A Study of Personal Financial Planning Process and Socio-Economic Decision-Making in Households

Published in proceedings of International Conference on Interdisciplinary Issues for Empowering Trade, Industry and Society Organised by Nirma University

24 Pages Posted: 25 Jul 2016

See all articles by Sweety

Sweety

L J Institute of Management studies

Amola Shahir Bhatt

Nirma University - Institute of Management

Date Written: January 9, 2016

Abstract

In the current era, planning of finance is assuming extreme importance as myriad financial products are available and individuals’ demands are increasing. Personal financial planning is a process which outlines one’s financial objectives and takes financial decisions in a manner that his goals are achieved. The process of financial planning and decision-making in household has been studied independently by various researchers. However, these are essentially intertwined in nature. In view of this, the researchers have undertaken the task of understanding whether individuals followed the Personal Financial Planning process consciously and whether this was linked to household decision-making, especially in the social and economic areas. This paper also examines gender inequality in household decision-making and how household decision-making evolves with time. The study was conducted in the Ahmedabad district of Gujarat, and a sample size of 196 respondents was selected on judgmental basis to meet the objective of the study. The response rate was 78% (n=150) which is considered to be acceptable for a research study. The sample size was equally split between males and females. The survey was carried out in June- July, 2014.Analysis has been done by using Analysis of Variance (ANOVA), Binary Logistic Regression and Chi-square.

It was found that age influences components of Personal financial planning (PFP) like determining one’s financial objectives, knowledge of finance, satisfaction regarding current economic status, and retirement planning. Likewise, gender, income, education, profession and marital status affect various components of PFP. It was also found that household economic and social decisions were related to income and investment of the respondent. Further, it could be inferred that in a household, males held more bargaining power in taking economic decisions, while females exerted more influence in taking social decisions.

Keywords: Personal financial planning, financial objective, household economic decisions, household social decisions

JEL Classification: D10, D11, D12, D14

Suggested Citation

Shah, Sweety and BHATT, AMOLA SHAHIR, A Study of Personal Financial Planning Process and Socio-Economic Decision-Making in Households (January 9, 2016). Published in proceedings of International Conference on Interdisciplinary Issues for Empowering Trade, Industry and Society Organised by Nirma University, Available at SSRN: https://ssrn.com/abstract=2813484

Sweety Shah (Contact Author)

L J Institute of Management studies ( email )

SG Highway
Near Nagdev Mandir
Ahmedabad, GA Gujarat 380058
India

AMOLA SHAHIR BHATT

Nirma University - Institute of Management ( email )

Sarkhej-Gandhinagar Highway
Chandlodia, Via : Gota
Ahmedabad, GA Gujarat 382 481
India

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