Topic : UNIT 1

Submitted To : MR. TURAB

Date:

Submitted by : ADITYA JAIN

Roll No. : 1174
Course : B.COM (Programme)
Subject : FIANANCE
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
Budget Surplus and Budget
Deficit
•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,
Fiancial 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
Here are various commercial banks and other financial institutions in India.

some Commercial Banks-

Commercial banks go about various activities such as taking
major deposits, lending for various purposes. They can even collect taxes
on behalf of institutions and the central government.
financial There are three types of Commercial Banks in India:
1. Foreign 2. Private 3. Public
Banks Banks Sector
institutions 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
some The credit rating agencies in India were mainly formed to
assess the condition of the financial sector.

major The two most important credit rating agencies in India are:

2)
financial 1) CRISIL
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