In the hustle and bustle of modern life, in a world that is more and more commercially driven, the well being of a person is particularly dependent upon their resources. Since Western modern societies have shifted away from being predominantly agriculturally based, the focus of valuable resources for the average person is quite firmly centered on the particular financial resources a person may have at their disposal.

Often the term ‘asset’ is associated with the serious finance of corporations, and particularly frequently in an accounting context. Quite simply, however, an asset is anything that a person may possess within their control that is able to be readily converted into cash.

Assets come in various forms and can include anything from actual cash, to balances in a bank account, stocks and bonds, possessions, buildings and land, equipment, and even extend to what are known as ‘intangible assets’. The latter are able to be converted into cash but are unable to be physically handled because they are in the form of a right or entitlement. Such things as a patent or a copyright, or the goodwill of a business may be termed as an intangible asset. Many businesses choose to protect their assets through a business life insurance policy, enabling them to protect shares, key people within the company or their employees.

Of course, as reluctant as most of us are to undertake a lengthy study of accounting and economic theory, it is interesting to note that all of us engage in some form of accounting analysis each day.

Every day we participate in an economy where we pay others for the privilege of consuming goods or services. The ability to pay for these valuables stems from the assets that we already have control over, or assets that we create by receiving payment ourselves.

This ability or purchasing power to pay for things that we need is entirely dependent on the flow of ‘value’ or money. However, just like any dam full of water, if it isn’t topped up it will eventually run dry….

So herein lays an extremely important issue.

Any discussion of assets necessarily includes the recognition of what are known as ‘liabilities’ and these include the debts or financial obligations that a person owes to others already, or those that they will owe at a time in the future.

Given that an asset is something that can be converted into cash, if a person were to convert all of their assets into cash and then repay all of their debts, bills or ‘liabilities’, then the excess balance would be what is known as financial equity or ownership.

If, of course, the result is that there are liabilities left outstanding, then we are presented with a person who has negative equity and is really one who, without financial recovery, is living on borrowed time before the inevitable conclusion is drawn that creditors are unable to be paid.

This condition has a number of consequences, the most serious of which may be in the form of bankruptcy, which is a formal and legal declaration that a person’s creditors are unable to be paid. This may lead to restrictions being imposed on a person that restrain them from the full participation in economic life that other people enjoy. Concessions often need to be made, such as giving up smoking; worthy of noting is that non-smokers enjoy much lower premiums on life insurance, whereas a smoker’s life insurance premiums are often up to 50-60% more expensive than a non-smoker’s. Clearly, this demonstrates the need for sound asset management.

The personal finance is the availability in terms of money and more generally the management of our economic-financial resources.

That means how we decide to use, store, bring them.

In practice, the personal finance is shown by actions such as spending decisions, saving, investing and debt concerns and everything to do with the money and the financial market.

More generally, finance is the discipline that studies the processes by which individuals, businesses, institutions, organizations and manages the cash flows over time and studied the methods of allocation of money between alternative uses. The then finance deals in financial instruments through which trade takes place in the flow of money between individuals, companies and countries, as well as markets where these securities are traded.

In the area of management of our finances, a key part occupies what is described as a family budget. Although apparently the family budget appears to relate more to the future of our young people outside the family, it is good to start from the beginning to be familiar with the dynamics relating to revenue and expenditure of money with which each person has to do every day. In this way, a time to become independent economically, it will be easier to clear the way to manage adequately the personal finances to avoid financial difficulties and easily avoidable through embanked taken in planning costs.
To effectively manage the family budget is necessary:

• Gather all the documentation on current accounts, credit contracts, and the amortization plans etc… And order them routinely.
• Make a list of sources of income, ie income of the person or family (since the total assets may contribute more components). Of this revenue, there are also extra, as the thirteenth and fourteenth or tax rebates, which provide in some periods a greater availability of money.
• Keep a list of fixed costs and those variables that affect costs such as monthly fees for ordinary purchases (food, clothing, transportation, etc…). A portion of these expenses are paid in cash or through ATMs, while others, always regular but higher economic weight, are scaled directly from the account and are seen in the account.
• To examine the budget staff for the basis of residual income monthly and yearly available, you can calculate for example how to allocate savings or depreciation of a claim.
• Define the targets, because what is clear from the analysis of family accounts, with deposits and investments, suggests solutions for the financial future programs: for example the decision to change jobs or to invest their savings.

To help you in managing the family budget, there are now much digital reporting software downloadable for free directly from the Internet, making it possible to separately record the expenditure and revenue quickly and systematically. In this way everything concerning our revenue and our output is kept in one place, constantly track able.

• Personal finance, which regards the debts and credits for individuals;
• Corporate Finance, which deals with the research and the use of financial resources by enterprises;
• Public Finance on the issues of research and use of financial resources by the government;
• International finance, which deals with the flow of money exchanged between countries (giving rise to both financial and operational transactions between individuals, companies and international public administration).

In recent years there is a new way to finance, where the characteristics of ethical investment (ie driven by ethical and social) and where’s the goal is not represented only by profit, but peak activity on that meet the requirements of social and environmental responsibility, a desire to be aware of the reasons that make it profitable (the characteristics of the goods produced, and the location of the verification of how business is conducted).

This mode of finance is to finance such ethics.

Phase in adolescence, when still living at home, maintenance is provided by parents, for which expenditure decisions are few and small;

Achieved a degree of economic dependence (occasional work, etc. …), we face personal expenses such as buying clothes, music to reach the most important expenses, like buying a car;

If we take the important decision to live on our own responsibilities and costs are increasing exponentially, keeping them from achieving significant savings;

In life together, perhaps against a fixed place of work, money is invested for the realization of their projects, such as buying a house. The life of torque allows you to store some savings in more;

With the birth of their children and their maintenance, the costs are changing yet again;
Once the children left the home, expenses related to maintaining them no longer exist, but it could be that continued economic aid in the form directly. Becomes important to think of retirement, investment and taxes;

To be retired will pay more taxes than you actually spend for themselves, is spent on medical costs and considering the savings of a lifetime.