Income simply refers to the money that we receive from an outside source. It can either be through the monthly salary we earn after a good work or even the money we raise from our personal businesses. The common example we know is the pay cheques and this are usually awarded after a hard work as we have seen earlier. Tax is normal in any government thus in this case income is subjected to taxation where we pay them just a small fair portion of a dollar. Therefore taxation will vary according to what you earn. The higher the income the more the tax is levied on you, the lower the income the less the tax is levied on you.
On the other hand assets refer to those tangible things that we own that are worth more than money. Assets may include furniture, cars and houses among others. As regards income assets are accumulated from it either through the personal savings or any other investments. Assets can be classified into two where we have the long-running and the short-running assets. Long-running are those assets can stay for a long period. A motor vehicle is one good example of a long run asset. Even though it depreciates in value, it may serve you for a long period of time. A short-running asset on the other hand is an asset that cannot last you a long period of time.
An expense is something that you use money on it. It is commonly refers to as an expenditure where this is an outflow of money to either a group of people or an individual. For instance in the case of a mere tenant the expense is the rent and for students tuition is the expense. Thus expense is simply seen as a negative concept of personal finance as it involves the usage of your money in order to achieve what you desire for. This usage of money in buying services can be seen as a bridge to loss making to some extend. For instance someone who receives a low income and has a large family will not be able to sustain it fully because nearly half of its income will cater for the expense inclusive of tax.
Thus the more the expense the low the lifestyle you live. But this can be controlled by proper management of your income such that once you receive it; you budget for all the things first before rushing on other non-vital things. Focus on the earthly luxuries such as comforts; for instance spending money on alcohol might lead you into great trouble as regard your expenses. That will be an expense that you would have added to yourself for which you will have to cater for it regardless of your family back there at home. These luxuries are preventive if only you are self-disciplined. With this measure put into consideration you will be able to enjoy managing your expenses.
Liabilities are related to expenses such that they both fall in the category of the negative concepts of personal finance. Thus a liability can be referred to as an obligation arising from a previous deal. You can at times borrow money from the bank, a long term loan for instance and this will require you to pay with an interest at the end of the period. You can therefore be termed as being liable to the bank. This is because you owe the bank a certain amount of money. Some sources of liability include the mortgages, car loans, personal loans, credit card debt among others. Even though liabilities are seen to be negative in nature, they are not that bad; at times once you apply a loan you can use it to invest for something better that can put you in a better financial state in future.
Thus the above four forms the basic overview of the key concepts in personal finance.