Finance is a term that describes the study and system of money, investments and various other financial instruments. Generally, finance is broken into three categories: public finance, corporate finance and personal finance.
Each sector of finance describes the way governments, firms and individuals manage cash, assets, liabilities, revenues and other various debts to ultimately generate public, private and personal cash flows.
Governments finance activities that include the allocation of resources, distribution of income and stabilization of the economy primarily through taxation and borrowings from banks, insurance companies and other governments. Private entities finance operations through various means that include equity investments and credit arrangements via various lenders. Individuals finance personal expenditures including life, health and health insurance expenses, mortgage payments and retirement savings via active and passive incomes and borrowings from private and public institutions.