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What is finance

Finance is money. Finance is also a source of money. 

To finances, we include both expenses and income. Finance is a set of relationships built in the process of money turnover. Finance is a broad concept, but in any science you can offer classifications.

One of the main features of classification is belonging to the type of economic entities. In the economy, it is customary to distinguish the following groups: states and private participants, including corporations and households.

This is how finances are divided - into public and private.

Public finances (often defined as state and municipal finances) are finances related to the revenue and expenditure part of the state budget, as well as the activities of extra-budgetary organizations. In fact, the state determines the rules of the game: it requires contributions to the budget (taxes and fees) and then distributes them in the necessary areas. 

The state ensures the achievement of the goals of social policy, the security of the country's inhabitants, solves infrastructure issues, finances educational and medical institutions. 

The social policy includes the so-called transfers - irrevocable payments of the state to people: pensions, scholarships. 

A special topic for analysis is unconditional income, which will be analyzed in a week: an extremely relevant issue in the era of rising unemployment. 

Now there is a kind of trial period - the question is, will the states renew the subscription?

Private finance includes the finances of organizations and people.

Corporate Finance

Company finance is about several disciplines at the same time. There is a broad concept of corporate finance - here the issues of attracting sources of financing (whether own or borrowed funds) and their subsequent distribution (investments) are solved. 

Also, financial management is often considered separately - the discipline of asset and liability management, as a rule, we are talking about short-term (working) funds - management of receivables and payables, inventories and cash balances.

Household finances

Household finances are matters of income and expenditure of families or individuals. Issues of salaries, bonuses, expenses, deposits, private investments, loans are dealt with here. 

Many products of banks and other financial organizations are specially designed for individuals, now fintech companies have entered this territory in full swing.

 

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Luqman Scott

Interesting, but still would like to know more about it. Loved the article!:-)

Susanna Spears

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Andrei Simmons

Easy to read, and at the same time a lot of new, important information. Just what you need!:)