Personal Finance FAQs What is personal finance? Personal finance is the financial planning that an individual or a family unit undertakes to earn, save and spend money wisely. It involves all aspects of financial decision-making, from budgeting and investing to saving for retirement and insurance planning. Personal finance is about making your money work for you – in other words, getting the most out of your money. Why is personal finance important? Personal finance is important because it gives you the tools to make informed financial decisions. It can help you budget your money, save for retirement, pay for unexpected expenses and more. What are some key concepts in personal finance? Some key concepts in personal finance include setting financial goals, budgeting, investing, saving, retirement planning, and insurance planning. What is insurance? Insurance is a contract in which an insurer agrees to pay a designated beneficiary a sum of money in exchange for premiums paid by the policyholder. The death of the insured person triggers this payment. What does compounding mean? Compounding refers to the process of earning interest on both the original investment and any previous interest earned. This allows your money to grow at an accelerated rate over time. About the Author True Tamplin, BSc, CEPF® Facebook Linkedin Instagram Twitter Youtube True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists. True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.