Finance could be a branch of economics that talks about how we manage money, especially how we make money and spend money as an individual, organization, or country. However, it is an important part of our lives that we get to face daily. Finance management is very important as it could make or mar an individual, organization, or nation. There are instances where there is enough or even excess money but poor management will result in important expenses not being attended to. On the other hand, there are instances where available funds might be inadequate, but with proper management, every need and the most important wants will be sorted out and things will continue to work normally to a large extent. Several companies help people manage their finances that you can get to learn about by reading about them on USreviews. This article will discuss Finance under personal finance, organization or corporate finance, and national finance.
Personal finance majorly has to do about the finances of an individual or family. Those who are single and leaving on their own would have to make money and make sure that they plan their expenses around the money that they make. Hence, they would have to get a job or start a business from where they can get some money as a form of payment.
When they get money, they would have to consider how to effectively spend the money to meet their needs. Generally, it is expected that every individual should plan their finances around 3 major factors: Expenses, savings, and investment. It is often best to allocate a percentage of your income to each of the 3 factors. That way, you can quickly remove your investments and your savings before you start spending.
Many people make the mistake of starting to spend with the hope of saving and investing what is left. The result is often that they end up spending everything without having anything to spend or invest. As long we have money that we think we are free to spend, there will always be things that we would use the money to buy.
It is advised that an individual make a list of expected expenses for the month and plan around what they have available. They would need to make a scale of preference and buy the most important things. They can postpone others till after the next paycheck and completely strike out some other things because they can’t afford it coupled with its not being too important.
Organizational or Corporate finance
Organizations are organized groups of people that come together for a particular purpose. It could be a business organization that provides products and services, an NGO for a non-profit organization, or government institutions among others. In most cases, organizational expenses will include management of an office, management of an IT department (would include web hosting and management), payment of employees as well as the purchase of supplies and needed services.
Businesses often make their money from the products and services they sell, NGOs majorly get donations with which they carry out their activities, while government institutions either get allocations from the government and/or provide services and products from which they make money.
The finance of a nation is very important as it would affect the finance of organizations and individuals. The government mostly gets money from selling natural resources, semi-processed and finished products as well as provision of services. In most countries, citizens are expected to pay tax which is also a major way a country makes money. The earnings are used to provide infrastructure and enabling environment for their citizens and business, payment of salaries for government staff, and support their citizens when necessary.