4 Must Known Pillars of Personal Finance

Let's teach our kids 4 pillars of personal finance: assets, debts, income, and expenses. They are easy to understand and important to manage personal finances.

Everyone has four basic components in their personal financial structure: assets, debts, income, and expenses. They are easy to understand in every age and it is very important to realize that our financial freedom depends on the well-balanced management of these four components. That’s why let’s understand what are four pillars of money and teach our kids in basic terms and make some activities together.

What are Four Pillars of Money?

Let's cover 4 pillars of personal finance in this post! Let me know your experiences and share with me your comments on your kids’ understanding.

1) Assets

Assets are items that you own and that have value that can be turned into cash when needed.

• Cash money

• Life insurance policy

• Private pension plan

• Gold and other valuable metals

• House

2) Debts

Debts are obligations or items that are owed to others.

• Mortgage

• Student loans

• Credit card balances

• Taxes

• Bills due

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3) Income

Income is all the money you generate.

• Salary

• Equity

• Dividens

• Interests

• Stakes

4) Expenses

Expenses or outflow is all the money you spend.

• School supplies

• Toys

• Bills

• Hair Cut

• Rent

I hope these above basic explanations and examples will help you while you are teaching four pillars of personal finance to your kids. Do not forget to do suggested to dos and share with me your experiences.