Managing Your Personal Finances | Notes | NCERT | Class 9th

• Our journey into managing money begins in childhood; as we grow into adulthood, we earn income and spend it in many ways to fulfil our needs and wants.
• We also save money and make investments to achieve goals such as buying a house or funding higher education.
• Individuals and households in today’s world have to make many decisions involving money, which is an important resource that should be utilised efficiently.
• Personal finance refers to the planning and management of an individual’s money to meet their needs and wants.
• It involves making smart financial decisions, such as how much to spend, how much to save, where to invest, and how to prepare for future financial needs.
• For instance, if someone wants to buy a house in the next five years, they will have to plan and manage their money well to achieve this goal.

Pillars of Personal Finance

Income (Earnings):

• Income is the money a person receives regularly or occasionally in return for products sold or services rendered; it is the starting point of personal finance because without income, it is not possible to spend, save, or invest.
• Examples of income include a teacher earning a monthly salary, a shopkeeper earning profits from a business, a person earning rent from letting out property, an investor earning interest from bank deposits, and a shareholder receiving dividends and interest from securities.