What is personal finance?

The term personal finance comes out a lot. and there is a lot of confusion on what exactly this phrase means.

In essence - personal finance is the way of an individual or a family to live and manage their expenses, investments and resources over time, on a budget.

Personal financial planning process

Personal Finance

Financial planning is the key component in personal finance. In most cases this process requires five steps:

1. Assessment: By compiling a person's financial statements, balance sheets and income statements, you can start to evaluate the average monthly flow your household has.
2. Goal setting: This is done with the goals to meet the financial requirements for each defined goal. the best practice is to list all goals, short and long. Whether you want to buy a new car or retire at the age of 65 with a specific net worth. you should plan for it, and save money accordingly. 
3. Plan creation: The financial plan details how to accomplish the goals. It could include, for example, reducing unnecessary expenses, increasing the employment income, or investing in the stock market (assuming you know what you are doing).
4. Execution: To execute a financial plan you need to have discipline and knowledge. so you might want to use the help of accountants, investment experts, lawyers and similar professional help. but you can also dedicate the time to learn the practical knowledge yourself. 
5. Monitoring and reassessment: As time passes, the financial plan is monitored for possible adjustments or reassessments.

Typical goals that most adults and young adults have are paying off credit card/student loan/housing/car loan debt, investing for retirement, investing for college costs for children, paying medical expenses.