What is the primary purpose of personal finance?

The primary purpose of personal finance is to manage an individual's financial resources to achieve personal financial goals. This encompasses a broad range of financial activities, including budgeting, saving, investing, and planning for future expenses. A comprehensive understanding of personal finance allows individuals to assess their current financial situation, plan effectively for future needs, and make informed decisions about how to allocate their resources.

While saving for retirement, investing in stocks and bonds, and determining one’s credit score are important components of personal finance, they are all subsets of the overall goal of managing finances effectively. Personal finance gives individuals the tools and strategies to reach a diverse set of objectives—be it paying off debt, saving for emergencies, affording a home, or planning for retirement. The ultimate focus is on aligning financial behavior with one's personal aspirations and needs.