Personal finance is ananalysis of financial flows at various points in time. For example, we may receive our paycheck today, but have to pay tuition fees next year. Mortgage, interest, premiums, and numerous other financial flows are recurring events that repeat at regular intervals. Because these involve several time periods, we have to ask "What role does time play in these financial calculations?".

We know that if we deposit money in a bank we receive interest. Because of this, we prefer to receive money today rather than the future.