Personal Finance: More Than Just Money In and Money Out

Roni Dragusha

Personal finance - a term that is often misinterpreted and misunderstood. Many people think personal finance is just the money you make, and in turn, the money you use. But it is so much more than inflow and outflow. That is exactly what this event was about.

As someone interested in building a better understanding of how to manage money more intentionally, I attended a personal finance session led by Arta Ramaj, Co-Founder of ThreeSixtyFinance. She delivered an extremely insightful presentation on what personal finance actually is, and how, if managed properly, it can pave the way for something that we are all too familiar with hearing - financial freedom.

The session began by exploring the differences between being rich and wealthy. The key distinction lies in sustainability: being 'rich' is often associated with the amount of money you make, while being 'wealthy' refers to the amount of money you sustain over time. One key takeaway was that you can be rich but not wealthy, or wealthy but not rich. But how can we achieve both? The answer lies in two main approaches: saving more, earning more - or ideally, both.

One way to increase your disposable income (the amount left after subtracting expenses from your income) is through saving. This is something that has likely been instilled in all of us growing up, but saving without a system can be counterproductive. This introduces the main principles of saving: paying yourself first, following the 50/30/20 rule, and using psychological tricks to stay consistent.

Zooming into the 50/30/20 rule, this is essentially a loose guideline for how to apportion your income: 50% towards your needs, 30% towards your wants, and 20% towards savings. This final 20% opens the door to creating emergency funds (because life happens) and also leads us to the next solution for growing your wealth - investing.

Investing is another term often thrown around on social media and in conversations with friends. While it may seem complex or intimidating, investing does not need to be. Arta introduced us to investing through ISAs (Individual Savings Accounts), which exist in a few forms: cash ISAs, stocks and shares ISAs, and lifetime ISAs. Without getting too technical, each serves a different purpose but ultimately acts as a tool to make your money work for you - something that can be achieved with just a few clicks. If you want to look at the different ISAs in more detail, here is the link to the PowerPoint:

file:///C:/Users/Student/Downloads/ALSA.pdf

Why should you care about this? Why should anyone care about managing their finances? A common but often unnoticed reality is inflation. The value of your £100 today will not equal the value of your £100 in the future. Having your money simply sitting around means it is slowly losing value over time. Nobody wants that.

Managing your finances unlocks new potential for your money and opens the door to stronger financial security, better spending habits, and - with a commitment to a long-term vision - true financial freedom.

The biggest lesson I took from this session is that financial freedom is not about how much you earn, but how intentionally you manage what you already have. It is a journey, not a destination.

What’s one step you could take today toward financial freedom?