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What are finances? Finances, as you probably already realise is about money. It is really about the management of money. It really doesn't matter if you are a country , corporation, family, or an indivdual, finances will affect you in some way. According to wikipedia, the term finance may incorporate any of the following: The study of money and other assets The management of those assets Profiling and managing project risks As a verb, "to finance" is to provide funds for business.

Finance stems from the concept of money, although money is often a representation of something else. Finances can be represented as resources called assests, what ever they may be... from goods to services to resources. Where does the word finance come from? Middle English finaunce meaning settlement, money supply, from Old French finance, payment, from finer, to pay ransom, from fin, end, from Latin finis source: Answers.com

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Why are finances important? Finances are important to us all . How we manage money can have a profound influence on our everyday lives. Well managed finances, poor managed finances all have an influence on different parts of society. Personal finance revolves around: How much money will be needed by an individual (or a family) at various points in the future? How does this money need to be funded? Personal financial decisions involve paying for education, financing durable goods real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.

Finances influence us on a daily basis, monthly and lifetimes and even spanning several generations. Having a clue about what this is all about could help us better manage or prepare for uncertainty in finances that occur from time to time.

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News about finances There are a wide range of financial news sources. These often include major newspapers that have business sections which examine the latestinfluences that affect finances from entire countries to local communities. Another useful source are stock exchanges. Australian Stock Exchange New York Stock Exchange London Stock Exchange Also The reserve banks of countries provide an indication of the interest rates ( though banks usually have interest rates higher) Reserve Bank of Australia US Federal Reserve Bank Try a search on Google News for finances to see the most recent news headlines from around the world A typical stock exchange

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How do finances work? The way finances work relies mainly on simple mathematics of money coming in and money going out. Generally speaking finances is about managing the various flows of incomes and expenses. Most of the time we are trying to increase our income and minimise our expenses.

How are finances classified, arranged? The most common way of sorting out finances is by looking at all the various common terms related to finance. In any financial system there are at least the following concepts: Loans - money that you owe often with interest associated with it. A loan for a house realestate is called a mortgage. Savings - money that you have and that you can grow. A more advanced version can be investments in stocks or real estate. Income - this is money coming in usually by exchanging either goods or services. ie your job you exchange your skills, abilities & time for money. Assets can be a form of income. Expenses - this is money going out , sometimes the interest of a loan can or even taxes canbe an expense.

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What is the history finances? Finances have been around as long as there have been people. Even nature itself has to manage its resources. Early financial systems were based on bartering goods or services. Exchanging one thing for another. It was not until the development of more stable settled socities and the development of writing that finances became important. A Roman coin that was used as an important means of exchange. (image Wikipedia)

Cunieform(above) was a form of ancient writing from some 5000BC that has a strong numerical basis. Writing itself was probably developed as a way of counting, and keeping track of how much grain villages had and general account keeping.

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The future of finances Finances are likely to be around for quite a while in some form. People will always need to somehow trade one thing for another, simply just to live or to lead a fulfiling life. Finances in the far future in the rest of the solar system? Could there be a financial system that links a colony on mars or the moon? A Martian Dollar or Lunar Dollar?

No one can really predict the financial future with great accuracy, perhaps all we can do is to minimise potential problems. Preparation is likely the key. Some financial values will go up and down. Generally speaking an area or a time that is increasing in population is most likely to be increasing in financial value. What are futures? Futures are a contract to buy a commodity like metals, oil or even food at a specific price for a specific amount at a specific time in the future. For example you could ask for 100,000 barrels of oil at todays price of $60/barrel to be delivered in 6 months time. If the price of oil goes to $80 at the delivery date that original amount must be delivered and paid. This now means that this amount of oil can be resold for a profit. Futures description from Wikipedia

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