Question

Why is personal finance dependent upon your behavior?

Answer 1

Personal finance depends on your behavior because you are the manager of your financial resources, so it is necessary to carry out personal planning of your finances.

Personal financial behavior can be measured by six dimensions, which are:

1. Emergency funds
2. Indebtedness level
3. Savings rates
4. Asset diversification
5. Retirement Preparation
6. Wealth distribution

Personal finances are directly impacted by our behaviors and decisions. Some of these behaviors are subconscious and difficult to identify, but they should be analyzed in case they negatively influence your finances.

Therefore, financial planning is essential to use your financial resources consciously and in accordance with your goals.

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