Managing daily routine involves managing finance at most. We need to be well planned about income and expenses so that any uncertainty or shortage can be avoided.
Managing finance is a very crucial problem at every level, individual, business and govt.
An individual recognize its finance from level of salary income and all day to day expenses, a business man gives it more broader meaning as capital, liability, budget etc.
Gove use their inflow and outflows at national level; accumulate them to reach at cash flow surplus or deficit to decide financial policies for whole country. So our entire lives are empowered by finance. Successful are those who earn good, spend wisely, save more and keep on adding their finance through investments.
Individual or personal finance refers to the financial management of which an individual or a family unit is required to make to obtain, budget, save, and spend financial resources with time, consider various risks of finance and future events. Personal finance would consider the suitability to his or her needs of a range of banking product or investment products or participation and monitoring of individual and employer sponsored plans, benefits of social security, and income tax management.
Achieving these goals requires projecting what they will cost, and funds withdrawal. Inflation or rise in prices is the main risk that house holds buying will face. Net present value calculation, Financial adviser will suggest for saving and investing in different portfolio of investment. To protect from rising inflation rate, More return should be generated from investment, and definitely they will subject to varying risks. These portfolio of risks can be overcome by Asset allocation which require investment on variety of assets and cash convertibles like bond, cash and other investments.
5. Retirement planning is the process of understanding how much it costs to live at retirement, and making distribution of assets in a way that manage fall in income. Retirement plan inckudes reliance on Govt. made policies to manage tax liability including Individual and employer based retirement schemes.