Topic : ‘ UNIT 1 ’ Submitted To : MR.

TURAAB
Date:

Submitted by : ADITYA JAIN

Roll No. : 1174
Course : B.COM (Programme)
Subject Finance For Everyone
Section : ‘D‘
TOPICS TO
BE Definition
COVERED
Benefits
Prerequisites of Financial
Literacy
Difference Between Savings &
Investment

Various Financial Institutions

Financial Planning
Types Of Budget
Procedure for making a Budget
Conclusion
•INTRODUCTION
•In the modern society, financial literacy has a significant role. Every person should be
taught financial Literacy as a life skill to handle their personal finances. The complexity of
financial goods, the prevalence of fraud and Ponzi schemes, the need for money to attain a
better quality of life after retirement, etc. are just a few of the problems People deal with.
These problems have created demand for better personal financial management, including
proper control of income and expenditure. People who receive financial education become
more financially literate and adopt a responsible attitude toward managing their income,
expenses, assets, and liabilities, which will ultimately improve their financial well-being .

•For every household, financial planning is a necessity. Savings alone are not enough for
financial planning It is financial commitment with a goal. Budgeting should be done properly
since it is a strategy to conserve and spend money from future income. With the help of this
literature, readers can gain a basic understanding of personal finance, including information
on financial planning, key financial literacy concepts, different investment opportunities,
wealth creation components, insurance and pension products, retirement planning, warnings
against Ponzi schemes, tax-saving strategies, investor protection measures, dos and don'ts of
investing, etc.
 Financial literacy is the cognitive
understanding of financial components and
Definition Of skills such as budgeting, investing, borrowing,
Financial taxation, and personal financial management,
'The absence of such skills is referred to as
Literacy being financially illiterate. Financial literacy
makes individuals become self-sufficient, so
that financial stability can be accomplished.
Those who understand finances should be able
to answer questions concerning transactions,
such as whether an item is required, whether it
is accessible, and whether is it is an asset or a
liability Managing your money is a personal
skill that benefits you through out your life -
and not one that everybody learns.
 BENEFITS
Ability to make Effective Greater equipped Reduction of
better financial management of to reach financial expenses through
decisions. money and debt. goals. better regulation.

Increase in ethical Using effective

Less financial decision-making
creation of a
stress and when selecting
insurance, loans, structured
anxiety.
investments budget

Budgeting: Creating and
managing a budget to
ensure that income is
sufficient to cover expenses
and achieve financial goals.
Insurance: health insurance
and life insurance and
selecting policies that provide
adequate coverage at a
reasonable cost.
PREREQUISITES
Saving: Understanding Investing: Managing debt:
different savings vehicles, Understanding the Understanding different
such as savings accounts basics of investing, types of debt, such as
and retirement accounts, including stocks, credit card debt and
and developing a savings bonds, mutual funds, loans, and to avoid
plan to meet short and and other financial high interest rates and
long-term goals. products, fees.
Retirement planning: Taxes: Understanding Financial decision-making:
Understanding basic tax concepts and Developing the skills to make
retirement savings and developing a plan to informed financial decisions,
developing a plan to minimize tax liability. including comparing financial
ensure adequate products and services, negotiating
retirement income. fees, and avoiding financial scams
and fraud.
 INVESTING VS SAVING
Basis of Difference Investing Saving
Meaning Putting money in financial products or Money is set aside after meeting all the
assets with an expectation to earn profits expenses to meet unforeseen expenses.
in the future.
Risk High Risk Low or Zero Risk
Goal Wealth creation and capital appreciation. Suitable for a rainy day or unforeseen events.

Liquidity Low liquidity in comparison to a savings Highly liquid, equivalent to holding cash.
fund.
Time horizon Long term, five years or more. Short term.
Returns High returns. Low returns in the form of interest.
Type of Asset Long term asset. Suitable for goals such as Short term asset. Suitable for short term goals
a child’s education, marriage, buying a such as buying furniture, home appliances, or
house, etc. meeting emergency requirements.

Products Stocks, Bonds, Mutual Funds, Gold, Real Savings account, Certificate of deposits,
Estate, etc. money market instruments, etc.
Protection against Good protection against inflation. Only a little.
Inflation
Account Type Brokerage Bank
 FINANCIAL INSTITUTION

A financial institution (FI) is a company engaged in

the business of dealing with financial and monetary
transactions such as deposits, loans, investments, and
currency exchange. Financial institutions include a
broad range of business operations within the
financial services sector, including banks, insurance
companies, brokerage firms, and investment dealers.
 Reserve Bank of India (RBI)
The Reserve Bank of India was established in 1935. It aims to
organize the financial framework and promote economic stability
in India. The bank acts as the regulator for the operation of the
various commercial banks and other financial institutions in India.
Here are
Commercial Banks-
some major Commercial banks go about various activities such as taking
deposits, lending for various purposes. They can even collect taxes
financial on behalf of institutions and the central government.
There are three types of Commercial Banks in India:
1. Foreign 2. Private 3. Public
institutions Banks Banks Sector
Banks.

in India:
Securities and Exchange Board of India
The Securities and Exchange Board of India was established in
1992. It aims to protect the interests of investors. It also monitors
market conditions, register institutions, and are dedicated to risk
 Insurance Companies
Insurance companies offer damage protection. They deal
with life insurance, transport insurance, car insurance, etc.
They collect the small savings from investors and then
reinvest these savings in the market.

Here are Credit Rating Agencies

The credit rating agencies in India were mainly formed to
some major assess the condition of the financial sector.
The two most important credit rating agencies in India are:

financial 1) CRISIL
2)
ICRA

institutions Specialized Financial Institutions

Specialized Financial Institutions in India are government
in India: companies established to support various sectors. They affect
the overall development of the Indian economy.
The significant institutions falling under this category
include:
Board for
Small Industries
Industrial & Export-Import National Housing
Development
Financial Bank Of India Bank
Bank of India
Reconstruction
WHAT IS FINANCIAL PLANNING ?
Financial planning is defined as the act of evaluating the necessary capital
and figuring out its competition. It is the process of establishing a
company's financial strategy with regard to raising, investing, and
managing capital.

GOALS
Calculating the necessary capital

Determining Capital structure

Developing Financial Policies

Maximize returns from resources

The Importance of Financial Planning :-
3. Financial
5. With
planning makes
adequate cash,
1. The it possible for
it is simple to
necessary financial
overcome the
finances must service
risks caused by
be raised. providers to
shifting market
invest with ease
patterns . 6. Financial
2.Financial in businesses. 4. Financial
planning helps to planning planning aids in
guarantee a enables the lowering the
proper balance development of uncertainties
between cash growth and that may
inflows and expansion impede a
outflows. strategies company's
expansion.
 •Name - Mr. Rajiv Tibrewal
•D.O.B - 19.06.1958 ,Age - 52yrs 10mths
•Employment - Employed with family business (Spouse is the
proprietor) and is the sole key-man of the said business .
Real •Under insured with the following dependents
Life •Wife - Kavita Tibrewal
•D.O.B - 09.05.1966, Age - 44yrs 11mths
Case •Son- Rahul Tibrewal
Study •D.O.B - 13.11.1989, Age - 21yrs 5mths
•Daughter - Shreya Tibrewal
•D.O.B- 16.11.1993, Age - 17yrs 6mths
•Plan Needed For Retirement At Age 65Yrs. With A Current
Monthly Surplus, Approx.. Rs.10,000.00.
 Available options

1. Invest Rs. 3,000.00 per
month in a conventional
pension plan for 13 yrs.
That might build up a
corpus of around
Rs.7,00,000.00
3. Invest Rs.3,250.00 per
month for 13 years in risk
associated instruments that
has the potential to build a
corpus of around
Rs.11,00,000.00
5. After 7 yrs. invest the
unutilized Rs.750.00per
month for the next 6 years
that might buildup a
corpus of around
RS.75,000.00

2. Invest Rs.3,000.00 per 4. Allot approximately 6. The EXPECTED

month in PPF for13 years
that might build up a
corpus of
aroundRs.7,70,000.00
Rs.750.00 per month i.e., Corpus after 13
approx. Rs.4500.00 half
years from the
yearly for protection worth
Rs.5,00,000.00 for 7 years above = Rs.26,45,000.00

The above plan is based on certain assumptions and expectations and is not binding on anyone . The
plan might fail due to various external factors like Government policies, Natural or unnatural
calamities, unforeseen circumstances, etc. Whoever follows this plan does so entirely on his / her
own risk and discretion .
 Personal budget or household budget is a
Personal
strategy for balancing a person's or
Budget
household's resources (income and expenses).
This strategy is developed for the entire
Different Family household using a family budget. And the best
Budget family budgets include everyone in the family
Types of .
A business budget aids the owner in
Budgets Business determining whether there is sufficient capital
Budget to support operations, grow, and bring in
revenue.
The process of forecasting income and
The
expenses for a specific time period is called
National
budgeting. A country's budget is its national
budget
budget
Planning and Budgeting Process
 CONCLUSION
The social science of economics examines the processes of production, distribution,
and consumption. It involves making choices on the distribution of finite resources in
order to maximize their usage and satiate human desires and requirements. The act
of measuring the necessary capital and figuring out its competition is known as
financial planning. It is the process of establishing a company's financial strategy
with regard to raising, investing, and managing capital.
A budget is a plan for how much money will be spent over a specific time period; the
amount that is indicated. First, pay yourself. Before you spend money on anything
else, set aside money from your income. Spend any remaining funds after saving.
Additionally, if your income increases, consider investing some of it—preferably the
majority—into your savings. Before you get used to spending the extra money, it will
be simpler to accomplish this. Contribute on a regular basis to your savings.
Utilize tax benefit programmes to increase your savings. Using programmes
like EPF, PPF, NSC, ELSS, SSY, and NPS, you can lower the taxes you have
to pay on your savings. To ensure that your future is financially secure, saving
is a crucial step. Start early to give your savings the most growth potential.