Financial Control Management Services
Private banking financial advisors provide money management services to individual customers. Commercial banking provides money management to corporate clients. In financial markets, money management also refers to portfolio management and investment management. Financial professionals manage investments and make investment decisions for pools of funds.
Money management is a broad concept. It refers to the strategies and techniques to determine the use of an individual, company, or institution’s capital. In personal finance, money management covers budgeting, spending, and saving (investing). Money management can be proactive with periodic or regular financial planning. It can also be reactive to specific events without intuitive planning in advance.
As a result of different ages, lifestyles, family structures, and many other factors, financial plans for individuals are different. However, the fundamental principles of budgeting can be commonly shared. For example, one simple method of personal budgeting is the “50-20-30 Budget Rule.”
The 50-20-30 Budget Rule suggests an individual spends 50% of their after-tax income on essential expenditures. The essentials include house mortgages or rents, transportation, groceries, utilities, and so on. 30% of their income should be spent on the things that the person wants. It can include expenses on partying with friends, movie tickets, and vacations. The remaining 20% should be saved or invested for future financial goals.
Money management with intuitive planning and budgeting helps to reduce inessential expenditures. Such expenditures do not add value to an individual’s living standards. They can be saved or invested for better use in the future. Money management also lowers the risk of running out of money. It helps individuals to achieve their financial goals in the long term.
Financial advisors in private banks, insurance firms, and other financial institutes provide personal money management services. Individuals can also process their money management needs through personal finance applications.
Similar to personal finance, money management for corporate finance also includes planning and budgeting. However, the process of budgeting is quite different. A company’s budgeting is mainly shaped by its business strategies. It is built upon the company’s historical financial statements and adjusted with forecasting estimates.
In addition to the use of capital, corporate money management also considers the raising of capital – how much to finance and how to finance should be determined. Money management for corporate finance is more complex than for individuals. Companies need professional teams to provide financial analysis and planning.
- Money management refers to the process of tracking and planning an individual or group’s use of capital. In personal finance, money management includes budgeting, spending, saving, and investing.
- In corporate finance, money management covers the raising and use of capital. A firm’s budgeting is mainly influenced by its business strategies.
- In financial markets, money management refers to portfolio management and investment management.