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The Best Way To Understand Personal Finance

Many people think that accounting and personal finance are the same things, but personal finance is NOT accounting. At first glance they may look the same; Both have to do with money. However, definitions help us better explain the differences.

Merriam-Webster's description of accounting is "a system for capturing and summarizing business and financial transactions, and for analyzing, reviewing and reporting results". 

Based on this definition, we see that accounting is the process of analyzing and recording what you have done with your money. You can visit to have more information about personal finance. Therefore, having an accountant is normally not sufficient when it occurs to your personal finances.

Accountants don't usually deal with personal finances (there are some exceptions to this rule). Unless your analyst is also a financial consultant, he or she will likely only look at what you did with your money at the end of the year and provide you with a report on their analysis.

This report is usually your tax return. your debt to the management or what the administration owes you.

Very rarely do accountants give someone a balance sheet, income statement, or asset statement. All very useful tools you need to manage your personal finances effectively.

Personal Finance views at your finances from a more active and focused perspective. This gives accountants something to note, review, and analyze.