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personal finance

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Abstract

The present study was conducted in Bihar with an effort to analyze knowledge and practice of personal finance among working women. The ex post facto research design was used for the study. Total three hundred working women randomly selected for the purpose from Patna town. A survey schedule was developed for the collection of data based on pre-testing. To analyze the knowledge and practice of personal finance among working women the schedule was developed in four aspects viz. saving plan, Tax approach, Financial emergency and Retirement plan. Overall knowledge and practice of personal finance were measured on the basis of Practice Index Score obtained by the respondents. Findings suggest that majority of the respondents (82 %) show medium level of practicing personal finance management besides having higher education, employment and belonging to middle to upper middle income group.

Figures (5)
a financial year. Findings suggest that only 43 percent of the respondents carefully plan their investment early in the finan- cial year to avail maximum tax benefit whereas 30 percent plan by the end of financial year when is the time to fill the in- come tax returns. And this is the time when investors mostly invest their money without proper investigation and doesn’t entitle themselves to get much profit; the biggest mistake in personal finance. There are also some respondents (27per- cent) who doesn’t actively plan their tax benefits mainly due to lack of financial literacy either don’t know much scheme or not able to understand the terms and conditions. So by the end 60 percent of the respondents enable themselves to utilize the maximum tax benefit scheme while about 40 percent failed to do so. Figure 3
a financial year. Findings suggest that only 43 percent of the respondents carefully plan their investment early in the finan- cial year to avail maximum tax benefit whereas 30 percent plan by the end of financial year when is the time to fill the in- come tax returns. And this is the time when investors mostly invest their money without proper investigation and doesn’t entitle themselves to get much profit; the biggest mistake in personal finance. There are also some respondents (27per- cent) who doesn’t actively plan their tax benefits mainly due to lack of financial literacy either don’t know much scheme or not able to understand the terms and conditions. So by the end 60 percent of the respondents enable themselves to utilize the maximum tax benefit scheme while about 40 percent failed to do so. Figure 3
Next step in personal financial planning is about creating emergency fund which is also most important part. When the respondents were asked whom to depend in case of financial emergency (fig.3), 40 percent say to their spouse, 30 percent to their parents and relatives while only 30 percent has cre- ated the emergency fund to cope up with adverse financial situations. Further 40 percent respondents has created emer- gency fund upto 3 to 6 month income in addition to fixed deposit in bank. Here the point to be noted that these re- spondents were in higher income group and their husbands earning was also included. Likewise 20 percent respondents also invested in mutual funds besides saving upto 3-6 month income for emergency situation. Study shows that 40 percent respondents only has 1 to 3 months income in bank account for emergency fund. Most strikingly as much as 98 percent of the respondents doesn’t made the will of their property pos- sibly as majority hasn't any entitlement of the property none other than their earnings and ironically invest in joint names with their husbands. Figure 4
Next step in personal financial planning is about creating emergency fund which is also most important part. When the respondents were asked whom to depend in case of financial emergency (fig.3), 40 percent say to their spouse, 30 percent to their parents and relatives while only 30 percent has cre- ated the emergency fund to cope up with adverse financial situations. Further 40 percent respondents has created emer- gency fund upto 3 to 6 month income in addition to fixed deposit in bank. Here the point to be noted that these re- spondents were in higher income group and their husbands earning was also included. Likewise 20 percent respondents also invested in mutual funds besides saving upto 3-6 month income for emergency situation. Study shows that 40 percent respondents only has 1 to 3 months income in bank account for emergency fund. Most strikingly as much as 98 percent of the respondents doesn’t made the will of their property pos- sibly as majority hasn't any entitlement of the property none other than their earnings and ironically invest in joint names with their husbands. Figure 4
The financial behavior of the respondents in terms of sav- ing plan as shown in fig.1 clearly indicated that only 31 per- cent of the respondents plan their short term goal and long term goal which is known to be basics of planning personal finance. As much as 75 percent respondents retained their financial records viz. tax records, insurance policies, invest- ment records, credit card accounts, banking records, health records, deeds, mortagages or contracts, picture of property and real estate, notes payable etc. while rest 25 percent doesn't retain all the records. 61 percent working women use their savings either to buy durable items or gold and orna- ments, whereas 26 percent of the respondents got their sav- ings to be deposited as fixed deposit in bank and only 13 percent dare to invest their savings in share/stocks and mu- tual fund. Further 12.5 percent respondents less than 20 per- cent of their income has to repay loan per month while same fraction has to repay 20 to 50 percent of their income as loan.
The financial behavior of the respondents in terms of sav- ing plan as shown in fig.1 clearly indicated that only 31 per- cent of the respondents plan their short term goal and long term goal which is known to be basics of planning personal finance. As much as 75 percent respondents retained their financial records viz. tax records, insurance policies, invest- ment records, credit card accounts, banking records, health records, deeds, mortagages or contracts, picture of property and real estate, notes payable etc. while rest 25 percent doesn't retain all the records. 61 percent working women use their savings either to buy durable items or gold and orna- ments, whereas 26 percent of the respondents got their sav- ings to be deposited as fixed deposit in bank and only 13 percent dare to invest their savings in share/stocks and mu- tual fund. Further 12.5 percent respondents less than 20 per- cent of their income has to repay loan per month while same fraction has to repay 20 to 50 percent of their income as loan.
Figure 1 Research suggests that knowledge is strongly linked to be- havior in the area of personal finance, as more knowledge- able individuals generally display more responsible or ef- fective financial behaviors (Hilgert et al., 2003; Robb 2011; Robb & Woodyard 2011; Xiao, Tang, Serido, & Shim 2011). Based on these findings an attempt was made in the study to explore and analyze the financial management behavior of the respondents. The findings of the investigation have been categorized into four aspect and depicted through chart. Further overall knowledge and practice of personal finance were assessed and presented in table.
Figure 1 Research suggests that knowledge is strongly linked to be- havior in the area of personal finance, as more knowledge- able individuals generally display more responsible or ef- fective financial behaviors (Hilgert et al., 2003; Robb 2011; Robb & Woodyard 2011; Xiao, Tang, Serido, & Shim 2011). Based on these findings an attempt was made in the study to explore and analyze the financial management behavior of the respondents. The findings of the investigation have been categorized into four aspect and depicted through chart. Further overall knowledge and practice of personal finance were assessed and presented in table.
When data were statistically analyzed for identifying overall knowledge and practice level of personal finance (table 1) among the respondents which were categorized into four level based on their practice index score we can observed that majority of the respondents (82 percent) belongs to me- dium category where their PIS range is between 51 to 75. PIS of 18 percent respondents fall in low category. None of the respondents exhibit PIS of high category. So we may con- clude that overall majority of the working women manage their personal finance in medium level. of the respondents plan for investment returns and additiona house. Conclusion
When data were statistically analyzed for identifying overall knowledge and practice level of personal finance (table 1) among the respondents which were categorized into four level based on their practice index score we can observed that majority of the respondents (82 percent) belongs to me- dium category where their PIS range is between 51 to 75. PIS of 18 percent respondents fall in low category. None of the respondents exhibit PIS of high category. So we may con- clude that overall majority of the working women manage their personal finance in medium level. of the respondents plan for investment returns and additiona house. Conclusion

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