ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is personal finance? It is everything in your life that involves money. Personal financial planning is arranging to spend, save, and invest money to live comfortably, have financial security, and achieve goals.

Detailed explanation-2: -There are three primary dimensions to consider when determining the right amount of risk for your investment portfolio or financial plan: risk tolerance, risk capacity, and risk composure.

Detailed explanation-3: -According to Investopedia, “Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings and retirement planning.” Understanding these terms can help you better control your funds and prepare for future financial success.

Detailed explanation-4: -Assets include the value of securities and funds held in checking or savings accounts, retirement account balances, trading accounts, and real estate. Liabilities include any debts the individual may have including personal loans, credit cards, student loans, unpaid taxes, and mortgages.