investordictionary.com/definition/personal+finance.aspx
Few essential components associated to personal finance are as mentioned below:
- Assessment: Compilation of financial balance sheets and income statements can provide a clear assessment of personal assets
- Setting goals: Financial goal setting is essential for direct planning, by accomplishing financial goals it is possible to reduce unnecessary expenses
- Execution: Execution of individual's personal financial plan needs discipline and perseverance, and many people obtain help from financial experts such as accountants, financial planners, investment advisors etc
- Monitoring: Investments and savings as per personal financial plans should be monitored periodically
