SIP Presentation

Study of Personal Finance

FY MBA – II SEM - III

Name – Amanullah Akhtar Khan

Roll No. 58

Faculty Name – Mr. Surjeet Kumar

 Introduction to personal finance
Personal finance is the process of managing one's financial activities, such as income generation,
spending, saving, investing, and planning for the future. It encompasses everything from budgeting
monthly expenses to making decisions about long-term investments and retirement savings. The
goal of personal finance is to achieve financial security and meet personal financial goals by
making informed decisions with the resources available.

The core components of Personal Finance Management are:-

1. Budgeting
2. Saving
3. Investing
4. Debt Management
5. Retirement Planning
6. Risk Management and Insurance
Objectives of the Study

• To analyze the key components of personal finance,

including budgeting, saving, investing, debt management,
retirement planning and Risk Management and Insurance.

• To identify the most common financial challenges faced

by individuals and the impact of poor financial
management on their overall well-being.
Literature Review Of Personal Finance
Previous studies done on the components of personal finance :-
1. Financial Literacy : Financial literacy enables smarter budgeting, saving, investing, and reduces
financial mistakes. (Lusardi & Mitchell, 2014)
2. Budgeting and Saving : Budgeting controls spending, boosts savings, improves finances, and
supports financial goals. (Xiao & O’Neill, 2018)
3. Investment Decisions : Investment decisions reflect risk tolerance, knowledge, beliefs, and personal
biases’ impact. (Grable & Lytton, 1999)
4. Debt Management : Debt management supports financial health, but many need responsible
borrowing education (Gathergood, 2012)
5. Behavioral Finance : Behavioral finance explores emotional biases, improving financial decisions and
habits. (Thaler & Sunstein, 2008)
6. Retirement Planning : Delaying retirement savings harms future security; early saving improves
outcomes. (Benartzi & Thaler, 2007)
7. Technology in Personal Finance : Digital tools simplify money management, but raise concerns about
privacy, security. (Kim, 2016)
Knowledge Gaps and Future Directions
Despite the wealth of knowledge on personal finance, several gaps remain. For instance, while
much research has focused on the importance of financial literacy, less attention has been paid to
how cultural and socioeconomic factors influence financial behaviours and attitudes. Future
research could explore these dimensions to provide a more nuanced understanding of personal
finance management across diverse populations.

Moreover, the impact of digital financial literacy on financial outcomes remains under-researched.
As fintech products proliferate, understanding how individuals navigate these tools is essential for
developing effective educational programs that address contemporary financial challenges.
Research Methodology :-
Research Topic Selection:

I conducted a Research focused on personal finance, aiming to understand Personal Financial practices,
and challenges faced by individuals in various financial sectors. The respondents of the research
included Businessmen, Job professionals in various financial sectors , etc.

Participant Selection:

I gathered a sample of 100 respondents who were actively working in different areas within the financial
industry.
This diverse group provided a wide range of insights into personal finance from professionals with
firsthand experience in the field.

Questionnaire Design:

To capture relevant data, I developed a questionnaire containing 20 questions covering key aspects of
personal finance.
The questions addressed various topics including budgeting, saving, investing, debt management,
retirement planning and Risk Management and Insurance.
Data Collection and Analysis:
Data Collection:

I distributed the questionnaires to all 100 respondents and collected their responses.
This allowed me to gather quantitative data on personal finance practices directly from individuals
engaged in financial roles.

Data Processing and Analysis:

Once responses were collected, I converted the data into percentages for each question.
This approach helped to standardize responses and enabled a clearer analysis of trends and
preferences across all respondents.

Based on the analyzed data, I summarized the Key Outcomes regarding the financial habits and
attitudes of the respondents, did a detailed research on each and every responses and provided a
construct theory received from the responses.
 Findings And Suggestions :-
• Most respondents rely on salaries (56%) for stable income, while 28% earn from business, reflecting
entrepreneurial spirit. A smaller portion, 13%, earn from investments for passive income, and 3% from
alternative sources like freelancing, offering flexibility but less stability.
• 41% of respondents earn ₹2,50,000 to ₹5,00,000 annually, covering basic expenses with limited
savings, while 36% earning above ₹5,00,000 have more financial flexibility for wealth-building. The 23%
earning below ₹2,50,000 face financial constraints and may rely on additional support or income
sources.
• 59% of people budget monthly, leading to better financial control and reduced stress, while 41% don't,
risking overspending and limited savings.
• 34% of people save monthly, showing disciplined financial planning, while 26% save rarely, often due to
inconsistent income or financial challenges. 26% save occasionally, driven by extra funds, and 14%
never save, facing financial constraints or lack of awareness.
• 42% of people are aware of the importance of an emergency fund but haven't started saving, while
28% have more than three months' worth of expenses saved, demonstrating strong financial
preparedness. 15% have less than three months saved, and another 15% lack any emergency savings,
putting them at higher financial risk.
• 32% of people are debt-free, enjoying financial security and flexibility, while 25% carry high-interest
credit card debt, indicating potential financial strain. 23% have student loans, limiting their financial
• 51% of people are actively investing in financial products, aiming to build wealth and secure their
future, while 45% are not investing, possibly due to lack of knowledge, risk aversion, or limited funds.
• 30% of people are saving for retirement through employer-sponsored plans, benefiting from
structured contributions, while 25% use personal accounts like PPF and SIPs for more flexible saving.
20% plan to start saving but haven’t yet due to financial constraints or procrastination, and 25%
aren’t saving at all, often due to financial struggles or cultural reliance on family support.
• 31% of people aim to invest more, 27% prioritize reducing debt, 22% want to increase savings, and
20% focus on improving their budgeting skills to manage finances better. These groups reflect a mix
of goals centered around wealth building, financial stability, and improved money management.
• 30% of respondents feel confident in their personal finance knowledge, while 28% have a basic
understanding and 26% have a solid but less confident grasp. 16% feel their knowledge is poor,
indicating a need for further financial education and support.
• 32% of respondents consult financial professionals rarely, while 30% do so frequently, indicating a
proactive approach to managing finances. 22% seek advice occasionally, and 16% never consult
professionals, relying on self-education or personal experience.
• 36% of respondents track their finances manually, 24% use mobile apps for convenience, and 21%
rely on spreadsheets for customization. 19% do not actively track their finances, which could lead to
financial mismanagement.
• 40% of respondents have multiple types of insurance, indicating a comprehensive approach to
financial protection, while 31% are considering it. 15% lack any insurance, and 14% have coverage in
just one area, potentially leaving them underinsured..
• 60% of respondents use loans or credit to fund major purchases, indicating a common practice of
borrowing, while 20% rely on investment gains, indicating long-term financial planning. 15% prefer
saving for purchases, emphasizing financial discipline, and 5% turn to alternative sources like gifts or
crowdfunding
• 39% of respondents aim to achieve their financial goals within the next year, while 38% are targeting
a 3-5 year timeline for medium-term goals. 23% have goals planned within 1-3 years, indicating a
range of short to medium-term financial planning.
• 40% of respondents base their spending decisions on budget limits, indicating a disciplined approach
to managing finances, while 26% consult others for input before making decisions. 18% make
impulsive decisions, potentially leading to unplanned expenses, and 16% use other methods not
covered by the other categories.
• 31% of respondents frequently experience financial stress, likely due to ongoing challenges, while
27% report never feeling stressed, indicating strong financial stability. 24% experience occasional
stress during specific situations, and 18% are always stressed, possibly due to significant financial
difficulties or anxiety.
• 41% of respondents plan for taxes only during tax season, while 25% engage in regular tax planning
throughout the year. 22% plan to start tax planning in the future, and 12% do not currently engage in
any tax planning.
 Conclusion
Personal finance is crucial for achieving financial stability,
involving the management of income, expenses, savings,
investments, and debt to reach financial goals. Effective
planning through strategies like budgeting, savings, and
insurance is essential, but challenges such as limited
knowledge and economic factors can impact financial success.
Continuous learning, staying informed, and seeking
professional advice are important for navigating financial
decisions and achieving long-term goals.
Books:
Bibliography
Graham, B., & Dodd, D. L. (2008). Security analysis: Sixth edition. McGraw-Hill Education.
Malkiel, B. G. (2011). A random walk down Wall Street: The time-tested strategy for successful investing (10th ed.). W.
W. Norton & Company.
Graham, B. (2003). The intelligent investor: The definitive book on value investing (Rev. ed.). HarperCollins. Journal
Articles
Websites
https://www.investopedia.com/terms/p/personalfinance.asp
NerdWallet. (2024, January 5). 10 personal finance tips for beginners. NerdWallet.
https://www.nerdwallet.com/article/finance/personal-finance-tips
Reports
National Endowment for Financial Education. (2022). Financial literacy and education: Annual report. National
Endowment for Financial Education. https://www.nefe.org/financial-literacy-report-2022
U.S. Department of the Treasury. (2021). Financial literacy report (Report No. 2021-123). U.S. Government Printing
Office. https://www.treasury.gov/financial-literacy
Government Publications
Consumer Financial Protection Bureau. (2023). Your money, your goals: A toolkit for managing personal finances.
Consumer Financial Protection Bureau. https://www.consumerfinance.gov/your-money-your-goals
https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_financial-empowerment_toolkit.pdf
 Questionnaire
4.Annual Income group
1. Name
Less than ₹2,50,000
___________________
₹2,50,000 - ₹5,00,000
More than ₹5,00,000
2. Age Group
15-25 5. Budgeting:
25-45 Do you create a monthly budget to track your expenses?
45 above Yes
No
3. Income:
What is your primary source of income? 6. Savings:
Salary How often do you save money from your income?
Business Monthly
Investments Occasionally
Other Rarely
Never
7. Emergency Fund:
10. Retirement Planning:
Do you have an emergency savings fund?
Are you currently saving for retirement?
Yes, with more than 3 months' expenses
Yes, through employer-sponsored plans
Yes, with less than 3 months' expenses
Yes, through personal accounts
No, but I am planning to start
No, but I plan to
No
No
8. Debt:
Do you currently have any outstanding debt? 11. Financial Goals:
Yes, credit card debt What is your primary financial goal for the
Yes, student loans next year?
Yes, personal loans Reducing debt
No Increasing savings
Investing more
9. Investments: Budgeting better
Do you invest in any financial products (e.g., stocks,
mutual funds, retirement accounts)?
Yes
No
12. Financial Knowledge:
14. Financial Tracking:
How would you rate your understanding of
How do you track your expenses and income?
personal finance concepts (e.g., budgeting,
a) Manually (e.g., notebook, ledger)
investing, debt management)?
b) Spreadsheet (e.g., Excel)
Excellent
c) Mobile app
Good
d) Not actively tracked
Fair
Poor
15. Insurance:
Do you have any form of insurance (e.g., health, life,
13.Do you seek financial advice from
auto)?
professionals (e.g., financial advisors,
a) Yes, multiple types
accountants)?
b) Yes, one type
Yes, regularly
c) No, but I am considering it
Yes, occasionally
d) No
No, but I am considering it
No
 18. Spending Habits:
16. Major Purchases: How do you make decisions on spending money?
How do you typically fund major a) Based on budget limits
purchases (e.g., car, home)? b) Impulse decisions
a) Savings c) Consult with others
b) Loans or credit d) Other
c) Investments
19. Financial Stress:
d) Other
How often do you feel stressed about your finances?
a) Never
17. Financial Goals Timeline: b) Occasionally
What is your timeline for achieving your c) Frequently
main financial goal? d) Always
a) Less than 1 year
b) 1-3 years 20. Tax Planning:
Do you actively plan for taxes (e.g., deductions, credits)?
c) 3-5 years
a) Yes, regularly
d) More than 5 years
b) Yes, during tax season
c) No, but I plan to start
d) No