BlogsWhat is Personal Finance and why does one need to understand the game of personal finance?

What is Personal Finance and why does one need to understand the game of personal finance?

July 16, 2022

Personal finance includes budgeting, creating an emergency fund, managing debt, understanding the nuances of credit cards, saving for long-term/retirement, having enough insurance coverage and much more.

Now, what are the downsides of being financially unaware?

1. If you do not understand the power of compounding, you will become a slave to your monthly salary. If you get to a stage where your money invested earns more than your salary every month, your life will completely change.

2. If you rely too much on elders or family advisors, you may not be able to make smarter financial decisions for yourself.

3. You may become a victim of financial mis-selling. Insurance agents or Mutual Funds agents, some of them, are notorious for selling products you may not even need.

4. Fall into a debt trap with your credit card or buy now pay later accounts

5. Constantly stressed out about money

6. Depending on friends/family during emergency situations

7. Be tempted to invest all your money into speculative assets (read: crypto) More than the subject, personal finance is a habit and like any habit requires discipline. How I stumbled upon personal finance by first understanding the broader market dynamics and banking system.

You might wonder how the broader market affect your day-to-day life. Wait and see!

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