Personal finance

Personal finance is the financial management that an individual or a family unit performs to budget, save, and spend monetary resources in a controlled manner, taking into account various financial risks and future life events.

When planning personal finances, the individual would take into account the suitability of various banking products (checking accounts, savings accounts, credit cards, and loans), insurance products (health insurance, disability insurance, life insurance, etc.), and investment products (bonds, stocks, real estate, etc.), as well as participation in monitoring and management of credit scores, income taxes, retirement funds and pensions.

Before a specialty in personal finance was developed, various closely related disciplines, such as family economics and consumer economics, were taught in various colleges as part of home economics for over 100 years.

In 1920, Hazel Kyrk's dissertation at the University of Chicago was instrumental in developing the disciplines of consumer and family economics. Margaret Reid, a professor of home economics at the same university, is recognized as one of the pioneers in the study of consumer behavior and household behavior.

In 1947, Herbert A. Simon, a Nobel laureate, suggested that a decision-maker did not always make the best financial decision because of limited educational resources and personal inclinations.

Research into personal finance is based on several theories, such as social exchange theory and andragogy (adult learning theory). In America, professional bodies such as the American Association of Family and Consumer Sciences and the American Council on Consumer Interests started to play an important role in developing this field from the 1950s to the 1970s. The Association for Financial Counseling and Planning Education (AFCPE) at Iowa State University and the Academy of Financial Services (AFS) were established in 1984 and 1985 respectively. AFCPE started to offer several certifications for professionals in this field, such as Accredited Financial Counselor (AFC) and Certified Housing Counselor (CHC). Meanwhile, AFS cooperates with Certified Financial Planner (CFP Board).

Before 1990, the study of personal finance received little attention from mainstream economists and business faculties. However, several American universities such as Brigham Young University, Iowa State University, and San Francisco State University started to offer financial educational programs in both undergraduate and graduate programs since the 1990s. These institutions published several works in journals such as The Journal of Financial Counseling and Planning and the Journal of Personal Finance.

As the concerns about consumers' financial capability increased during the early 2000s, various education programs emerged, catering to a broad audience or a specific group of people, such as youth and women. The educational programs are frequently known as "financial literacy". However, there was no standardized curriculum for personal finance education until after the 2008 financial crisis.^{[citation needed]} The United States President's Advisory Council on Financial Capability was set up in 2008 to encourage financial literacy among the American people. It also stressed the importance of developing a standard in financial education.