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Money Management Definition
In a simple language, money management refers to an act of handling one’s finances to avoid debt and liability risk. Money management is important for individuals, organizations and the government. The core processes of money management are budgeting, saving, spending, investing, tracking of expenses, and the evaluation of taxes (corporate tax, income tax, and other taxes). Money management entails strategies and techniques that ensure that money is appropriately disbursed, spent and accounted for. Money management is also called portfolio management or investment management, which explains how manages handle pool of funds, mutual funds or even retirement plans.
A Little More on What is Money Management
Money management is a set of procedures through which individuals manage their personal finances and corporate organizations handle their expenses, savings, investment and other parts of their finances. Money management directly impacts the credit score of an individual or creditworthiness of a firm, the amount of debt a person or company ends up with is also dependent on how well they manage their finance.
Through adequate money management, an individual or investor can increase improve their credit score and net worth. There are several processes through which corporations and individuals can manage their finances. In the investment industry, money management is crucial, it entails plans and processes that aid effective management of investment funds.
Services and Solutions
Managing personal finance is a daunting task that requires the intervention of technological solutions. Diverse solutions and applications that allow individuals to manage their finances exist. These applications are used for daily spending activities of individuals and it helps track spending, savings, and others. Common examples of personal finance apps that individuals use are mint, level money, acorn, digit, wally, good-budget, and others.