What is Personal Finance?
To understand personal finance, one must first understand the personal side of it. Merriam-Webster defines personal as “of, relating to, or affecting a particular person”. When something is personal, it matters to us in a hasty manner and instantly becomes relatable. It also affects us deeper emotionally and strengthens reality. For example, people die every day; but when someone close to you dies, it feels different because this experience is not relatable, the reality of it hits you and the emotions kick in.
When something happens to us it is natural to feel like why me. It can feel like the situation selected us or is personalized to us. No matter how you define personal it all revolves around a person.
One synonym of personal is personalized. Just like when you go out to eat and order your meal that is prepared (personalized) for you, so are your finances. Similar to how none of us are exactly alike, so are our finances. Personalized situations and circumstances require personalized finances.
Merriam-Webster defines finance as “the science or study of the management of funds.” This management of money includes but is not limited to budgeting, investing, saving, borrowing, lending, and planning.
One synonym of finance is fund. In finance, there are many types of funds; but, they all are established to set aside money for a specific purpose and are invested and managed. Our finances are like funds that we personally manage and control.
When you combine Merriam-Webster’s definitions for personal and finance you get personal finance defined as “the science or study of the management of funds relating to or affecting a particular person”. How you manage your money is personal, and this management is personal finance.
Be WIZE with MONEY