What is personal finance?

Answer 1

Personal Finance is 2 things...finance and personal.

The finance thing is money. Money is logical and financial success requires that you pursue specific behaviors to properly manage your money to that end. One of those specific behaviors is using the dynamics of compound interest and compounding financial gains. There are 3 finance tools...the personal budget, the personal balance sheet and the personal life plan. For success you need to spend less than you make (budget), own more than you owe (balance sheet) and know where you are going or you might not get there (life plan).

The personal thing is your human psychology and how it affects your capacity to manage money and engage in the specific behaviors that result in financial success. The psychological is affected by IQ, age, addictions, mental illness and a built in capacity to make excuses for financial shortcomings.

Put this together and you have personal finance.

Personal Finance are those loan/finance that you need for some business or personal use. There are many types of loans available in the financial market. You may use personal loans for getting home, starting a business and buying a car.