The term ‘personal finance’ refers to the financial managerial actions an individual performs to budget, save and spend his/her money.
Before the development of this discipline, other subjects were closely related to it, including family economics, consumer economics and home economics. Personal finance has become relevant in 1920 with the work of Hazel Kyrk which focused on the foundation of consumer economics and family economics.
Personal finance education is needed for all the individuals who have to make rational financial decisions through life. Before the 1990s, educational courses around this subjects were not relevant. Nevertheless, afterwards, several American universities have started offering courses to both graduate and undergraduate programmes.
The key component of personal finance is the financial planning that includes five different steps: assessment, goal setting, plan creation, execution, and monitoring and reassessment.
Furthermore, personal finance focuses on different areas such as financial position, tax planning, adequate protection or insurance, investment and accumulation goals, estate planning, retirement planning, cash management, delayed gratification, education planning and revisiting written financial plan regularly.
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