All Media Mint is here to help you make sense of business and UK personal finance issues.
Personal finance means different things to different people; some think of it as how much cash you have in your pocket or wallet, while other think it is the amount of money you have coming in every month. The fact is that personal finance in the UK covers both of these aspects, and many more besides. The official description of personal finance is the application of financial principles to the monetary decisions.
In short, personal finance addresses the way in which we obtain money, budget it, save it and ultimately spend it. Every penny that comes into, or goes out of your household, whether you are an individual or a family, is covered by personal finance in the UK.
While we all have financial responsibilities such as energy bills, food, car or house insurance, this isn’t all that is covered. It also encompasses stock market investments, income tax, retirement plans and anything else that you pay for on a regular basis.
Of all of these factors, financial management and budgeting is the biggest problem that UK households are having at the moment. Due to redundancies, many are finding that their wage has been replaced by social security benefits, and budgeting to enjoy a similar stand of living is a real challenge. You can’t lose several hundreds of pounds per month and expect to live the same as you did before; even affording the basics requires budgeting.
Insurance policies are an area that few take into consideration when they are calculating their personal finances, but they are right up there as you will either have money invested in them, or are paying a monthly premium to protect yourself from the possibility of facing a huge bill, depending on the eventuality. Credit cards, loans, mortgages, phone bills, they all come under the personal finance umbrella, and are all as important as each other.