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Having a suitable financial plan to take care of present and future financial needs as well as to balance day to day expenditure and savings is considered indispensable given the increased complexity and attention that the investment space taken in the recent times. Appreciating that there is a definitive role of intrinsic elements which can bring about a discipline to engage in the process or personal financial planning, the present study has the objective of understanding the role of self-control and money attitude in impacting personal financial planning. Considering a national sample of salaried individuals, the study has measured and collected data on self-control, money attitude and personal financial planning. Apart from conducting exploratory factor analysis, confirmatory factor analysis establishes a measurement model with satisfactory fit indices. Further, structural equation model exemplifies the positive a strong influence of self-control and money attitude on personal financial planning in presence of demographic factors viz. gender, age, education, income, job and marital status as control variables. The implications for investors, finance professional and academicians are discussed.

Personal financial planning is an emerging area of interest, given the complexities and risks involved in investments and financial markets. As an extension to studies in the field of cognitive and behavioural decision theories, the role of financial cognition (FC) and mental accounting (MA) is examined as antecedents to personal financial planning (PFP) of Indian households and established as a model to represent the same. The study considers factors, that is, financial attitude (FA), risk attitude (RA) and financial knowledge (FK), to measure FC and uses the components of mental budgeting (MB), current income (CI), current assets (CAs) and future income (FI) to study MA as per the behavioural life cycle hypothesis. The study used a structured questionnaire to explore PFP in all the areas of financial interest, that is, cash flow management (CM), investment (INV), insurance (INSU), retirement (RP), tax (TAX) and estate planning (EP). The salaried individuals from different sectors are considered as samples for the study. The data have been collected from all-India representative samples. The analysis has been done with 359 responses from Indian households. The confirmatory factor analysis (CFA) has been used to establish and validates the measurement model.

Risk tolerance has a great impact on every individual's portfolio decision. It is a very important factor to be considered to achieve long term financial goals. The low level of risk tolerance may put back the individuals from investing in stocks or other long term investment avenues which will result in a shortfall of income in the retirement period. Individuals with extremely high risk tolerance may suffer losses of wealth by considering short term investment with high return portfolios. The purpose of the paper is to find out the influence of demographic characteristics and personal financial knowledge on risk tolerance levels among working adults in India. Six demographic variables namely gender, age, education, income, marital status and occupation have been studied in relation to risk tolerance level. Study also analyzes the influence of personal financial knowledge on risk tolerance level. The study is based on primary data collected through structured questionnaire to capture various dimensions of risk and personal financial knowledge. To capture various dimensions of risk tolerance level of individuals, this study used structured questionnaire of Grable.J and R.H. Lytton (1999). Personal financial knowledge has been measured based on five dimensions i.e. money management, investment planning, insurance planning, retirement planning and tax planning. Regression analysis was employed for 297 responses to assess which of the variables influence the levels of risk tolerance. It is observed in the present study that male are more risk tolerant than female. The result suggests that the risk tolerance of a respondent generally increases as income increases. The results also suggest that higher education indicates an increased risk tolerance. Demographic characteristics such as occupation, age and marital status were found to be significant. Level of financial knowledge has significant positive relationship with risk tolerance indicating that individuals with higher personal finance knowledge will be willing to take informed higher risks. Present study brings out the age, education and personal financial knowledge as the important antecedents to risk tolerance level of Indian individuals which highlights the necessity to involve basic finance course in different levels of education curriculum. Present study will assist financial service providers in asset management industry in manufacturing better financial products. More risky and high yielding products can be designed for more educated male who are employed in service.

A person’s capability to manage financial matters has become important in today’s world. Availability of different types of sophisticated financial products coupled with the complexity and increased uncertainty of the economy and financial markets have generated a strong move to measure and study financial literacy among investors. The present article aims to analyze the status of financial literacy of college students with three identified antecedents, namely, socio-demographic characteristics, parental influence and attitude towards financial planning. A sample of 425 students from various colleges of the Hyderabad–Secunderabad region was studied to understand the role of the identified antecedents on financial literacy. The results of logistic regression analysis support the hypothesis that financial literacy of Indian college students is influenced by their socio-demographic characters, parental influence and their attitude towards financial planning. While both socio-demographic and parental influences have a positive impact on financial literacy, attitude towards financial planning is observed to have a negative impact.

Studies noticed that individuals’ cognitive, psychological, and behavioral limitations always have some influence in their everyday decision making. And the financial decisions are no exceptions. Perhaps it can be affirmed that individual financial decisions do have cognitive influence. This is also true with the Indian households. This study has briefly identified one such component i.e. mental accounting system and has explored the presence of mental accounting influence in households’ financial decisions. The study also establishes mental accounting as a second-order construct by using a hierarchical latent variable model. Partial Least Square Structural Equation Model (PLS-SEM) has been used to analyze and validate the scales. The analysis has been done with 452 responses collected using a survey method through a structured questionnaire given to Indian households. The study essentially analyses the influence of mental accounting in the financial decisions of households. This study aims at extending the knowledge of behavioral finance among the scholars of consumer behavior and personal finance, as well as the financial service providers.

Given the increasing relevance of Behavioral Economics in understanding decisions, this paper has analyzed the role of Mental Accounting (MA) in influencing Personal Financial Planning (PFP) decisions of Indian Households. Using the components put forth by the behavioral life cycle theory, MA variables are identified and validated. Individual tendencies for engaging in PFP are captured through identified dimensions. A significant influence of MA on PFP of investors is being empirically established in the study and the implications for business research are put forth. Using PLS-SEM technique, a structured questionnaire exclusively designed for this purpose has been analyzed on a total of 310 responses. The analysis strategy involved three-stage approach through establishing structural and path relationship between MA and PFP, including second order factoring to corroborate validations.

Financial decisions are the most important and life-shaping decisions individual make in their life. The increasing body of literature evidences the role of the individual psychological influence in their financial decisions. More specifically, the role of mental accounting is established in the domain of individual behavior towards money and financial matters. The present study also explores the influence of cognitive components on individual financial decision making and named the antecedent as financial cognition. The study hypothesizes a significant association of financial cognition on mental accounting process and on personal financial planning of Indian households and also hypothesizes mediating role of mental accounting. Study uses partial least square structural equation modeling in SmartPLS 3.0, to analyze the data of 310 responses. The hypothesized relationships are established and a partial mediating role of mental accounting in between financial cognition and mental accounting process of Indian households is evidenced.

The term financial planning has been an area of research interest since few years. Studies have underlined the influence of various cognitive factors in individuals’ financial decisions. The present study is also trying to underline the influence of various cognitive factors in personal financial planning of Indian households. The term financial cognition considered three components namely financial attitude, risk attitude and financial knowledge and raise the concern about the influence of various cognitive factors on individual personal financial planning. Especially in India, being a conservative attitude towards financial decisions, individual households do have higher influence of various cognitive and behavioral aspects in their suboptimal decision towards personal financial planning. The present study is putting forward those aspects of personal financial planning decisions of Indian households. The main objective of the model is to create the bare minimum structure to demonstrate the influence of financial cognition on personal financial planning among Indian households. The study mainly tried to explore the fundamental principle of subjective thinking towards financial decision. The model would represent the influence of financial cognition towards people financial decisions and can be helpful in exploring the financial information process. The study used PLS-SEM to explore PFP process in all the area of financial interest i.e. cash flow management, investment, insurance, retirement, tax and estate planning. The salaried individuals from different sectors are considered as sample for the study. The analysis has been done with 452 responses from Indian households.