PERSONAL FINANCE Financial planning for individuals. Generally, it involves analyzing your current financial position, predicting short-term and long-term needs, and recommending a financial strategy. The financial strategy involves setting a budget and planning for future needs and wants.

INCOME The monetary payment received for goods or services, or from other sources, such as rent or investments. Income is money that literally “comes in” on a regular basis. For most people, income is something that comes from getting paid for doing work. Some people, however, are able to live off from their savings or investments. Income may also come from gifts or from selling something.

Spending  to pay out, disburse, or expend; dispose of (money, wealth, resources, etc.):  Money is needed for food, shelter, and clothing. Of course, people spend money on things they want, too.  Things that we want but do not need are called luxuries.  The best way to spend money wisely is to make a BUDGET, which is a plan for how much money will be spent on each type of item that a person must buy.

SAVINGS One goal of BUDGETING is to save money. Savings=money left over after buying what is needed & wanted. Saving allows people to plan to buy/pay for something expensive in the future. (i.e., car, house, vacation, college, etc.) Many different ways to save money. EX. Piggy bank, not necessarily safe. Best way of saving money is to put it in a bank. (Short Term) By saving in a bank, your money can earn interest ($) and is insured. This form of interest is money that the bank pays you to use your money.

CREDIT When savings and income are not enough to pay for what a person wants or needs, he or she can use credit. Credit is money that you borrow from a bank; the ability to borrow money. When you let the bank use your money, that bank pays you interest. When you use the bank’s money, you then must pay the bank interest. There are many different types of CREDIT, i.e., credit cards, home loans, car loans, college loans, etc.. Anytime money is owed, credit is extended. The key to personal finance is never to borrow more than you can pay off in a reasonable amount of time.

INVESTMENT using money or capital in order to gain profitable returns, as interest, income, or appreciation in value. Investing is spending money in the hope of earning more money than is spent. (Long Term) EX. Collectable trading cards. A card that is bought for a $1 may someday be worth $10. A return of $9- which is 900% investment gain. EX. Honus Wagoner card in 1909 cost less than 50 ¢, this year it sold for $2.35 million.