Knowra Personal finance Personal finance Personal finance is the management of an individual’s or household’s income, spending, saving, borrowing, investing, insurance, and financial planning to meet needs and goals over time.
Budget : A plan that assigns expected income to spending, saving, and debt repayment over a set period. A budget makes household cash flows visible and gives spending decisions a deliberate limit.
Retirement planning : Planning how to accumulate and use resources to support life after paid work. Retirement requires coordinating long-term saving, investment risk, and future withdrawals.
Debit card : A payment card that draws funds from a linked deposit account. Unlike credit, debit generally spends money already held in the account.
Amortization : The gradual repayment of a loan through scheduled payments that cover interest and reduce principal. Amortization determines how a household’s loan balance changes with each payment.
Financial resilience : The capacity to withstand financial shocks, recover from setbacks, and adapt to changing circumstances. Reserves, manageable debt, and protection help households absorb disruptions.
Cash flow : The movement of money into and out of a person’s or organization’s accounts over time. Tracking cash flow shows whether income arrives in time to cover planned expenses.
Mortgage : A loan secured by real estate, typically repaid through scheduled principal and interest payments. A home purchase often becomes a household’s largest borrowing and budgeting commitment.
Credit card : A payment card that lets its holder borrow up to a limit and repay later. Its convenience and protections come with interest and fees when balances are not paid as agreed.
Credit score : A numerical estimate of a person’s credit risk based on information in a credit report. Lenders may use credit scores to set borrowing eligibility, rates, and terms.
Debt-to-income ratio : Monthly debt payments divided by gross monthly income, expressed as a percentage. Lenders use this measure to assess repayment capacity, and households can use it to monitor obligations.
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