A STUDY ON PERSONAL FINANCIAL PLANNING WITH SPECIAL REFERENCE TO NEEDS AND CAPACITY APPROACH

Abstract

Personal Financial Planning is the need of the hour. The formal education in schools, colleges and universities cannot give full pledged financial education. This creates financial illiteracy among even educated persons in spite of their degrees like MBA, M. Com, M. Phil, Ph. D. Indians are struggling to face the high inflated economic conditions. So, it is our duty to take up financial education and financial planning. Financial education is the process of getting awareness about financial activities such as expenses, incomes, savings and investing surplus funds. Personal financial planning includes planning future individual financial activities independently. This helps individuals to enjoy financial freedom in future. The present paper is done based on secondary sources which is collected from text books, newspapers, journals and other internet sources. The concepts discussed in this paper are family roles in personal financial planning, Need and capacity based financial model to buy luxuries such as car and other branded items, Financial philosophies from Warren Buffet, Benjamin Franklin and Albert Einstein. The main findings are, only 10% Indian people do financial planning, Indian youth have huge opportunity to enjoy the advantage of power of compounding; Indians must be passionate to get more and more financial education which is helpful for their financial planning.